Shares of Rocket Companies (RKT) traded more than 11% higher on Friday despite the market dropping more than 2%.
The stock’s outperformance was based on the company’s latest earnings results. Last quarter, Rocket Companies beat earnings per share estimates of $0.05 by a penny ($0.06) as the company earned more revenue than analysts expected.
While earnings were positive, investors are more likely looking at the potential for the mortgage and fintech company to become more profitable as interest rates are likely to move lower in September at the hands of the Federal Reserve.
That drop in interest rates should drive more business activity to Rocket Companies as prospective homebuyers take advantage of lower rates.
Unlike the large cap technology sector, analysts have been underestimating Rocket’s future performance as the average Wall Street analyst recommendation for the stock is a “hold”. Additionally, the average analyst target price for Rocket companies is just under $15, while the stock currently trades above $17.
Watch for analyst upgrades to drive prices even higher.
Today’s break above $17, on heavier than normal buying, put the stock on course for a $20 price target over the next 3-6 months, an additional 15% move on top of the stock’s 20% year-to-date performance.
Intel (INTC) shares are one of the worst performers in the market today at the bottom of the Nasdaq 100 and S&P 500 as the stock lost more than 25% of its value.
The heavy selling comes after the company announced their quarterly earnings result last night after the close that missed analyst expectations by a wide margin.
The company’s earnings per share missed expectations by $0.08 cents, with earnings per share of just two cents for the quarter. Those results came with lower-than-expected revenue that dropped by 1% on a year-over-year basis.
Intel has been by far the worst performer in the semiconductor sector, a sector that has driven the overall performance of the market for all of 2024.
The company is also in a rebuilding stage in which they're trying to shift semiconductor production to the United States. As part of the CHIPS Act passed last year, the company announced $8.5 billion in direct funding and additional tax credits to help with this plan.
We’re likely to hear from Wall Street firms over the next week with downgrades to the stock, though the majority of analysts covering the stock have it ranked a “hold” already. Watch for analysts to start pointing to the book value of Intel as a positive catalyst.
Intel’s current book-to-price value sits at 1.17 compared to an industry average of 3.15. That’s often looked at as a “value” trade, especially in the technology industry.
As for Intel’s price chart, the stock spent three months treading water at the $30 price after dropping from $40 after Intel’s last earnings report.
Round-numbered support is likely to hold the stock at $20, though the long-term chart is bearish.
Investors looking at the long-term chart have to look back to 2015 for any sign of price support. $20 held as a long-term buying opportunity that saw the stock rally 50% in the following year.
Shares of Booking Holdings (BKNG) dropped more than 10% on Friday, despite the company’s better-than-expected earnings report after the close on Thursday.
For the quarter, Booking beat analysts estimates for their earnings per share handily, announcing results that were $3.27 (9%) better than what analysts had been looking for from the company. The company beat on their revenue guidance by just 1%.
The unexpected drop in the stock may seem unwarranted, but it comes from two different catalysts.
First, investors are starting to become deeply concerned with the health of the travel industry. Airlines, hotels, resorts and other discretionary travel companies have reversed their bullish trends as expectations of a possible recession are fueling fears for the industry.
Those fears were magnified by the jobs report this morning which fell short of economist’s expectations.
Second, Booking Holdings is what is considered a “crowded trade”, meaning that expectations may have overrun reality, making the stock susceptible to “sell the news” activity like we saw today.
Today’s move knocked the stock from its all-time highs just above 4,000 - the stock is likely to see a stock split soon - on a crash course to $3,000.
That move will likely result in some support at $3,000, though investors should expect to see a move even lower to $2,500 over the next 3-6 months.
