Consumer Discretionary

Cost Concerns Weigh on Airline Shares

/ / Consumer Discretionary /

Delta Air Lines shares tumble as the airline trims its profit outlook for the year, citing higher costs of wages, inflation, and supply chain snarls. Delta now expects profits this year between $6 and $7 a share–a modest reduction from the more than $7 per share it had previously predicted for 2024. CEO Ed Bastian says on an earnings call that he believes Delta could pull off profits above the upper end of the guidance range, but felt more caution was warranted. Airlines including Delta have struck new contracts with massive pay increases for pilots, and Delta said it also expects higher maintenance costs. Delta shares fall 8% and concerns that the industry remains vulnerable to cost creep dragged shares of other carriers down as well, with American Airlines and United Airlines also off sharply.

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Uber Technologies, Inc. (NYSE:UBER) Stock Analyst Ratings

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Uber Technologies, Inc. (NYSE:UBER) Stock Analyst Ratings Date Upside/Downside Analyst Firm Price Target Change Rating Change Previous / Current Rating 01/11/2024 25.2% Goldman Sachs $59 → $78 Maintains Buy 01/09/2024 10.75% BMO Capital → $69 Initiates Coverage On → Outperform 12/29/2023 -0.48% Nomura $59 → $62 Downgrades Buy → Neutral 12/19/2023 12.36% Keybanc $61 → $70 Maintains Overweight 12/04/2023 20.39% Oppenheimer $65 → $75 Maintains Outperform 12/01/2023 -0.48% JMP Securities → $62 Reiterates Market Outperform → Market Outperform 11/30/2023 1.12% Needham → $63 Reiterates Buy → Buy 11/30/2023 15.57% Tigress Financial $66 → $72 Maintains Buy 11/13/2023 -0.48% JMP Securities $57 → $62 Maintains Market Outperform 11/08/2023 -0.48% Morgan Stanley $60 → $62 Maintains Overweight 11/08/2023 -0.48% Roth MKM $61 → $62 Maintains Buy 11/08/2023 -0.48% JP Morgan $56 → $62 Maintains Overweight 11/08/2023 -6.9% Truist Securities $60 → $58 Maintains Buy 11/08/2023 2.73% Wells Fargo $59 → $64 Maintains

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Preview: Delta Air Lines’s Earnings

/ / Consumer Discretionary /

Delta Air Lines (NYSE:DAL) is set to give its latest quarterly earnings report on Friday, 2024-01-12. Here’s what investors need to know before the announcement. Analysts estimate that Delta Air Lines will report an earnings per share (EPS) of $1.16. Delta Air Lines bulls will hope to hear the company announce they’ve not only beaten that estimate, but also to provide positive guidance, or forecasted growth, for the next quarter. New investors should note that it is sometimes not an earnings beat or miss that most affects the price of a stock, but the guidance (or forecast).

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Tesla Notifies US Production Workers of Pay Increase

/ / Consumer Discretionary /

Tesla (TSLA) has notified production workers that it is raising pay across its US factories, Bloomberg reported Thursday, citing a flyer posted at the automaker’s facility in Fremont, California. According to the report, the flyer states that the company is making a “market adjustment pay increase” for all US production associates, material handlers and quality inspectors but it did not mention how much of a raise they will get. Tesla’s senior director of human resources didn’t respond to questions, Bloomberg said.

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Uber, DoorDash and Instacart Can Integrate More Deeply Into Local Commerce, Goldman Sachs Says. They’re Less Optimistic About Lyft.

/ / Consumer Discretionary /

By Bill Peters Lyft faces ‘a wide range of topline outcomes in the quarters ahead’ as it tries to stand out from Uber, analysts say The fortunes of gig-economy giants like Uber Technologies Inc., DoorDash Inc. and Instacart will increasingly depend on their ability to broaden what they deliver and to integrate more deeply into local economies, Goldman Sachs analysts said on Thursday. But they saw fewer benefits this year for one of the bigger industry players that hasn’t expanded into delivery, Lyft Inc. Analysts at Goldman downgraded shares of Lyft (LYFT) to a neutral rating from buy, saying the ride-hailing platform’s price cuts for rides and expectations for solid demand growth had already been priced in to Wall Street’s financial estimates this year. Shares of Lyft finished 0.3% lower on Thursday. The analysts also said they “continue to see execution risks” as Lyft contends with higher insurance costs to

Uber, DoorDash and Instacart Can Integrate More Deeply Into Local Commerce, Goldman Sachs Says. They’re Less Optimistic About Lyft. Read Post »

Starbucks Showing Signs of Demand Slowdown

/ / Consumer Discretionary /

Many investors seem to be bracing for Starbucks to miss Wall Street’s comparable sales estimates in fiscal 1Q amid indications of a slowdown in U.S. demand, Baird analysts say in a research note. The analysts are lowering their own estimates based on management’s fairly cautious commentary about consumer spending during a conference presentation in December, as well as its unusually aggressive approach to promotional activity during the high-volume holiday season. Those promos and signs of a step-up in personalized marketing suggest Starbucks may have been reacting to the more challenging spending backdrop, the analysts say.

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Home Depot (NYSE: HD) Stock Analyst Ratings

/ / Consumer Discretionary /

Home Depot (NYSE: HD) Stock Analyst Ratings Date Upside/Downside Analyst Firm Price Target Change Rating Change Previous / Current Rating 01/10/2024 8.73% Wedbush $330 → $380 Upgrades Neutral → Outperform 01/04/2024 6.44% Barclays $325 → $372 Upgrades Equal-Weight → Overweight 12/21/2023 10.73% Truist Securities $356 → $387 Maintains Buy 12/20/2023 1.58% Stifel $306 → $355 Maintains Hold 12/08/2023 1.86% Truist Securities $340 → $356 Maintains Buy 11/15/2023 -2.72% Guggenheim $360 → $340 Maintains Buy 11/15/2023 -14.45% RBC Capital $303 → $299 Maintains Sector Perform 11/15/2023 3.01% Oppenheimer → $360 Reiterates Outperform → Outperform 11/15/2023 -2.72% Truist Securities $341 → $340 Maintains Buy 11/15/2023 -4.15% Morgan Stanley $350 → $335 Maintains Overweight 11/15/2023 -7.01% Telsey Advisory Group → $325 Reiterates Market Perform → Market Perform 11/13/2023 -12.44% Stifel $350 → $306 Maintains Hold 11/07/2023 -13.3% RBC Capital → $303 Initiates Coverage On → Sector Perform 11/07/2023 -7.01% Telsey Advisory Group $330

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Home Depot Should Witness Demand Growth In 2024, Says Bullish Analyst

/ / Consumer Discretionary /

Home Depot Inc (NYSE:HD) recently announced the launch of new smart home devices at CES 2024. The headwinds faced by the company in 2023 seem to be “bottoming or reversing,” which should lead to an increase in demand this year, according to Wedbush. The Home Depot Analyst: Seth Basham upgraded the rating for Home Depot from Neutral to Outperform, while raising the price target from $330 to $380. The Home Depot Thesis: The company is a prime beneficiary of the expected rise in home improvement spending, which is likely to grow by at least low single digits by the second half of 2024, Basham said in the upgrade note. “We expect HD’s Pro business segment to outperform DIY in a rebounding industry environment with healthy Pro and general employment, solid wage growth and homeowner spending power from continued home price appreciation,” the analyst wrote. “Further, HD’s building Complex Pro initiative should help it

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Why This Lululemon Athletica Analyst Raises Forecast After Meeting With Management

/ / Consumer Discretionary /

Lululemon Athletica Inc (NASDAQ:LULU) has been in focus after grabbing the attention of U.S. shoppers during the holiday season. Although the company’s growth could slow, it remained “one of the most attractive growth stories among global brands,” given the potential to scale the International and Men’s segments with margin expansion, according to Raymond James. The Lululemon Athletica Analyst: Rick Patel maintained an Outperform rating for Lululemon Athletica while raising the price target from $495 to $520. The Lululemon Athletica Group Thesis: The meeting with the company revealed revenue growth guidance for the fourth quarter was raised from +13-15% to +14-15% to reflect better-than-expected demand, Patel said in the note. Lululemon Athletica expects its gross margins to expand by 120 to 130 basis points, versus its earlier projection of 90 to 120 basis points, due to better-than-expected sales growth, modestly higher-than-expected air freight benefit and lower-than-planned markdowns, the analyst stated. The company’s competitive promotions

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Lululemon’s Upgraded Guidance Drives Estimates Higher

/ / Consumer Discretionary /

Lululemon is benefiting from strong demand levels for its categories, even though outerwear was “good but not great,” Raymond James’ Rick Patel says after meeting with Lululemon’s VP of investor relations, Howard Tubin, at the annual ICR conference in Orlando, Florida. Lululemon raised its 4Q EPS and revenue guidance earlier this week. “While we expect growth to slow versus recent years, we still consider Lululemon one of the most attractive growth stories among global brands with an opportunity to scale International and men’s with high margins that can increase further,” Patel adds. Raymond James raises its 4Q revenue estimates to 15% growth, up from 14% previously, and upgrades its FY24 EPS estimates to $13.98 from $13.90. The firm also raises its target price to $520 from $495.

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Walmart Seen Keeping Higher-End Consumers In Less Inflationary Environment

/ / Consumer Discretionary /

Walmart is a favorable combination of visible growth drivers and should see accelerating growth in a better economic environment, DA Davidson analysts say in a research note. The retail giant’s brand perception evolution means it should maintain new customers after inflation pushed more higher-end consumers into the company’s ecosystem, and its holiday season seems to have played out as planned, the analysts add. Still, Walmart needs to get faster when it comes to online deliveries. “As this improves, Walmart will continue to take online market share,” the analysts say. Shares rise 1.3% to $161.37.

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CFRA Keeps Hold Opinion On Shares Of United Airlines Holdings, Inc.

/ / Consumer Discretionary /

CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows: Our 12-month target of $47, up $6, is 5.1x our 2024 EPS estimate (remains at $9.13; 2023 remains at $9.87), below UAL’s 2018-2019 historical forward average of 8.4x. We believe a discount is merited due to the recent events regarding the Boeing 737 Max-9 aircraft, as the Federal Aviation Administration (FAA) grounded 171 737 Max-9 planes due to increased quality control concerns that arose after a panel blew off an Alaska Air Group (ALK 37 ***) operated flight last Friday. The 737 Max-9 series aircraft currently accounts for roughly, by our estimation, 6% of UAL’s current fleet. In addition, UAL currently has almost 50% of its expected aircraft order book tied to the 737 Max series; however, we believe that the lion’s share of its 737 Max

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