10 things to watch in the stock market Friday including a bullish call on Best Buy

— Today’s newsletter was written by the Investing Club’s director of portfolio analysis, Jeff Marks.

1. The S&P 500 was looking at a slightly higher open Friday after another record high close. The 10-year Treasury yield was finally lower following a tame August reading on the Fed’s favorite inflation gauge, the PCE price index. With just a couple trading days left in what’s historically the worst month of year, the S&P 500 was heading for its first September gain in five years.

2. Club holding Costco shares were a tad lower after a solid fiscal 2024 fourth-quarter earnings report Thursday night. The wholesale retailer’s long-awaited membership fee increase, which took effect Sept. 1, will have a limited impact until the back of its fiscal 2025 and into fiscal 2026, executives said. We raised our price target on the stock.

3. Best Buy was added to JPMorgan’s analyst focus list after a meeting with the electronics and appliance retailer’s management team. The analysts, who reiterated their $111 price target, called Best Buy a “value idea” to take advantage of the computing replacement cycle along with TV and appliance sales growth as existing home sales improve. That closely mirrors the Club’s investment thesis.

4. The Food and Drug Administration approved Bristol Myers Squibb‘s schizophrenia drug Cobenfy, the first new treatment for the disorder approved in seven decades. Shares of the New Jersey-based drugmaker were up more than 3% on the news.

5. Wynn Resorts was upgraded to a buy-equivalent rating at Morgan Stanley. Analysts say the casino operator’s stock can start to command a higher valuation thanks to stability in Las Vegas, more details around its project in the United Arab Emirates, and increased capital returns. Wynn shares had struggled mightily since the spring but caught a bid in recent days on China stimulus news. The Chinese gaming hub of Macau has been a thorn in Wynn’s side.

6. Citigroup downgraded Dollar General to sell from neutral and slashed its price target on the stock to $73 a share, which is about $14 below its Thursday close. Analysts argued that Walmart is taking market share, making a recovery for the dollar store retailer more difficult. Jim Cramer blamed Walmart for Dollar General’s ugly earnings report last month.

7. Deutsche Bank restarted coverage of Dell Technologies with a buy rating and price target of $144 a share. The analysts expect Dell’s revenue growth to accelerate into the double digits due, in part, to the growth of its AI server business; project its bottom line growth rate to also reach double digits; and tout its “clean and simple” capital return framework.

8. Be careful ahead of PepsiCo‘s earnings report Oct. 8, according to Citigroup. Analysts put the stock on its 30-day negative catalyst watch, saying they expect an operational sales growth miss driven by softness in the soda and snack maker’s North American business.

9. HP Inc. was downgraded to a hold-equivalent neutral from buy at Bank of America as analysts expect upside from its personal computer business to be offset by lower margins in its printer unit. HP shares moved lower Friday.

10. Wedbush Securities’ Dan Ives upped his price target on Salesforce to $325 a share from $315 after positive customer feedback at the software maker’s Dreamforce conference. As we wrote earlier this week for Club members, Salesforce’s new AI offering has jump-started the stock.

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