Customers experience an iPhone15 at an Apple store in Shanghai, China, October 7, 2023.
CostFoto | Getty Images
My top 10 things to watch Wednesday, March 27
1. Apple iPhone sales in China have gotten worse, according to analysts at JPMorgan. Shipments declined 33% year over year and 56% month to month. Some managers will say that Apple has to preannounce results next week because of this. I do not know. I know that any business tied to China is terrible and has not gotten better. Separately, The Wall Street Journal said Apple held preliminary talks with Baidu about using its AI tech.
2. We have four stocks in our portfolio with Chinese exposure to discuss on our monthly call with Investing Club members today at noon ET. We will also provide updates on every holding and announce a new addition.
3. The Food and Drug Administration approved a drug from Merck to treat a rare and life-threatening lung condition called pulmonary arterial hypertension. The company estimates that the drug — which will be marketed as Winrevair and is an injection administered every three weeks — will hit select pharmacies by the end of April. Merck got the rights to Winrevair through its $11.5 billion acquisition of Acceleron in 2021. Only a big company can launch something like this …
4. Davidson downgraded Lowe’s to hold from buy, said shares are due for a pause after outperforming this year, and the company’s valuation is at its highest since the early months of the pandemic. The firm did say Lowe’s margin gap with Home Depot shrunk for five years straight.
5. Tesla‘s price target was lowered to $196 from $224 at Citi, which says delivery estimates are too high. Watch this one. Shares of the electric vehicle maker have absorbed a lot of body blows lately.
6. Citi opened a “30-day positive catalyst watch” on shares of Marvell Technology going into its AI event on April 11. I like this call because the focus will not be on the chipmaker’s declining business. Marvell is kind of like Club holding Broadcom because it has a lot of legacy businesses that are slumping.
7. Disney‘s price target was raised to $140 from $120 at UBS. The firm sees “multiple sources of potential upside” that should drive earnings estimates higher over the next several quarters. I think activist investor Nelson Peltz, who is agitating for change at the entertainment company, is the upside.
8. A rare downgrade of Visa, to neutral from buy, at Redburn Atlantic. The firm talked about how mature the stock is, along with the potential threat from digital wallets. The more cautious outlook leaves only a 10% potential upside with a $307 price target.
9. Leidos has become everyone’s favorite defense stock because of its reorg into five new business segments. Bank of America, citing the alignment as a catalyst, raised its price target on LDOS shares to $150 from $125.
10. Barclays wanted the Jet Blue–Spirit Airlines deal to work out: It initiated both stocks with underweight ratings.
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