10 Things to Watch on Friday, September 27
As the financial markets gear up for another trading day, several key developments are shaping the landscape. From record highs in the S&P 500 to significant corporate earnings reports, here’s a detailed look at the ten things investors should keep an eye on this Friday.
1. S&P 500 on the Rise
The S&P 500 is poised for a slightly higher open after achieving another record high close. This uptick comes on the heels of a lower 10-year Treasury yield, following a tame August reading of the PCE price index, which is the Federal Reserve’s preferred inflation gauge. With only a few trading days left in September—historically one of the worst months for the market—the S&P 500 is on track for its first September gain in five years. This shift could signal a more optimistic outlook for the remainder of the year.
2. Costco’s Earnings Report
Shares of Costco are experiencing a minor dip following the release of its fiscal 2024 fourth-quarter earnings report. Despite this, the wholesale retailer’s long-anticipated membership fee increase, effective September 1, is expected to have a limited impact until late fiscal 2025 and into fiscal 2026. Analysts have responded positively, raising their price target on Costco shares, indicating confidence in the company’s long-term growth trajectory.
3. Best Buy Gains Analyst Attention
Best Buy has been added to JPMorgan’s analyst focus list after a productive meeting with the retailer’s management team. The analysts reiterated a price target of $111, labeling Best Buy as a "value idea." They believe the company is well-positioned to benefit from the ongoing computing replacement cycle and the anticipated growth in TV and appliance sales as existing home sales improve. This aligns closely with the investment thesis held by many in the market.
4. Bristol Myers Squibb’s New Drug Approval
In a significant development for the pharmaceutical sector, the FDA has approved Bristol Myers Squibb’s schizophrenia drug, Cobenfy. This marks the first new treatment for schizophrenia approved in seven decades, leading to a more than 3% increase in the company’s stock. This approval not only highlights the company’s innovative capabilities but also its potential to capture a substantial market share in a critical therapeutic area.
5. Wynn Resorts Receives Upgrade
Wynn Resorts has been upgraded to a buy-equivalent rating by Morgan Stanley. Analysts believe that the casino operator’s stock is set to command a higher valuation due to stability in Las Vegas, clearer details surrounding its project in the United Arab Emirates, and increased capital returns. After struggling since spring, Wynn shares have recently gained traction, particularly in light of positive news regarding stimulus measures in China, which could benefit its operations in Macau.
6. Dollar General Faces Downgrade
In a notable shift, Citigroup has downgraded Dollar General from neutral to sell, slashing its price target to $73 per share—approximately $14 below its Thursday close. Analysts attribute this downgrade to increased competition from Walmart, which has been gaining market share. Jim Cramer has pointed to Walmart’s influence as a significant factor in Dollar General’s disappointing earnings report last month.
7. Dell Technologies Gets a Boost
Deutsche Bank has restarted coverage of Dell Technologies with a buy rating and a price target of $144 per share. Analysts anticipate that Dell’s revenue growth will accelerate into double digits, driven by the expansion of its AI server business. They also project a similar growth rate for the company’s bottom line, highlighting Dell’s "clean and simple" capital return framework as an attractive feature for investors.
8. Caution Ahead of PepsiCo’s Earnings
As PepsiCo prepares to release its earnings report on October 8, Citigroup has placed the stock on a 30-day negative catalyst watch. Analysts predict an operational sales growth miss, primarily due to softness in the company’s North American business. Investors should be cautious and closely monitor any developments leading up to the earnings announcement.
9. HP Inc. Downgraded
HP Inc. has been downgraded to a hold-equivalent neutral from buy by Bank of America. Analysts expect that while there may be some upside from its personal computer business, this will likely be offset by lower margins in its printer unit. As a result, HP shares have seen a decline, reflecting investor concerns about the company’s overall profitability.
10. Salesforce’s Price Target Increased
Finally, Wedbush Securities’ Dan Ives has raised his price target on Salesforce from $315 to $325 per share following positive customer feedback at the company’s Dreamforce conference. The introduction of Salesforce’s new AI offerings has energized the stock, indicating strong market interest and potential for future growth.
In conclusion, Friday, September 27, promises to be an eventful day for investors, with significant movements across various sectors. From corporate earnings to market trends, staying informed will be crucial for making sound investment decisions. As always, it’s essential to approach the market with a balanced perspective, weighing both opportunities and risks.
