The Club on Friday is updating five price targets for stocks in the portfolio to reflect recent developments at the companies and broader macroeconomic trends. We’re also adding a new stock to the bullpen, while reiterating our support for Morgan Stanley amid the recent upheaval in the banking sector. Meta We’re increasing our price target on Meta Platforms (META) to $220 per share, from $195. This new target represents about 18-times 2024 earnings estimates. Over the last two months, analysts have steadily increased their earnings estimates on Meta, and the stock has appreciated alongside those revisions to above our previous target. Since Jan. 31, the day before Meta announced fourth-quarter results , the consensus earnings-per-share (EPS) estimate for 2023 has moved up about 24%, to $10, from $8.08 per share. For 2024, the consensus EPS estimate has risen 2%, to $12.39, from $10.14 a share. The driving forces behind those analyst revisions are the company’s emphasis on improving efficiency through a second round of layoffs , controlling its costs by reducing its 2023 expenses outlook and, most recently, signs of so-called green shoots at its advertising business for its family of applications. That’s a result of the continued monetization of its Reels short-form video offering on Facebook and Instagram, along with the easing of ad-targeting headwinds. The two fundamental ingredients that drive higher stock prices are earnings and the valuation multiple investors are willing to pay for those earnings. Generally, higher earnings are our preference of the two. Sometimes multiple expansion is just a great fool theory. In essence, you are buying a stock because you think someone else will pay more for it in the future. But when earnings are up, it’s because the value of the company is increasing. With estimates pushing higher, we think the rally in META still has more room to run, prompting us to raise our price target. Nvidia We’re increasing our price target on Nvidia (NVDA) to $300 per share, from $240. This new target puts Nvidia’s valuation at a pricey 67-times the consensus EPS estimate for next year. But the chipmaker is uniquely worthy of such a premium because it is the unrivaled leader in accelerated computing and artificial intelligence (AI), which is finally at an inflection point after having what CEO Jensen Huang called its “iPhone moment.” Nvidia has previously said generative AI — which includes applications like OpenAI’s ChatGPT — has a total addressable market of $600 billion split between hardware and software. Indeed, with the channel inventory correction in gaming largely behind Nvidia and new orders for its H100 graphics processing unit (GPU) accelerating to support generative AI, it’s likely that earnings estimates this year are too low. Energy We’re reducing our price targets on Coterra Energy (CTRA), Devon Energy (DVN), and Pioneer Natural Resources (PXD) to reflect the lower prices of both oil and natural gas. For all three names, we are lowering our price targets to the consensus price, according to FactSet. That means reducing Devon Energy to $68 per share from $82, Coterra Energy to $30 per share from $40, and Pioneer to $259 per share from $300. We’re also downgrading Devon to a 3 rating , meaning we’ll look to sell shares into strength — part of a broader move to consolidate our energy holdings and free up space in the portfolio. Our rationale behind keeping Pioneer is its higher dividend yield of 11.8%, compared with Devon’s 7.6% yield. With Coterra, we support its shift to focus on share repurchases over paying out a variable dividend. Favoring buybacks over dividends make more sense to us, with the stock down more than 30% from last year’s high. Bullpen The newest addition to our bullpen is Foot Locker (FL). The sneakers and athletic-wear retailer plays a large role in the $80 billion sneaker market, which has been growing at a mid-single digit clip thanks to three big tailwinds, according to the company. The first is mass casualization, whereby hybrid work and new norms of wearing sneakers with dress clothes have boosted sneaker sales. The second is traditional and new performance sneaker brands becoming fashion statements. And the third tailwind is the rise of sneakers as a vehicle of individual expression. In the 2021 Piper Sandler Spring Teen Survey, 25% of teens identified as a “sneakerhead” or a sneaker enthusiast that is likely to own multiple pairs. But the rising tide of sneakers hasn’t lifted all ships. Foot Locker has struggled over the past few years because it was mostly thought of as a reseller of Nike (NKE), which has shifted gears to double down on its own direct-to-consumer business. Foot Locker has also been a victim of the shift to shopping on ecommerce platforms, given its large presence in malls. Foot Locker needed a change. And in September, the company appointed retail industry veteran Mary Dillon, the former CEO of Ulta Beauty (ULTA), as its new CEO. On Monday, Dillon unveiled Foot Locker’s new “Lace Up” strategy, in conjunction with its fourth-quarter results and Investor Day event, while stopping by “Mad Money” to talk with Jim Cramer. Dillon is hitting the reset button in 2023 in order to put the business on a path towards sustainable growth. To do this, management plans to diversify its brand mix to offer more sneaker choices to become less beholden to Nike; optimize its store footprint by exiting 400 underperforming stores; launch new store concepts; and accelerate investments in technology and its loyalty program. But all these actions will come at a price, with management expecting 2023 earnings to be down 30%. We don’t want to make light of how big this haircut to earnings will be, but as Foot Locker’s growth initiatives and cost savings programs play out, it should quickly return to growth in 2024. And in the years after that, management’s financial targets look very robust. In 2024 through 2026, management expects annual sales growth of 5% to 6%, with comparable sales growth of 3% to 4%, and earnings before interest and taxes (EBIT) margins reaching 8.5% to 9% by the end of 2026. For comparison, EBIT margins are expected to be 5.7% in 2023. After including share buybacks every year, Foot Locker sees its adjusted EPS growing by a low-to-mid-twenties percentage rate annually from 2024 to 2026. For a stock that currently trades at about 11-times earnings, this isn’t growth at a reasonable price, it’s growth at a very cheap price. Of course, a price-to-earnings multiple that low implies some skepticism around Foot Locker’s ability to make good on its goals. Turnarounds are never easy and the company continues to face headwinds from Nike and its traditional mall presence. So it’s now up to Dillon to deliver. But if she can do for Foot Locker what she achieved at Ulta Beauty, Footlocker’s shares can go much higher. And in the interim, the company’s current 4% dividend yield represents a solid payment to hold us over. Morgan Stanley We continue to see great value in the Morgan Stanley (MS) franchise but haven’t added to our position because we already own so much and can’t meaningfully improve our cost basis while the stock is in the $80s-per-share range. We would like to see it go a little lower, with a dividend yield closer to 4%, as we await a resolution to the troubles at First Republic Bank (FRC). Despite the challenges facing regional and community banks, Morgan Stanley should still emerge as a net winner from the ongoing turmoil. Along with other big banks, Morgan Stanley committed $2.5 billion of uninsured deposits to First Republic Bank, in a likely sign that MS saw inflows since the collapse of Silicon Valley Bank two weeks sparked the current uncertainty. Furthermore, Morgan Stanley’s business model is driven by wealth-and-asset-management fees and is less reliant on collecting deposits and issuing loans. (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
An employee arranges a sneaker display at a Foot Locker Inc. store inside the South Park Mall in Strongsville, Ohio.
Luke Sharrett | Bloomberg | Getty Images
The Club on Friday is updating five price targets for stocks in the portfolio to reflect recent developments at the companies and broader macroeconomic trends. We’re also adding a new stock to the bullpen, while reiterating our support for Morgan Stanley amid the recent upheaval in the banking sector.
Wagons don’t get a lot of love Stateside, with American buyers choosing SUVs over – well, pretty much every other type of vehicle imaginable. That’s our loss, as the latest plug in hybrid versions of the Volkswagen Passat are here to prove.
The latest Passat Variant eHybrid (or, in some markets, Vario, which is what the Europeans like to call wagons) is different from the version we get in the US. Unlike the domestic version which is based on a low-cost platform specific to the US and China, the Euro-market version is built on the MQB platform that underpins VW’s flagship Arteon four-door coupe and both VW‘s and Audi’s entry-luxe SUVs.
That might seem weird, since VW has sold more than 34 million units sold worldwide and the Passat is the second top-selling Volkswagen of all time (behind the Golf and ahead of the Beetle). It’s understandable, then, that the European execs are pretty proud of their Passat.
The latest evolutionary stage of the modular transverse matrix (MQB evo)forms the highly innovative technical basis of the ninth Passat generation. Thanks to the significant economies of scale of the MQB evo, Volkswagen has again democratised numerous high-tech developments and made them available for hundreds of thousands of drivers. The two completely newly developed plug-in hybrid drives (eHybrid) are a perfect example of this. In combination with a new battery,they make all-electric ranges of around 100 km possible. This distance turns the new Passat Variant into an electric vehicle for everyday life – this is additionally ensured by short charging times as the battery can now be charged at AC charge points with 11 kW instead of the previous 3.6 kW. The Passat Variant eHybrid can even be charged with up to 50 kW at DC fast charging stations. In addition, the combination of electric drive motor and new economical turbocharged petrol engine provides overall ranges of around 1,000 km.
KAI GRÜNITZ Member of the Brand Board of Management, VW
In case the jealous American wago-philes reading this aren’t jealous enough, Volkswagen has announced new Passat eHybrid Match and Black Editions that add nearly £5k of options for the new model year effectively for free.
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“Match is better equipped than the outgoing Life, with additional features including metallic paint, VW’s IQ.Light LED matrix headlights, tinted rear windows and an ‘assistance pack’ which adds area view and emergency assist,” reports Alastair Crooks, from the UK car site AutoExpress. “The new Black Edition comes with metallic paint, 19-inch alloy wheels, a panoramic sunroof, tinted rear windows (darker than the Match’s), heated front and rear seats, a head-up display, a 15-inch central touchscreen and the same assistance pack as the Match.”
The entry-level Match replaces the previous Life trim, but costs the same £45,555 (about $60,500), while the Black Edition costs the same as the outgoing R-Line, from £48,900 (about $64,950). The order books open 14 August.
You can take a look at some of the VW press photos of the European Passat wagon Variant, below, then let us know if you’d rather have this for $60K or the discount American version in the comments.
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Wirtgen Vögele recently revealed the battery-powered MINI 500e and the MINI 502e electric pavers. With an electrically heated screed, a range of paving widths, and zero-emission operations, they’re paving a greener, cleaner path.
“These pavers excel on small-scale construction projects and jobs covering a small area – the type of work for which paving crews would not previously have been able to use machines,” reads the official Wirtgen Vögele copy. “Thanks to their elimination of manual labor, among other benefits, the new MINI pavers improve the efficiency and quality of asphalt paving, particularly in the construction of sidewalks and drains, as well as in tight downtown locations.”
The new Wirtgen MINI 502e (the one with wheels) and the MINI 500e (the one with crawler tracks) offer pave widths from 0.25 to 1.8 m, feature a battery-electric drive outputting 22.8 kW (30 hp), and your choice of either a 15 kWh or 22 kWh 48V li-ion battery – good enough battery capacity for up to 16 hours of continuing paving. Both versions can be fully charged on a conventional 110/120 “L1” power socket in about eight hours.
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Electrek’s Take
Wirtgen Vögele MINI 500e; via Wirtgen.
At the end of the day, it doesn’t matter what the federal EV incentives are or even what the guys on your crew want to operate. What matters is that construction noise upsets Mrs. Clancik’s terrier, and she will force the town council to keep the noise down all by herself.
If your construction company wants to bid on any municipal work, that means you’re gonna have to stay quiet. Maybe even keep the smells to a minimum, too. Buying electric equipment means you can do both.
If you’re considering going solar, it’s always a good idea to get quotes from a few installers. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. It has hundreds of pre-vetted solar installers competing for your business, ensuring you get high-quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use, and you won’t get sales calls until you select an installer and share your phone number with them.
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Car brands like Volvo, Mercedes-Benz, and Tesla have built up solid reputations for safety, but their ultra-safe vehicles often come with a premium price tag. The good news for car buyers looking for a deal, but still prize safety, is that there’s an all-electric Hyundai for under $40K that scores top marks on the IIHS’ toughest new safety tests.
Last Februray, the Insurance Institute for Highway Safety (IIHS) established new benchmark criteria that included stricter side-impact and moderate overlap crash safety standards, improved safety for back seat passengers, and a stronger emphasis on pedestrian detection in low light.
“We followed the tougher requirements we introduced last year with another major update to the award criteria,” explains IIHS President David Harkey. “(The 2024) winners are true standouts, offering the highest level of protection for both vehicle occupants and other vulnerable road users.”
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The Insurance Institute for Highway Safety is making it harder to earn its Top Safety Pick and Top Safety Pick+ awards from 2024, challenging manufacturers to offer better protection for back seat passengers and improve their pedestrian crash avoidance systems.
We’ve covered a few of the standout performers already over the past year-plus since the new safety standards were awarded, including the Rivian R1T (the only electric pickup to earn the coveted Top Safety Pick+ award), Audi Q6 e-tron, and the Tesla Model Y … but what we haven’t written about was the fact that the Hyundai IONIQ 6 was the only electric sedan to get a Top Safety Pick+, as well.
The good news is that it’s an excellent option. The 2024 version was named Car and Driver‘s 2023 EV of the Year, and led our own Scooter Doll to ask, “is any other automaker delivering more value in high-tech EVs right now?” and Nigel Evans over at CarBuzz to write, “Comparing the Ioniq 6 to its rivals is also an interesting exercise. For example, the Tesla Model 3 RWD now costs more than $40,000, with questionable interior design and layout and no Top Safety Pick+ from the IIHS. You can’t get the Chevrolet Bolt or Bolt EUV anymore in the budget EV sector, but they also lacked fast-charging capability.”
With up to 342 miles of range and a starting MSRP of $37,850 with all trims eligible for $7,500 in Retail Bonus Cash through Labor Day plus dealer discounts (if you can get them) bringing the price down even further, there’s a nonzero chance car buyers will be able to score a 2025 Hyundai IONIQ 6 for a sub-30K transaction price. Other featured deals include 0% interest financing for up to 48 months on any 2025 IONIQ 5 models in dealer inventory for well-qualified buyers, while lease buyers able to get a new SE model for $199/mo. with $3,999 down.
If you’re considering going solar, it’s always a good idea to get quotes from a few installers. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. It has hundreds of pre-vetted solar installers competing for your business, ensuring you get high-quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use, and you won’t get sales calls until you select an installer and share your phone number with them.
Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisors to help you every step of the way. Get started here.
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