A tech giant, a biotech company and a "retail winner" in Jim Cramer's Action Alerts PLUS portfolio are all making waves in the market Wednesday -- and one of them is looking quite vunerable.
Apple (AAPL) shares were trading slightly lower Wednesday. Analysts at Citi lowered estimates, citing concerns that the U.K. vote to leave the European Union might hurt the technology company. Citi is now forecasting $41.2 billion in revenue, $1 billion below the previous estimate. The analysts also lowered their expected earnings per share by $5 to $135. The team at Citigroup is anticipating a lower demand for Apple products due to the Brexit-related "macro uncertainty" and are bracing for weak sales for the iPhone 7, which is slated for release this fall.
Also, there is news about the latest version of Apple's smartphone. The iPhone 7 will start with 32 gigabyte of storage, instead of the 16 gigabyte, according to a report by the Wall Street Journal.
Apple has been a holding Action Alerts PLUS since December 2013. During that time, the stock has gained more than 20%.
Biogen's (BIIB) stock jumped nearly 2% in afternoon trading despite Jefferies analysts reducing the price target to $317 from $323. Citing strong sales trends across its multiple sclerosis franchise, with drugs Tecfidera, Tysabri and Avonex tracking above consensus, and lower research and development costs, the analysts "expect a bottom-line beat for BIIB -- $4.74 vs. $4.68 consensus." In a research note Wednesday, the analysts said they see "upside opportunity," especially with the continuation of its Alzheimer's drug, BAN2401.
Jim Cramer and Jack Mohr, the director of research for the AAP portfolio, wrote in their Weekly Roundup that "the prospect for this drug is a big question mark that investors are betting on," but added that they "remain cautious on the long-term story as the company faces a pressured multiple-sclerosis franchise and has had recent disappointments in other pipeline drug trials. Biogen is scheduled to report quarterly results on July 21.
Since Biogen became a holding in Action Alerts PLUS in November 2015, the stock has lost nearly 10%.
Shares of Costco Wholesale (COST) were inching up but are beginning to look quite vulnerable, according to TheStreet contributor Gary Morrow. "Since last year's powerful fourth-quarter rally, the stock has not been able to fully regain its footing," said Morrow. Costco has been an Action Alerts PLUS holding since October 2015 and has gained nearly 4%; it has also been a Trifecta Stocks holding since November 2015 and is down 0.03%.
But the company is also transitioning from American Express (AXP) to Visa (V) cards (Visa is an Action Alerts PLUS holding as well). "While we think the card will be a great driver in the coming months, we would not be surprised to see the initial hiccups show up in the June sales report," said Cramer and Mohr, noting also that any top-line weakness will prove to be temporary. Trifecta Stocks portfolio manager Chris Versace visited a Costco last week, and found the sign-up process for the new card "rather easy," seeing the transition as a merely a bump in the road for the "long-term retail winner."
-- Written by Anders Keitz