Ticker Reports for October 6th
Trump's Drug Price Cuts: Boom or Bust for These 3 Pharma Giants
When investors hear that a company will lower prices on its products, their instinctive reaction is to expect a sequential decline in margins and profits, which is not entirely incorrect. However, sometimes these price decreases end up attracting new business, expanding market share, and more than making up for the lost ticket price in the top-line revenue.
With increased volume and demand, suppliers also receive better deals, which significantly lower costs, among other benefits. Ultimately, a price discount can end up being a blessing in disguise. As President Trump just announced his proposal to lower drug prices among the most prominent players in the space, this is precisely what healthcare investors are hoping for.
With several elements already taking shape and others still in flux, investors are wondering: Can these price cuts actually fuel growth and margin upside for names like Pfizer Inc. (NYSE: PFE), Eli Lilly Co. (NYSE: LLY), and Johnson & Johnson (NYSE: JNJ)? Or will they trigger a profit collapse?
Pfizer: Tariff Waivers in Exchange for Price Cuts
On Sept. 30, Pfizer agreed to pricing cuts under Trump’s plan and received a three‑year waiver from new tariffs on drugs manufactured abroad—a benefit worth billions if fully enacted. In addition, Pfizer pledged to invest roughly $70 billion in capital expenditures for U.S. drug manufacturing facilities, as part of a broader plan to further onshore the industry.. If executed, that could further mitigate margin pressure over time.
The market clearly approved, as PFE jumped 14% in the week following the announcement. Prior to this, the stock was trading around 70% of its 52-week high. That surge was one of its strongest rallies in recent years, and suggests investors believe the savings and volume potential could outweigh the impact of lower sticker prices.
Institutional buying following Pfizer’s rally could signal confidence in the deal’s long-term benefits. Canada Life Assurance, for example, increased its stake to $207.7 million in August, a 19.6% rise from prior holdings, suggesting that major investors see the tariff waiver and pricing concessions as net positives for the stock’s future trajectory.
Eli Lilly: Onshoring as a Defensive Moat
Eli Lilly doesn’t currently have a set agreement in place, but investors shouldn’t be surprised if a price reduction request also comes for this name. The real benefit of Eli Lilly’s business model is that its leading weight loss drug is rapidly shifting its footprint to the United States.
In fact, over the past five years, the company has invested over $50 billion in manufacturing facilities within the country, with the most recent commitment being a $6.5 billion site in Texas for their obesity products. This gives it a built-in buffer against tariff risk.
This may be a reason why Wall Street analysts maintain a consensus price target of $933 on the stock, implying a 14.5% upside from its current trading price—even after a one-week rally of 13.2% that matches Pfizer’s.
Investors are also seeing some capitulation emerging from short sellers. Eli Lilly’s short interest declined by 8.9% over the past month, crystallizing the fact that this company is well-positioned to avoid tariffs in the long term and tap into the ability to share its facilities with others looking to expand their onshore footprint.
Johnson & Johnson: The Potential Explosive Upside
With Pfizer's locked-in deal and Eli Lilly onshoring manufacturing way before these tariffs were on anyone’s mind, it seems Johnson & Johnson has truly fallen behind. Because most of its manufacturing capacity and supply chain is in Europe, Johnson & Johnson is the company most exposed to tariff risk on this list.
However, given the real benefit of lowering prices in America in exchange for tariff relief, an explosive (but speculative) scenario could unfold if President Trump decides to extend the same deal to Johnson & Johnson This would render most bearish scenarios worthless at that point.
That possibility may be driving some optimism and explain why JNJ is now trading at a new 52-week high. It could also explain why Wall Street analysts were willing to place a price target above the current consensus of only $187 per share, making today’s price fair value. Guggenheim analyst Vamil Divan assigned JNJ a $206 price target, implying a new 52-week high and 10% additional upside, potentially leading to much more if this deal scenario unfolds.
In its latest earnings, JNJ beat expectations and raised full-year guidance, which supports the view that the company has underlying momentum even amid tariff uncertainty.
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3 Fintech Stocks That Are Set to Rise as Rates Fall
Shares of Upstart Holdings Inc. (NASDAQ: UPST), Affirm Holdings Inc. (NASDAQ: AFRM), and Rocket Companies Inc. (NYSE: RKT) are under tremendous upside pressure right now. Each company has a strong individual value proposition, and some are already beginning to show in price action that hints at a potential bull run.
But the real tailwind is what's going on in fintech as the Federal Reserve begins to cut rates.
The first cut finally came in September, and at least two more are expected before the end of 2025. Consumer sentiment has been slow to reflect this, but markets are already moving. That is what makes these three names worth watching closely as the cycle turns.
Upstart's Bottleneck Is Starting to Clear
Upstart Holdings operates an AI-driven lending platform that helps banks and credit unions assess credit risk more effectively than traditional FICO-based models. Its success depends heavily on loan approvals, which are tied to broader interest rate conditions.
When interest rates fall, approval rates rise, creating higher loan volumes. That is where investors uncover Upstart's cash cow: loan referral and servicing fees. Lower rates not only increase originations but also reduce delinquency risk—both of which create a steady and strong revenue stream for the company.
UPST is trading at only 53% of its 52-week high, indicating a fundamental disconnect between its 33% earnings-per-share (EPS) beat in Q2 2025 and its current price action. For the second quarter, Upstart reported 36 cents in EPS, whereas the MarketBeat consensus was 27 cents.
If Upstart easily beat analyst expectations before the Fed rate cuts took effect, investors are left wondering what future financial performance could look like when as this first rate cut—and future cuts—are fully priced in.
This is why Wall Street analysts have maintained their consensus price target of $81.08, a potential 56% upside from today’s prices, despite the bearish price action in the stock.
Affirm Could See Faster Benefits
Because Affirm operates on a floating-rate basis, unlike Upstart, its ongoing operating costs and financing costs are directly tied to the short-term fluctuations in interest rates. This is why Affirm’s benefits from rate cuts are seen much sooner.
Affirm specializes in Buy Now Pay Later (BNPL) financing, letting consumers split purchases into installments. While often seen as risky, adoption is growing.
More and more Americans are using this service to finance everyday purchases, with over 25% of its users indicating they use BNPL for basic needs like groceries. That should be a sign of just how tight consumer budgets are right now, especially with the prospects of inflation looming in the background.
This is a net benefit for an accommodator like Affirm. Which is why, despite trading at only 74% of its 52-week high, Dan Dolev from Mizuho assigned AFRM a $108 price target, 45% above today’s share price and well above the analyst consensus of $80.04.
Rocket Companies: Positioned for a Refinance Wave
The housing market lives and dies by mortgage rates, and Rocket Companies—best known for its Rocket Mortgage platform—is uniquely positioned to capture demand when refinancing picks up.
Millions of new homebuyers took out mortgages in 2023-2024 when mortgage rates reached as high as 7%. Now that rates are set to decline through the end of the year, markets are beginning to factor in a potential surge in refinancing demand.
Over the past quarter, RKT has rallied by 39.4%, outperforming the S&P 500 index and most of its mortgage peers.
Yet, some on Wall Street are aware that the potential refinancing increase is far from being fully priced in. Like Bank of America’s Mihir Bhatia, for example, who set a $24 price target, which is well above the consensus price target of $16.65. Bhatia believes the stock has 18% more room to run.
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3 Travel Stocks to Watch Heading Into the Holidays
The calendar just turned to fall, but for investors, it’s time to think about the holiday travel season and what it could mean for travel stocks. A recent report by TravelAge West suggests that travel and entertainment spending will increase by 1%, bucking a broader trend to lower spending in other areas, such as gifts.
But even with the potential for lower interest rates, consumers will still be looking for value. The same should be true of investors, who may find some bargains in the travel sector. That’s the case with these three travel stocks, which balance opportunity and risk heading into the holiday season.
Expedia Shows the Distinction Between Price and Value
Expedia Group Inc. (NASDAQ: EXPE) is one of the leading online travel companies. EXPE stock has delivered a total return of 129.6% in the last three years. The stock price growth is slowing a bit in 2025, but it’s still up more than 16% for the year and over 24% in the last three months.
That surge has pushed EXPE to trade about 4% above its consensus price target, raising concerns about valuation. However, several factors suggest the stock still has room to run, particularly with the holiday travel season approaching.
First, in September, the stock got two bullish price targets of $240 and $250 from Mizuho and BTIG Research, respectively.
Second, it trades at around 17x forward earnings. However, earnings are expected to grow by 20% in the next 12 months, so investors are paying a discount for the company’s future earnings.
Third, unlike some competitors that issued cautious guidance, Expedia projected strong margin expansion through year-end. This builds on the 24% EBITDA margin expansion reported in its most recent quarter, a trend that could strengthen further as holiday travel bookings increase.
Royal Caribbean: Smooth Sailing After a Pullback
Royal Caribbean Group (NYSE: RCL) has staged one of the strongest recoveries from the COVID-19 industry shutdown. Over the past three years, the stock has delivered a total return of more than 765% and is up 37% in 2025, powered by resilient travel demand and a balance sheet that management has steadily repaired after the heavy debt load of 2020.
Shares have slipped more than 12% in the past month, reflecting profit-taking after Royal Caribbean surged to an all-time high above $365 following its second-quarter earnings beat. While the consensus price target of $326.95 suggests limited near-term upside from current levels, analyst sentiment remains bullish. Several targets sit near or above $400, pointing to confidence in continued growth.
Royal Caribbean has also strengthened its shareholder appeal by raising its dividend 25% this year. For investors, that combination of strong demand, improving fundamentals, and ongoing capital returns makes RCL a stock worth watching closely heading into the holiday travel season.
Southwest Airlines: Hedging Its Way to Holiday Strength
Southwest Airlines Co. (NYSE: LUV) is another stock that looks like a value based on future earnings expectations. In the case of Southwest Airlines, analysts are forecasting earnings growth of over 50% in the next 12 months. That makes the company’s forward P/E ratio of 20x something to watch closely.
Southwest is expected to benefit from rising jet fuel costs. The company is known for its hedging strategy, and lower interest rates are expected to stimulate demand for low-cost, domestic travel, which is the niche that Southwest fills.
LUV stock is down about 3.5% in 2025 after hitting a 12-month high in July, and shares may have further room to pull back. However, with earnings scheduled for October, holiday travel demand could be a key catalyst. If forward guidance confirms expectations for strong seasonal bookings, Southwest may present an attractive entry point heading into the busiest travel months of the year.
Central Banks Are Hoarding Gold — Shouldn't You?
Central Banks Are Hoarding Gold — Shouldn't You?
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