😴 This Stock Could Be a Sleeping Giant

Plus, the shocking percent of banking jobs Citigroup thinks can be automated.

Happy Monday 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 Rose on Monday. The Nasdaq Composite rose nearly 1%, while the Dow and S&P 500 made marginal gains to kick off the second half of the financial year.

  • 📈 | One Notable Gainer: Shares of Tesla popped 6%, showing investor optimism ahead of the company’s second-quarter EV delivery data, which will be released tomorrow.

  • 📉 | One Notable Decliner: Floor & Decor Holdings saw its stock fall 4% following a report from Spruce Point Capital that expressed concerns about the company’s management and the board’s credibility. It also called Floor and Decor’s financial reporting accuracy into question.

  • 😴 | Tomorrow's Trade: This Stock Could Be a Sleeping Giant. Scroll down for more.

Plus, learn which brokers offer CBOE index options.

LAST FRIDAY’S POLL RESULTS

🟩🟩🟩🟩🟩🟩 Yes ✅ 

🟨🟨🟨🟨⬜️⬜️ No ❌ 

S&P 500 Heatmap. Credit: Finviz

All Stock Heatmap. Credit: Finviz

Global ADR snapshot. Credit: Finviz

MARKET MOVERS

GME (-6%) Shares of GameStop fell amid news that meme-stock promoter Keith Gill is being sued for an alleged “pump-and-dump” scheme with GME (NYP)

NIO (+7%) Chinese EV maker Nio reported that its vehicle deliveries rose nearly 100% in June, with 21,209 vehicles delivered last month (Barron’s)

NCLH (-6%) Shares of Norwegian Cruise Line fell following Hurricane Beryl making landfall in Grenada as a category 4 storm (NBC)

APPL (+3%) Apple’s stock rose on news that iPhone shipments in China surged 40% in May (BI)

NEE (-1%) NextEra Energy mostly recovered from a 5% decline earlier in today’s trading session following a downgrade from the Royal Bank of Canada (CNBC)

TOGETHER WITH CBOE

OVERHEARD ON THE STREET

AP: The DOJ is pushing Boeing to plead guilty to criminal fraud in connection with two deadly plane crashes involving its 737 Max jetliners.

WSJ: Delta Apparel has filed for Chapter 11 bankruptcy with a deal in hand to sell its Salt Life brand.

Investing.com: Amazon is the first company to sidestep a carbon offsetting standard developed by a non-profit funded largely by Jeff Bezos.

AP: A strike by plane mechanics forced Canada’s second-largest airline, WestJet, to cancel hundreds more flights, upending 110,000 travelers.

CNBC: A comeback for movie-going? “Inside Out 2” topped $1 billion at the global box office, the first film to do so since “Barbie.”

TOMORROW’S TRADE IDEA, TODAY

A Difficult Few Years

Honeywell (HON) stock hasn’t had a great record over the past few years. The industrial company used to be a bastion of consistency as far as business fundamentals and stock performance.

Covid certainly hindered Honeywell, and its EPS grew only at around a 3% annual rate between 2018 and 2023. That’s well below the S&P 500’s 8% average during the same time. The stock gained just 22% over the past 5 years, over 60% below the index.

A New Path

Now, under newly minted CEO Vimal Kapur, the company could turn things around. Honeywell is gunning for 10% annual earnings growth and 25% operating profit margins through acquisitions and improving operations. Analysts are predicting annual sales growth of 5% a year between 2023 and 2026.

In June, the company completed its acquisition of Carrier’s security business for $5 billion. The newly acquired company will be added to Honeywell’s building automation arm to increase product offerings.

The industrial giant also has plans to purchase aerospace and defense company CAES for $2 billion, to be melded into its aerospace department.

A Fair Price

For the first time in a long time, Honeywell stock looks to be priced fairly. Shares are up 2% YTD and almost 3% over the past 12 months. Analysts give it an average price target of $227.47, a 7% upside from Friday’s close. However, some analysts think Wall Street is underestimating the company. 

Honeywell is a well-established and longstanding company that some analysts believe is a sleeping giant.

Are you bullish or bearish on Honeywell (HON) over the next 12 months?

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TOGETHER WITH CBOE

ON OUR RADAR

Bloomberg: Hedge funds, including Anchorage Capital Advisors and Squarepoint Capital, are hoarding cobalt amid a battery metal slump.

HCP: 46% of Americans are “currently struggling to remain where they are financially," according to a Monmouth University Poll.

PT: According to Citigroup, approximately 54% of jobs across banking have a high potential to be automated.

USA Today: Financial platform Moneywise found that the average American salary has fallen 8.2% over the past five years.

WSJ: China’s manufacturing sector stayed in contraction for a second consecutive month in June.

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