Amazon target cut, Lordstown cut to sell, Coinbase introducing direct deposit of paychecks

Yahoo Finance’s Jared Blikre reports on the day’s trending tickers.

Video Transcript

ALEXIS CHRISTOFOUROS: Jared Blikre here now with a spotlight on some of our trending tickers. And Jared, I know you’ve got your eye on Amazon. Actually, it’s having its price target cut at Morgan Stanley. Pretty rare for Amazon. Tell us what’s behind that.

JARED BLIKRE: That’s right. It’s all about rising wages and the constraints that that puts on their operating margins. And they’re only expecting this to be transitory for a few quarters. They’re expecting. revenue growth to accelerate in the first half of next year.

Let’s go to the YFi interactive. And this is going to be the NASDAQ 100, just so I can show all the mega-caps. Most of them under pressure right now, Facebook and exception. But here’s Amazon, down just short of 1%. Here’s over the last five days, pretty choppy action. You take a look at the year to date, pretty choppy action. You take a look at the two year, pretty choppy action going back to about the middle of 2020.

So this is a stock that broke to recent record highs, really came back to the ground, and hasn’t done much since. So here’s what Morgan Stanley is saying about the company. They lowered their price target to 4,100 from 4,300, excuse me. You can see that still well above the current price of about 3,400 right here. That’s still an upside of almost 20%.

However, they’re saying that the shares could remain range-bound until that revenue growth that I was talking about can reaccelerate in the first half of next year. Now, you’ll remember, recently they announced that they were going to hire 125,000 seasonal workers. That’s in addition to 40,000 people in their corporate and tech roles. And we know that wage prices have been going up, especially on the lower end.

Starting wages for open logistics jobs, those are averaging about $18 an hour, according to the company. And that’s above the $15 per hour base that they set back in 2018. So you take it all in stride though, because they’re saying however, while the cost of labor is rising, the company’s growing logistics workforce is, quote, “set to enable more e-commerce share gains, faster ship speeds, and new business opportunities.” Maybe you’ll have to wait a little bit to see that reflected in the share price, Alexis.

ALEXIS CHRISTOFOUROS: All right. I guess choppy is the word of the week or the word of the moment right now on Wall Street, Jared. I want to get to Lordstown, the electric vehicle company, because you’ve also got a cut to sell there at Goldman. What’s behind that?

JARED BLIKRE: Well, this is a company that’s been beleaguered. Here’s our EV workspace here. And you can see, lots of green on the screen. Here we go. So Lordstown is actually in the green right now, up about 2 and 1/2 percent with the space. This is an intraday look. And you can see, they started out in the red but have managed to climb into the green. But you take a look at the year to date, still down about 61% and just slightly off of these lows here.

Now, here’s what Goldman is saying about Lordstown. They’re saying that they expect a, quote, “competitive albeit growing market for electric vehicles.” Also citing the operational challenges that Lordstown Motors is facing as a factor behind the downgrade.

Their price target is $5. You can see there at $7.78. And just being down more than 60% year to date, hard to see or not difficult to imagine if that target would be reached. Nevertheless, we have some more action in the EV space.

Tesla, for that matter, I’m going to go back to a market cap view. You can see the kahuna here up about 3%. They’re rolling out their self-driving beta. And according to a leaked email, there is an NDA, a non-disclosure agreement attached to that. And Elon Musk is reasoning there are a lot of people that want Tesla to fail. That’s a direct quote. And he’s telling people to be careful about posting footage to social media that could make Tesla and the company look bad.

So interesting day for EV, not all the greatest news here. But nevertheless, the reflation trade definitely on. Hot money flows going into a number of different sectors that we’ve been talking about, Alexis. EV is only one of them.

ALEXIS CHRISTOFOUROS: And another one of them is crypto, right? I know you’ve got some news coming out of that space. Coinbase going to be introducing direct deposit of paychecks into those crypto accounts. Tell us more.

JARED BLIKRE: That’s right. So here are the details on that. And first, let me get the chart up. Here we can see it’s down 1% today, still down 30% from its IPO day, hovering near those lows that it made back in June.

But here’s the details on it. Customers, they’re going to be able to choose the percentage of their paycheck to direct deposit. This is something that we’ve seen rolled out on other financial platforms. I believe Robinhood has been floating the idea that users can even get a two-day advance on it.

But back to Coinbase, they’re using a bank partner to receive customer paychecks. And they’re saying the exchange converts these allocations to crypto and deposits them in their Coinbase accounts. And then when customer funds, when they’re held as cash, they’re kept in one or more banks insured by the FDIC. And so presumably, this will get around perhaps some of the problems that they faced When. They were trying to unroll their program just a couple of weeks ago, where they were going to allow interest to be received by their customers on some of their crypto holdings.

They got in trouble with the SEC for that. Hopefully they get past that and don’t get challenged on this particular line item as well, Alexis.

ALEXIS CHRISTOFOUROS: Yeah, well, regulation, as we keep talking about, still being written there for the crypto space. So flexibility is key. Thanks a lot, Jared Blikre.