Goldman Sachs (GS) is whispering something in investors ears this morning, but you have to tune out the noise to hear it.
As with most Monday morning’s the analyst activity came in fast and furious around 8 a.m. ET.
But there is one analyst’s comments that I found interesting. An analyst from Goldman Sachs did something you don’t see often.
We’ll get to that in a second.
First, the flurry of analyst recommendations on Lineage (LINE), one of the newest IPOs in the market.
Twelve, count them 12, analyst rushed through the front door this morning and initiated coverage on this stock. Of course, that coverage comes simply on what Lineage provided the Wall Street bankers with during their road show and other IPO events. The company has yet to provide any earnings results.
Lineage shares are trading 11% higher than their initially traded price. The stock chart is too short to take a technical read on the shares, but one of their largest competitors has plenty of price action to follow.
The chart for Americold Realty Trust (COLD) is much more robust than just a few days and tells a cautionary tale for the industry.
Shares of COLD have been bouncing in a wide range as they slip into a long-tern bear market trend.
The chart reminds me of the slew of transportation companies that are bouncing in and out of bear market trends because of one thing, the risk that the economy is still heading for a recession.
The same risks come with the cold storage companies like Americold and Lineage.
Yes, these will be companies that help to streamline the food logistics businesses, but the time appears to be a little off for an IPO or an initial investment into an existing company in the same industry.
Let’s bottom line this so that we can get to Goldman’s Comments:
This morning chorus of “Buy” initiations for Lineage shares is part of the well-choreographed IPO dance. The block of analysts initiating their coverage on the stock is meant to give a boost to the shares in order to avoid the stock from dipping below the “deal” price. In most cases, the investment banks leading the charge are the ones mobilizing The Street to issue buy recommendations on newly IPO’d stocks.
Morgan Stanley, Goldman Sachs, Bank of America, J.P. Morgan and Wells Fargo are your leading banks on this deal. All but one - Bank of America – were part of this morning’s upgrade parade.
From this seat, investors are wise to wait on determining an entry price for LINE shares. It is likely that we will see lower prices soon as their largest competition slipping into a bear market trend.
$80 is the price points where we are likely to see increased buying volume from investor’s, not just the investment banks that took the stock public.
Of all the upgrades that hit the tape this morning, Goldman’s “reiteration” of NVIDIA (NVDA) was the one that caught my eye.
Now, don’t get me wrong, analysts “reiterate” stocks all the time, there have been 71 reiterations of NVIDIA stock since February 2024, but they always come with something else, a target price change.
There was to change to Goldman’s target price for NVIDIA this morning.
So what? Maybe Goldman forgot to send the new target price? No, this is more of a “play it close to the chest” move.
As has been pointed out here several times, NVIDIA is the most loved stock in the market. By that I mean that the analysts have upgraded it as high as they reasonably can. To continue raising the target price of any stock beyond reasonable estimates is to put additional pressure on the stock if a company misses their earnings target.
Let’s face it, this is one of the biggest quarterly earnings reports in the history of NVIDIA.
Curiously, Goldman Sachs made comment on the reiteration that mentioned the possible delay in Blackwell and the potential short-term volatility that such a delay would cause.
By coming out and quietly reiterating their position on the stock, Goldman is acknowledging the risks ahead for NVIDIA in the case that the company were to show any weakness in their earnings report due next week.
Looking at the moves in NVIDIA, it’s safe to say that investors are bidding up the hopes that the company releases a stellar report.
NVIDIA triggered a “buy the rumor” rally last week as the stock crossed above the $110 price level. Today, shares are trading almost 20% higher on steady daily volume, suggesting that investors are pouring into the stock ahead of the report.
If Goldman Sachs is right, and the results aren’t worthy of a price upgrade, we’re likely to see a report that will be a little lighter than expected. That would cause NVIDIA shares to immediately reverse their “buy the rumor” rally heading back to support at $100 within days.
