Boeing Downgraded, Apple & Facebook Upgraded Why?

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Well holy smoke these guys we got some upgrades and downgrades going on out there welcome to the financial education channel i am jeremy if you are new here i want to talk about three stocks in particular today that have been upgraded or downgraded within the last 24 hours one being boeing stock we know boeing’s in a bad situation right now we want to talk about

Apple stock which got upgraded we want to talk about facebook stock which got upgraded now facebook and apple i do own those companies boeing i do not own them so i just want to kind of read what these analysts upgraded and downgrade them and i want to kind of give my personal opinion on these stocks so hope you guys enjoy this as always all right let’s get into

This smash that thumbs up button edward jones is downgrading boeing to hold from by we are downgrading shares are bowing to a hold from a buy two recent accidents have raised some concerns about a specific model of the 737 max we know that boeing is focused on safety and is working with the appropriate agencies to identify the issues in our opinion the accidents

May result in additional expense in some delays in orders which from a business perspective could pressure financial results longer term we believe the outlook is balanced by the backlog of other planes such as a 787 recent defense program winds and the expansion of the services business overall we believe shares are appropriately valued for long-term investors

But needless to say once again they lowered it to a hold from a buy now obviously boeing i’m getting a lot of questions about boeing whether it be in my private stock group link down there in the description by the way if you’re interested in joining or just from people like in the comments section what and i saw a lot of comments yesterday about like my opinion

On boeing stock and my opinion on boeing stock is this still it’s a company that has a big valuation on as it fell a bunch more today but still this a company that has around a 200 billion dollar market cap on it and it’s a company that is in a real pickle right now they’re in a bad situation where we don’t know if their planes are really to blame for those two

Accidents over the past you know six months or whatnot so if it is that could be a ton more cost in there we see a lot of airlines around the world basically saying we’re taking those those are boeing’s actually out of our fleets right now we’re not going to fly them right now so obviously this is a big risk to boeing stock overall and the company so in my opinion

It’s if for me personally it’s not it’s not a company worth touching at this particular time it’s not a company that has so much upside potential that i’m looking at i’m like wow they have so much upside that here it looks cheap or something like that and i’ve gotten in stocks in the past without it you know have had things going on with them who i’ve gotten

Facebook last year when the whole cambridge analytical starter stuff you know came out and all that started going and all the negativity around facebook i said there’s so much upside in facebook that it was worth me starting to buy and i started to buy shares obviously in boeing i look at this stock and i’m like it’s not a stock i want to be part of that’s the

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Bottom line with this not a stock i want to be part of so that’s kind of my opinion on boeing it’s just not the upside potential there in my opinion in there’s still more downside risk in my personal opinion to this stock overall especially you could get really ugly you know could get a lot worse before it gets better let’s keep that in mind all right elbow so

Apple investors are too pessimistic about its hardware and its stock an analyst says alright mohan’s monday note included a number of reasons he thinks apple shares can rise roughly 17 percent from current levels including over bearishness about the hardware business ongoing questions about the us china trade and demand from the crucial asian market as well as

Concerns about hardware feature upgrades still linger mohan wrote he lowered his fiscal 2020 iphone unit sales estimate to 190 million from 200 million but he boosted his 2021 outlook to 220 million from 215 million citing upgrades in the connection with 5g networks as we know the 5g iphone should be out around that time i expect the 5g iphone to come out in the

Fall of 2020 so which means 2021 units should be very high i think that’s when an iphone will really get back to big growth i wouldn’t expect you know obviously this year we’re in or next year to really be growth yours kind of like i would expect almost like next year to kind of be stagnant compared to whatever you know we do this year but in 2021 moving forward

I think we’re gonna have a mass upgrade in not just iphones but smartphones in general people that have been holding out for years and years are kind of waiting for that 5g because the speeds and whatnot in what you can do on 5g it’s just a whole different ball there okay says their current stock price of one hundred and seventy three dollars suggests that the

Market is discounting a negative growth scenario for hardware and for services mohan rope we view this as too pessimistic in our price objective of two hundred and ten dollars is more aligned with a scenario that assumes a flat hardware revenues and mid-teens year-over-year growth and services that’s the thing with apple stock it’s not just about this this iphone

Story obviously iphone dominates a lot of their revenues but services continues to be an absolute growth beast and and even if iphone units don’t grow this year or next year which they probably won’t that still puts services in the situation where services can still grow plenty okay services can still grow you know anywhere from ten to twenty percent for at least

The next two plus years even if iphone revenues do not grow that’s the magical thing about that because service is just a recurring revenue stream people keep spending money you know someone like myself that signed up for apple music for instance guess what i keep paying into apple music each and every month to keep making money i’m on the apple cloud or whatever

I keep paying into that each month and that’s just a great thing obviously for apple because these just recurring revenue streams from folks in and i mean any apps you have or movies you buy or songs you buy our albums or anything like that across the board apples making money from all that and even though you know things like battery upgrades and whatnot they’re

Making money from that and something he didn’t even really touch on was wearables the air pods have absolutely taken off and become like something like almost everybody wants now at first that people were like what the heck are those and now i see it in like every kid out there at a college campus now wants a pair of ear pods or has a pair of air paws apple watch

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Sales are absolutely taken off so the wearables is another growth story for them and then i just think iphone won’t grow until 5g comes out and then it’s gonna start to become a growth beast once again okay obviously apple is our best position in terms of percent we bought that in january and we’re already up over 25% on the apple shares unfortunately i only bought

$5,000 worth when i bought i’m kind of regretting that i wish i would have bought a lot heavier but that can always be said what’s interesting is back when i put out that video i finally bought apple stock a lot of people were like oh that’s such a dumb investment you’re going to lose money i don’t know if it’s just apple haters in general if people really thought

I would lose money on that stock and the best part is that’s an s stock stuff going up this stock will go up a lot more over the coming year especially once iphone gets back to growth so just you know people have their opinions and that’s fine okay now let’s talk about facebook stocks so facebook is being upgraded to a buy from a neutral numerous said to expect

Positive revisions throughout the year given management’s original commentary that the operating margins would trend toward the mid 30% range over the next several years and considering guidance for 2019 expense growth essentially equates to 35 to 36 percent operating margins right out of the gate we believe the expense growth outlook may be tempered as we progress

Throughout the year while we’re not making it in to any improvement for 2019 we assume 2020 operating margins or 100 basis points better than the prior model and reached 35% in 2021 regulation likely makes facebook stronger we continue to believe that increased regulation will be a net positive for large platforms like facebook though there could be some headline

Risk in the near to medium term on the whole we do think the negative headline headwinds have largely been exhausted with little reaction to negative press as of late okay two things i want to touch on in regards to facebook obviously you guys know i love facebook long term that’s my actually biggest position and whatnot i don’t want to really get into that okay but

Two things okay one is people think regulations hurt big businesses already they think regulation they think all day i hurt those big businesses well a lot of times actually when you have more and more regulations come in a lot of times it actually hurts the small businesses or the people trying to come in and compete because our ton more legal costs are some more

Compliance costs that have to go with it a company like facebook or google these massive companies if they have to spend an extra 10 million or 100 million dollars on legal fees and whatnot for you know keep it up with all the regulations it’s nothing to them however if you’re a mid-sized business is trying to become a big business in that million or 100 million

Could be you know basically oh what makes or breaks you in the end okay so the regulation part i think it’s funny that everything sold yeah they’re gonna hurt google so bad they’re gonna hurt him is only gonna hurt facebook i’m looking at and i’m like a lot of times that actually helps them protect the big businesses long term it’s just unfortunately how it works

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Okay second part i want to bring out is around the negative headlines in relation to facebook and i talked about this a lot in late 2018 when i was buying facebook stock heavy i talked about how facebook’s stock in facebook the company was basically right around the center of a hurricane okay right around the center of the hurricane is the most violent you know

Rate when you’re outside of that middle part there is so violent in that part and that’s where facebook has just been for the last couple years and what i felt is the hurricanes now moving further and further away and now there’s been so much thrown at facebook over the last few years and so many negative headlines around facebook and just everybody that’s a media

Outlet thrown so much negativity at facebook oh facebook’s bad for this with that now all so now they get at the point where you if you’re trying to sling mud at facebook anymore it just slides right off him because there’s been so much that’s been in people’s minds already that it’s just like at this point there’s no more mud you can sling at it okay there’s no

More mud you can sling at it that will stick to facebook now there’s just everything’s been out there and people are going to judge facebook and facebook’s products and they’re either judge it as oh well we’ll use it or we won’t use it there’s nothing else that you can really throw at facebook at this particular time that’s gonna hurt the stock and we’ve seen it

Where we’re you know publications will try and come out and write negative articles at about facebook and a year or two ago that would hurt facebook stock and now at this particular time it’s at a point where it just doesn’t even hurt the stock anymore because people understand there’s so much growth left in that company and there’s so much business moat around

That company like it’s so hard to just start a social media company that gets a billion plus people on earth even hundreds of millions it’s so unrealistic like why have we not seen that right snapchats been the closest thing we could call to a competitor of facebook or instagram and snapchat is just a little little tiny thing compared to facebook and instagram

Right and that’s a closest thing we can call it a competitor over the last five plus years so it’s just really hard to build build littles types of businesses facebook continues to be that the company that everybody wants to stick add money to that rates will continue to increase over time and it’s just a fulfilling prophecy that the stock is gonna go up and up

And up over the coming years and all this regulation and whatnot you know it’s ultimately it will help the big businesses longer term short term it provides a little bit of risk everybody’s right some scary articles but in facebook’s case at this point in time you can’t sling anymore fit guys this that’s this kind of situation there but i want to hear your guy’s

Opinion about boeing apple facebook do you like those stocks do you not like those stocks or like what is your opinion out there i would love to hear from you guys as always in that comment section thank you for watching and have a great day

Transcribed from video
Boeing Downgraded, Apple & Facebook Upgraded Why? By Financial Education

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