Stock Market & Ratings Round Up: December 5th

STA Research

December 5th, 2023

In this article

Top Stock News

Market Adjustment: The real estate market in the Greater Toronto Area experienced a significant shift, with home prices dropping nearly 19% from the peak observed in 2022. This decline is attributed to higher borrowing costs, impacting the affordability of homes.
Sales Resilience: Despite the drop in prices, there was a silver lining as the level of home sales saw a modest increase for the first time in six months. This suggests some resilience in the market, even in the face of economic challenges.

Fossil Fuel Phase-Out: The COP28 climate conference is exploring the formal phase-out of fossil fuels as part of the final deal to combat global warming. A draft negotiating text indicates the consideration of this substantial measure by participating countries.

Ericsson’s Win: AT&T’s decision to choose Ericsson for building a telecom network using the cost-cutting technology ORAN led to a significant jump in Ericsson’s shares. This move is expected to cover 70% of AT&T’s wireless traffic in the United States by late 2026, impacting Nokia negatively.

GTA VI Launch: Rockstar Games unveiled the first trailer for “Grand Theft Auto VI,” announcing its launch in 2025. This decision disappointed investors anticipating an earlier release of the highly anticipated game.

Tech Lobbying Against EU Rules: Alphabet Inc, Amazon.com Inc, and Microsoft Corp, through the Japan Association of New Economy, are warning against proposed EU cybersecurity labeling rules. They argue that these rules could hinder their access to the EU market, particularly the requirement for non-EU cloud providers to set up a joint venture with an EU-based company.
Apple’s Resistance: Apple is lobbying against India’s plan to implement a European Union rule requiring smartphones to have a universal USB-C charging port. Apple warns that this could impact its local production targets, requesting an exemption or delay for existing iPhone models.

Barclays Share Sale: Qatar Holding, one of Barclays’ largest shareholders, is selling around £510 million of its stock. This move is seen as a reduction of its investment in the bank, coming as Barclays undergoes a shake-up to cut costs and revive its share price.
CVS Health’s Outlook: CVS Health Corp forecasts revenue above Wall Street estimates for 2024, driven by its expansion into health services and strength in its health insurance business. The company introduces an umbrella brand called CVS Healthspire to encompass its portfolio of health services.
Kinder Morgan’s Projections: Kinder Morgan Inc anticipates higher earnings in 2024, fueled by growth in its natural gas pipelines and energy transition ventures. The company expects to benefit from increased rates in refined products businesses and the demand for renewable diesel and renewable natural gas.
Dairy Industry’s Methane Emission Disclosure: Six major dairy companies, including General Mills and Kraft Heinz, will begin disclosing their methane emissions as part of a new global alliance launched at the United Nations climate summit.

Nio’s Asset Sale: Anhui Jianghuai Automobile (JAC) announces that Nio’s Anhui unit and a state-owned company of China’s Hefei government won a bid for assets worth a combined 4.58 billion yuan. This involves the sale of assets at two plants where Nio produces electric vehicles.
Rio Tinto’s Investment: Rio Tinto approves $77 million for the development of the Rhodes Ridge project in Western Australia, adding 40 million tonnes a year to its iron ore operations. The project’s pre-feasibility study is expected to be completed by the end of 2025.
Symbio’s Gigafactory Inauguration: Stellantis NV’s hydrogen mobility joint venture, Symbio, inaugurates Europe’s largest gigafactory for hydrogen fuel cells in France, known as SymphonHy. The site aims to produce 50,000 fuel cell systems per year by 2026.
Tesla Labor Dispute: Denmark’s 3F labor union announces support for Swedish mechanics in their strike against Tesla, refusing to unload or transport cars made by Tesla for customers in Sweden.

UBS Investigation: Credit Suisse reinstates an independent reviewer, Neil Barosky, to oversee an investigation into the servicing of Nazi clients and Nazi-linked accounts. This move follows allegations that Credit Suisse held potential Nazi-linked accounts.
Vale’s Production Forecast: Brazilian miner Vale SA expects to produce between 310 million and 320 million metric tons of iron ore in 2024, maintaining the output target for a second year in a row.

UK Retail Sales: British retail sales growth remains sluggish in November despite Black Friday deals. The ongoing cost-of-living squeeze prompts shoppers to rein in spending on non-essential items, according to the British Retail Consortium.

Deckers Outdoor Corp (DECK):
- Rating Change: Baird raises the target price from $650 to $750.
- Rationale: The increase reflects confidence in the impressive product pipeline of the company’s HOKA unit.
FedEx Corp (FDX):
- Rating Change: JPMorgan raises the target price from $315 to $322.
- Rationale: The adjustment is based on FedEx’s improving performance across its segments, despite concerns related to the industry and macroeconomic factors.
Gitlab Inc:
- Rating Change: Barclays raises the target price from $50 to $55.
- Rationale: The decision is supported by Gitlab’s solid third-quarter results and a positive outlook for fourth-quarter revenue.
Mondelez International Inc (MDLZ):
- Rating Change: Piper Sandler raises the target price from $73 to $80.
- Rationale: Headwinds from rising cocoa prices are offset by currency tailwinds, leading to an optimistic target price adjustment.
Uber Technologies Inc (UBER):
- Rating Change: Wedbush raises the target price from $57 to $67.
- Rationale: The increase follows Uber’s inclusion in the S&P 500 index, reflecting positive sentiment and expectations for the company’s future performance.