4 Quick Portfolio Hits on McDonald's, Amazon, Morgan Stanley, and Apple
It's all about donuts, pharmacies, large-cap banks, and a developer summit.
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* McDonald’s to go nationwide with Krispy Kreme
* Amazon Pharmacy aims to tap weight loss drugs
* Morgan Stanley remains a big bank bull
* Mark your calendar for Apple’s WWDC 2024 event
While it’s been a rather subdued trading session today, there have been a few items worth noting in and around TheStreet Pro Portfolio.
McDonald’s and Krispy Kreme
Starting in 2H 2024, McDonald’s MCD intends to sell Krispy Kreme DNUT doughnuts at its restaurants, and by 2026 that effort should be nationwide. While this is a positive for McDonald’s and its menu offering, complementing its coffee push, our thinking is the fatter beneficiary is Krispy Kreme as it gains access to ~7,500 McDonald’s locations in what we would call an asset-lite move. Until we see signs this effort is improving comp sales at the Golden Arches, our price target remains $325.
Amazon and weight loss drugs
Moving 180 degrees in direction, according to an interview in the Financial Times with John Love, head of Amazon’s AMZN pharmacy operations, the unit is aiming to tap into the rising demand for weight loss drugs in the US. Per Love, “the drugs are poised to generate "a lot of revenue" for the unit” but it’s only one part of the business, one that Love describes as “seeing rapid growth.”
Amazon doesn’t break out its Pharmacy business, at least not yet, but as we shared this morning, that industry is one that, in our view, could benefit from “creative destruction” as Amazon focuses on it.
Morgan Stanley is bullish on large-cap banks
Morgan Stanley MS analyst Katy Huberty published a research note sharing the view that money center banks should benefit from the continued rebound in capital markets activity, mergers and acquisitions, equity capital markets, and debt capital markets. We are always happy to hear our thinking being echoed at bulge bracket firms like Morgan Stanley.
Huberty called out Bank of America BAC, Citi C, Goldman Sachs GS, and JP Morgan JPM, but we would add Morgan Stanley to that list, a firm that Huberty could of course not name as it would be a conflict of interest.
Apple set the date for WWDC 2024
Apple AAPL announced its annual developer summit, WWDC 2024, will kick off on June 10 and run through June 14. The annual event showcases upcoming software releases across the company’s portfolio (iOS, iPadOS, macOS, watchOS, tvOS, and visionOS), with the unveiling happening during the keynote address.
We are in the camp that Apple will include AI-related announcements at the event, and our thinking is that those will include third-party partnerships, like the ones we’ve been reading of late with Alphabet’s (GOOGL) Google Gemini, as well as its internal efforts.
At the time of publication, TheStreet Pro Portfolio was long AAPL, MCD, MS, BAC.
