Woodring is also downgrading shares of Dell rival HP, Inc. (NYSE: HPQ)to underweight, this time with a $24 price target.
“While HPQ remains a beneficiary of a stronger (and longer) than expected PC refresh,” says Woodring, “rising memory costs … puts incremental pressure on margins. As a result, despite our slightly stronger topline outlook, our FY26 gross/operating margins move 70-90bps lower and our EPS falls 9%, to $2.98.
The analyst values HP stock at 8x P/E, resulting in the $24 price target. HP stock is down nearly 4% in response.
Morgan Stanley analyst Erik Woodring double-downgraded Dell (NYSE: DELL) to underweight with a $110 price target this morning.
The analyst isn’t happy with Dell’s “AI server mix” and warns that “component cost inflation” is pressuring profit margins at Dell, with “rising memory costs” being of particular concern.
Dell stock is down nearly 7% on the news. On the plus side, the Voo’s loss has been cut to just 0.1%.
RBC Capital analyst David Paige initiated coverage on S&P 500 component company Axon Enterprise (NYSE: AXON) with a outperform rating and an $860 price target this morning.
“Revenue growth of 25%+ is expected to be sustained,” says Paige, “driven by cross-sell/up-sell opportunities within the US state and local public safety market, continued penetration into emerging customer verticals (Federal, Enterprise, and International), and expansion into new product categories with broad applicability beyond the public safety market.” The analyst forecasts rising profit margins as revenue continues to grow.
Axon stock isn’t responding as expected, however, down nearly 2% so far today.
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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) fell at the open Monday morning, down 0.4%, as investors brace for the federal government resuming issuance of (presumably bad) economic reports now that the government shutdown has ended.
On Thursday, the Bureau of Labor Statistics is due to report on September payrolls, releasing numbers that never came out in October because of the shutdown. On Friday, a report on “real earnings” is due out, numbers related to the monthly consumer price index that also never came out in October.
Before this government data issues, investors will get Q3 earnings from Nvidia (Nasdaq: NVDA | NVDA Price Prediction) on Wednesday. That news could be either good or bad, but given the selloff in AI stocks over the past couple weeks, it’s likely investors are leaning towards an expectation of bad news — or at least bad guidance.
For what it’s worth, analysts polled by Yahoo! Finance anticipate Nvidia will report a $1.25 per share profit on sales of $55 billion — 57% sales growth… but only 54% earnings growth, which if correct would imply a decline in profit margin.
Nvidia stock opened about 2% lower today.
As for earnings that come out today, the biggest news is actually on Chinese stocks.
Sohu (Nasdaq: SOHU) reported early this morning that its Q3 profit was $0.33 per share on sales of $180.2 million. The company guided investors to expect 3% to 12% year over year sales growth in its gaming division in Q4, and Sohu stock is up almost 9%.
Robotics and electric cars company XPeng Inc. (NYSE: XPEV) reported a loss for the quarter, RMB 0.16, but that was better than the RMB0.57 loss than analysts had predicted. Unfortunately for XPeng, the company’s revenue for the quarter came in at RMB 20.4 billion, and this was less than expected.
XPeng stock is down more than 7% in response.
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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