US futures edge up in countdown to jobs data

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• Fri, April 5, 2024 at 2:00 PM GMT+3

  Here is Wall Street’s new highest price target on Netflix

  The Netflix (NFLX) rally is just beginning, contends Pivotal Research analyst Jeffrey Wlodarczak.

  Wlodarczak hiked his price target on Netflix shares by $65 to a Street high $765 this morning, projecting about 24% upside from current levels. Shares are up 27% year to date.

  At the core of the revised price target are higher assumptions around subscriber growth and average revenue per user. Wlodarczk believes Netflix has “solid momentum” around each metric given its unrivaled content offering. Wlodarczk says:

  “In the end, our positive investment view remains unchanged, Netflix has won the streaming wars and their continued strong subscriber/average revenue per user and free cash flow generation should drive the shares higher. The key for Netflix going forward is to press their advantages and keep the flywheel going because the larger they get the more leverage they have over their peers, content creators, the better their product gets (allowing them to drive subscriber/average revenue per user growth) and the bigger the moat grows around their core business model.”

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  Fri, April 5, 2024 at 1:45 PM GMT+3

  PepsiCo comes into focus as a safe-haven

  One stock that hasn’t stunk up the joint in the past month is PepsiCo (PEP).

  Shares are up 2.6% over the last four weeks, out-performing the S&P 500’s 0.3% gain. Coca-Cola (KO) has dropped 0.9%.

  Jefferies analyst Kaumil Gajrawala appears to be doubling down on the stock’s move today, adding PepsiCo to the firm’s “Franchise Picks” list (removing Colgate).

  Gajrawala sees several catalysts for the stock: 1) an international business that is likely to surprise to the upside due to its scale — it represents about 40% of PepsiCo’s overall business; 2) a long runway in the snacking category; 3) the potential for above-average profit margins to be fueled by the beverage and snacks business, and lower costs.

  “There is a lot to like,” Gajrawala says.

  I caught up with PepsiCo’s chairman and CEO Ramon Laguarta at the World Economic Forum in late January. The below video gives you a good flavor on what his team is up to for this year.

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  Fri, April 5, 2024 at 1:30 PM GMT+3

  Big call on Uber out of Jefferies

  Jefferies sees Uber’s (UBER) stock riding only higher.

  Uber’s price target got bumped to $100 from $95 by its analyst John Colantuoni this morning, which assumes about 33% upside from current levels.

  The call looks logical to me, as it centers on Uber’s ability to gain new customers by offering new mobility product tiers. Colantuoni says:

  “Uber has dramatically expanded mobility offerings in recent years, increasing the portfolio from just two products in 2011 (UberX/Black) to ~20 currently. Addressing more use cases allows Uber to capture new users and drive increased frequency through multi-product adoption, which also expands the total addressable market by providing a substitute for more driving occasions.”

  The stat backing up Colantuoni’s call: Bookings from new mobility products hit $8.5 billion in 2023, up from $2.3 billion in 2021.

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  Fri, April 5, 2024 at 1:15 PM GMT+3

  Watch this one area in the jobs report, says Goldman Sachs

  The immigration impact.

  Goldman Sachs has been doing some good work of late around the economic impact of immigration on the US economy, and its team has continued that analysis ahead of today’s March jobs report.

  Chief economist Jan Hatzius estimates that non-farm payrolls rose by 240,000 in March — above consensus of 213,000 — in part due to a boost in the supply of immigrant workers.

  Here’s some of Hatzius’ thinking on the issue:

  “Elevated immigration boosted labor supply by roughly 80,000 per month last year, relative to normal, and we expect a continued tailwind averaging 50,000 per month this year. We expect an even larger boost for March in particular because of an influx of foreign-born jobseekers that had not found jobs as of February (241,000 newly unemployed workers since November).

  “Given the still-elevated level of job openings and the ramp-up of the spring hiring season, we assume many of these labor force entrants found jobs during the March survey period. On this basis, immigration could conceivably contribute anywhere from 50,000 to 290,000 to job gains in tomorrow’s report, relative to normal.”

  

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  Fri, April 5, 2024 at 1:00 PM GMT+3

  And we are watching Nvidia

  Eyes on market leader Nvidia (NVDA).

  The stock has dropped below its 20-day moving average amid the broader market sell-off. Naturally, any time an investor darling like Nvidia is lagging, it warrants concern. Many on the Street will say something akin to, “As goes Nvidia, as goes the market.”

  They wouldn’t be wrong.

  Good chart on this thread from EvercoreISI’s Julian Emanuel. He highlights how Nvidia’s stock under-performed last summer, and it weighed on the broader market. He hints the pattern may be starting again.