My top 10 things to watch Thursday, April 27
1. Meta Platforms (META) is the star of the show, as CEO Mark Zuckerberg’s “year of efficiency” meets accelerating ad revenue growth in the first quarter. Price target increases galore. Meta AI cracked the code of engagement. That’s what mattered. Zuckerberg said more than 3 billion people use Meta apps every day; Facebook alone reached 200 million daily active users in the U.S. and Canada; Reels are being shared 2 billion times per day, double that of six months ago. Rosy forward guidance. The stock is up 14%.
2. The Dow Jones Industrial Average, the S&P 500 and the Nasdaq are open higher. Tech stocks, in particular, are taking their cue from Meta. GDP rose at a 1.1% rate in the first quarter, versus 2% expected. That’s slower than the 2.6% growth seen in the fourth quarter of 2022 and the 2.1% seen for all of last year. Perhaps this slowing pace signals the Federal Reserve’s interest rate hikes are taking hold and an end to the tightening cycle may be near.
4. Eli Lilly (LLY) has a standout first quarter and raises its guidance, while shares are pushing towards its all-time high. It delivered a nice beat on revenue but earnings-per-share (EPS) missed. Notably, it reported a big beat on diabetes drug Mounjaro. The pharmaceutical company’s data readout data from a trial using Mounjaro as an obesity treatment cements the case for approval from the U.S. Food and Drug Administration.
4. Honeywell (HON) reports first-quarter revenue of $8.86 billion, versus $8.52 billion expected; big EPS beat of $2.07 versus $1.93 expected. The aerospace unit was up 14% organically. The industrial also raises its full-year outlook for revenue and EPS.
5. Caterpillar (CAT) posts a monster EPS beat for the first quarter: $4.91 versus $3.78 expected. Revenue beat, too. Yet, the bears want to pressure this one. Operating margins are now expected at the top half of the range. Second-quarter sales expected to be higher than the first quarter, but profit should be lower due to seasonality. The first-quarter order backlog is roughly flat, compared with the fourth quarter of last year, amid investor concerns about the backlog peaking. But new infrastructure spending this year could change that.
6. Linde (LIN) beats on adjusted EPS: $3.42 versus $3.13 expected. The industrial gasses giant raises its full-year outlook for the 17th straight quarter, including EPS.
7. Pioneer Natural Resources (PXD) posted solid first-quarter results after the bell Wednesday, thanks to higher-than-expected energy production. Free cash flow, however, was a slight miss. It was also a bittersweet evening, as CEO Scott Sheffield said he will retire at the end of the year after more than two decades collectively at the helm.
8. ServiceNow (NOW) delivered a first-quarter earnings beat and revenue match. Subscriptions revenue growth climbed 27% year-on-year. And second-quarter on subscriptions was better than analysts had predicted.
9. Citi raises its price target on General Electric (GE) to $114 per share, from $109, while maintaining a buy rating. Momentum in the industrial giant’s aerospace end-markets should support “a relatively sustainable earnings growth runway,” according to Citi.
10. Barclays raises its price target on PepsiCo (PEP) to $206 per share, from $201, while reiterating an overweight weighting on shares — a grudging recognition of the soda maker’s potential upside.
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