VIDEO: What We're Looking for as This Holding Hosts 2025 Investor Day

In today’s Daily Rundown, Chris Versace shares why the market is likely to drift until we have fresh developments on Trump tariffs or the next set of economic data out later this week. In the meantime, we’ll be focused on two known-known events and one known unknown one.

As Chris explains, the two known knowns are Thursday's 2025 Investor Day by Dutch Bros BROS and the expected pricing of CoreWeave’s (CRWV) IPO. You’ll want to hear what the Portfolio is looking to see and hear from both of those events. 

The unknown-known is the U.S. Navy announcing the winner of its next-gen fighter jet contract, and Lockheed Martin LMT is a contender. 

Chris closes out today’s video with a reminder we have Office Hours on Wednesday afternoon in the Portfolio Forum between 4 p.m. and 5 p.m. ET. 

Transcript

CHRIS VERSACE: Hey everyone, Chris Versace here. Wednesday, March 26th. We are moving into the second half of the trading day with a mixed market, as you've probably seen. And I suspect that part of that is because we don't have any fresh catalysts likely to lift the market, and as a result, we're just kind of drifting, especially following three positive days in the market, something we haven't seen in a little while.

I suspect that we are going to see a little bit of a tug-of-war near term between any and all related headlines regarding tariffs ahead of next week and, of course, the economy and Fed speakers, which we'll get more economic data later in the week. And we are seeing an array of Fed speakers, something we talked about earlier this week. And no surprise, they are taking a more conservative approach on the topic of rate cuts. No real surprise.

As we wait for those comments and the other economic data that's coming this week, including February personal income, personal consumption, and, of course, the PCE price index. We'll also be on the lookout for a negative earnings pre-announcements. If you haven't seen our alert yet discussing a couple investment banks on Wall Street taking down their S&P 500 price targets for 2025, please be sure to do so. With that said, I want to spend today's rundown really getting you ready for what's likely to come our way tomorrow, or at least later in the week.

I would say that outside of the economic data and Fed speakers, there's really two known-knows that we have coming and one potential known unknown. So let's break them down. The first known-known is Dutch Bros 2025 Investor Day. Now, I realize that this is something that we put way back on our calendars when Dutch Bros presented at the ICR Conference. Gave a very good, upbeat presentation, I will remind you.

But the event is tomorrow. And what we're looking for is more on the company's expected geographic expansion plans, but we also want to hear them serve up more about the expanding food offering that they have been testing. Remember, this has been a very successful strategy at others, including Starbucks, where we drive greater attach rates and a higher ticket. And I think that Dutch Bros, this would be a really nice complement to what they're doing on their core beverage business.

I'd also remind you that, remember, coffee prices are not the largest driver of Dutch Bros overall input costs, but we will be looking to hear what they have to say about input costs for coffee, but also elsewhere dairy and, of course, labor tomorrow. And we'll also be very interested in what they might have to say about tariffs.

All in all, I expect it's going to be a positive event and one that could lead to some price target rejiggering across Wall Street. We may even have to revisit our price target as well. I will tell you that expectations outside of ours are rather positive for the event. I can say that because today, Wells Fargo initiated coverage on Dutch Bros shares with a overweight rating and an $80 price target.

So that's the first known-known. The second is the expected pricing of CoreWeave's IPO tomorrow. Odds are, it's going to come after the market close and begin trading on Friday. But remember, we're paying close attention to this because a successful offering and favorable post-transaction trading in CoreWeave shares has the potential to help re-open the IPO window. And of course, we're very interested in that as it relates to Morgan Stanley and our Bank of America positions.

The other thing to remember is that the price talk on this is between $47 and $55 per share. We know that coming into this week the book for the deal was already oversubscribed. So we'll have to see if it prices towards the upper end of the range, maybe even beyond the range. But again, it's not just the pricing, it's also going to be the aftermarket performance that will matter. And just a quick reminder, NVIDIA owns about a 5% share of CoreWeave, so to the extent that the deal is larger than expected, whether they raise more capital, whether or not the price is at the upper end of the range or even past that, it could be a nice little spark for NVIDIA shares, again, given that 5% stake that they have in CoreWeave.

Now, let's turn to the known unknown. That is the US Navy is expected to award its Next Gen fighter contract this week. This Next Gen fighter is going to replace the Super Hornet fleet. And yes, Lockheed Martin is one of the named contenders, but so are Northrop Grumman and Boeing. The way we're thinking about it is that it would be really nice to see Lockheed get the win, especially after that surprising loss last week. But a win by either Boeing or Northrop, that's going to mean that Lockheed has lost two large multi-year contracts back to back.

And again, even though Lockheed has its own enormous multi-year backlog, something we've written about and discussed with you before, back-to-back losses are going to raise questions. And at a minimum, we could see some price target revisions. We may have to revise our price target as well. Now, that announcement from the Navy, it's expected to come this week, which means it could come tomorrow. It could come Friday. But when it does, we'll be sure to break it down and share our opinion with you on what it all means.

And as these other events happen, coming out of Dutch Bros Investor Day, when we find out what the pricing is on CoreWeave and what the potential implications are, we will, of course, be sharing our insights, our reactions, and our thoughts with you. But I would also remind you that today, it's Wednesday, as I mentioned at the top. And that means we have office hours today between 4:00 PM and 5:00 PM in the Portfolio Forum. Excuse me. You bring your questions, I will bring the answers, and I'll answer as many as time permits. So that is today's video and I will see you in the Portfolio Forum later today.

At the time of publication, TheStreet Pro Portfolio was long BROS and LMT.