Palo Alto Networks Inc – TheNewsHub

Palo Alto shares helped by contract news, Abbott Labs braces for lawsuit ruling

Harsh — Thu, 31 Oct 2024 18:50:48 +0000

Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street. Markets: Wall Street is under pressure Thursday, led to the downside by the tech-heavy Nasdaq Composite , which dropped more than 2%. The S & P 500 is down more than 1%, while the Dow Jones Industrial Average lost about 260 points, or 0.6%. Selling in Microsoft and Meta Platforms following their Wednesday evening earnings results weighed on the Nasdaq and S & P 500. Also adding to the weakness: The yield on the closely watched 10-year Treasury note continued its climb higher, topping 4.3% at one point in the session. Investors are gearing up for Friday morning’s nonfarm payrolls report, which is expected to show the U.S. economy added 100,000 jobs in October while the unemployment rate remain unchanged at 4.1%. But many expect noise in the numbers due to the impact of the recent hurricanes and Boeing strike. The data will help shape Wall Street’s expectations around the path of Federal Reserve policy. Currently, traders are pricing in a roughly 95% chance of a quarter-point interest rate cut at the central bank’s meeting next week. Earlier Thursday, the Fed’s favorite inflation gauge, the PCE price index, matched expectations, rising 2.1% in September . Cyber deal: Morgan Stanley put out a note Thursday morning on Club holding Palo Alto Networks that caught our eye, discussing reports of the cybersecurity leader landing a five-year, roughly $1 billion software licensing agreement with the Department of Defense. An executive at Palo Alto Networks also posted about it on LinkedIn , without mentioning the dollar amount and duration. “While timing of bookings or revenue recognition isn’t clear yet, we think this could provide multi-year tailwinds,” Morgan Stanley analysts wrote to clients. These headlines could be helping support shares of Palo Alto in Thursday’s down market. The stock rotated between slight gains and losses, holding up much better than an exchange-traded fund that tracks the cybersecurity industry , which dropped more than 1% in the session. Shares of our other cyber holding, CrowdStrike , were down nearly 4% Thursday. To be sure, Morgan Stanley sought to temper expectations on the reported Palo Alto deal. The firm noted, for example, that the contract was awarded through software reseller Carahsoft, which means it “likely includes ~15% reseller margin for Carahsoft.” Nevertheless, analysts said they “think this contract award … suggests the large but elusive DoD opportunity could finally be coming into fruition.” Palo Alto did not respond to CNBC’s request for comment on the licensing agreement. The company experienced some softness in its federal government business earlier this year and also tamped down expectations about the next few quarters, which added to the messiness in its February earnings report. More recently, on an August earnings call, Palo Alto CEO Nikesh Arora said the company continued to have “a muted set of expectations” around its federal government business due to the election. Trial decision looms: We’re bracing ourselves for a verdict soon in Abbott Labs ‘ latest trial over allegations that its specialized premature infant formula causes an intestinal illness commonly abbreviated as NEC. The company has strongly denied the claims, and recently received the backing of major U.S. health agencies, which in a statement earlier this month came out in support of using the formulas like Abbott’s to treat premature infants. “There is no conclusive evidence that preterm infant formula causes NEC,” the agencies wrote. However, the judge in Abbott’s trial — held in the 22nd Judicial Circuit of Missouri — did not allow that statement to be shown to jurors in the case . For that reason, we’re not expecting the Club holding to receive a favorable verdict. A loss in the case could ding the stock, but that could represent a buying opportunity, according to Director of Portfolio Analysis Jeff Marks. The reason is that while Abbott faces additional lawsuits over its formula, we expect the statement from U.S. health agencies will be allowed as evidence in future cases. Up next: Apple , Amazon and Coterra Energy are set to report quarterly results after the closing bell Thursday. Outside the portfolio, we’ll also hear from Intel , U.S. Steel and Juniper Networks . As mentioned, the big event Friday is the October nonfarm payrolls report. Chevron , Exxon Mobil and chemical maker LyondellBasell Industries are among the notable earnings reports Friday. (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) 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.

Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street.

Why Eli Lilly and Palo Alto Networks are both up on news from their competitors

Harsh — Fri, 20 Sep 2024 18:14:26 +0000

Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street. Markets: The Dow and S & P 500 were lower Friday after surging to record highs Thursday in response to the Fed cutting interest rates by 50 basis points. It’s been a strong week for stocks with the S & P 500 gaining roughly 1.5%. The top performing sectors week to date were energy, communication services, financials and industrials. Only three sectors were on pace for a down week: real estate, consumer staples, and health care. Obesity drugs: New information often sends one company’s stock higher and causes its biggest competitor to fall. Take a look at shares of Club name Eli Lilly . They were trading higher in a soft market after a key competitor in the obesity space reported disappointing Phase 2 trial results. That competitor, Novo Nordisk , said Friday its medicine monlunabant, which is a small molecule oral cannabinoid receptor (CB1) inverse agonist, showed weight loss of about 6% at 16 weeks. This was a big disappointment. The results fell short of Lilly’s lead daily oral GLP-1 orforglipron, which has showed about 8% weight loss in 16 weeks and was well below what Novo previously suggested. Analysts at Deutsche Bank called the trial results underwhelming, adding it “removes the threat of a large well-capitalized, small-molecule competitor to LLY’s orforglipron.” Competition in the obesity space is going to heat up over the next few years, but this disappointment from Novo Nordisk shows how hard it is to make a safe and effective drug. That’s why we’ve long disagreed with the selling of Eli Lilly when a competitor puts out a press release of an early-stage trial. Some medicines will work, some won’t. Some will be highly effective, others won’t move the needle. Some will have safety and tolerability issues. This is the nature of the business. But what we know now is that Eli Lilly’s leadership isn’t going away any time soon thanks to its current lineup of obesity medications, robust pipeline, and massive manufacturing scale. Cybersecurity stocks: In other scenarios, both a company and its competitor can trade up on new news. CrowdStrike shares were on the move higher after the cybersecurity company hosted its annual conference. One of the key revelations from the event was the very little customer churn in the aftermath of the global IT outage it caused in July. Recall, that we initially had a view that competitors like Club name Palo Alto Networks would take advantage of this event to pitch their products. However, we can’t say we are completely surprised to see very few customers leave CrowdStrike. When we looked at Palo Alto’s quarter in August, the results didn’t show a huge swing in market share resulting from the outage. Sure the quarter was good because Palo Alto has a great product and value proposition, but it didn’t suggest a massive departure from CrowdStrike. Both companies are great. So why aren’t Palo Alto shares lower? CrowdStrike’s commentary likely indicated that spending on cybersecurity is still healthy, which benefits both companies. Up next: We’ll see a pickup in earnings next week. Some of the notable reports are from KB Home , which will provide insight into housing, and Micron , which will give us a good look of demand and inventory levels for high bandwidth memory (which feeds into AI chips) as well as cellphones and personal computers. Jefferies , which is always a good preview into the banks, and Club name Costco , which is a good read on consumer spending, are also out next week. (See here for a full list of the stocks in Jim Cramer’s Charitable Trust.) 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.

Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street.