Morgan Stanley wealth management makes portfolio moves with Goldman, BlackRock
Shares of BlackRock and Goldman Sachs both saw big rallies on Wednesday after earnings beats, but Morgan Stanley’s wealth management is taking different approaches to the stocks going forward.
Senior investment strategist Daniel Skelly said in a note to clients Thursday that his team is adding Goldman Sachs to its US model portfolio, but reducing its exposure to BlackRock.
The optimism about Goldman is due to “increased confidence in accelerating capital markets and M&A activity,” while at BlackRock “risk/reward appears balanced, with any pick up in equity market volatility potentially limiting multiple expansion,” Skelly wrote.
Both stocks were up more than 1% on Thursday.
— Jesse Pound
Bank of America upgrades UPS to buy, sees a return in demand
Shares of UPS rose more than 1% Thursday after Bank of America updated the parcel delivery company to a buy rating.
The Wall Street firm hiked its rating on UPS to buy from neutral, saying demand is on the cusp of growth. BofA also maintained its $150 price target for the next 12 months, which represents a 18% upside from Wednesday’s close of $127.47.
“We see a potential end to the freight recession in 2025, as well as benefits from the company’s dynamic pricing model and cost initiatives,” BofA said in a note.
UPS had a dismal 2024 with shares down nearly 20% as demand weakened after the pandemic and inflationary pressures crimped some e-commerce purchasing.
— Yun Li
S&P 500, Nasdaq Composite inch higher Thursday
The S&P 500 and Nasdaq added 0.1% and 0.3%, respectively, on Thursday morning.
Meanwhile, the 30-stock Dow Jones Industrial Average flickered near the flatline.
— Hakyung Kim
Retail sales see slightly miss, jobless claims up more than expected
Consumers spent less than expected in December though they still kept up with inflation, according to a Census Bureau release Thursday.
Retail sales increased 0.4% on the month, down from the upwardly revised 0.8% growth in November and below the 0.5% Dow Jones consensus estimate. However, excluding auto-related items, sales rose 0.4%, in line with expectations. The numbers are adjusted for seasonality but not prices, which also increased 0.4% for the month, according to a Bureau of Labor Statistics report Wednesday.
Miscellaneous store retailers saw a 4.3% gain, while sporting goods, musical and book stores reported a 2.6% increase and gasoline station sales were up 1.5%. Building material and garden stores posted a 2% decline while bars and restaurants saw a 0.3% pullback.
In other news, the Labor Department said initial jobless claims for the week ending Jan. 11 totaled 217,000, an increase of 14,000 from the previous week and higher than the forecast for 210,000. Continuing claims, which run a week behind, declined slightly to 1.86 million.
—Jeff Cox
Philadelphia manufacturing activity soars to highest in nearly 4 years
Manufacturing activity for the Philadelphia area improved dramatically in January as new year started with surges in new orders and shipments.
The Philadelphia Federal Reserve’s manufacturing survey posted a reading of 44.3, representing the percentage difference between companies seeing growth against contraction for the month. That was up from -10.9 in December, representing the highest level since April 2021 and the biggest single-month gain since June 2020.
Internally, the survey showed 47-point gain in the new orders index, hitting its highest since November 2021, and a 39-point surge for shipments to its highest since October 2020.
Inflation gauges also rose, with the prices received component soaring by more than 24 points, while the hiring gauge was up more than 7 points.
—Jeff Cox
Stocks making the biggest moves premarket
Check out the companies making headlines in premarket trading.
- UnitedHealth Group – Shares dropped more than 3% after the company’s fourth-quarter revenue came in below Wall Street’s expectations. UnitedHealth posted $100.81 billion for the top line, while analysts surveyed by LSEG were expecting $101.76 billion. Earnings, however, beat the Street’s estimates.
- Morgan Stanley — The bank gained 1% after its fourth-quarter results surpassed Wall Street estimates, aided by a 29% gain in investment banking throughout the quarter. Morgan Stanley reported earnings per share of $2.22 on revenue of $16.22 billion, while analysts polled by LSEG forecast $1.70 per share and $15.03 billion.
- Target — The retailer traded along the flatline after the company raised its fourth-quarter sales guidance. Target expects comparable store sales to increase by 1.5% in the fourth quarter, while a previous forecast called for the figure to remain roughly flat.
Read the full list here.
— Brian Evans
Morgan Stanley initiates Philip Morris at overweight as smoke-free products gain traction
Philip Morris‘ smoke-free portfolio is beneficial for the stock, according to Morgan Stanley.
Analyst Eric Serotta initiated coverage of the tobacco giant at overweight. Serotta’s $140 price target reflects upside potential of 18.1% over Wednesday’s close.
“We see continued upside for PMI’s stock as its reduced-risk smoke-free portfolio drives stronger than expected [long-term] sales and earnings growth and becomes an even larger percentage of the mix, which should drive upward re-rating for the stock,” Serotta told clients.
Serotta also said to expect “substantial growth ahead” for the smoke-free portfolio, which has found success as offerings like Zyn have taken off. Morgan Stanley said these products accounted for about 38% of net revenue in 2024, but that share should rise to between 55% and 65% by the end of 2030.
Philip Morris shares were little changed in Thursday’s premarket, but have slid 1.5% in the new year. That marks a pullback after rallying nearly 28% in 2024.
— Alex Harring
Target raised fourth-quarter sales guidance
Target hiked its fourth-quarter sales forecast on Thursday thanks to a strong performance during the holiday period.
The retailer expects comparable store sales to have grown 1.5%, versus a previous outlook that pointed to flat sales. That said, Target didn’t hike its fourth-quarter earnings guidance.
Target shares were up more than 2% on the news.
— Melissa Repko
UnitedHealth shares slip on mixed quarterly figures
UnitedHealth reported mixed fourth-quarter results, sending shares down more than 4%.
The company earned an adjusted $6.81 per share, beating an LSEG estimate of $6.72 per share. Revenue, however, came in at $100.81 billion, just below the $101.76 billion consensus. Revenue from premiums totaled $76.48 billion, below a StreetAccount estimate of $78.18 billion.
— Fred Imbert
Baird says DexCom shares can rally almost 30% after 2024’s sell-off
Baird turned optimistic on DexCom, saying shares can rebound after getting battered last year.
Analyst Jeff Johnson upgraded the diabetes technology stock to outperform from neutral and hiked his price target by $18 to $104. Johnson now anticipates shares can jump 29.4% over Wednesday’s close.
“Since DXCM’s surprising 2Q-24 shortfall, we believe new sales reps have steadily made progress, setting the stage for a potential inflection in productivity moving throughout 2025,” Johnson wrote to clients in a Thursday note.
Johnson said visibility on potential catalysts for 2025 and 2026 have improved. The analyst said he’s comfortable expecting growth to return to the low-to-mid teens by mid 2025, which can in turn push up EBITDA valuation when looking over the next 12 months.
DexCom shares climbed 2.4% in Thursday premarket trading. The stock has added more than 3% so far in 2025, bouncing after last year’s plunge of more than 37%.
— Alex Harring
Europe stocks open higher
Stoxx 600 index.
JPMorgan Chase should see multiple expansion ahead, Tom Lee says
JPMorgan Chase could be primed for even more growth ahead, according to Fundstrat’s Tom Lee.
“JPMorgan is one of the best-executing banks,” the firm’s head of research said on CNBC’s “Closing Bell” on Wednesday. “The company spends a huge amount of money on technology, so I actually think JPMorgan should see its multiple expand.”
His remarks come after the company posted better-than-expected earnings and revenue for the fourth quarter. The stock rose about 2% during Wednesday’s session following those results.
On top of that, Lee believes there’s a multi-year period in store for banks in general where they’ll perform “very well.”
“This is a risk-on environment with animal spirits coming back and capital markets picking up, so it should be good for all banks,” he added.
— Sean Conlon
December retail sales data due out Thursday
The December retail sales report due out Thursday is expected to show a 0.5% increase, down from a 0.7% rise the previous month, according to a Dow Jones consensus estimate.
Excluding autos, it’s expected to have risen 0.4% last month, up from a 0.2% gain in the prior reading.
The data is set to release 8:30 a.m. ET.
— Sarah Min
Stock futures open little changed
U.S. stock futures opened little changed Wednesday night.
Dow Jones Industrial Average futures added 21 points, or 0.05%. S&P 500 futures rose 0.01%, while Nasdaq 100 futures dipped 0.04%.
— Sarah Min
