My top 10 things to watch Monday, May 6
1. Warren Buffett’s Berkshire Hathaway now has $189 billion in cash, up from $167.6 billion in the fourth quarter. Buffett has been looking to make a big acquisition but hasn’t found the right target. Elon Musk has an idea. “He should take a position in Tesla. It’s an obvious move,” said Musk in a message on his social media service X.
2. Tesla replaced the Model Y, which got 260 miles on a charge, with a 320-mile version for $2,000 more, reports The Verge. The new car starts at about $45,000. Meanwhile, a report in The Wall Street Journal over the weekend said Musk is pushing for changes that would make the company’s traditional car business less of a priority to focus on robotics, driverless cars, and other advanced tech.
3. Former Starbucks CEO Howard Schultz on Monday shared his thoughts on the coffee giant’s earnings miss last week. “At any company that misses badly, there must be contrition and renewed focus and discipline on the core,” Schultz wrote in a LinkedIn post. “Own the shortcoming without the slightest semblance of an excuse.” He also said that people inside and outside the company have asked him how to fix things. “Senior leaders — including board members — need to spend more time with those who wear the green apron,” he wrote. Starbucks chairwoman Mellody Hobson led the search for Schultz’s replacement, and Howard participated, which ended with current CEO Laxman Narasimhan. She continues to support Laxman.
4. In my Sunday column, I wrote about how investing lessons from my past are informing my current approach to Starbucks, a longtime favorite and stock in our portfolio.
5. Micron upgraded to buy from hold at Baird with a price target of $150, up from $115, and added the company to its list of top chipmaker ideas. The research firm said the stock’s recent pullback doesn’t jibe with the positive trends in DRAM it saw in recent channel checks.
6. U.S. Steel upgraded to overweight from equal weight at Morgan Stanley. The firm said the company is nearing the end of its transformation into a more flexible steelmaker.
7. Club name Linde‘s price target lowered to $452 from $458 at HSBC, citing the natural gas giant’s project start-ups in coming quarters. Shares of Linde fell last week after reporting a mixed quarter and a softer forecast for the current quarter. We believe management’s estimates are conservative and used the pullback as an opportunity to buy more shares.
8. Hershey‘s price target was raised to $205 from $200 at Wells Fargo, and to $204 from $199 at Citi. Both firms reiterated their hold ratings, noting the downside of higher cocoa prices.
9. Block price target raised to $90 from $86 at Citi, noting EPS potential.
10. Bausch + Lomb upgraded to buy from hold at Morgan Stanley. The portfolio owns Bausch Health, which still has an 88.5% stake in Bausch + Lomb and reported a quarterly earnings miss last week. We remain in a holding pattern until two major overhangs are resolved.
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