My top 10 things to watch Friday, May 17
1. Wall Street heads for a flat open Friday, tracking to complete a strong week that was kicked into high gear Wednesday on a cooler-than-expected April consumer price index. The S&P 500 and the Nasdaq hit records again during Thursday’s session but closed slightly lower. The Dow on Thursday topped 40,000 for the first time ever. But it, too, finished a bit lower.
2. Applied Materials delivers fine second-quarter results. I would buy the stock because the semiconductor equipment maker is in all the right areas. JPMorgan increases estimates and its price target goes to $240 a share from $230. Analysts keep their buy-equivalent rating.
3. Reddit is being pushed everywhere on Wall Street after the social media site reached a data-licensing deal with OpenAI, the creator of ChatGPT backed by Club name Microsoft. It makes sense given Reddit’s rich dataset. Shares jump more than 10% in premarket. Terms of the deal weren’t disclosed, but analysts at JMP Securities believe data sales could eventually be a $500 million business for Reddit. This company has done everything right in the process.
4. Cracker Barrel tumbles after the restaurant chain announces massive changes to its brand and operations. Quarterly dividend is sliced to 25 cents a share from $1.30 to free up money to invest in the overhaul. Management expects adjusted earnings growth to really pick up pace in fiscal 2027.
5. Jefferies upgrades Club name DuPont to buy from hold with a price target of $101 a share, implying 30% upside from where the stock closed Thursday. A recovery in DuPont’s electronics business is a big part of our thesis and also informs Jefferies’ more positive view on the stock. Analysts also see a path to multiple expansion for the stock.
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6. Bank of America expects Club holding Nvidia to deliver better-than-expected results next week but warns the stock could be volatile in the near term. The reasons include quarterly deceleration ahead of the launch of its next-generation artificial intelligence chip. Analysts maintain their buy rating and $1,100 price target on the stock, which is one of my two “own it, don’t trade it” names. Apple is the other.
7. TD Cowen raises its price target on TJX Companies by a buck to $120 a share ahead of earnings next week. Analysts believe the parent of TJ Maxx, Marshalls and Home Goods can top same-store sales expectations and possibly raise its full-year earnings outlook. Elsewhere, The Wall Street Journal published a fun story Thursday about millionaires increasingly shopping at TJX’s stores in search of heavily discounted designer brands. That “treasure hunt” experience is something we’ve liked about the company. We own it for the Club.
8. BTIG upgraded Darden Restaurants stock to a buy rating from hold. Price target $175 per share. The analysts see a “compelling valuation” for the Olive Garden and LongHorn Steakhouse company and say investors should give more weight to the stock’s nearly 3.5% annual dividend yield.
9. JPMorgan cuts its price target on Deere to $385 a share from $425 after the farm equipment maker on Thursday lowered its full-year outlook for the second time in as many earnings reports. Analysts at TD Cowen, Stifel and Bank of America go the other way and up their price targets. Tough agriculture environment globally is weighed on Deere’s business. At the Club, we took Deere off our watchlist of stocks in response to the guidance revision.
10. Mizuho Securities slashes its price target on cloud security platform Zscaler to $240 a share from $310. Analysts believe business is harder than expected right now. Contrarian call. On Thursday, Stifel also reduced its price target on Zscaler to $220 from $270.
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