Ticker Take with Jon Erlichman

A weekly newsletter on investing.

Rough end to the trading week.

Greetings! Traders hit the sell button on Friday, after investors learned the U.S. economy (in December) added the most jobs since March and the unemployment rate unexpectedly declined. That might sound good, but it prompted traders to lower their expectations for rate cuts by the Fed this year.

And yet, at the same time that rate cut expectations are declining, inflation worries are actually rising. New U.S. data suggested consumers in the U.S. remain deeply worried about long-term price pressures, particularly with the threat of tariffs looming.

On that inflation narrative, it also didn’t help that oil prices were rallying on worries tied to more U.S. sanctions directed at Russia.

Overall, the S&P ended the week down nearly 2% , meaning January overall has been a negative month so far. In Canada — where a strong jobs report also had traders wondering about the rate cut plan — the TSX was also roughed up, but remains in positive territory for 2025.

For what it’s worth…January has generally been a mixed month for stocks. You can listen to the stories about the “January Effect” if you want, but going back 20 years, it’s pretty much a toss up as to whether or not it’s an up or down month for stocks. And perhaps some uneasiness after last year’s big run-up should not be a surprise.

Fallout from the wildfires

Insurance providers are tallying up the costs tied to the devastating wildfires in Los Angeles, with the estimated losses climbing well into the billions. While publicly traded companies are not the largest insurers in the state…they certainly have a sizeable presence. Chubb, for example, tends to insure very high value homes, while Allstate, Travelers and Hartford also have exposure.

5 stocks that could double in 2025?

Do you subscribe to my YouTube channel? If you don’t, please do! Not only is it free… it also helps me to continue making this newsletter free to subscribe to. This week, we explored a question I have received quite often recently — are there stocks that could double this year? Obviously some investors got excited by that idea, after some standout moves in 2024. As we always say, nobody knows the future. However, there are a few bullish analysts who believe a handful of stocks have the capability to double. You can watch that video here:

Which software stocks are top picks for 2025?

Snowflake, ServiceNow and cybersecurity-play Zscaler are names to watch, according to Deutsche Bank. The analysts there have cited improving demand, as well as AI optimism, as catalysts for continued gains.

How much does Deutsche Bank think the stocks could move? On average, 20% or more. Now, that’s just one Wall Street shop’s opinion, but a majority of analysts do like these stocks. Here are the buy recommendation breakdowns for each:

ServiceNow: 80% buy rated
Snowflake: 72% buy rated
Zscaler: 64% buy rated

Still lovin…AppLovin

Can last year’s hottest stock continue to climb this year? Investors were really lovin’ AppLovin in 2024. The company — which provides marketing services to mobile app developers — saw its stock surge more than 700%!

Aside from strong earnings, excitement over its new AI-powered ad engine and news it would be added to the NASDAQ 100 all served as fuel for the stock.

But now, a debate is raging on Wall Street over what happens next.

Let’s start with the most bullish view. On the one hand, Jefferies analysts have named it one of their top picks for 2025, with a belief the shares could potentially reach $425. And while 78% of Wall Street still recommends the stock, some analysts — Bank of America stands out, for example — are increasingly worried AppLovin won’t be able to live up to expectations with its earnings. That could be the next catalyst for the stock, when the company reports results in February.

How much time does it take companies to generate $1 billion in sales?

Walmart: 12 hours, 46 minutes

Amazon: 13 hours, 33 minutes

UnitedHealth: 21 hours, 23 minutes

CVS Health: 22 hours, 34 minutes

Apple: 22 hours, 47 minutes

Berkshire Hathaway: 23 hours, 10 minutes

Alphabet: 1 day, 28 minutes

Exxon Mobil: 1 day, 38 minutes

Costco: 1.5 days

JP Morgan: 2 days

Nvidia: 2.5 days

AT&T: 3 days

Tesla: 3.5 days

Disney: 4 days

Citigroup: 4.5 days

Analyst picks of the week

Alimentation Couche-Tard

National Bank boosted its target price on the TSX-listed shares to $89, citing growth potential. As for the lingering uncertainty surrounding Seven & I, while there would be the risk of a large equity issuance in the case of a deal happening, that would only be a short-term concern.

Bank of Montreal

The analyst team at RBC upgraded BMO and sees the TSX-listed shares reaching $161. The analyst outlook is based on the belief that BMO has largely worked through any credit concerns.

Carvana

Citi came out with a bullish call, suggesting the stock could reach $277, as the company ramps up inventory to meet demand. The stock was hit recently by a short report, but Citi suggests “taking advantage” of the sell-off.

CIBC

That same analyst at RBC who likes BMO is also praising CIBC and sees the potential for CIBC’s stock to reach $103. In particularly, the analyst believes the bank is executing well.

Coca-Cola

The research team at TD Cowen that covers Coke really likes the stock and believes $75 is a realistic target for the shares. In its view, the company is executing at the top of its game and TD Cowen sees the recent weakness for the stock as a good opportunity.

Deckers Outdoor

Evercore ISI has boosted its target price on Deckers to $235, based on its own research finding that the Hoka and UGG brands are in good shape, ahead of earnings.