Stocks look mixed, dueling Disney notes

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The Club’s top 10 things to watch Monday, Feb. 13

1. The Dow Jones Industrial Average, the S&P 500 and the Nasdaq are set to open mixed to start the week. No major economic news Monday. January’s consumer price index is out Tuesday morning. The Dow’s modest loss last week, marked the second straight weekly decline. The S&P 500 and the Nasdaq had their worst weeks since December, with the former breaking a two week winning streak and the latter ending five straight weeks of gains.

2. Club holding Caterpillar (CAT) downgraded to neutral (hold) at Baird; price target cut to $230 per share from $290. Analyhsts believe CAT is “nearing a cyclical pivot point,” and they think that a dealer stocking tailwind is about to decelerate. Calls for the backlog to peak in first-quarer 2023. However, the Club still sees room for growth from projects funded by the Infrastructure Investment and Jobs Act and Inflation Reduction Act spending plans.

3. Meta Platforms (META) has delayed final budgets across several of its teams ahead of a fresh round of job cuts, according to the Financial Times. No word on the potential size of layoffs at the Club holding, but we know from CEO Mark Zuckerberg that this is going to a “year of efficiency” for the company behind Facebook, Instagram, WhatsApp and leading virtual reality headsets.

4. RL (RL), the company formerly named Ralph Lauren, is upgraded to buy at Bank of America. Analysts believe the fashion powerhouse’s U.S. wholesale business is best positioned among the vendors.

5. Disney (DIS), a Club stock, price target is lowered to $130 per share from $145 at Citi; keeps a buy rating following last week’s solid earnings and restructuring announcement. JPMorgan reinstates coverage with overweight (buy) rating and a $135 price target, which represents 25% update to Friday’s close of just over $108 per share.

6. Morgan Stanley downgrades XPO Logistics (XPO) to equal weight (hold). Puts the stock in the “penalty box” until the market has more evidence on execution and sees the path towards long term targets.

7. Bank of America on software: double upgrades Fastly (FSLY) to buy; goes neutral (hold) on Okta (OKTA) due to no positive catalysts in sight; calls Club holding Salesforce (CRM) an emerging quality growth at a reasonable price (GARP) stock.

8. Merck (MRK) price target is increased to $125 per share from $120 at Credit Suisse. The analysts expect the 2023 American College of Cardiology conference in early March to be a catalyst for the stock.

9. Five Below (FIVE) is upgraded to buy at Roth MKM. Analysts say “the abrupt shift” to value merchandise has happened more quickly than expected.

10. The board of Chevron (CVX) is considering waiving the mandatory retirement age for CEO Mike Wirth, according to The Wall Street Journal.

(Jim Cramer’s Charitable Trust is long CAT, META, DIS, CRM. 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.

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