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Earnings Beat Lifts BlackBerry, Levi's; Block, Hertz Dip on Downgrades

Pre-Market

By Alex P. Chase

4/4, 06:22 EDT
Hertz Global Holdings, Inc
Levi Strauss & Co
Block, Inc.
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Key Takeaway

  • BlackBerry (BB US) and Levi Strauss (LEVI US) shares rise by 6.8% and 8.4%, respectively, after surpassing earnings expectations, signaling strong financial health.
  • Block (SQ US) and Hertz (HTZ US) face declines of 3.8% and 3.4% following analyst downgrades from Morgan Stanley and Goldman Sachs, highlighting market skepticism.

A Glimpse of Optimism

As dawn breaks on Wall Street, the pre-market activity hints at a cautiously optimistic stance among investors, with S&P 500 futures edging up by 0.3% to 5,282.25. This subtle yet positive shift sets the stage for a day where earnings reports and analyst ratings recalibrate market expectations, particularly as the financial community braces for the latest jobs data and its implications on future monetary policies.

Earnings Surprises and Analyst Revisions

In a market that thrives on expectations, BlackBerry (BB US) stands out with its ADRs climbing 6.8% after unveiling a surprise profit for the fourth quarter, a stark contrast to the anticipated loss. This performance, underscored by effective cost reductions, signals a potential turnaround for the software firm. Meanwhile, Levi Strauss (LEVI US) shares soar 8.4%, buoyed by an upward revision in its full-year earnings forecast and a first-quarter adjusted net income that surpassed estimates, painting a robust picture of the clothing giant's financial health.

Analyst Downgrades Stirring the Pot

The narrative takes a different turn with Block (SQ US) and Hertz (HTZ US), both experiencing a dip, down 3.8% and 3.4% respectively, in the wake of analyst downgrades. Morgan Stanley's downgrade of Block to underweight from equal-weight reflects skepticism about the Cash App's potential to further penetrate the banking and credit services market. Similarly, Hertz faces headwinds as Goldman Sachs shifts its stance to sell from neutral, contrasting with its more favorable view on Avis Budget Group.

Sector-Specific Optimism

The pre-market session also shines a light on specific sectors poised for growth. Wayfair (W US) shares ascend by 5.3% following an upgrade to outperform from in-line by Evercore ISI, signaling confidence in the home furnishings e-commerce platform. Additionally, Zeta Global (ZETA US) enjoys a 4.8% uplift as Morgan Stanley moves its rating to overweight, citing the software firm's sustainable growth and improving profitability as key drivers.