In a recent CNBC Investing Club “Morning Meeting,” host Jim Cramer expressed his views on the performance of Palo Alto Networks Inc (PANW) and Constellation Brands Inc (STZ).
Cramer noted that the U.S. stock market had a strong week, with the Dow Jones Industrial Average, S&P 500, and Nasdaq all set for significant weekly gains. He attributed this to the Federal Reserve’s indication of three expected interest rate cuts this year.
Despite this positive market outlook, Cramer warned investors against speculating on the timing of these rate cuts and advised them to focus on quarterly earnings instead. He specifically mentioned that Palo Alto Networks had been “overly punished” this year, with its shares dropping approximately 2% year-to-date, in contrast to the S&P 500’s 10% gain.
Cramer is considering buying more shares of the cybersecurity company and cited CEO Nikesh Arora’s positive remarks about the company’s new “platformization” strategy as a potential indicator of future performance. Despite a recent dip in the stock following a revenue guidance cut due to the business strategy shift, Cramer and the Club view this as short-term pain for long-term gains.
On the other hand, Wall Street analysts have been bullish on Constellation Brands, with Piper Sandler initiating coverage with a buy-equivalent rating and a $300-per-share price target. Cramer also expressed optimism about the company’s future, predicting that the stock will “go much higher.”
The short interest in Palo Alto Networks has been decreasing, indicating a more bullish sentiment among investors. This aligns with Cramer’s view that the company’s recent struggles may be temporary. Analysts have provided a mix of bullish and bearish ratings for Palo Alto Networks, with the average price target for the stock at $352.03.
Palo Alto’s stock closed at $286.78, down 0.30% from its previous close, according to data from Benzinga Pro.
Overall, Cramer’s insights on Palo Alto Networks and Constellation Brands provide valuable information for investors looking to make informed decisions in the current market environment.
