Latest news with #KeithLerner
Yahoo
6 days ago
- Business
- Yahoo
Market outlook: What to expect from the second half of 2025
The market has been trading sideways for roughly seven months, Truist co-chief investment officer and chief market strategist Keith Lerner tells Brad Smith on Morning Brief. Watch the video above to hear Lerner outline his expectations for the second half of 2025. To watch more expert insights and analysis on the latest market action, check out more Morning Brief here.
Yahoo
27-06-2025
- Business
- Yahoo
Fed rate cut and tech boom could lift markets but a choppy summer still looms, analyst warns
After a roller-coaster first half for US stocks, investors hoping for smooth sailing in the back half of 2025 should hold off on celebrating. Keith Lerner, co-chief investment officer at Truist, says the technical picture remains bullish, but valuations are stretched, and seasonal volatility could test investor resolve before year-end. 'I think the bias is still high,' Lerner said on Yahoo Finance's Opening Bid. 'I think you still want to position for that, and we're focused more on some of these growth areas.' The S&P 500 (^GSPC) is trading near 22x forward P/E, the top end of its range from recent years. While July is historically a solid month, 'August and September tend to be a little more challenging,' he said. Year to date, the S&P 500 and the tech-heavy Nasdaq composite (^IXIC) have both jumped around 5%. AI hype has driven Big Tech stocks like Nvidia (NVDA) to record highs. Yet despite the tech gains, markets have largely traded sideways for seven months. Lerner noted that while the tech breakout is encouraging, investors should perform "gut checks" along the way. Long-term investors should stay in the market but keep expectations in check, especially as valuations near their ceiling. A softening Fed, steady economic data, and robust earnings from key sectors still underpin the bull case. 'We still like growth areas, tech, semiconductors, communication services, and we're starting to add a bit more international exposure,' Lerner said. Layered on top of seasonal chop and valuation anxiety is a steady drip of geopolitical uncertainty, including ongoing tensions in the Middle East. But investors may be overestimating the impact of these on the market. According to a new Barclays report, spikes in geopolitical risk have had little observable impact on US equity returns over the past three decades. The S&P 500 has historically shrugged off periods of unrest, with six-month returns staying largely in line with long-run averages after spikes in risk. At the sector level, industrials tend to outperform after geopolitical shocks, while energy stocks typically lag, a trend that might be unexpected for investors adopting a defensive strategy. However, geopolitical spikes are rarely a reason to abandon equities, per the report. Francisco Velasquez is an associate reporter at Yahoo Finance. He can be reached on LinkedIn and X. Click here for in-depth analysis of the latest stock market news and events moving stock prices
Yahoo
27-06-2025
- Business
- Yahoo
JPMorgan, Goldman Sachs' new highs: A 'good sign' for the economy
Nvidia's (NVDA) record run isn't the only big move on Wall Street this week: JPMorgan Chase (JPM) and Goldman Sachs (GS) have also hit all-time highs. Truist co-chief investment officer and chief market strategist Keith Lerner, Yahoo Finance Senior Business Reporter Ines Ferré, and Yahoo Finance Senior Reporter Allie Canal join Opening Bid host Brian Sozzi to break down what's behind the surge in bank stocks and how investors should approach the sector. To watch more expert insights and analysis on the latest market action, check out more Opening Bid here. While you have been paying attention to Nvidia's record highs this week, JP Morgan and Goldman Sachs are also at all-time highs as well. The drivers you ask? Even if you didn't ask, I'm going to tell you. No signs of a rate cut from the Fed, more volatility in the market, and likely easing financial regulations. Veteran bank analyst Mike Mayo telling me this morning, he's still bullish on the banks in large part because of easing capital requirements. Jumping into the Yahoo Finance platform, I find it interesting, you see the platform right there, that JP Morgan and Goldman Sachs still trade at a discounted forward PE ratio versus the broader market given all these tailwinds. They do still trade at their historically relatively high price-to-book ratio. A lot of wonky stuff there, but all very important for making investment decisions. Uh still with me is Keith Lerner, Ali Canal, and Ines Ferre. Keith, well, uh the good thing about having you here amongst many reasons, you actually work at a bank. So, help us understand what the market might be seeing in some of these big bank stocks. Yeah, well, first of all, I think it's a good sign that you're seeing these big banks, um, break out to new highs. That's not something you typically see right before a recession. And I think what you're seeing is one, you're seeing a steeper yield curve, that's a positive. I I think, you know, the M&A and IPO market was pretty much shut down in the first half. That's starting to pick up. That should accelerate in the second half as well. Eventually, we do think that the the Fed likely cuts rates in the back half as well. And then the big part as you already mentioned is the deregulation part as well. So, it is mixed somewhat with some within the sector, but um especially with more volatility as well that you've seen, it is certainly good for some of the the larger uh financials. And again, a good sign technically that they're that they're leading the uh broker dealer index just broke out. Now, how should investors, Keith, let me just stay on you for a second. How how should investors value these these stocks? You heard me right there talk about the P ratios, it's trading at a discount relative to the broader market, price to book still relatively high. I was looking at a good note from RWB this morning noting that JP Morgan is trading at record high valuations. Should investors just ignore that and ride this momentum because we are going to get easier regulations? Well, I wouldn't ignore them and those high valuations may suggest the upside will be may be somewhat constrained over time, but I also think you have to remember coming out of the the financial crisis, you know, the capital ratios are a lot um higher, the financial system's a lot stronger as well. So, I think a lot of these financial companies are in a better position. So it, you know, depending depending how far you're looking back, it makes sense that they're trading somewhat more at a premium valuation, and there's also the overall market's trading at more of a premium valuation. So it makes sense that um that you'll see some follow through, and you're actually seeing those higher quality names that investors have more confidence with um, you know, have that premium, which to me makes some sense. Uh Ines, uh you know, Keith mentioned a good point on on volatility in the markets. I just, I'm thinking through what we've seen in the oil markets, I'm seeing what's happening in the crypto markets and and you would have to think, you know, on those second quarter earnings calls with the big banks, they're going to really hype up how that volatility is shaping their bottom lines and how it could continue to shape the bottom lines in the back half of this year. Yeah, no doubt, but um as you know, as Keith was alluding to, I mean this is very, this is very good for the banking sector in general. Um the fact that there we are seeing now, we've seen peak regulation when it comes to banks. So these stress tests are expected to come in uh very in in putting banks in a very favorable light. Um I was struck by the fact that expenses, regulation related costs, from one of the analyst notes this morning, are estimated at 20% of the total bank expenses. So this is going to free up a ton of capital. But as you mentioned, yes we've seen volatility in different areas. One thing I will mention about crypto, it is going to change the way uh financial services are um are done in many aspects. Um just one note on the stable coin which I know that you know that I've been covering quite a bit. Stable coins is going to be very, very significant uh when it comes to uh these stable coin issuers are big buyers of short-term treasuries. This is going to be huge. This gives incentives for the government to uh work alongside stable coin issuers. So this is going to sort of revolutionize the financial sector. And you could type in Ines Ferre into the top of Yahoo Finance in that search bar, read all her work uh because it's really good stuff on all things crypto. Ali, uh you're in the zone today. Last 30 seconds, do you have a big call on the banks? Why not just throw caution to the wind, right? Yeah, I you talked about that note that you flagged, Brian, from Barrett and they did wave caution on some of those mega cap names. JP Morgan, they downgraded to underperform, Bank of America to neutral. Not because they are bad banks, they have fortress balance sheets there, but because they're just too expensive, as we've been discussing with these valuation concerns. JPM in particular trading at record valuations here with limited upside according to these strategists. And they argue that regional banks may be the better play here. Now, regional banks, they've just been so beaten down here, but the risk reward scenario just looks a bit more attractive on that front. So maybe we could see this big rebound here in regional banks, but I do agree with Keith that those high quality names, probably within this market that's very prone to headlines and volatility, you want to be focused there.
CNBC
26-06-2025
- Business
- CNBC
Bull market's dominant theme is AI, says Truist Wealth co-CIO
CNBC's 'Closing Bell' is joined by Stephanie Link, chief investment strategist at Hightower Advisors, and Keith Lerner, co-chief investment officer at Truist Wealth, to discuss the day's market action, their outlook and more.
Yahoo
21-06-2025
- Business
- Yahoo
‘Stick to the Bullish Trend': Truist Sees Breakout Ahead for S&P 500 — 2 Stocks That Could Ride the Momentum
Markets roared into the new year on a wave of tech and AI optimism, climbing to record highs in February. That rally briefly lost steam when Trump's erratic tariff rollout injected a dose of uncertainty into the market. But with those concerns now receding, investors are shifting back into risk-on mode, and the S&P 500 is trading less than 3% below its peak. Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter On a 12-month basis, Keith Lerner, chief market strategist at Truist, sees this stretch as a period of quiet consolidation — one that could pave the way for further upside. 'If you look at the big picture for the overall market – the S&P – we've been flat for seven months, and the technology sector has been flat for almost a year. As we test these technical levels, I think we'll eventually break above them,' Lerner opined. 'That said, there's likely to be some pain trade… but I think in general, the underlying trend is still positive and we want to stick with that underlying trend.' Taking that outlook to heart, Truist's stock analysts have pinpointed two stocks they believe are primed to benefit from renewed market strength. We've used the TipRanks database to find out what the rest of the Street has to say about both of their recent picks. TAT Technologies (TATT) The first company we'll look at is TAT Technologies, an aerospace tech firm that provides a set of specialized services for the commercial and military aviation industries. These services include thermal solutions, including environmental controls as well as engine and fluid coolant systems; APU support, including service and maintenance of aircraft APUs (auxiliary power units); and landing gear services, to support this key system. At its core, TAT, a global firm, gives its customers a wide-ranging set of technical skills vital to keep aircraft fleets in efficient operating order. TAT was founded in 1969, and brings its decades of experience to bear on aviation problem solving. The company takes a proactive approach, delivering cutting-edge solutions designed to promote customer confidence along with operational efficiency. Aviation is big business, and TAT has leveraged its supporting role to build up a business that generated $152.1 million in revenues last year. In its most recent earnings report, covering 1Q25, TAT showed solid year-over-year growth in both revenue and earnings. The company had a top line of $42.1 million, up almost 24% from 1Q24, and the bottom line of 34 cents per share was up from 19 cents in the prior-year period. We should note that the company's revenue total just missed the forecast, coming in $450,000 below the estimates. On a more positive note, EPS trumped Street expectations by $0.04. For Truist's Michael Ciarmoli, an analyst ranked amongst the top 1% of Wall Street stock pros, the key points for investors here are TAT's solid potential for expansion and growth, and its favorable risk/reward profile. He writes, 'We view TATT as an under the radar small cap comm'l aero aftermarket component repair player poised to drive above market/peer avg growth through share gains and an improved go-to-market strategy. In the coming years as revenues grow and the company scales its operations we believe gross and EBITDA margin expansion will be a key driver of the stock. In the near-term mgmt's execution on its recent APU repair wins and corresponding share gains will be a major focus point. With the stock trading at a 20% discount to its closest peers on an EV/EBITDA basis we believe the risk/reward profile is favorably skewed.' The 5-star analyst goes on to put a Buy rating on this stock, complemented by a $35 price target that suggests a potential one-year upside of 32%. (To watch Ciarmoli's track record, click here) There are only two recent analyst reviews on file for TATT shares, but both are positive – giving the stock its Moderate Buy consensus rating. The shares are priced at $26.44 and their $35.50 average price target implies that the stock will gain 34% in the coming year. (See TATT stock forecast) Peloton Interactive (PTON) Next on our list is Peloton, the well-known home workout company that brought interactive social media to the world of home-based fitness. Peloton has updated an old stand-by – the stationary bicycle – with modern technology, including digital video connections. This forms the base for a connected, online exercise community, allowing Peloton's customers to find the advantages of group exercise classes in their own homes. Peloton leveraged its connectivity to great advantage several years ago, during the COVID pandemic, and has continued to use it as an important selling point that differentiates it from its competition. Peloton has built a community of 6 million members, making it one of the world's largest interactive fitness platforms, however its recent financial results weren't a particularly strong affair. In the last reported quarter, for fiscal 3Q25, the company saw a 13% year-over-year decline in sales. The revenue hit was strongest in the connected fitness segment, at 27%, but also included a 4% decline in subscription revenue. In total, Peloton's revenue came to $624 million. As noted, that was down 13% YoY – although the figure did beat the forecast by $2.67 million. The company's bottom line came to a net loss; the EPS of ($0.12) missed expectations – by 6 cents per share. The company has recognized the weaknesses and is actively working to address them. In January, Peloton launched its Personalized Plans programs and had enrolled 500,000 members by the end of its fiscal Q3 on March 31. Looking ahead to the end of fiscal year 2025, on June 30, Peloton expects to realize an adjusted EBITDA in the range of $330 million to $350 million and to bring in approximately $250 million in free cash flow. This stock has caught the attention of Truist analyst Youssef Squali, who believes that the headwinds have been priced in and that management will likely succeed in its plans to restart revenue and earnings growth. Squali says of Peloton, 'With the BS cleaned up and Opex materially cut to ensure sustainable FCF profitability, the new leadership is now squarely focused on improving the customer experience to drive revenue growth. Mgmt will guide to FY26 in early August, which is likely to be flattish, implying positive Y/Y revenue growth in 2H26, the first time since 2021. For F4Q25 (ending 6/30), our tracking of the Truist Card Data shows that revenue is tracking virtually in line with consensus (thru 6/9). With subscriptions accounting for ~2/3s of revenue, improving profitability and a valuation at 1.6x & 11.4x sales and AEBITDA, we believe that PTON is virtually de-risked with compelling upside.' Quantifying this stance, Squali rates PTON as a Buy, and his $11 price target points toward a hefty gain of 77% on the one-year horizon. (To watch Squali's track record, click here) Overall, Peloton holds a Moderate Buy consensus rating from Wall Street's analysts, based on 13 recent reviews that break down to 5 Buys and 8 Holds. The stock is currently trading for $6.22 and its $7.86 average price target suggests that the shares will gain 26% in the next 12 months. (See PTON stock forecast) To find good ideas for stocks trading at attractive valuations, visit TipRanks' Best Stocks to Buy, a tool that unites all of TipRanks' equity insights. Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment. Disclaimer & DisclosureReport an Issue
