My Top 10 Things to Watch Friday, Jan. 17
1. President Joe Biden will not force TikTok to shut down its U.S. operations on Sunday, a day before President-elect Donald Trump is sworn in, NBC News and multiple other media outlets reported, citing sources. Trump has signaled support for keeping TikTok, and its CEO is expected to be at Trump’s inauguration. A ban would be good news for Club stock Meta Platforms.
2. Four winners in cybersecurity thanks to Biden’s last-minute executive order on the matter: Okta in Zscaler for identity protection, and Club names CrowdStrike and Palo Alto Networks for platforms with wide-ranging solutions. Cyber remains a top secular growth area.
3. Cowen upgraded Club stock Salesforce to buy from hold as analysts see a “compelling entry point” following the recent pullback in shares. Analysts like what they’re hearing about demand for AI agent tools Agentforce, which I’ve been upbeat on from the start in September.
4. Barclays cut its PT on Coca-Cola to $66 a share from $73, though analysts kept their buy-equivalent overweight rating on the stock. The firm took similar action on PepsiCo stock. Very important. I see a definitive slowdown in packaged goods and alcohol, thanks in large part to growing adoption of GLP-1 obesity drugs made by Novo Nordisk and Club name Eli Lilly.
5. Guggenheim reduced its price targets on Eli Lilly, going to $973 a share from $995, and Merck, going to $122 a share from $130. Analysts kept their buy ratings on both stocks. I would also buy both stocks. I am not worried about Lilly’s guidance cut earlier this week, though it’s not my favorite drug stock for 2025.
6. DuPont upgraded to a buy-equivalent outperform at Wolfe Research with a price target of $91 a share. With most focus on the impending spin-off, analysts see improving fundamentals for DuPont’s electronics and water businesses and argued the stock’s current valuation discount is “harsh.” I said yesterday to buy the dip in the Club name on its spin-off update.
7. Worries about Honeywell’s aerospace are overdone, Barclays said, as analysts upped their price target on the Club stock to $260 a share from $255. I am worried about earnings per share as Honeywell has not been able to report clean beats since Vimal Kapur took over as CEO in 2023. Honeywell is expected to announce a breakup of its own Feb. 6.
8. Citigroup lowered its price target on Levi Strauss to $19 a share from $21 and maintained its neutral rating on the stock. Analysts are worried about its quarterly numbers. I think the one to own in this space is Bracken Darrell’s VF Corp., the owner of Vans, The North Face, Timberland and more brands.
9. Mellody Hobson, the lead independent director of Starbucks, is stepping down from the coffee chain’s board after two decades. New CEO Brian Niccol is consolidating power as he tries turning around the Club holding. Shares haven’t done much following their initial surge on Niccol’s hiring.
10. Odd downgrade of Spotify at Wolfe Research, which went to a hold-equivalent rating from outperform. Analysts say the music streaming giant’s revenue forecasts “look full.” Don’t see a lot of downgrades of this stock because, like Netflix, it has a valuable subscription model. Shares have more than doubled over the past year.