Club holdings Meta Platforms (META), Microsoft (MSFT) and Estee Lauder (EL) all made headlines Thursday surrounding solid quarterly earnings, regulatory challenges and analyst downgrades. The Club remains highly bullish on these two Big Tech names, while continuing to muddle through with our embattled China-exposed cosmetics-retail play. Here’s the latest developments at Meta, Microsoft and Estee Lauder — along with our take on the news. META YTD mountain Meta Platforms Inc. (META) year-to-date performance. The news: Meta surged more than 5% Thursday after releasing stellar quarterly results Wednesday evening, nearing levels the company’s stock hasn’t seen for 18 months. The Facebook and Instagram parent posted an earnings beat, along with robust guidance for the quarter. Elsewhere, the House Judiciary Committee scheduled a vote Thursday on whether to recommend holding CEO Mark Zuckerberg in contempt of Congress for not releasing certain internal documents to officials. The Club’s take: We think the tech giant has proven that it’s back on track after delivering on cost-cutting measures like layoffs throughout the past year, while seeking to further monetize its product offerings like Reels videos. “It’s just been a complete turnaround for the business,” Jeff Marks, the Club’s director of portfolio analysis, said Thursday. Additionally, we don’t expect the Judiciary Committee’s actions to impact Meta in the long-term. MSFT YTD mountain Microsoft (MSFT) year-to-date performance. The news: Microsoft is facing a European Union antitrust investigation around potential violations over how the software firm bundles its products. This marks the first formal probe by the EU of a software company in over 10 years. The Club’s take: This is yet another example of regulators trying to clamp down on Big Tech. While it’s too hard to say what this latest investigation will lead to, past situations like this have led to a slap on the wrist through a fine and not a broader breakup. We suspect this EU probe will be more of the same. In the meantime, shares of Microsoft are down for the second day in a row after a strong earnings beat was overshadowed by a softer revenue outlook . The Club thinks this weakness will ultimately prove to be a buying opportunity as Microsoft’s AI-related revenues ramp up in the second half of its fiscal year. EL YTD mountain Estee Lauder (EL) year-to-date performance. The news: Estee Lauder received yet another downgrade Thursday. Jefferies cut its rating to hold, from buy, while lowering its price target on the skincare-and-cosmetics firm to $190 a share, from $270. The firm cited a a slower recovery in the company’s China and travel-retail businesses. Shares of Estee Lauder closed down 2.6% Thursday, at roughly $173 apiece. This is Estee Lauder’s sixth downgrade from Wall Street over the past two months. The Club’s take: Estee Lauder is one of the Club’s worst-performing stocks, with shares down 31.48% year-to-date. By comparison, the broader consumer staples sector is up about 1.5%. To say the least, it’s been a major disappointment. Even though the recovery in China has stalled and travel retail in Asia will take multiple quarters to get past inventory issues, we have stuck by the company because these challenges are temporary and not indicative of a structural issue. The more downgrades that come between now and earnings, the more the bad news will get price in to the stock. (Jim Cramer’s Charitable Trust is long META, MSFT, EL. See here for a full list of the stocks.) 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.
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Club holdings Meta Platforms (META), Microsoft (MSFT) and Estee Lauder (EL) all made headlines Thursday surrounding solid quarterly earnings, regulatory challenges and analyst downgrades. The Club remains highly bullish on these two Big Tech names, while continuing to muddle through with our embattled China-exposed cosmetics-retail play.
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