HAPPY TUESDAY TO THE STREET
PayPal (PYPL) helped invent online checkout. Nearly 30 years later, it's getting beat at its own game. From Affirm (AFRM) to Apple (AAPL) Pay to Cash App, rivals are cropping up everywhere, and the stock is down roughly 80% over five years.
In response, new CEO Enrique Lores says "significant changes" are coming. Translation: pay attention to PayPal now, or potentially, pay later.
🟨 | US stocks were mixed to start an abbreviated trading week, but the S&P 500 and Nasdaq Composite notched new records on tech strength.
📉 | One Notable Decliner: AutoZone (AZO) dropped after international sales challenges drove Q3 revenue below estimates.
— Brooks & Cas
MARKET SNAPSHOT
S&P 500 Heatmap. Credit: Unusual Whales
WILL CAMP DAVID MOVE THE NEEDLE ON STRAIT TRAFFIC?
As US strikes in Iran continue and the Strait of Hormuz stays effectively closed, President Trump is bringing his entire Cabinet to Camp David on Wednesday. Will it move the needle on a deal?
Secretary of State Marco Rubio says the chokepoint has to reopen "one way or the other," but no deal has materialized. Traders are putting real money on when tankers start moving through the world's most important oil corridor again.
Market Movers
ELI LILLY, QUALCOMM, ROCKET LAB
📈 | Eli Lilly (LLY) ticked up after acquiring three companies to build its infectious disease portfolio.
📈 | Qualcomm (QCOM) gained on a deal to supply ByteDance with AI data center chips.
📈 | Rocket Lab (RKLB) climbed on a $90M Space Force contract for two geospatial satellites.
📈 | Modine Manufacturing (MOD) jumped on a $4B data center cooling deal running through 2029.
📈 | Oklo (OKLO) rose after the DOE picked it for advanced talks on plutonium-fueled reactors.
Tomorrow's Trade Idea, Today
BUY THE ROAST
Stock Spotlight
Stock: Ferrari NV (RACE)
Firm: Bernstein
Current Price: $331
Price Target: $402
Implied Upside: 21.5%
Looking for more upside? Street Sheet Research members get 3 stock picks from the Top 30% of analysts with 30%+ implied upside each week. Subscribe today.
Roasted to Order
Ferrari had its big EV moment on Monday, unveiling the all-electric Luce in Rome. The internet promptly responded in savage fashion, with some commenters comparing the $640,000 sportscar to a Nissan Leaf.
But Bernstein analyst Stephen Reitman isn't sweating it. He's keeping his Outperform rating, arguing the keyboard critics aren't the customers Ferrari is actually trying to reach.
Built-In Prestige
Reitman’s take: "if you build it, they will come.” Bernstein expects the century-old brand’s built-in prestige to translate to buyers for its first battery-electric vehicle.
Evercore ISI (EVR) analyst Michael Binetti echoed the sentiment with his own Outperform rating. He noted the Luce is targeted largely at new clients who aren't part of today's online narrative.
Street's Verdict
The Street is overwhelmingly bullish. Of the 13 analysts covering Ferrari, 11 rate it a Buy or Strong Buy, with just two Holds.
Shares are in the red over the past three months and dropped sharply today in the wake of the Luce reveal. But if Bernstein is right, the RACE is far from lost.
Do you own any shares of Ferrari (RACE)?
OVERHEARD ON THE STREET
🤖 | Pope Leo warned AI job losses could become a "social calamity”, raising prediction market probabilities that US unemployment crosses 8% before 2030.
Above 8%: 60%
Above 9%: 47%
Above 10%: 20%
✈️ | American Airlines (AAL) will outfit more than 500 narrow-body planes with SpaceX's Starlink Wi-Fi starting early next year.
🛰️ | It wasn’t all wins for SpaceX, as the Pentagon leveled criticism against the firm for hiking Starlink fees for US drones in Iran fivefold to $25,000 per terminal.
🛢️ | BP (BP) abruptly removed Chairman Albert Manifold over "serious concerns" about governance and conduct.
🏪 | Toshifumi Suzuki, the businessman who helped build 7-Eleven into a global convenience-store empire, died at 93.
FRIDAY’S POLL RESULTS
Do you own any shares of Generac Holdings (GNRC)?
▇▇▇▇▇▇ 🐂 Yup, I’m holding
▇▇▇▇▇▇ 🐻 Nope, not interested
▇▇▇▇▇▇ 👀 No, but I’m interested
And, in response, you said:
🐻 Nope, not interested — “The P/E of nearly 85 tells me the upside is already priced in.”
👀 No, but I’m interested — “Generac has a reputation for building and maintaining good systems. How well their model will scale is an open question. Probably a good long term prospect rather than a trade play.”
