4th July 2024

Author

Nick Barber
July 04, 2024

šŸ’¬ ā€No users prefer itā€¦but big tech CEOs are addicted to stocks going up in a vertical line, because of AI.ā€ Sasha Yanshin on Googleā€™s AI integration.

Note: Weā€™ll be back on Monday due to the 4th July holiday.

ANALYST STOCK TIPS
Another firm tips Adobe.

Intuit, the financial software company behind QuickBooks, was given an Outperform rating by RBC Capital with a target price of $770. This represents a 16% upside over its current price of $660. RBC Capital believes the company has a strong future based on its "successful transition" to a subscription model, strong leadership position in the market, the potential benefits of its generative AI technology, and its potential to increase margins.

First Foundation dropped almost 33% this week as investors feared its commercial real estate exposure and the announcement that it had raised a $228 million investment. Despite this, DA Davidson has upgraded it to a Buy with a price target of $9, which is 80% above its current valuation. They see the injection of capital as a "clearing event" for the company that would allow it some flexibility to offer loans and reduce its concentration in certain areas.

However, not all are so positive. Stephens downgraded the company to Equal Weight and said their previous $10 price target was under review.

Adobe and Oracle were named Mizuho's top picks in technology. Jim Lebenthal of Cerity Partners concurred, stating that they are both stocks that will continue to do well in the AI boom:

"I like both of them. I find them reasonably attractive names that are good ways to play the AI space. Adobe has figured out a way to actually monetize AI, and I think it was held down for too long and is now marching higher as it should be on the back of recent earnings. Oracle is the same...attractively priced."

However, he did recommend waiting for a pullback before buying Oracle.

MGM is now covered by BTIG, with a Buy rating and a price target of $52, which is 21% above its current price. They believe it has a "favorable" fundamental story with profit upside driven by its Vegas and China properties. They also think most investors are underestimating MGM's growth opportunities, including their nascent digital gaming business.

Charter, the largest US cable operator by subscribers, was downgraded to Sell by Citi with a revised price target of $255 as the cable market becomes "tougher" compared to expectations for the company. This follows Goldman Sachs also downgrading Charter earlier this week.

PRESS STOCK TIPS
Barronā€™s backs Honeywell.

Honeywell has been given the thumbs up by Barronā€™s. The company has suffered from yearā€™s of underperformance. Over the past five years, its stock gained just 24%, underperforming the benchmark index by some 60 percentage points.

However, Associate Editor Al Root feels the industrial and consumer manufacturerā€™s ā€œhard times may be coming to an end.ā€

A combination of operational improvements, M&A, and a relatively cheap valuation has the industrial companyā€™s shares looking more attractive than they have in years.

30 SECOND NEWS
More Paramount drama.

  • šŸŽ„ Skydanceā€™s merger talks with Paramount are back on. The question is whether the sweetened offer can this time satisfy heiress Shari Redstone.

  • šŸš— Teslaā€™s share price just keeps on trucking, closing at $246.5 before the holiday.

  • šŸŒŽ AI has driven a 48% increase in emissions from Google. Many are asking if tech firms will need to turn to nuclear power to meet their green commitments, which could impact the share prices of energy providers.

  • šŸ‡¬šŸ‡§ The UK goes to the polls today and are certain to elect the centre-left Labour Party in a landslide victory.