Morning Market Feed, May 29th

Celsius takes a not-so-refreshing plunge as the Duolingo bird flies away with a 8.8% gain. We also saw something happening that I wouldn’t have bet on happening but investors bet on some impact. Let’s see what yesterday brought and dive straight into it!

- Let’s start the day on a positive note

Duolingo got an analyst upgrade and was up 10% on the day as the analyst said that Duolingo would survive the AI threat and gave it a price target of $260 which implied a 46% upside from where the stock was trading. In my opinion, that makes sense because of how dominant the company actually is. I also think it’s a stupid move as the stock is on my watchlist and I was hoping for it to go lower, so I may be slightly biased with my opinion. I’m currently working on the analysis of this company so that will be released in the coming weeks as well.

- I’m getting delulu

Shares of lululemon dropped another 2.5% yesterday as both Stifel, and Goldman Sachs adjusted their price targets for the company while keeping the “Buy” rating. Stifel adjusted the price target from $539, to $410, while Goldman drops the price target from $521, to $463. Additionally, shipping rates should be on the rise again with prices for shipping containers being up as much as 88% in recent weeks in China according to this article. Not a really good development for a business that has a big part of its production in Asia. My expectation is for this stock to keep dropping into the earnings as the uncertainties start mounting which will need to be cleared by management.

- I wasn’t betting on it

Draftkings was down as much as 13.4% at some point yesterday as Illinois Senate approved their budget for 2025 which includes a sports betting tax increase. According to an article by IGB, the state is expected to almost triple the tax rate on sports betting. It will result in the highest revenue players in the space having to pay up to 40% in taxes. That will affect the net income numbers of the business and this was reflected in the stock as the shareprice ended the day down 10.3%.

- So what about this non-refreshing plunge?

Well, if you thought Draftkings was having a bad day, Celsius Holdings was down as much as 18.8% at some point today, before somewhat recovering towards ending the day down 12.85%. So what happened? Morgan Stanley maintained their equal weight rating with a $75 price target as they cited data from Nielsen which showed that sequential sales growth was supposed to have dropped to 39%, with market share dropping to 10.5%, from 10.8% three weeks ago. The Nielsen data is often used in order to see energy drinks market is doing. So was it all bad? Well… Stifel came out with an increased price target after meetings with the company’s management but this seemed to not be important yesterday.

- So what is there to look for today?

There are no real macro environment catalysts, but there will be earnings from Salesforce after the market closes. Besides Salesforce, I may look into the Dick’s Sporting Goods earnings to see how they talk about the retail market for sporting goods. It may hide some hints for lululemon even as they don’t really compete or have true cross-over.

That was it for today, I will see you again tomorrow when I will include the numbers from those earnings in the report