Markets traded a bit lower as they waited on the Fed's decision on interest rates.
Eli Lilly (LLY) - upgraded to Buy
Berenberg moved off the sidelines on Eli Lilly (LLY), raising it to Buy from Hold. The new price target is $1,400, up from $1,220, which points to more than 20% upside. Shares rose. The view: Eli Lilly (LLY) can hold its lead in the obesity drug market and has outperformed Novo Nordisk. Berenberg cites strong returns on research spending and a solid record of turning drug development into pipeline products.
A key possible catalyst is an oral GLP-1, a pill version of the drug. This is seen as the next opportunity in the space, since a pill would appeal to patients who do not want an injectable. Eli Lilly (LLY) is already doing well with Zepbound and Mounjaro, the leading brands in obesity and diabetes treatment. Demand is speeding up, which should help the company beat its full-year 2026 guidance.
The wider healthcare group was strong, with gains across UnitedHealth (UNH), AbbVie (ABBV), Medtronic (MDT), Merck (MRK), Johnson & Johnson (JNJ), and Eli Lilly (LLY).
Etsy (ETSY) - upgraded to Outperform
Oppenheimer upgraded Etsy (ETSY) to Outperform from Perform, setting a $90 price target that implies more than 20% upside from the prior close of about $74. Shares moved higher, bouncing between roughly a third and three-quarters of a percent gain in soft market trade. Etsy (ETSY) came into the day already up more than 20% year to date.
The call centers on AI and a shift in how people find products online. Shoppers are using AI tools instead of traditional Google search for recommendations and product discovery, and Etsy (ETSY) has been a winner in that shift. Adobe Analytics data showed about half of US consumers used AI for online shopping in June. AI often works in the background even when shoppers do not realize they are using it.
Dave & Buster's (PLAY) - down over 7% on earnings
Dave & Buster's (PLAY) shares fell more than 7% after a quarter that missed on both top and bottom lines. The company reported an adjusted loss of 27 cents per share; analysts had expected a profit. Revenue fell 2.4% to $544.1 million, also below estimates. Same-store sales declined 2.9%, but that drop was smaller than analysts feared.
The core problem is the arcade business. Entertainment sales have fallen year over year for eight straight quarters with no improvement. Food and beverage sales improved, but not enough to offset the arcade weakness. The new CEO said years of underinvestment in the arcades left the business weak and raised the relevance question of why more kids are not coming for birthdays. The company plans to keep working on it.
