Chicago, IL – March 18, 2024 – Today, Zacks Investment Ideas feature highlights Micron MU, Lululemon LULU and Nike NKE.
2 Nasdaq 100 Stocks to Buy Before Earnings – and Hold Forever
Today’s episode of Full Court Finance at Zacks dives into key stock market levels to watch for as Wall Street bulls attempt to keep the Nasdaq and Bitcoin near record highs. The episode then breaks down why investors might want to buy two Nasdaq-100 stocks— Micron and Lululemon — ahead of their upcoming earnings reports.
The stock market took a breather on Wednesday and Thursday following its post-CPI release pop.The bulls have pushed stocks higher in 2024 without sending the market to euphoric altitudes. The nearby chart showcases the regular pullbacks to the 21-day throughout the year.
The Nasdaq is trading near fresh highs while sitting at neutral RSI levels. Bitcoin’s surge to new records has also likely helped stop the Nasdaq from overheating. Plus, there are tons of market movers such as Tesla and Apple trading at highly enticing levels for long-term investors.
Micron Technology, Inc. – Q2 FY24 Results Due on March 20
Micron shares have climbed about 70% in the last year vs. the Zacks Tech sector’s 50%. MU has tracked the Tech sector over the last decade, up 290%. Yet MU trades 9% below its average Zacks price target and 10% below its recent highs.
The stock is approaching its 21-day moving average after sellers prevented Micron from breaking too far above its previous records. Micron stock had also hit overbought levels.
Micron is the giant of memory chips, which have been more historically cyclical than the broader semiconductor market and heavily impacted by pricing.
Thankfully, Micron’s outlook is impressive as the memory chip maker benefits from data center expansion and booming AI growth. Micron predicts that AI will drive record demand for memory chips.
Micron is projected to post 45% revenue growth in FY24 and FY25 to soar from $15.54 billion last year to $32.94 billion. The company’s adjusted earnings growth outlook is even stronger and its most accurate/recent EPS estimates came in miles above its already improved consensus.
Micron’s upbeat EPS revisions help it land a Zacks Rank #2 (Buy). Micron’s balance sheet is sturdy and 23 of the 27 brokerage recommendations Zacks has are “Strong Buys.” If Micron impresses on March 20, the stock could finally enter a new trading range.
Lululemon – Q4 FY23 Results Due on Mach 21
Lululemon stock has soared 60% in the last 12 months vs. Nike’s -15% drop, its Zacks sector’s 17% climb, and the Market’s 32% jump. Lululemon has skyrocketed nearly 900% in the last decade vs. the benchmark’s 180% and Nike’s 167%. LULU, like Micron, sits at an attractive range for long-term investors.
LULU trades 10% below its average Zacks price target and it recently rebounded above its 50-day after buyers came in at its long-term 21-week moving average. Plus, Lululemon trades at a roughly 50% discount to its 10-year highs at 31.9X forward earnings and in line with its 10-year median.
Lululemon’s transformation into a well-rounded sportswear and apparel company pushed Nike, Target, and countless upstarts to mimic the athleisure giant’s style. Lululemon’s high-margin growth is highly impressive as higher-income shoppers power it through various economic conditions. Lululemon executives project it will double its net revenue between 2021 and 2026, driven by direct-to-consumer, menswear, and international expansion.
LULU is projected to post 18% revenue growth in FY23 and 14% higher sales in FY24, following 26% average expansion in the trailing five years. LULU is projected to expand its bottom line by 24% in FY23 and 15% in FY24. Lululemon, which grabs a Zacks Rank #3 (Hold), is buying back stock, supported by its robust balance sheet.
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NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.
Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.
“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”
Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.
Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.
Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.
Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.
In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.
The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.
And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
