We’re raising our price targets for 4 stocks and cutting them for 2 others
Every weekday, CNBC Investment Club with Jim Cramer publishes Homestretch, an actionable afternoon update just in time for the final hour of trading on Wall Street. Stocks gave up earlier gains and fell Friday afternoon, putting the S&P 500’s seven-day winning streak at risk. It’s been a strong week for the market, with the S&P 500 up roughly 3.5%, so we’re not surprised to see some profit taking after such a big rally. We said on the Morning Meeting that we would right-size our Broadcom position based on Friday’s strength (but we can’t buy or sell a stock for 72 hours, as Jim Cramer mentioned on CNBC TV). If we’re not constrained, watch out for a trade on Monday. The rally will be put to the test this weekend when delegates from the United States and Iran meet in Pakistan for peace talks on Saturday. As the start of first quarter earnings season approaches, we’re making a number of changes to stocks that are trading at or near our price targets. We are lowering our Dover price target to $230 from $220. We think 2026 is shaping up well for this diversified industrial company, as each business is expected to grow this year and has very limited direct access to the Middle East. We raise our GE Vernova price target to $1,000 from $875; This is more in line with the recent views of many bullish analysts. In Goldman Sachs’ earnings preview, analysts said they expected gas turbine orders to be stronger in the quarter and an increase in GEV’s electrification division, which sells transformers, switchgear and other products found on the power grid. We are increasing Corning from $160 to $180. On Friday, Lumentum CEO Michael Hurlston mentioned that the company is nearly out of optical components by 2028, indicating strong demand and pricing power for all things fiber. Lumentum’s technology helps convert electrical signals into light, and Corning produces the optical fiber that transmits the light throughout the data center. Besides earnings, another potential catalyst could be Corning announcing another multi-year supply deal with a hyperscaler, like it did with fellow club Meta in January. Hyperscalers are racing to secure AI infrastructure supply chains, and we think more deals to sell optical fiber, cable and connectivity products are likely. We have another positive update about Linde. We are raising our price target from $510 to $540; This reflects our view that global helium shortages linked to conflicts in the Middle East will have a negative impact on industrial gas supplier earnings. Over a longer horizon, Linde can gain share in the helium market by establishing long-term supply agreements with new customers. Meanwhile, we’re lowering our price target on two software stocks: Salesforce and Microsoft. Both companies are under pressure from AI and the threat of Anthropic taking share of enterprise software. We do not think this excess will disappear anytime soon, putting pressure on price/earnings multiples across the group. We’re lowering our price target for Salesforce from $250 to $215. We’re moving from $600 to $500 for Microsoft. We have equivalent 2 ratings in both stocks and do not plan to add to either position at this time. Next week, several portfolio companies will kick off first-quarter earnings season. We’ll hear from Goldman Sachs on Monday, and from both Johnson & Johnson and Wells Fargo on Tuesday. We will see previews of all three Club names in our column next week on Sunday. Some other major reports next week will come from JPMorgan, BlackRock, Citigroup, ASML, Morgan Stanley, Bank of America, PepsiCo, Taiwan Semi, Abbott Labs and Netflix. (See here for a complete list of stocks in Jim Cramer’s Charitable Trust.) When you subscribe to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trading alert before buying or selling a stock in his charitable foundation’s portfolio. If Jim talked about a stock on CNBC TV, he would wait 72 hours after issuing the trading alert before executing the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, TOGETHER WITH THE DISCLAIMERS. NO CIVIL OBLIGATIONS OR DUTIES EXIST OR SHALL BE RESULTING FROM YOUR RECEIVING ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULT OR PROFIT CAN BE GUARANTEED.
