3 Stocks To Watch In The Coming Week: Tesla, Korger, American Express

After staging a remarkable rebound since the March 23 plunge, stocks have again entered a period of volatility as investors weigh the positives of a reopening economy against worries that the coronavirus continues to spread.

In the past week, the S&P 500 lost some of its momentum when it fell sharply on Thursday as Federal Reserve Chairman Jerome Powell painted a mixed picture of the U.S. economy, saying it will take longer than some anticipate to achieve its full growth potential. However, after falling nearly 6% post-Fed, the SPX rose on Friday, up more than 1%.

Stocks had recovered by more than 47% from the March 23 low before investors became spooked by signs COVID-19 is picking up in some areas. As investors eye a possible second wave, we’re keeping the following three stocks on our radar:

1. Tesla

It could be another uncertain week for Tesla (NASDAQ:TSLA) investors after the electric carmaker was hit by two downgrades even as it reached a new all-time high midweek.

TSLA Weekly TTM

TSLA Weekly TTM

Analysts at Morgan Stanley and Goldman Sachs last week raised concerns about this year’s meteoric rise in Tesla shares. The stock closed at $935.28 on Friday, after falling about 9% from the $1,025 record close it reached on Wednesday.

In a note to clients, Morgan Stanley analyst Adam Jonas downgraded the stock to underweight from equal-weight and cut his price target to $650 from $680, saying the recent run-up in the share price to over $1,000 may not reflect a number of important emerging risks, “many of them long-term, that have the potential to impact fundamentals (growth and profitability) in a materially negative way.”

Goldman Sachs analysts, led by Mark Delaney, said they downgraded Tesla to neutral because shares were trading above their upwardly revised 12-month price target of $950. “We’d look to become more positive on Tesla stock again if we had more confidence in the near to intermediate term trajectory in fundamentals, or if valuation became more attractive,” Delaney said.

2. Kroger

Supermarket behemoth, Kroger (NYSE:KR) will report its fiscal 2020, first quarter earnings on Thursday, June 18, at 10 AM Eastern, during market hours. Analysts are expecting $1.07 a share profit on sales of $40.43 billion.

KR Weekly TTM

KR Weekly TTM

Shares of Kroger gained 11% this year, fueled by a lockdown triggered spending surge during the coronavirus pandemic. The stock fell 1.35% on Friday to close at $32.26.

The nation’s largest traditional supermarket chain, Kroger, in its March earnings report, posted strong sales driven by its private-label products along with expanded online pickup and delivery options. Shares of Kroger closed on Friday at $27.34 after gaining 0.4%.

To defend its turf against increasing competition from Amazon (NASDAQ:AMZN) and Walmart (NYSE:WMT), Kroger acquired meal kit company Home Chef, and expanded its partnership with privately-held Instacart, a San Francisco-based, same-day grocery delivery service which operates in some areas of the U.S.

3. American Express

American Express (NYSE:AXP) shares may see some activity on Monday when the New York City-based credit card and travel services company becomes the first non-Chinese financial firm to start bank card clearing services in China. This move will enable it to process local currency transactions in one of the world’s largest markets.

AXP TTM

AXP TTM

The People’s Bank of China granted a network clearing license to American Express’s China joint venture with Express (Hangzhou) Technology Services Co., the central bank said in a statement on Saturday.

The U.S. company, which won initial approval in 2018, is required to start the clearing service within six months, according to the statement. The bank card clearing network being built by the joint venture will process both online and offline payment transactions.

As well, the company will cooperate with leading Chinese mobile wallet services providers, according to a statement from American Express.

Amex shares are down 18% this year. They closed at $101.68 on Friday, after gaining 3.12% on Friday.



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