Top 10 things the Club is watching Wednesday, Feb. 15
1. Consumers are still spending. Retail sales for January came in higher than expected. Up 3% month over month versus an expected increase of 1.9%. Ex-autos sales were up 2.3% versus 0.9% expected.
Ex-autos and gas sales were up 2.6% versus 0.9% expected. All categories up from December 2022, only electronics and appliance stores fell year over year. Remember, retail sales are not adjusted for inflation, which of course remains elevated but growing at a slower rate in recent months.
2. The Dow, the S&P 500 and the Nasdaq are set to open lower as investors digest the implications of Wednesday’s stronger retail sales and Tuesday’s slightly hotter-than-expected consumer inflation data on the Fed’s thinking about interest rates and whether the economy is headed for a soft landing or a hard landing.
3. Airbnb (ABNB) delivers strong a fourth quarter. Earnings per share (EPS) of 48 cents versus 25 cents expected. Also, $1.9 billion in revenue versus $1.86 billion expected. Shares of the Club Bullpen name shot up nearly 9% early Wednesday. Q1 revenue guide was higher than expected. But warned of some softness in average daily rates. The home rental marketplace is still hiring. But since 2019, headcount down 5% while revenue has increased by 75%. Using cash to offset stock-based compensation. Lots of price target increases: Bank of America to $145 per share. Barclays to $128. JPMorgan to $135. Credit Suissse to $160.
4. Kraft Heinz (KHC) EPS beats: 85 cents versus 78 cents expected. Organic revenue increased 10.4% versus 9.2% expected. Prices up 15.2% while volumes/mix fell 4.8%.
5. Bausch + Lomb (BLCO) announces Brent Saunders will be named CEO and chair of the Board effective March 6, replacing Joe Papa at the top of the company. Great choice. The stock up more than 6% early Wednesday. BLCO is mostly owned by troubled Club holding Bausch Health Companies (BHC), which is also getting a boost. Saunders has extensive experience in health care and previously led B+L from 2010 to 2013. Deal-maker. He also was in charge of Allergan for many years and sold the business to AbbVie (ABBV) in what turned out to be a win-win deal for shareholders.
6. Goldman Sachs (GS) is ending plans to develop a Goldman-branded credit card for retail customers. However, Goldman remains in partnership with Apple (AAPL) on the Club holding’s Apple Card.
7. Berkshire Hathaway (BRK.a) filings: Apple position slightly up. Adds to Paramount Global (PARA). Trims Chevron (CVX), Activision Blizzard (ATIV), Taiwan Semi (TSM) and US Bancorp (USB). We don’t like to read too much into 13-F filings because they represent a single moment time in the past. Opinions and views could have changed.
8. Tesla (TSLA) agrees to open parts of its charging network to other electric vehicles by end of 2024.
9. Evercore steps to the sideline on Marriott (MAR), downgrading to in line from outperform (hold from buy) after the stock’s outperformance year to date and since the analyst assumed coverage last July.
10. Citi downgrades Upstart (UPST) to sell; price target lowered to $11 per share from $7.
(Jim Cramer’s Charitable Trust is long BHC. See here for a full list of the stocks.)
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.