Happy Wednesday afternoon to everyone on The Street. Here's a snapshot of where markets ended the trading session, plus tomorrow's trade idea delivered to you today.

• 🟥 | US stocks fell sharply today, despite trading up intraday, after the Federal Reserve cut rates by another 25 basis points but signaled fewer to come in the near future. The Dow’s decline cemented its worst losing streak since 1974.

• 📈 | One Notable Gainer: Shares of electronics parts supplier Jabil surged 6.7% after soaring past expectations and raising its guidance.

• 📉 | One Notable Decliner: Tech giants sold off in the wake of the Fed’s decision, led by a decline of more than 8% in Tesla’s stock.

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MARKET MOVERS

UnitedHealth, Cigna, Rivian

UNH (+2.9) / CI (+6.3%) UnitedHealth, Cigna Plunge On Trump's Latest Promise: A Potential Buying Opportunity? (SeekingAlpha)

RIVN (-11.2%) Rivian Stock Is Falling. Why This Analyst Downgraded the Shares. (Barron’s)

BIRK (+2%) Birkenstock Aims for Firmer Footing After Tough Year for Profitability (WSJ)

HEI (-8.7%) Warren Buffett Defense Pick Heico Tumbles As Sales Slow (IBD)

OVERHEARD ON THE STREET

CNBC: The Fed lowered its key interest rate by a quarter point today, the third consecutive cut, but emphasized a cautious outlook on future reductions.

Reuters: The Fed cut the reverse repo rate by 30 basis points, bringing it to the low end of its benchmark rate, which could flush cash from the reverse repo facility.

NYT: The US Supreme Court will hear arguments regarding the TikTok divestment law, set to take effect Jan. 19, but will not block the ban during the case.

WSJ: The US is considering a ban on Chinese-made TP-Link routers, the bestselling router on Amazon, due to links with cyberattacks.

Bloomberg: Apple will end its efforts to create an iPhone hardware subscription service.

TOMORROW’S TRADE IDEA, TODAY

The (Re)Growth of Hims & Hers

The Future of Healthcare

Hims & Hers (HIMS) is calling itself “the future of healthcare” — and Morgan Stanley (MS) thinks there might be something to that.

Much like hair upon exposure to its products, the company has been growing rapidly. And according to the investment firm, it shows no signs of slowing down.

Analyst Craig Hettenbach initiated coverage of the stock at an Overweight rating and a $42 price target. That’s good for nearly 50% upside from current prices, on top of its already impressive 220% YTD gain.

Positioned for the Future

The stock saw a sharp increase early in 2024, following the company’s announcement that it would be giving customers consistent access to weight-loss injections.

Hettenbach also believes that HIMS shares are attractive at their current value, especially on a growth-adjusted basis. He referred to the stock as a “compounding machine”, thanks to the company’s apparent ability to continuously grow its margins.

The analyst expects Hims & Hers to grow its revenue by a compound annual rate (CAGR) of 20% through 2026.

Strong Leadership

Of the 14 analysts covering the stock, 6 have given it a Buy rating, while just one has rated it Underperform.

According to Hettenbach, Hims & Hers is well-positioned to take advantage of increasing demand across the spectrum of personalized medication. Its management team is well-seasoned and focused on growth, the analyst added. In fact, that growth has already materialized, with subscribers increasing 175% year-over-year in Q3.

When a self-care product yields tangible results, you’ll probably keep using it until that changes. According to Morgan Stanley, the same principle should be applied to investing in Hims & Hers.

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ON OUR RADAR

BI: Read how famous musicians like Chris Brown used COVID relief funds for luxury purchases like Balenciaga, private flights, and million-dollar bonuses.

The Hill: GOP senators are arguing over a proposal to increase Social Security benefits for some government workers ahead of a Senate vote.

Barron’s: After falling into correction territory, NVIDIA stock appears stagnant — but there are ways it could rebound.

Reuters: Toy manufacturers are redesigning products and seeking new low-cost suppliers in anticipation of President-elect Donald Trump’s proposed tariffs.

AP: 16 subway stations in Barcelona now use energy from train brakes to power the trains, stations, and nearby EV charging stations.

TUESDAY’S POLL RESULTS

Are you bullish or bearish on Uber (UBER) over the next 12 months?

🟩🟩🟩🟩🟩🟩 🐂 Bullish

🟨⬜️⬜️⬜️⬜️⬜️ 🐻 Bearish