Honeywell Aerospace lands an analyst endorsement ahead of its debut. This is our plan for the stock
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CNBC Finance
3 min read
Every weekday, the CNBC Investing Club with Jim Cramer holds a "Morning Meeting" livestream at 10:20 a.m. ET. Here's a recap of Friday's key moments. 1. The S & P 500 is slightly higher Friday, capping off a volatile week in the markets. The semiconductor group â including Micron and Club holdings Arm , Broadcom , Nvidia and Intel â is lower. The pullback comes following a New York Times report Thursday night that OpenAI may delay its initial public offering until 2027. One of the reasons cited in the story is that executives are cautious in light of SpaceX's volatility since becoming a publicly traded company two weeks ago. We're not so sure that would be a reason to wait longer than initially expected. Director of Portfolio Analysis Jeff Marks said that considering how SpaceX immediately soared past a $2 trillion dollar valuation despite being unprofitable, he deems that "pretty successful." 2. Nike shares are modestly higher Friday despite KeyBanc downgrading the stock to a hold-equivalent rating ahead of next Tuesday's earnings report. Earlier in the week, Evercore also downgraded Nike. "There are signs of progress, but not enough for us to remain optimistic," KeyBanc analysts wrote. Jeff shares the concerns, pointing to weakness in China as the problem, which analysts also noted hasn't been addressed as quickly as expected. " That's been a big struggle for them for many quarters," said Jeff. However, analysts do favor Nike's decision to replace CFO Matthew Friend with Pfizer executive David Denton, who will takeover the role on Aug.17. Analysts expect the change to "drive incremental cleanup actions that are currently not contemplated." Nevertheless, they warned it that may push the recovery timeline and delay the anticipated investor day slated for the fall. As for the Club, our sentiment on Nike remains the same. "We're going to give it one more chance, one more quarter to see if they can turn things around," Jeff said. "The moment of truth is coming." 3. Shares of Honeywell are trading lower ahead of the spin-off of its Aerospace division on Monday. RBC Capital Markets initiated coverage of the new company, Honeywell Aerospace, at a buy-equivalent rating ahead of its first trading day. Analysts issued a $300 price target on Honeywell Aerospace's shares, saying that the company's aerospace and defense business is under-appreciated. RBC appears to be the first Wall Street firm to initiate coverage. As of Thursday's close, Honeywell Aerospace's stock was tracking to open around $220 per share, so RBC's price target represents around 35% upside. "I like that a lot," said Jeff. We've been waiting for this spin-off for ages. Jeff added, "The aerospace businesses is one where we're going to look to build up over time." (Jim Cramer's Charitable Trust is long NKE, ARM, AVGO, NVDA, INTC, HONA . See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
