It's been difficult to keep up. That's the story of this year's big stock winners. They keep winning and winning and winning. To analysts on Wall Street and here at the Club, it appears that some of these names are beating our six to nine month price targets every few weeks. To that end, we are increasing our Club PTs on four of the stocks in our portfolio. Raising Eli Lilly price target to $850 from $750 starting with Eli Lilly, which has been nothing short of incredible, advancing roughly 60% in 2023 and adding another 30% so far this year. However, we continue to see more upside as the company has completely reinvigorated growth thanks to GLP-1 drugs. Following last week's price target increase from $120 per share to $750 on the back of strong earnings, we will raise our PT again to $850 on Thursday. LLY 1Y mountain Eli Lilly 1 year GLP-1s are the new type of diabetes and weight loss medication that is taking the world by storm. Lilly and Novo Nordisk dominate the market. Lilly has Mounjaro for diabetes and Zepbound for weight loss. Novo has Ozempic for diabetes and Wegovy for weight loss. Those four injectable drugs are also being studied to treat a range of conditions, from heart disease to sleep apnea. In addition to Zepbound and Mounjaro, Eli Lilly has an interesting next-generation GLP-1 portfolio, including a weight loss pill. Lilly is also awaiting regulatory approval for its Alzheimer's drug donanemab. While it trades at a significant valuation premium to its historical forward price-to-earnings (P/E) multiple, this is not the Eli Lilly of yesteryear. In fact, it works out a little cheaper when accounting for growth using the PEG ratio, which adjusts the P/E to growth estimates. Even with our new $850 price target, Lilly stock still represents a lower PEG than we've seen historically, but that provides some margin of safety. The stock hit an all-time high price on Wednesday of 764.05 per share. Costco price target increased to $770 from $680 Costco is also trading at a premium valuation, but we believe it is justified due to the company's reliability and consistency. We are raising our price target to $770 per share, up from the $680 we just raised in mid-December. By competing to have the lowest gross margins and implementing a membership model, Costco has developed an incredibly defensive moat that will continue to generate market share gains. COST 1 year mountain Costco 1 year Given the incredible value shoppers get from Costco, we believe management can move through an increase in the membership price with minimal risk of high turnover. It's historically overdue. In December, in addition to reporting a solid quarter, Costco delivered the special dividend we were waiting for. It is important to recognize that the entire market is currently trading at a premium. So, relatively speaking, Costco's valuation is easier to swallow, especially considering the geopolitical uncertainty we already face, which tends to push investors toward quality large-cap names. Costco hit an all-time high of $728.17 last Thursday. A week later, it's only about $8 a share below that level. Salesforce Price Target Increased to $320 from $275 Salesforce is a Club name that we recently highlighted in our commentary on 10 Undervalued Stocks. The stock has gained nearly 10% so far this year, after nearly doubling in 2023. However, we continue to see more upside ahead as management has pivoted at breakneck speed to better balance profitability with growth. We are raising our price target to $320 per share from $275. CRM 1 year mountain Salesforce 1 year While the artificial intelligence revolution is still in its early stages, we believe Salesforce has many opportunities ahead. While companies are still learning how to implement generative AI, Salesforce has made initial progress with its Einstein GPT tool, designed to make users of its consumer relationship management platforms more productive, with features including writing personalized emails. The company also announced AI integration for its Slack work messaging platform. Microsoft has a similar AI assistant for its Office Suite called Copilot. Salesforce shares were trading near Friday's all-time high of $295.24. Broadcom price target increased to $1,400 from $1,200. Speaking of AI, that brings us to Broadcom, which hit an all-time high of 1,295.97 per share last Thursday. While we are slightly below that level, we still see upside in the stock despite its valuation premium. The need to upgrade data centers for the type of accelerated computing needed for current and future AI capabilities remains at an early stage. We are raising our price target to $1,400. This comes on the heels of a PT increase from $200 per share to $1,200 in mid-December. AVGO 1Y mountain Broadcom 1 year Broadcom's AI networking sales are already growing at a rapid pace (up 23% year-over-year in Q4 2023) and are expected to grow 30% in 2024. In fact, the UBS analysts recently said AI networking sales could accelerate further to 50% growth in fiscal 2025. Also underway is the integration of VMware, which will help Broadcom's profit margins and reduce the character cyclic. JPMorgan analysts recently said Broadcom's software business, which currently accounts for about 40% of sales, will lead to “increased earnings power with increased gross, operating and free cash flow margins.” Companies with high-margin, recurring revenue like VMware are also rewarded with higher valuation multiples on Wall Street. In chips, Broadcom is emerging as a big winner among large cloud providers, also known as hyperscalers, looking to develop their own custom silicon solutions. Its clients include other Club names, Meta Platforms, Microsoft and Alphabet's Google. While management guided 2024 sales a little below what the Street expected, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) guidance was well above expectations. Palo Alto Networks Price Target Change Pending Finally, we are aware that our price target on Palo Alto Networks also requires an update. Like Broadcom and Costco, Palo Alto saw a PT increase in mid-December from $300 to $320. That's how it is right now. We'll take a closer look at what to do after the cybersecurity leader reports earnings next week. Although slightly below last week's all-time high of $380.84, shares on Thursday were still up about 24% year to date. More than doubled in 2023. PANW 1 year mountain Palo Alto Networks 1 year (Jim Cramer's Charitable Trust is long LLY, COST, CRM, AVGO, MSFT, META, GOOGL. See here for a full list of stocks.) to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable fund's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, TOGETHER WITH OUR DISCLAIMER. NO FIDUCIARY OBLIGATION OR DUTY EXISTS OR IS CREATED BY VIRTUE OF THE RECEIPT OF ANY INFORMATION PROVIDED IN RELATION TO THE INVESTMENT CLUB. NO SPECIFIC RESULTS OR BENEFITS ARE GUARANTEED.
The Bronze Bull in the financial district of New York City.
Robert Nickelsberg | fake images
It's been difficult to keep up.
