A rough week for the U.S. markets
The three major U.S. indexes fell sharply over the last week.
After the August consumer price inflation data came in hotter than expected last Tuesday, investors are now split between one full percentage point rate hike and a 75 basis points raise in the Fed’s upcoming policy meeting on Wednesday this week.
Top Stories
- Adobe to buy Figma for $20 billion
- Starbucks’ plans for making more bucks
- FedEx rings an alarm bell
Adobe to buy Figma for $20 billion
In its biggest ever deal, technology giant Adobe Inc (ADBE) agreed to buy cloud-based design platform Figma for about $20 billion. Known for buying multiple businesses in the past, Adobe aims to tap into a broader customer base with this acquisition.
Snap Summary
Adobe shares fell 17% after the announcement as its investors were not happy with the hefty amount paid by the company for a smaller rival. The company also reported quarterly revenue of $4.43 billion, which unfortunately missed market expectations.
- Analyst consensus: Deutsche Bank rated Adobe stock “Buy” with a price target of $400. The stock closed at $299.50 on Friday.
- Future outlook: Adobe expects to generate total revenue of $4.52 billion in the fourth quarter.
Starbucks’ plans for making more bucks
Shares of Starbucks (SBUX) gained 5.5% after the coffee house chain raised its three-year profit and sales forecast and announced its “Reinvention Plan”. The company now expects double-digit growth as it expands its loyalty programme.
Snap Summary
The company plans to build about 2,000 new U.S. stores between fiscal years 2023 and 2025. It aims at having 45,000 stores globally by 2025.
- Analyst consensus: JPMorgan Chase rated Starbucks stock “Overweight” with a price target of $100. The stock closed at $91.31 on Friday.
- Future outlook: The company will resume buying back shares in its next fiscal year, which begins in October.
FedEx rings an alarm bell
Global delivery firm FedEx (FDX) spooked Wall Street after reporting revenue and income for the three months ended August 31 that missed market expectations. FedEx Express’s quarterly revenue fell $500 million below company forecasts, while FedEx Ground reported a revenue shortfall of $300 million.
Snap Summary
FedEx stock lost about 23% last week as the company sees the slowdown in global demand worsening in its November quarter. FedEx withdrew the outlook it had issued three months ago.
- Analyst consensus: Goldman Sachs rated FedEx stock “Buy” with a price target of $250. The stock closed at $161.02 on Friday.
- Future outlook: The company will close down some of its offices and freeze hiring in order to cut costs in challenging times.<CTA- Explore Markets>