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Deal to create new multichannel video distributor also settles litigation. (0:16) Nvidia gets another accolade. (1:58) Citi gets defensive. (3:28)
This is an abridged transcript of the podcast.
Our top story so far. FuboTV (NYSE:FUBO) and Disney (NYSE:DIS) will merge Disney’s Hulu + Live TV business with Fubo, creating a new venture that will cater to more than 6.2 million customers in North America.
FUBO shares are rallying more than 150%.
Fubo’s existing management team, led by CEO David Gandler, will operate the new business in which Disney will hold a 70% stake.
As part of the deal, Fubo has agreed to settle all litigation with Disney and ESPN related to Venu Sports and also settled all litigation with Fox (FOX) and Warner Bros. Discovery (WBD). Disney, Fox, and Warner Bros. Discovery will pay Fubo $220 million to settle their existing lawsuits. Disney has also committed to providing a $145 million term loan to Fubo in 2026.
The deal will include a new carriage agreement in which Fubo will create a new sports & broadcast service that will feature Disney’s sports and broadcast networks, including ABC, ESPN, ESPN2, ESPNU, SECN, ACCN, and ESPNEWS, as well as ESPN+.
In today’s trading, it looks like the January Effect is kicking in after a dud of a Santa Rally. The major averages are all higher, with growth doing the best. The Nasdaq (COMP.IND) is up more than 1.5%, leading the S&P (SP500), which is up more than 1%.
Scott Rubner, tactical specialist at Goldman Sachs, says private wealth managers are back from the holidays and asking, “what should we buy.”
It’s not “FOMO but more FOMU (fear of materially underperforming benchmarks) out of the 2025 gates.”
Rubner is short-term bullish as the markets move above key threshold levels but says he will “go bearish in February and look to re-establish hedges given any resets in volatility.”
Among active stocks today, the floodgates are open for sell-side research calls.
Here are the highlights:
Stifel said Nvidia (NVDA) remains its “best idea” for AI/accelerated computing, saying the company will likely maintain its strong leadership position in the AI infrastructure market as its Blackwell architecture ramp begins in earnest in 2025.
Boeing (BA) was upgraded to Overweight from Equal Weight at Barclays. Analysts said the aviation and defense company is poised to gain as its output of planes, especially the best-selling 737 Max, drives higher free cash flow.
Morgan Stanley initiated Palantir (PLTR) at Underweight, citing negative risk-reward at current levels and success more than priced in at the current multiple despite strong execution and momentum.
Bank of America called out Amazon (AMZN), Chewy (CHWY), and RH (RH) as the top e-commerce picks for 2025. The three companies are seen as the best positioned to navigate potential tariff and interest rate risk in the year ahead.
And UBS downgraded Goldman Sachs (GS) to Neutral from Buy as the Wall Street firm’s business model relies heavily on Global Banking & Markets, and a “considerable” capital markets recovery is already priced into the stock’s valuation.
In other news of note, Uber (UBER) announced an accelerated share repurchase agreement to buy back $1.5 billion of shares of common stock. The accelerated buybacks are part of its previously announced $7 billion share repurchase authorization.
CFO Prashanth Mahendra-Rajah said, “Our stock is undervalued relative to the strength of our business, and we plan to accelerate our buybacks under the existing authorization as a result. This ASR represents a value-enhancing deployment of capital, retiring over one percent of our market cap.”
And in the Wall Street Research Corner, Citi favors defensive industries such as Health Care and Financials in its model portfolio.
Strategist Scott Chronert said his team’s “Sector & Industry Group Navigator” is shifting toward defensive industries “as we work through the Q4 reporting period and first 100 days for the new U.S. government regime.”
Citi has overweight ratings on Health Care, Communication Services, Energy and Financials. Underweight industries include Consumer Discretionary, Industrials, Consumer Staples, and Materials.
“Information technology is Market Weight, but we differentiate with semiconductors Overweight, software Market Weight and hardware Underweight,” Chronert said.
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