Monday started out on Wall Street with a bang. Plenty of the biggest portfolio stocks made big moves off of key upgrades, multi-year plans, and meaningful sector news. FedEx Corporation had a share gain of more than a percentage point. This jump came on the heels of a favorable upgrade from Jefferies, which moved its rating from hold to buy. Shares of aerospace giant Boeing rose 2% in premarket trading. Melius Research subsequently raised its rating on the stock to a buy, citing “a sustained period of positive newsflow.” In stark contrast, 23andMe was in dire straits as it entered Chapter 11 bankruptcy with leadership shake-ups and disappointing performance.
The U.S. steel and aluminum industries continue to benefit from strong tariff protection under the current administration, a point highlighted by Andrew Jones. This protection, alongside the current cash and credit economic climate, builds production capacity at different sectors and private firms.
Jefferies' decision to upgrade FedEx was influenced by the firm's recognition of the company's ongoing cost-cutting efforts. Such attempts at enhancing operational efficiencies are projected to drive earnings growth in the face of doubters. Bank of America analyst Ronald Epstein had already expressed some concerns about the overall quality of FedEx’s recent earnings. Competitive losses came in as the second biggest issue according to Scott Mikus at Melius.
It was a tough day for James Hardie Industries, whose stock dropped 11%. Strategically the company still was well-served by announcing its planned acquisition of AZEK in a cash-and-stock transaction. This ruling set AZEK stock flying by 23%!
Anne Wojcicki's resignation as CEO and co-founder of 23andMe added to the company's tumultuous situation. The company’s recently-filed Chapter 11 bankruptcy will allow for its sale to go through. Melius Research believes that the underperformance means that this is a good buying opportunity for investors.
Tesla shares jumped as much as 4% on the week’s first trading day, signaling optimism for TSLA stock. As Edison Yu of Deutsche Bank called it, this was a buying opportunity for the beleaguered electric vehicle manufacturer.
"multiple paths for the company to create equity value by materially deleveraging its balance sheet through asset monetization." – Edison Yu
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