Mid-Morning Look: January 29, 2025

Auto PostDaily Market Report

Mid-Morning Look

Wednesday, January 29, 2025

Index

Up/Down

%

Last

DJ Industrials

57.99

0.13%

44,907

S&P 500

-12.33

0.20%

6,055

Nasdaq

-85.49

0.44%

19,646

Russell 2000

10.03

0.44%

2,298

 

 

U.S. stocks seeing a little bit of selling pressure early ahead of the FOMC policy meeting at 2:00 pm et (Powell press conference at 2:30 pm) where rates are widely expected to stay put after the Fed began its rate cutting cycle last September. While no major changes are expected, investors remain hopeful of a more “dovish” message from Powell after recent inflation data readings proved “cooler” than some had expected. Fed officials are widely anticipated to refrain from easing monetary policy further to gain more time to assess potential implications of various policies announced by President Trump since his return to the White House earlier this month. The other main catalyst remains in tech with earnings results from META, MSFT, IBM, TSLA after the close. Both healthcare and food industries will also be in focus this morning as Robert F. Kennedy Jr., President Trump’s nominee to head the US Department of Health and Human Services, will speak in front of the Senate Confirmation Committee Wednesday. The Bank of Canada cut its policy rate 25 bps to 3%, matching Street expectations while also cut its 2025 growth forecast to 1.8% from 2.1% in Oct (said forecasts do not consider potential effect of U.S. tariffs) and sees inflation to average 2.3% in 2025 (vs 2.2% in Oct), 2.1% in 2026 (vs 2.0%). It’s been a volatile weak thus far with a tech rout Monday sparked by concern over Chinese startup DeepSeek, though tech rebounded nicely on Tuesday including a bounce in semis and continued surge for software names.

 

 

Macro

Up/Down

Last

WTI Crude

-0.39

73.38

Brent

-0.04

77.45

Gold

6.30

2,773.80

EUR/USD

-0.002

1.0408

JPY/USD

-0.46

155.06

10-Year Note

-0.028

4.52%

 

Sector Movers Today

  • In the EMS Sector: SANM was upgraded from Underperform to Neutral at Bank America and raised tgt to $92 from $58 after recent earnings saying the communications end market (20% of rev in F24) is coming out of an inventory correction and F25 should see rev growth. FLEX shares rose on results and guidance as delivers record adjusted operating margin and EPS for Q3 while raises FY25 adj EPS view to $2.57-$2.65 from $2.39-$2.51 (est. $2.45) and boosts FY25 revenue view to $25.4B-$25.8B from $24.9B-$25.5B.
  • In Insurance: BHF was upgraded from Equal Weight to Overweight at Barclays and raised tgt to $85 from $52 noting on January 28th, the Financial Times released a piece stating Brighthouse was in the process of exploring a sale and were entertaining bids from prominent private capital managers. Barclays said they believe there remains ~45% more upside potential to current levels. PGR Q4 combined ratio reported 87.9%, vs. est. 89.9%, Q4 net premiums earned $19.14B above Bloomberg est. $18.75B and Q4 net premiums written $18.11B.
  • In Crypto: COIN was upgraded to Neutral from Underperform at Mizuho and raised tgt to $290 from $250 saying their analysis of bitcoin adoption growth points to further upside in bitcoin price over the medium-term. USDC market cap is on an upward trajectory, and stablecoin revenue is 20% of COIN’s mix. MSTR was initiated at Buy and $550 tgt at Compass Point saying it offers Bitcoin exposure to equity investors by steadily increasing its BTC holdings per share.
  • In Autos: auto supplier AXL said it will buy GKN Automotive owner Dowlais in a cash-and-stock deal, valuing the London-listed firm at about 1.16 billion pounds ($1.44 billion) – Shareholders of American Axle will own 51% of the combined company, with Dowlais shareholders controlling the rest. RIVN was initiated at Underperform and $6.10 tgt at Bernstein saying while sees the company succeeding in its plan to reach >500k units by 2030, this is not enough to create financial success for shareholders. MNRO shares dropped on earnings results.

 

Stock GAINERS

  • ASML +5%; after Q4 bookings of 7.09B euros ($7.39B), easily topping ests of 3.99B euros and up from 2.63B euros in Q4, saying a boom in AI drove demand for the company’s most advanced equipment.
  • EAT +15%; shares jumped on better results and guidance as Q2 adj EPS $2.80 easily topped the $1.80 estimate while revs rose 26% y/y to $1.36B, vs. est. $1.24B while raises FY25 revenue view to $5.15B-$5.25B, above prior view of $4.70B to $4.75B.
  • FFIV +9%; after Q1 beat, guided 2Q revenues ahead, and raised full-year guidance (sees FY revs +6-7% vs est. +4.69% and adj EPS +6.5-8.5% vs est. +6.73%) as new opportunities are opening up across hybrid/multi-cloud and GenAI, driven by more stable IT spending, robust software renewals.
  • FNA +8%; after ZBH said it would acquire medical device company Paragon 28 (FNA) for about $1.1 billion to expand its portfolio of orthopedic surgical devices. ZBH will make an upfront payment of $13.00 per share in cash, which represents an 8.3% premium to Paragon’s closing price on Tuesday
  • NXT +20%; reported fiscal Q3 earnings, with a beat on both revenue and EPS; full-year profitability guidance was raised, largely due to the raising of its structural gross margin target to the low 30s due to increased domestic content, as well as operational improvements (shares of ARRY, FSLR rise in sympathy).
  • SBUX +5%; results beat as Q1 EPS $0.69 vs est. $0.67 on revs $9.4B vs est. $9.305B, US comps -4%, N. Am. comps -4%, China comps -6%, Int’l comps -4%, total comps -4% vs est. -5.3%.
  • TMUS +8%; reported better Q4 revenue and profit expectations (similar to comps AT and VZ recently) as EPS of $2.57 topped ests of $2.29 while revs rose 6.8% y/y to $21.87B (vs. est. $21.33B); said it added 903,000 postpaid phone subscribers, above Wall Street ests of 858K.
  • VFC +5%; reported Q3 revenue and adj operating income ahead of the company’s forecasts and boosted its fiscal 2025 forecast for free cash flow to $440M from $425M.

 

Stock LAGGARDS

  • AXL -4%; after entering a deal to combine with Dowlais. AXL said it will buy GKN Automotive owner Dowlais in a cash-and-stock deal, valuing the London-listed firm at about 1.16 billion pounds ($1.44 billion) – Shareholders of American Axle will own 51% of the combined company, with Dowlais shareholders controlling the rest.
  • DDOG -4%; was downgraded to Hold from Buy at Stifel and lower tgt to $140 from $165 saying they envision revenue growth and margin headwinds over the course of FY25.
  • DHR -6%; after Q4 EPS $2.14 missed est. $2.16 while Q4 revs $6.54B above est. $6.49B; sees Q1 revenue down low-single digits and said sees FY25 revs up 3%.
  • LC -18%; shares tumbled after guiding Q1 loan originations between $1.8B-$1.9B (vs. Bloomberg est. $1.98B) and pre-provision net revenue of $60M-$70M and posted higher Q1 provisions of $63.2M, up 51% y/y.
  • MANH -23%; after reporting a mixed Q4, with complications from currency moves and project downsizing in Pro Services driving a $50M cut to the 2025 revenue outlook (guides FY revs $1.06-1.07B vs est. $1.136B and adj EPS $4.45-4.55 vs est. $4.91).
  • PKG -6%; shares slumped on earnings miss as Q4 adj EPS $2.47 vs est. $2.53 on sales $2.146B, vs est. $2.13B; guides Q1 EPS $2.21 vs est. $2.41.
  • TEVA -8%; reported Q4 revs $4.2B vs. est. $4.13B, guides 2025 free cash flow $1.6B to $1.9B, guides 2025 adj. EBITDA to $4.5B-$5B below est. $5.28B but rev mid-point $16.8B-$17.4B above est. $17B; guided 2025 EPS $2.35-$2.65 below ests $2.76.
  • VSCO -6%; after narrowing its adjusted EPS and operating income forecasts for Q4 and named retail executive Scott Sekella as its new CFO (midpoints of the new profit ranges are below consensus estimates).

_________________________________________________________________

Market commentary provided by Hammerstone Markets, Inc, a firm separate from and not affiliated with Regal Securities. Regal Securities has not participated in the creation of the content, and does not explicitly or implicitly endorse the content.

Live Trading

Open an Account

Paper Trading

Register