17th July 2024

💬”The funny thing about Tom Lee is he makes absurd calls over and over again. Everybody dogs on him. Then, he’s right.” @Tony_Cheez

ANALYST STOCK TIPS
Russell 2000 Index tipped to grow 40%

Fundstrat’s Tom Lee reckons the Russell 2000 Index—a small-cap US stock index—could rally 40% amid a shift in Federal Reserve policy. He thinks there will be a rotation out of large-cap stocks, which could weigh on the S&P 500 and its potentially "overvalued" tech stocks. The index has gained 11.95% over the last month.

He added that he thinks the rotation will become evident in August.

Uber was given a $90 price target by Wolfe Research who expect to see continued strong demand for its core product.

Shopify is turning a corner by managing to balance growth and margins, according to Bank of America. They now rate it as a Buy with a price target of $82—an 18% upside over the current price. According to them, Shopify “is likely to continue to consolidate the vast small business market of 5.2 million businesses in the US alone." Shopify is set to report its second-quarter earnings on August 7th, but this date is subject to change.

Reddit was downgraded to Hold from Buy by Loop Capital. Even though they think Reddit might outperform revenue expectations, they think the firm has potentially reached a peak valuation when compared to its peers and that the risks inherent in the company do not outweigh the potential for upside.

Palantir was downgraded to Underperform by Mizuho, with a price target of $22 (it's currently at $28). Analyst Greg Moskowitz said, “But primarily, following the material 67% rise in the shares YTD, we find it increasingly difficult to justify PLTR’s high multiple (21x CY25E revenue) that, in our view, likely already discounts significant acceleration versus our consensus expectations for 20-21% revenue growth.”

PRESS STOCK TIPS
Barron’s thinks “it’s time to buy” ResMed.

When Eli Lilly announced that its experimental obesity drug, Zepbound, had been shown to reduce sleep apnea in trials, not everyone was cheering. ResMed, which makes most of its money selling equipment to treat sleep apnea, saw its stock fall 14% in a day. However, Barron’s thinks concerns have been overblown because "it takes years for obesity drugs to gain broad acceptance and widespread use." In addition, not everyone who has sleep apnea is overweight. With the company also expanding into software for out-of-hospital patients, they think investors may have reacted too quickly, and there could be an opportunity to buy the dip.

30 SECOND NEWS
Dow hits record highs.

• 📈 The Dow surged more than 700 points to a record high yesterday.

• 💻 Huawei has opened a new chip center in China, which most are seeing as a reaction to US sanctions.

• 🏦 Bank of America and Morgan Stanley both released expectation beating results helped by high interest rates.

• 🍊 Trump Media stocks dropped 9% on news of shareholder dilution as a result of new financing.