Volvo Car to Take $1.2 Billion Hit From Tariffs, EV Launch Delays
The Swedish carmaker, which is majority-owned by China's Zhejiang Geely Holding Group, has been grappling with tariff uncertainty, muted electric-vehicle demand and intensifying competition in China. It recently said it would cut around 3,000 jobs as part of a wider plan to slash costs and become more efficient amid the challenging global auto market.
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Yahoo
24 minutes ago
- Yahoo
Nvidia Stock Is at a Peak - What's the Best Play Here for NVDA?
Three weeks ago, we recommended Nvidia Inc. (NVDA) stock in a June 22 Barchart article and shorting out-of-the-money puts. Now, NVDA is near its target prices, and the short play is successful. What is the best play here? NVDA is at $171.30, up over 4.5% today. Trump OK'd an export license to sell its powerful H20 AI chips to China after Nvidia's CEO, Jensen Huang, met with President Trump. The Wall Street Journal said this has been a top seller for Nvidia in China and was specially designed for the Chinese market. How to Buy Tesla for a 13% Discount, or Achieve a 26% Annual Return Alibaba Stock is Well Off Its Highs - What is the Best Way to Play BABA? Generate Income on MSTR Without Owning The Stock (Yet) Tired of missing midday reversals? The FREE Barchart Brief newsletter keeps you in the know. Sign up now! My prior price target was $178 per share using an estimated 55% forward free cash flow (FCF) margin (i.e., FCF/sales), as well as a 2.85% FCF yield valuation metric (i.e., 35x FCF multiple). Last quarter, Nvidia made a 59% FCF margin. So, if this continues over the coming year, NVDA stock could have further to go. Moreover, analysts have lifted their price targets. Let's look at this. In Q1 ending April 27, Nvidia generated $26.1 billion in FCF on $44.06 billion in sales. That represents a 59.2% FCF margin. Over the trailing months, according to Stock Analysis, it's generated $72.06 billion FCF on $148.5 billion in sales, or a 48.5% FCF margin. So, it seems reasonable to assume Nvidia could make at least a 57% FCF margin going forward. Here's how that would work out. Analysts expect sales to rise to a range between $199.89 billion this year ending Jan. 2026 and $251.2 billion next year. That puts it on a next 12 months (NTM) run rate of $225.5 billion. Moreover, now that it will be able to sell to China again, let's assume this pushes sales at least 5% higher to $236.8 billion: $236.8b NTM sales x 57% FCF margin = $135 billion FCF Just to be conservative, let's use a 55% margin on the lower NTM sales estimates: $225.5 billion x 55% margin = $124 billion FCF So, our estimate is that FCF over the next 12 months could range between $124 billion and $135 billion, or about $130 billion on average Therefore, using a 30x FCF multiple (i.e., the same as dividing by 3.33% FCF yield): $230b x 30 = $6,900 billion market cap (i.e., $6.9 trillion) That is 65% over today's market cap of $4.178 trillion, according to Yahoo! Finance (i.e., at $171.35 p/sh). In other words, NVDA stock could be worth 65% more, or $291.55 per share. $171.35 x 1.65 = $282.73 price target That is what might happen over the next 12 months (NTM) if analysts' revenue targets are hit and its FCF margin averages 56%. Analysts have closer price targets. The average of 66 analysts surveyed by Yahoo! Finance is $173.92. However, that is higher than three weeks ago, when I reported that the average was $172.60. Moreover, which tracks recent analyst recommendations, now reports that 39 analysts have a $200.71 price target, up from $179.87 three weeks ago. One way to play this is to sell short out-of-the-money puts. That way, an investor can set a lower buy-in price and still get paid extra income. In my last Barchart article on June 22 ("Make Over a 2.4% One-Month Yield Shorting Nvidia Out-of-the-Money Puts"), I suggested shorting the $137 strike price put option expiring July 25. The yield was 2.48% over the next 34 days (i.e., $3.40/$137.00). Today, that contract is almost worthless, as it's trading for just 8 cents. In other words, the short seller of these puts has made almost all the money (i.e., the stock has risen, making the short-put play successful). The investor's account has little chance of getting assigned to buy 100 shares per put contract at $137.00 on or before July 25. It makes sense to roll this over by doing a 'Buy to Close" and entering a new trade to 'Sell to Open' at a later expiry period and higher strike price. For example, the Aug. 29 expiry period, 45 days to expiry or DTE (which is after the expected Aug. 27 Q2 earnings release date), shows that $155.00 strike price put has a midpoint premium of $3.93. So, the short-put yield is: $393/$155.00 = 0.2535 = 2.535% over 45 days That works out to an annualized expected return (ER) of +20.28% (i.e., 2.535% x 8). So, even if NVDA stock stays flat, the investor stands to make good money here shorting these puts every 45 days (assuming the same yield occurs). There seems to be a low risk here, given that the delta ratio is just 23%. But, given how volatile NVDA has been, and that the stock is at a peak, it might make sense to use some of the income received to buy puts at lower strike prices. Keep in mind that the breakeven point, i.e., the price where an unrealized loss could occur, is $151.07: $155-$3.93 = $151.07 That is 11.8% below today's price. But it is not uncommon for a stock like NVDA to fall 20% from its peak. That would put it at $137.00. So, using some of the income to buy long puts at $140 or $145 is not unreasonable. That would cost between $144 and $204 ($174 on average) for the $15,500 investment (net of $393 already received): $393 income - $174 long hedge = $219, or $219 / $15,500 invested in short put play = 1.41% New Breakeven = $15,500 = $174 = $15,326 or $153.26 per put contract This means that the investor's potential (unrealized) loss is between $14,250 and $15,326, or -$1,076 net on the $15,326 net investment, or -7%. But keep in mind that this is only an unrealized loss. The investor would have protected himself from a much lower downside by buying long puts from the income received. And, after all, the price target is substantially higher, so the investor might be willing to hold on or even sell out-of-the-money call options to recoup some of the unrealized loss. The bottom line here is that NVDA has room to move higher. Shorting OTM puts with a lower strike price long put hedge is one good way to play this. On the date of publication, Mark R. Hake, CFA did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Sign in to access your portfolio
Yahoo
25 minutes ago
- Yahoo
Stock Market News for Jul 15, 2025
U.S. stocks closed higher on Monday, with the Nasdaq closing at a fresh record high, as President Donald Trump's tariff threats kept investors on edge while they waited for key economic data and the start of the earnings season. All three major indexes ended in positive territory. The Dow Jones Industrial Average (DJI) rose 0.2% or 88.14 points, to close at 44,459.65 points. The S&P 500 edged up 0.1%, or 8.81 points, to finish at 6,268.56 points. Communication services and financial stocks were the biggest gainers, while material stocks were the worst performers. The Financials Select Sector SPDR (XLF) gained 0.8%, while the Communication Services Select Sector SPDR (XLC) added 1%. The Materials Select Sector SPDR (XLB) lost 0.6%. Seven of the 11 sectors of the benchmark index ended in positive territory. The tech-heavy Nasdaq added 0.3%, or 54.80 points, to end at 20,640.33 points, hitting a fresh all-time closing high. The fear-gauge CBOE Volatility Index (VIX) was up 4.88% to 17.20. A total of 15.43 billion shares were traded on Monday, lower than the last 20-session average of 17.62 billion. Stocks ended mostly higher on Monday despite Trump's tariff threats over the weekend. Trump announced on Saturday that he would impose 30% tariffs on the European Union and Mexico starting Aug 1. Investors have been closely monitoring any developments on the tariff front after EU leaders hinted at negotiating with the Trump administration this month to reach a deal that would lower the duties. The optimism kept losses in check on Monday as investors believe that the high tariffs will ultimately be negotiated down before Aug 1. Trump's renewed tariff threats come just days ahead of the key inflation reading. The consumer price index reading, which will be released on Tuesday, will give investors a clearer picture of how Trump's tariffs, which are already in effect, are impacting the economy. The second-quarter earnings season, which kicks off later this week, and investors are eagerly waiting to assess the financial outlook of the major companies after the new tariffs go into effect. Major banks, including JPMorgan Chase & Co. (JPM), Citigroup Inc. (C) and Wells Fargo & Company (WFC) are scheduled to report their quarterly results on Tuesday. Also, Bank of America Corporation (BAC) and The Goldman Sachs Group, Inc (GS) will report their quarterly results later this week. Goldman Sachs has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. No major economic data was released on Monday. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Goldman Sachs Group, Inc. (GS) : Free Stock Analysis Report Bank of America Corporation (BAC) : Free Stock Analysis Report Wells Fargo & Company (WFC) : Free Stock Analysis Report JPMorgan Chase & Co. (JPM) : Free Stock Analysis Report Citigroup Inc. (C) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research 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
28 minutes ago
- Yahoo
Top Stock Movers Now: Nvidia, AMD, Newmont, BlackRock, and More
Major U.S. equities indexes were mixed at midday Tuesday while China trade developments in the semiconductor sector boosted tech stocks. Shares of MP Materials soared after Apple said it would invest $500 million in the owner of America's only operational rare earths mine. Gold miner Newmont's CFO suddenly resigned, and shares U.S. equities indexes were mixed at midday Tuesday as tech stocks got a boost from semiconductor stocks. The tech-heavy Nasdaq climbed, while the S&P 500 and Dow dropped. Nvidia (NVDA) and Advanced Micro Devices (AMD) shares surged after the Trump administration reversed course and said it will allow the companies to sell key AI chips to China again. Shares of MP Materials (MP) soared after Apple (AAPL) said it would invest $500 million in the owner of America's only operational rare earths mine. Apple shares rose as well. Shares of medical equipment provider Steris (STE) gained on an upgrade from Morgan Stanley, which pointed to positive developments in its sterilization operations and market trends. Newmont (NEM) was the worst-performing stock in the S&P 500 as the gold miner's CFO, Karyn Ovelmen, suddenly resigned. Shares of BlackRock (BLK) dropped after the investment manager missed quarterly revenue estimates, even as it posted a record $12.5 trillion in assets under management. Wells Fargo (WFC) shares declined after the bank's net interest income came in below forecasts, and it lowered its guidance. Oil and gold futures declined. The yield on the 10-year Treasury note fell. The U.S. dollar was up on the euro, pound, and yen. The rally in cryptocurrencies stalled, with prices for most major digital coins lower. Read the original article on Investopedia Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
