Korea, India, Vietnam stand out as Asia's top growth plays
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CNBC
38 minutes ago
- CNBC
Friday's stock market rotation gives a further boost to an out-of-favor sector
Every weekday the CNBC Investing Club with Jim Cramer holds a "Morning Meeting" livestream at 10:20 a.m. ET. Here's a recap of Friday's key moments. 1. The S & P 500 was under mild pressure Friday but headed for another strong week, with a gain of more than 1%. Health-care stocks continued to bounce back at the expense of momentum names such as Palantir and Club name GE Vernova . The Dow was performing better than the broader market, receiving a boost from UnitedHealth's best day in five years after Warren Buffett's Berkshire Hathaway revealed, in quarterly securities filings, a significant stake in the troubled insurer. "Big Short" investor Michael Burry and Appaloosa Management's David Tepper also disclosed sizable stakes in the embattled health insurer. 2. Consumers were feeling worse about the economy and future inflation in the early weeks of August, according to the University of Michigan's latest sentiment data. Consumers have taken the worst-case scenario about tariffs off the table, the survey director said. "However, consumers continue to expect both inflation and unemployment to deteriorate in the future." The government released July retail sales before Friday's open, and the headline and ex-auto numbers matched expectations. 3. HSBC analysts downgraded their rating on Club name Cisco Systems to a hold from buy, with a $69 per share price target, following this week's earnings release. They think that a restocking benefit lifting the company's networking segment is almost over. HSBC also pointed out that Cisco's security business came in below expectations. We were also critical of that in our earnings analysis on Wednesday evening and during Thursday's monthly meeting . But the key, in our view on Cisco, is that the AI infrastructure business is getting traction. (Jim Cramer's Charitable Trust is long CSCO. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Yahoo
39 minutes ago
- Yahoo
HSBC lowers Cisco to Hold on valuation, slowing business momentum
-- HSBC on Friday downgraded Cisco Systems Inc (NASDAQ:CSCO) to Hold from Buy on elevated valuation and slowing business momentum, and cut its price target to $69 from $73. The bank also lowered its adjusted earnings per share (EPS) estimates for fiscal years 2026 (FY26) to 2028 by around 7% to 14% to reflect a weaker-than-expected outlook. Cisco's fourth-quarter fiscal 2025 results and fiscal 2026 guidance were in line with consensus but came in below HSBC's estimates. Revenue rose 7.6% year-on-year to $14.67 billion, matching both HSBC and consensus expectations. Non-GAAP operating margin was 34.3%, up 1.73 percentage points from a year earlier, but below HSBC's forecast of 35.3% and in line with consensus. Non-GAAP EPS increased 13.8% to $0.99, also in line with estimates. The company's networking segment showed improvement, with revenue growth accelerating from a 23.5% decline in the first quarter to a 12.2% increase in the fourth. However, HSBC analysts note that Cisco's fiscal 2026 revenue guidance of 5% growth, combined with slowing growth in remaining performance obligations and backlog, suggests 'the restocking effect may be coming to an end sooner we had expected.' Although Cisco reported over $2 billion in AI infrastructure orders in fiscal 2025, the strength 'seems to be getting offset by weakness elsewhere.' In security, revenue grew 9.2% in the quarter and orders rose in the mid-single digits, with double-digit growth excluding the U.S. federal market. Still, HSBC cut its long-term revenue CAGR estimate for the segment to 8% from around 10%, saying overall growth is 'disappointing' despite good cross-selling traction from the Splunk acquisition. Cisco shares have risen 42% since August 2024, outperforming the Nasdaq by 19 percentage points, and 'appear fairly valued," analysts said. The stock trades at 17.2 times estimated 2026 adjusted earnings, in line with other slow-growth companies under the bank's coverage. The new price target is based on a 17.5 times multiple applied to HSBC's next 12-month non-GAAP EPS estimate of $3.93, down from $4.16. The target implies a 2% downside. Related articles HSBC lowers Cisco to Hold on valuation, slowing business momentum Mizuho predicts this is the next $1 trillion stock Morgan Stanley turns more bullish on Apple, sees iPhone build boost Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
2 hours ago
- Yahoo
HSBC lowers Cisco to Hold on valuation, slowing business momentum
-- HSBC on Friday downgraded Cisco Systems Inc (NASDAQ:CSCO) to Hold from Buy on elevated valuation and slowing business momentum, and cut its price target to $69 from $73. The bank also lowered its adjusted earnings per share (EPS) estimates for fiscal years 2026 (FY26) to 2028 by around 7% to 14% to reflect a weaker-than-expected outlook. Cisco's fourth-quarter fiscal 2025 results and fiscal 2026 guidance were in line with consensus but came in below HSBC's estimates. Revenue rose 7.6% year-on-year to $14.67 billion, matching both HSBC and consensus expectations. Non-GAAP operating margin was 34.3%, up 1.73 percentage points from a year earlier, but below HSBC's forecast of 35.3% and in line with consensus. Non-GAAP EPS increased 13.8% to $0.99, also in line with estimates. The company's networking segment showed improvement, with revenue growth accelerating from a 23.5% decline in the first quarter to a 12.2% increase in the fourth. However, HSBC analysts note that Cisco's fiscal 2026 revenue guidance of 5% growth, combined with slowing growth in remaining performance obligations and backlog, suggests 'the restocking effect may be coming to an end sooner we had expected.' Although Cisco reported over $2 billion in AI infrastructure orders in fiscal 2025, the strength 'seems to be getting offset by weakness elsewhere.' In security, revenue grew 9.2% in the quarter and orders rose in the mid-single digits, with double-digit growth excluding the U.S. federal market. Still, HSBC cut its long-term revenue CAGR estimate for the segment to 8% from around 10%, saying overall growth is 'disappointing' despite good cross-selling traction from the Splunk acquisition. Cisco shares have risen 42% since August 2024, outperforming the Nasdaq by 19 percentage points, and 'appear fairly valued," analysts said. The stock trades at 17.2 times estimated 2026 adjusted earnings, in line with other slow-growth companies under the bank's coverage. The new price target is based on a 17.5 times multiple applied to HSBC's next 12-month non-GAAP EPS estimate of $3.93, down from $4.16. The target implies a 2% downside. Related articles HSBC lowers Cisco to Hold on valuation, slowing business momentum After soaring 149%, this stock is back in our AI's favor - & already +25% in July Tesla: Hype Aside, How Much Is the EV Giant Really Worth Now? Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
