Amy Poehler and Maya Hawke voice Joy and Anxiety, respectively, in Disney and Pixar’s “Inside Out 2.”
Disney | Pixar
My top 10 things to watch Wednesday, Aug. 7
1. Disney with a blowout, beating analyst estimates on top and bottom lines. Also, a big raise to earnings guidance. It’s about time. Adjusted EPS for its fiscal third quarter were $1.39, up 35% from a year ago. The company’s combined streaming businesses (Disney+, Hulu and ESPN+) turned positive for the first time, ahead of schedule. The entertainment segment was up 4%, much better than expected. And yet, shares were down about 1% in the premarket.
2. Airbnb‘s second-quarter results on Tuesday were a big disappointment and the vacation rental company talked about slowing demand from U.S. guests. It does look like a short-term peak. Shares fell 14%.
3. CVS Health on Wednesday reported better-than-expected earnings. EPS were $1.83 adjusted vs. $1.73. Revenue was $91.23 billion vs. $91.5 billion expected. However, the retail drugstore chain cut its full-year profit outlook because of higher medical costs. The company expects 2024 adjusted earnings of $6.40 to $6.65 per share, down from at least $7 per share. It has cut 600 stores since 2022 and expects to close 300 more this year. I have CEO Karen Lynch on “Mad Money” tonight.
4. Reddit reported second-quarter revenue on Wednesday of $281 million vs. $254 million expected. I like the number, growing user base — 91.2 million daily active users, topping estimates of 84.5 million. Good commentary, a lot to like. Confident presentation. Piper Sandler raised its price target on RDDT shares to $70 from $65. Loop Capital lifted PT to $80 from $75. Reddit stock added 1%.
5. Super Micro is no longer a proxy for Nvidia because of margin issues. Bank of America downgraded the server maker to hold from buy. Really terrible conference call. Major EPS miss but not a sales miss. Super Micro also announced a 10-for-1 stock split. Shares of the stock dropped more than 14%.
6. Instacart amazingly delivered earnings of 20 cents per share, beating estimates of 13 cents. That’s like Uber. The grocery delivery company trades at just 9 times EBITDA. Instacart, which publicly trades as Maplebear, announced in February that it was laying off 250 employees, or roughly 7% of the company, as part of a restructuring to focus on higher-margin projects. Shares jumped more than 9% on the report.
7. Fortinet‘s second quarter was much better than expected. Cybersecurity still very strong. EPS were 57 cents, beating consensus of 41 cents. Billing strong. The company sees full-year adjusted earnings to be between $2.13 and $2.19 per share versus estimates of $1.76 per share.
8. Caterpillar is a battleground stock with price targets getting raised and lowered. I thought it was an excellent quarter. The industrial giant on Tuesday easily topped Wall Street profit estimates in the second quarter, earning $5.99 a share versus $5.54 expected.
9. Wynn Resorts catches multiple price target cuts. Macau is the driver of negative sentiment. We exited our position in Wynn on Monday. Our thinking: If the casino operator can’t deliver robust results in Las Vegas and Boston in the quarters ahead, it will make it even harder to justify owning a stock so levered to China.
10. Toast: The end of the love affair for the SaaS company? Increased average-revenue-per-user pressure, more competition.
Sign up for my Top 10 Morning Thoughts on the Market email newsletter for free
(See here for a full list of the stocks at Jim Cramer’s Charitable Trust.)
As a subscriber 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 trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade.
THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, TOGETHER WITH OUR DISCLAIMER. NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
