The latest Market Talks covering Equities. Published exclusively on Dow Jones Newswires throughout the day.
1135 ET - Applied Materials' move to double systems-manufacturing capacity by 2028 was the key takeaway from the company's 3Q report and earnings call, UBS analysts write in a note. While the target isn't necessarily revenue guidance, they write, "we are hard-pressed to believe that AMAT would have excess supply in C2028 when it is getting 8-10Q visibility from major customers." The target, they write, is consistent with their model for around $14 billion in quarterly systems revenue exiting 2028, which would push earnings per share close to $30 with room for further upside. Still, the investments in capacity may be a headwind to gross margins, contributing to a guide that "left a bit to be desired," they write. Shares fall 4.6%. (elias.schisgall@wsj.com)
The disconnect between oil market fundamentals and prices is reducing oil's appeal as an investment asset class, says David Russell, global head of market strategy at TradeStation. The closure of the Strait of Hormuz came when the market was oversupplied, "so in some ways you had one of the most bearish and one of the most bullish things happening at the same time," he says. Before oil was understood as one market, now traders have to consider the different moving parts, such as where tankers are going, which refineries are offline. "These are conversations we never had even a year ago." Unexpected and aggressive government interventions destroy the speculative desire to go long oil or even short oil, Russell adds. "And why get speculative bullish about oil when you can get speculative bullish about AI stuff?" (anthony.harrup@wsj.com)
1028 ET - Sandisk is improving margins and demand cyclicality thanks to the AI trade, JPMorgan analysts say, moving the stock to overweight from not rated. The memory provider is positioned to capitalize on AI as the total addressable market for NAND memory products is inflecting from around $70 billion in 2025 to more than $300 billion this calendar year. The analysts expect it to reach $500 billion next year. Data centers are driving that growth with demand from AI hyperscalers and cloud customers, the analysts say. Sandisk is also adjusting its business model to reduce demand cyclicality and bring its margin profile higher, they say. Shares are up 6%. (katherine.hamilton@wsj.com)
1026 ET - Live cattle futures are lower following Thursday's announcement from Tyson Foods of a closure of a beef plant, as well as selling another. Tyson pulling back from the beef business amid a stubbornly-small cattle herd appears to be injecting more pessimism into the outlook for cattle prices. "The bears have the clear edge and the market appears to be on track to retest last month's lows on technical weakness and lower cash trade," says the Hightower Report in a note. Most-active live cattle on the CME is down 0.8%, while lean hog futures are off 0.6%. (kirk.maltais@wsj.com)
1013 ET - Sandisk is using a new operating model that is reducing volatility in demand, Chief Executive David Goeckeler tells CNBC. The company makes decisions about producing supply for memory customers 10 to 15 years in advance, Goeckeler says. But historically, it has negotiated pricing with customers on a quarterly basis, creating volatility across the year, as cycles in demand would ebb and flow. Now, Sandisk is asking customers for more visibility on a longer-term basis which Goeckeler says will reduce volatility. The new strategy comes as Sandisk is getting an influx of demand from AI developers. Shares are up 6%. (katherine.hamilton@wsj.com)
0924 ET - Target has just executed a major refresh of its product assortment, which Jefferies analysts believe will propel the retailer's turnaround. Since the start of the year, Target has expanded its wellness category, added 3,000 beauty products, reset 75% of home decor accessories and introduced a back-to-school line where 50% of the products are new, the analysts say. "In our view, this represents one of the broadest assortment refreshes in years and is beginning to translate into improved traffic trends," the analysts say. They believe investors are underestimating the traffic benefits Target will get from this refresh. (katherine.hamilton@wsj.com)
0856 ET - Walmart is expected to post largely in-line 2Q results next week, but that's not what investors are most focused on. Jefferies analysts say in a research note that shareholder debate remains centered around the retailer's implied back-half guidance, as well as how management frames the business's earnings power beyond the quarterly readout. Walmart management remains constructive on market share gains, e-commerce profitability and private label momentum, the analysts say. "We believe investors underappreciate how tariff-funded price investments, alongside growing advertising and e-commerce profits, can support future comp growth and extend Walmart's competitive advantage," they say. (connor.hart@wsj.com)
0844 ET - Antofagasta shares have limited room to rise after a recent rerating, UBS analyst Daniel Major writes. The copper miner's shares have outperformed peers after investors rewarded its copper growth story, he says. Antofagasta is likely to meet its 30% volume growth target over the next three years but its near-term outlook is mixed, he says. It has limited growth momentum over the next year and a mixed near-term operational performance, he adds. There are better opportunities buying Anglo American, Teck Resources and Freeport-McMoRan, he adds. Antofagasta shares fall 4.2% to 3,590 pence. (adam.whittaker@wsj.com)
0842 ET - Investor sentiment on Deere skews negative heading into F3Q earnings next week, JPMorgan analysts say in a research note. The heavy equipment and agricultural machinery maker is expected to say that EOP orders, or advance-purchase orders, for next year in North America are trending flattish to up slightly, compared with initial Wall Street estimates for Production & Precision Agriculture sales to be up roughly 8% in fiscal 2027, the analysts say. "While this reinforces the narrative that 'the ag cycle has troughed', flattish volume after a 50% drawdown from the 2023 peak is worse than expectations when we began the year," they say. JPMorgan cuts Deere's price target to $570 from $590 and lowers its F27 estimates, though it maintains its neutral rating. (connor.hart@wsj.com)
0817 ET - E.ON's shares fall after the German regulator publishes the draft determination for gas distribution. The proposals are weaker than expected but the drop in share price offers a buying opportunity, J.P. Morgan analysts write. They retain their overweight rating on the stock. Under the proposals, the headline pretax return on equity of 5.76% is significantly below the markets expectation of above 7%. However, many of the proposals aren't applicable to the power sector and once adjustments are made, the number are more equitable, they write. E.ON's shares fall 4.1% at 17.15 euros. (adam.whittaker@wsj.com)
0727 ET - The trimming of U.S. interest-rate rise expectations has failed to trigger another significant leg lower for the dollar after its recent selloff, MUFG Bank's Lee Hardman says in a note. "The price action suggests that the dollar could be deriving support from inflows into the U.S. equity market, in particular AI-related stocks." The DXY dollar index falls 0.2% to 99.729 but remains above the 200-day moving average of 99.200. The index reached a seven-week low of 99.418 on August 3 when the U.S. and Japan confirmed a joint intervention to strengthen the yen. (renae.dyer@wsj.com)
0717 ET - Pandora showed evidence that the business is gradually recovering, but further proof is needed, UBS analysts Robert Krankowski and Zuzanna Pusz say. The Danish jeweler posted organic sales growth for the second quarter slightly ahead of expectations, pointing to a recovery after recent external pressures due to commodity and tariff costs as well as strategic missteps, the analysts write in a research note. Quarterly results suggest the worst is now behind the company, the bank says. "We maintain our neutral rating pending clearer evidence of reaccelerating brand momentum and the strategic update expected in November," the analysts say. Shares are down 2.6%.
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