The Club’s top 10 things to watch in the stock market Friday
The Club’s top 10 things to watch Friday, May 22 – Today’s newsletter was written by Jeff Marks, the Club’s director of portfolio analysis. 1. Stocks are poised to continue yesterday’s gains. Oil rose slightly due to uncertainty over Iran’s war peace deal, but bond yields are not following a similar pattern and are lower. Stocks have struggled to recover lately in the face of higher yields. 2. Big earnings mover: Workday rose more than 7% after the enterprise software vendor reported improvement at both the top and bottom lines and raised its full-year margin outlook. Co-founder Aneel Bhusri is back as CEO and argues that AI strategies are working. 3. Deckers Outdoor reported better-than-expected sales and provided guidance above Wall Street expectations for the full year. Hoka sales increased 14.5% in the quarter. Ugg increased by 9.2%. The stock is down about 2.5%. BTIG called it a solid quarter but maintained its hold rating. 4. Shares of Take-Two Interactive are up more than 3% after the video game publisher reaffirmed that Grand Theft Auto VI will be released this November. It has faced a number of delays and it has been over a decade since the last GTA was released. 5. Ross Stores followed the club name TJX Companies with its own strong tempo and rise. Comparable store sales rose 17% in the quarter. Affordable retail is where the consumer gets stuck. TJX demonstrated this on Wednesday. 6. Estee Lauder rose over 11% this morning after merger talks with Spanish beauty company Puig ended. The market punished EL shares in March when takeover reports emerged. The concern was that acquiring Puig would add complexity to Estee Lauder’s organic transformation efforts. 7. Walmart was added to JPMorgan’s “analyst focus list” after falling 7% yesterday in response to earnings. KeyBanc said despite Walmart’s weak guidance, they believe the retailer is poised to capture additional market share in groceries and general merchandise and offset rising fuel costs. 8. BJ’s Wholesale shares lost less than 1% after reporting adjusted earnings of $1.10 versus the $1.03 expected. Revenues were also better than expected. It reaffirmed its full-year outlook. We have had our rival Costco on behalf of the club for years. Costco will report next week. 9. Zoom Communications is up over 7% following a full-year guidance increase with highs and lows. While analysts said Zoom delivered better margin expansion and stable performance than they expected, KeyBanc moved the stock from sell to hold. 10. Steelmaker Nucor was initiated with a buy rating and $270 price target at Barclays. The stock has been a winner this year, up nearly 40%. Steel mills reported a strong quarter at the end of April, thanks to volumes and margins. 4 more things on our radar 11. Loop Capital initiated American Express with a buy rating and $389 price target. We prefer Capital One, but it has been difficult to get the full group this year. 12. Chipmaker Marvell Technology’s price target was raised to $210 from $140 on Stifel, while Wells Fargo raised the PT on server maker Dell to $270 from $180. Both beneficiaries of AI trading will report earnings next week. 13. Nvidia remains an important AI stock to own in our eyes. Club portfolio analyst Zev Fima made this point clear for members yesterday. Vendors fail to fully appreciate what Nvidia’s next leg of growth will be. 14. Elon Musk’s SpaceX postponed the test flight of its experimental Starship reusable rocket. He plans to try again today. We have two winners from SpaceX’s planned IPO: Goldman Sachs, which is the lead bank on the deal, and the lesser-known Linde, which provides gases used in rocket launches and satellites. Sign up for free for my Top 10 Morning Thoughts on the Market email newsletter (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 waits 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.
