18th July 2024

Author

Nick Barber
July 18, 2024

💬”That last half hour of trading in the semis was the worst i can recall, even worse than any day of shortfall. What a tsunami...” Jim Cramer on yesterday’s tech sell-off.

ANALYST STOCK TIPS
UnitedHealth upgraded, Rezolute tipped to have 180% upside.

UnitedHealth was upgraded to Buy by Jefferies with a $647 price target, a 13% increase over its current value. This follows UnitedHealth's earnings report on Tuesday which showed it had managed to beat earnings expectations despite pressures on their medical loss ratios (MLR). Jefferies thinks that although the short-term MLR outlook may remain unclear, they are "clear enough" in Q1 and Q2 to focus on a positive outlook for 2025. This includes strong Medicare Advantage (MA) growth with better margins. Additionally, Jefferies has a positive view on the company's strategic initiatives and market position. UnitedHealth continues to expand its operations and invest in new ventures, such as navigating and adapting to regulatory challenges, which are expected to enhance its market standing and profitability in the long term.

MaxLinear was upgraded to Buy by Craig-Hallum with a price target of $38, representing a 50% upside. Analyst Richard Shannon described this as "not a quarter call," indicating a longer-term play. The upgrade to Buy from Hold is based on a 2-3 year outlook, driven by product cycle and inventory cycle dynamics, and supported by management comments from the past year. While acknowledging SIMO-related risks, Shannon believes the longer-term potential outweighs these risks. *SIMO refers to Silicon Motion, which has been involved in a significant legal and financial dispute with MaxLinear related to a proposed merger.

Axon was given a Buy rating by Bank of America with a price target of $380, representing a 20% upside. The company, known for developing and manufacturing law enforcement technologies including body cameras, tasers, and digital evidence management systems, was called the "Apple of safety" by Bank of America for its mix of hardware and integrated software. The firm highlighted Axon's "commanding lead" in capturing increased spending on public security and the digitization of policing.

Rezolute was given a Buy rating by BTIG with a $13 price target, representing a substantial 180% upside. The firm noted an "attractive disconnect" between the company's three promising pharmaceutical trials and the current trading price of its shares.

Sweetgreen was given a Buy rating by UBS with a price target of $31, indicating a 23% upside. The firm, which operates 255 casual restaurants focusing on healthy, plant-based meals, is experiencing rapid growth. UBS predicts a 15% revenue growth over the next three years and EBITA margins greater than 6% by 2026.

Five Below, the US chain of discount stores, was downgraded by a total of 7 analysts after it changed it CEO and reduced its Q2 outlook.

PRESS STOCK TIPS
The Telegraph thinks Edinburgh Worldwide could rocket.

Edinburgh Worldwide, an investment trust managed by Baillie Gifford, has provided shareholders with a rollercoaster ride over the past five years. Despite this volatility, The Telegraph has reiterated a Buy rating.

Similar to its big sister (Scottish Mortgage), Edinburgh Worldwide invests globally in a mix of public and private companies that its managers believe have exceptional long-term growth prospects, even if they are not necessarily currently profitable…It is more skewed towards younger, smaller businesses valued at under $5bn at the point of first investment and has a pronounced technology theme.

The trust owns 95 stocks, but it has high conviction in 10 which make up 42% of its total value.

Its shares have recovered partly, rising 10% in the past month due to positive news from its core holdings; The Telegraph refers to Space X’s and Starlink’s performance specifically.

However The Telegraph does sound some notes of caution advising “investors should be wary of committing too much money to Baillie Gifford if they already hold Scottish Mortgage for example” and that upcoming interest rate cuts may “not return growth funds to their glory days when borrowing costs were virtually zero.”

30 SECOND NEWS
Trump’s comments spook the chip market.

  • 📉 The S&P and NASDAQ tanked as investors dropped AI stocks driven by potential tighter US chip export curbs to China and Trump's comments that Taiwan was taking business away from the US.

  • 🛒 Prime days sales topped $7 billion in the USA.

  • 🚗 Cathie Wood sees a tenfold jump in Tesla’s stock as investors are underestimating robotaxis.

  • 👕 Clothing brand Supreme is being sold to Ray-Ban maker EssilorLuxottica.