Erste’s Engel appears to be very busy today, and not just in semiconductors. The analyst also posted a less congratulatory note on Visa (NYSE: V), downgrading the credit card company to hold.
High barriers to entry help Visa earn high margins and promise long-term profit growth. “In developed markets such as the USA or Europe, however” says the analyst, “the market for credit and debit cards is largely saturated. This limits the opportunities for organic growth. [And Visa] is also facing competition from new fintech companies.”
Shares of Visa closed at $341.61 yesterday.
Erste’s Engel also upgraded ASML Inc. (Nasdaq: ASML) stock today, and actually upgraded this one to buy.
ASML “has a monopoly position in state-of-the-art lithography systems,” says Engel. It’s also diversifying its revenue streams by investing in French AI start-up Mistral, and likely to benefit from increased chip production at Intel as the latter benefits from the cash infusion from Nvidia.
ASML stock is up 2.4%.
Erste Group analyst Hans Engel removed his sell rating from Intel (Nasdaq: INTC) stock, upgrading to hold this morning.
“Intel has achieved success with its own manufacturing technology, which has enabled it to increase production speed,” argues Engel. Furthermore, “NVIDIA (Nasdaq: NVDA) and Broadcom (Nasdaq: AVGO) are already testing this production platform. NVIDIA recently announced a USD 5 billion investment in Intel and a collaboration to jointly develop data center and PC products.”
Intel stock is up 1.7%, but the Voo is still down 0.2%.
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This article will be updated throughout the day, so check back often for more daily updates.
The Vanguard S&P 500 ETF (NYSEMKT: VOO) gained 1.2% last week, but is looking like it might take a breather Monday, down 0.3% premarket.
Last week, a Federal Reserve decision to lower its target interest rate by 0.25%, and its expressed willingness to cut twice more in October and December this year, helped boost the index of America’s 500 largest listed companies. But this week, worries that Democratic opposition to proposed continuing resolutions in Congress will force a government shutdown have investors on edge.
The government must pass the temporary funding measure by September 30 to avoid a shutdown, opening up the possibility nerves will remain on edge throughout the trading week and into next weekend.
No companies of any real size reported earnings today. That’s not unusual for a Monday. For whatever reason, companies mostly prefer to report earnings midweek. Tomorrow for example, space investors will be on the lookout for the first earnings report from new IPO Firefly Aerospace (Nasdaq: FLY | FLY Price Prediction), as well as from satellite company Spire Global (NYSE: SPIR).
On Wednesday, we’ll start hearing from larger companies, with Cintas Corporation (Nasdaq: CTAS) and KB Home (NYSE: KBH).
Thursday will be the busiest day for earnings reports this week, with Costco (Nasdaq: COST), CarMax (NYSE: KMX), and Accenture (NYSE: ACN) reporting.
Of the above, only Cintas and Costco are S&P 500 components.
Contact [email protected] for any questions or corrections.
Joel South covers large-cap stocks, dividend investing, and major market trends, with a focus on earnings analysis, valuation, and turning complex data into actionable insights for investors.
He brings more than 15 years of experience as an investor and financial journalist, including 12 years at The Motley Fool, where he served as an investment analyst, Bureau Chief, and later led the Fool.com investing news desk. He has also co-hosted an investing podcast and appeared across TV and radio discussing market trends.
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