OP Wire 8/27 (OP – Lite)

Apple Leadership Change and Market Updates

Apple (NASDAQ) is undergoing a significant leadership change, with CFO Luca Maestri set to step down at the beginning of 2025. Maestri, who has been with Apple since 2013 and played a key role in doubling the company’s revenue, will be succeeded by Kevan Parekh, the current Vice President of Financial Planning and Analysis. Parekh will join the executive team as the new CFO. Despite stepping down, Maestri will continue to oversee Corporate Services and report directly to CEO Tim Cook.

During Maestri’s tenure, Apple experienced substantial growth, more than doubling its annual sales and net income while expanding its gross margins. Apple’s stock has soared over 800% since Maestri took the helm as CFO. However, the stock fell around 1% in after-hours trading following the announcement of his departure. Additionally, Apple announced its next major launch event for September 9, where it is expected to unveil new iPhones and updates to other devices and apps, aiming to combat slowing global sales, particularly in the Chinese market.

Meanwhile, U.S. stock markets have had a volatile month, but investor sentiment improved following Federal Reserve Chair Jerome Powell’s indication of potential interest rate cuts. The Dow Jones Industrial Average reached a new record high, and the S&P 500 and Nasdaq Composite have both seen substantial gains so far this year. However, upcoming earnings from Nvidia and Nordstrom could significantly influence market sentiment heading into a typically volatile period.

Bronfman Exits Paramount Race

Skydance Media is now the leading contender to take control of Paramount Global (NASDAQ) after Edgar Bronfman Jr. withdrew his $6 billion bid. Bronfman, along with his consortium, sought to buy National Amusements’ controlling stake in Paramount but failed to secure the necessary financing as some partners exited late in the process. This withdrawal clears the path for an $8.4 billion agreement between Skydance and Paramount, which will see Skydance, RedBird Capital, and KKR investing over $8 billion into the company and acquiring Shari Redstone’s minority stake through National Amusements.

Signs of Life in the Chinese Economy

China’s economy showed some signs of recovery in July, with industrial profits rising 4.1% year-over-year, up from a 3.6% increase in June, according to the National Bureau of Statistics. However, domestic consumption remains weak, reflected in disappointing Q2 earnings from major retailers such as JD.com (NASDAQ) and Alibaba (NYSE), and a significant loss for PDD Holdings (NASDAQ), whose shares dropped over 28% on Monday.

Crude Oil Prices Pause After Rally

After a sharp rebound over the past three days, crude oil prices steadied on Tuesday. U.S. crude futures (WTI) fell 0.3% to $77.19 a barrel, and Brent crude dipped 0.2% to $80.17 a barrel by early morning ET. The recent rally was driven by expectations of U.S. interest rate cuts, potential production disruptions in Libya, and concerns over escalating conflicts in the Middle East. Analysts at ING note that disruptions in Libya, which produces between 1.1-1.2 million barrels per day, could lead to a significant market deficit if prolonged.

Trading Insights and Upgrades/Downgrades

Many new traders have yet to follow the instructions in the welcome email. This is crucial, as missing out on these instructions could mean missing significant opportunities. If you haven’t read or followed the welcome email, email us today to get another one sent to you. Stay tuned to OptionsPlayers.com for the latest updates on market movements and expert analysis on trading opportunities. See OP Chat for today’s upgrades and downgrades plus any chat plays—yesterday’s play paid huge (SPX puts).

Upgrades and Downgrades

  • Deutsche Bank maintains Aon at Hold and raises the price target from $311 to $353.
  • Truist Securities maintains Five Below (FIVE) at Hold and maintains a price target of $89.
  • Morgan Stanley maintains Deere at Overweight and lowers the price target from $450 to $425.
  • Truist Securities maintains Dollar General (DG) at Hold and lowers the price target from $135 to $130.
  • Oppenheimer maintains Enovix (ENVX) at Outperform and maintains a price target of $36.
  • UBS maintains Dick’s Sporting Goods at Neutral and raises the price target from $220 to $225.
  • BMO Capital maintains BILL Holdings at Market Perform and lowers the price target from $75 to $57.
  • Goldman Sachs maintains Canadian Solar (CSIQ) at Neutral and raises the price target from $5 to $6.
  • Benchmark maintains GoDaddy (GDDY) at Buy and raises the price target from $170 to $186.
  • Evercore ISI Group maintains Mobileye Global at Outperform and maintains a price target of $35.
  • Evercore ISI Group maintains Salesforce at Outperform and maintains a price target of $300.
  • Evercore ISI Group reiterates Birkenstock Holding (BIRK) at Outperform and raises the price target from $63 to $77.
  • Loop Capital maintains Trade Desk at Buy and raises the price target from $109 to $120.
  • Mizuho maintains Beyond Meat (BYND) at Underperform and lowers the price target from $6 to $5.
  • KeyBanc reiterates Autodesk at Overweight and maintains a price target of $305.
  • Wells Fargo maintains Toll Brothers (TOL) at Overweight and raises the price target from $160 to $163.
  • Wells Fargo maintains D.R. Horton at Overweight and raises the price target from $210 to $220.
  • Morgan Stanley maintains Zscaler (ZS) at Equal-Weight and raises the price target from $202 to $215.
  • TD Cowen maintains Revolve at Buy and raises the price target from $25 to $28.
  • Morgan Stanley maintains Constellation Brands (STZ) at Overweight and lowers the price target from $305 to $280.
  • Morgan Stanley maintains Lululemon Athletica at Overweight and lowers the price target from $404 to $329.
  • Argus Research upgrades Xcel Energy (XEL) from Hold to Buy and announces a price target of $68.
  • JP Morgan upgrades BJ’s Wholesale Club from Underweight to Neutral and raises the price target from $76 to $78.
  • Baird maintains Peloton Interactive (PTON) at Neutral and raises the price target from $4 to $4.75.
  • Baird maintains Foot Locker at Neutral and raises the price target from $26 to $35.
  • Loop Capital maintains Baidu (BIDU) at Buy and lowers the price target from $120 to $115.
  • Baird maintains Planet Fitness at Outperform and maintains a price target of $92.
  • Needham maintains SentinelOne at Buy and raises the price target from $25 to $29.
  • Wolfe Research upgrades Kymera Therapeutics from Peer Perform to Outperform and announces a price target of $65.

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