Cabot Stock of the Week Issue: October 27, 2025

Stocks resumed their march higher, with the major indexes stretching to new heights despite all the recent wobbles. A strong start to third-quarter earnings season is helping, as is a calming of trade tensions between the U.S. and China, the one thing that actually seemed to rattle investors in the last month or so. We’ll see if those tensions stay quelled after this week’s planned meeting between President Trump and Chinese President Xi Jinping. Another rate cut is also likely this week, so that’s another potential catalyst that could drive shares ever higher.

For now, the economy is stable. And in times of economic stability, it makes sense to invest in financials – something we’re currently light on in our portfolio. So today, we make room for a big-name U.S. bank, and one that’s been on enough of a tear of late to capture the attention of Mike Cintolo and warrant inclusion in last week’s Cabot Top Ten Trader issue.

Here it is, with Mike’s latest thoughts.

New Recommendation

Morgan Stanley (MS)

As a top-tier global financial services provider, Morgan Stanley needs no introduction—it’s currently the world’s fourth-largest investment bank by revenue and is consistently ranked in the top three among M&A deal-making advisors. Driving the strength for the firm in recent quarters has been a robust recovery in institutional securities, the steady, high-margin performance of its wealth management division, plus strategic investments in technology such as (what else?) AI. On the investment banking front, Morgan Stanley’s revenues have sharply increased this year due to a recovery in M&A, IPOs and strategic financing, while a more favorable regulatory environment under the current White House is also contributing to optimism for continued deal activity. Strength in these areas was highlighted by last week’s release of the firm’s fiscal Q3 (ended September) results, which revealed a 44% year-on-year surge in investment banking revenue of $2.1 billion. The quarter, which featured record total revenue of $31 billion rising 14% and record earnings of $2.80 a share beating estimates by 35%, was bolstered by M&A transactions that led to a strong advisory fee performance (fees jumped 25% thanks to an increase in completed M&As), and by the cyclical rebound in deal-making across the entire market. Elsewhere in the business, the firm’s equity trading revenue rose significantly (up 35%), fueled by increased client activity and strong performance (mainly from hedge funds) in its prime brokerage business, while institutional securities revenue grew 25% and wealth management revenue improved 13%. In the earnings call, management highlighted the firm’s investments in technology—including AI initiatives such as DevGen AI, Parable and LeadIQ—which it sees as “laying the foundation to drive productivity across the firm.” The firm also reiterated a goal of surpassing $10 trillion in total client assets (up from $8.9 trillion now) and said Morgan Stanley was “well positioned in each of our businesses and is demonstrating consistent execution.” Additionally, the outfit said it’s considering buying back shares at a “slightly higher cadence” going forward. Analysts see more upside for earnings after a booming past two years.

As for the stock, MS obviously isn’t going to be your fastest horse, but when times are good, the stock can trend nicely. The stock started to get going late last year before the Q1 market nosedive took it down—but shares have been trending higher along the 10-week line since the initial recovery, with this month’s earnings pop a good sign. Of course, the market is again a bit iffy, but we’re OK starting a position around here with a stop under the recent lows. BUY

Current Recommendations

Changes Since Last Week: None

No changes to the portfolio this week, though that could easily change next week as more than a third of our holdings report earnings this week. Sprinkle in the (likely) Fed rate cut and the anticipated meeting between Presidents Trump and Xi, and this should be a very busy close to October. Keep on your toes.

In the meantime, here’s what’s happening with all our stocks.

Updates

Agnico Eagle Mines (AEM), originally recommended by Carl Delfeld in his Cabot Explorer advisory, pulled back more than 6% this week as gold prices finally hit a roadblock. Optimism over a U.S.-China trade deal plus a strengthening dollar helped push the price of gold down nearly $300, which hit gold mining stocks even harder. But Agnico has a chance for a very quick turnaround as it reports third-quarter earnings this Wednesday, October 29. Big things are expected: Analysts are looking for 38.5% revenue growth and 66.7% EPS growth. Another bottom-line beat could have AEM shares bouncing right back. BUY

Airbus (EADSF), originally recommended by Carl Delfeld in his Cabot Explorer advisory, was up 2.5% this week ahead of Wednesday’s (October 29) earnings report. Analysts are anticipating 12.1% revenue growth. But the real needle-mover may be how many aircraft deliveries Airbus reports in its quest to outpace rival Boeing this year. We have a 40% gain on this stock in just nine months. BUY

Alibaba (BABA), originally recommended by Carl Delfeld in his Cabot Explorer advisory, advanced more than 3% this week as the stock rebounds from being knocked back 10% when the U.S.-China tariff rhetoric escalated a couple weeks ago. Now that those tensions have been quelled – and with a deal possibly coming when Presidents Trump and Xi meet later this week – there could be nothing to hold back this Chinese e-commerce powerhouse, which has taken off since becoming more of an artificial intelligence player. The stock is off to a very good start for us, despite the hiccup a couple weeks ago that had little to do with the company itself. BUY

American Electric Power Company (AEP), originally recommended by Tom Hutchinson in the Safe Income Tier of his Cabot Dividend Investor advisory, pulled back about 2% this week ahead of Wednesday’s (October 29) earnings call. Expectations are modest: 3.2% revenue growth with a 1.3% decline in EPS. But thanks to AI and data center buildouts, utilities are acting more like growth companies these days, so it’s possible those estimates are too conservative. We’ll know Wednesday. BUY

ArgenX (ARGX), originally recommended by Mike Cintolo in his Cabot Top Ten Trader advisory, dipped about 2% this week ahead of earnings this Thursday, October 30. Expectations for the quarter are high: 69% revenue growth and a whopping 178% EPS growth. Wall Street is bullish on the stock, with both Wedbush and Morgan Stanley raising their price targets by a large amount this month. Let’s see if the company can cross a high earnings bar. BUY

Armstrong World Industries (AWI), originally recommended by Mike Cintolo in his Cabot Top Ten Trader newsletter, also reports earnings this week – tomorrow (Tuesday), specifically. The stock was up 2% this week ahead of the report. Analysts are looking for 9.5% revenue growth with 8.8% EPS growth. The stock made a big leap after the last earnings report, from 168 to 190. Let’s hope for a similar move this time around. BUY

AST SpaceMobile (ASTS), originally recommended by Tyler Laundon in his Cabot Early Opportunities advisory, continues to retreat after a monster run, pulling back 8.5% this week on no news. Pushing the stock backward was the company’s announcement of a $1 billion convertible senior note to help fund some of its satellite projects. Deals with AT&T and especially Verizon to expand AST’s burgeoning satellite internet provider network prompted shares to more than double in a month, so even modest “bad” news, like a convertible note, was sure to knock the high-flying stock down a couple pegs. It’s still the best-performing stock in our portfolio since we added it 15 months ago. And I think it will soar to even greater heights as it edges closer to fulfilling its ambitious – potentially revolutionary – goal of bringing satellite broadband service to smartphones around the world. Let’s continue to hold our remaining half after we booked profits on the first half a couple months ago. HOLD HALF

Banco Santander (SAN), originally recommended by Carl Delfeld in his Cabot Explorer advisory, mostly held firm ahead of Wednesday’s (October 29) pre-market earnings report. Analysts are anticipating 1.3% revenue growth and 18% EPS growth; the stock has beaten bottom-line estimates in each of the last three quarters. Those earnings beats have fueled the 118% year-to-date run-up in SAN shares. It might take a definitive beat to send shares even higher this time around. BUY

BYD Co. Ltd. (BYDDY), originally recommended by Carl Delfeld in his Cabot Explorer advisory, was mostly flat this week ahead of this Thursday’s (October 30) pivotal Q3 earnings report. Analysts are anticipating 21% revenue growth; quarterly earnings estimates are not available. Last quarter, BYD’s profits declined by roughly a third year over year, and the stock has been in a slump since. If it can turn those around, and possibly improve year over year, this time, shares could finally get out of their monthslong rut. Given the sales growth – and the Chinese EV maker’s ever-expanding footprint into other countries, including Europe, where it has overtaken Tesla as the top electric vehicle seller – I think BYD shares have far more upside than downside at this point. BUY

CareTrust REIT, Inc. (CTRE), originally recommended by Tom Hutchinson in the Dividend Growth Tier of his Cabot Dividend Investor advisory, was up about 1% in its first week in our portfolio. In his latest update, Tom wrote, “Health care looks good after the tariff and pricing issues seem to be getting resolved in a positive manner. REITs should benefit because interest rates are more likely to trend lower over the rest of the year. I’m hoping this will be a solid holding with good relative performance in just about any kind of market. CTRE had a good week last week, and the REIT reports third-quarter earnings at the end of next week.” Indeed, CareTrust reports on November 5. BUY

Cinemark Holdings (CNK), originally recommended by yours truly in the Buy Low Opportunities portfolio of my Cabot Value Investor advisory, inched up a bit more after a convincing bounce-back week the week prior. The only news was that the movie theater chain announced a deal with IMAX Corp. to open 17 70-millimeter IMAX theaters in the U.S. and South America. Also, the company reports earnings on November 5. It’s been a strong year for movie theaters, which are on track for their best year for ticket sales since Covid. And Cinemark is on pace for record sales, presenting a value opportunity as the stock trades more than 40% below its pre-Covid highs. BUY

Coeur Mining (CDE), originally recommended by Carl Delfeld in his Cabot Explorer advisory, imploded this week, free-falling by more than 23% as silver prices, like gold prices, collapsed, tumbling nearly 10%. The one “silver” lining (pun intended)? The company reports earnings on Wednesday. Expectations are sky-high: 75% revenue growth, with 92% EPS growth. Coeur has beaten earnings estimates in three of the last four quarters. Another beat here could have shares bouncing back quite rapidly. Fortunately, we had a large cushion in terms of gains prior to this week’s collapse, and we downgraded to Hold a couple weeks ago, anticipating some measure of pullback, though maybe not this sharply. Keeping it right there ahead of the earnings report. HOLD

CurrencyShares Swiss Franc Trust (FXF), originally recommended by Carl Delfeld in his Cabot Explorer advisory, pulled back about half a percentage point this week as the U.S. dollar has strengthened a bit of late. The fund is a hedge against U.S. dollar weakness and tracks the price of the Swiss franc. As Carl noted, “The Swiss franc is backed by ample gold reserves, fiscal discipline, a trade surplus, and very little foreign debt. Switzerland represents the third-largest financial center in the world after New York and London. Switzerland enjoys a stable government, vibrant democracy and a reputation as an asset haven in times of stress.” BUY

DoorDash Inc. (DASH), originally recommended by Mike Cintolo in Cabot Top Ten Trader, was flat this week on no news, although it did receive another analyst upgrade, as Truist Securities raised its price target on the stock from 326 to 340 (the stock currently trades in the mid-260s). The online food delivery giant also recently announced a partnership with Waymo, the driverless car company available in select U.S. cities, to test-drive robot food deliveries in Phoenix, Arizona. Waymo’s DoorDash deliveries in Phoenix could start before the end of the year. We booked profits on half our DASH shares after it reached a double a couple months back and are letting the remaining half ride. The company reports earnings on November 5. HOLD HALF

Doximity (DOCS), originally recommended by Tyler Laundon in his Cabot Early Opportunities advisory, continues to bounce back, up 3.5% this week. Earnings are due out November 6. BofA Securities upgraded the stock to Buy this morning, giving shares a nice jolt and helping counteract the rating downgrade from JPMorgan that sent shares tumbling earlier this month. We have a solid, double-digit gain on this healthcare-related stock after just three months. BUY

FedEx Corp. (FDX), originally recommended by yours truly in my Cabot Value Investor newsletter, continues its late-October recovery and is back near its early-October highs. There was no company-specific news, but there also was no reason behind the drop-off in shares earlier in the month other than the escalation of U.S.-China trade tensions potentially throwing a wrench into the global economy and, by proxy, FedEx’s business. Now that those trade tensions have seemingly eased, faith in the global economy has been restored (for now), and FedEx remains a great way to play a healthy economy. BUY

Fidelity National Financial (FNF), originally recommended by Tom Hutchinson in the Dividend Growth Tier of his Cabot Dividend Investor advisory, was up 1.5% this week on no news. The company reports earnings on November 6. In his latest update, Tom noted, “Fidelity should benefit from Fed rate cuts and, hopefully, a reduction in mortgage rates. Business is affected by the housing market as more home purchases result in more business. And the biggest impediment right now is high mortgage rates and housing affordability. It will likely be range-bound until there is some significant improvement in the mortgage rate/housing market situation. Perhaps the situation will improve as housing-related companies report earnings.” BUY

Netflix, Inc. (NFLX), originally recommended by Tyler Laundon in Cabot Early Opportunities, missed earnings by a wide margin and got punished accordingly, with shares slipping more than 11% since. EPS of $5.87 was well shy of the $6.97 estimate, while revenues met estimates and improved 17% year over year. The big earnings miss comes with a bit of a caveat, as it was mostly due to a 10% tax levied by the Brazilian government – an item that was not in Netflix’s own internal estimate. Company CFO Spence Neumann attempted to reassure shareholders about the tax on the earnings call, saying, “It’s not a tax that’s specific to Netflix. It’s not even specific to streaming. Absent this expense, we would have exceeded our Q325 operating income and operating margin forecast, and we don’t expect this matter to have a material impact on our results going forward.” Fair enough. Still, the sticker shock sent a few NFLX investors running for the hills. We won’t be joining them. The streaming giant is still on track for 16% revenue growth this year, with an operating margin of 29%. And even with the Brazilian tax weighing on Q3 profits, they still improved 8.7% year over year. If you don’t own NFLX shares, I’d look at this sharp pullback as a buying opportunity – or a chance to add to an existing position if you do already own a stake. BUY

Oracle Corp. (ORCL), originally recommended by Tom Hutchinson in the Dividend Growth Tier of his Cabot Dividend Investor advisory, was up nearly 2% this week to recover somewhat from a down week the week prior. For its many ups and downs of late, the stock is exactly flat over the last month and is still well up from before its landmark earnings report in early September, in which the company said it anticipates AI cloud revenue to grow to $144 billion by 2030, or 700% from current levels. Given the volatility in the stock since that report, we’ll keep our rating at Hold. HOLD

Sea Limited (SE), originally recommended by Carl Delfeld in his Cabot Explorer advisory, kept pulling back, down more than 3% this week. Shares have now retreated 18% since topping 52-week highs above 196 in early September and are trading at their lowest point since early August. But earnings loom for this Singapore-based conglomerate, on November 11, and earnings have been a boon for this stock, as they were in early August. The company is still growing sales by double digits in all three of its major businesses (gaming, e-commerce and fintech), and the stock has still roughly tripled from our entry point. So I’m keeping it at Buy despite the recent downturn. BUY

Stoxx Europe Total Market Aerospace & Defense (EUAD), originally recommended by Carl Delfeld in his Cabot Explorer advisory, was flat this week but has backtracked about 4-5% since touching new 52-week highs in early October. We still have a gain north of 30% on this niche European play. BUY

Tesla (TSLA), originally recommended by Mike Cintolo in Cabot Top Ten Trader, reported another underwhelming quarter, but shares managed to gain about 2.5% despite the disappointment. Adjusted EPS of $0.50 fell about 10% short of the 56-cent estimate and net income plunged 37%, though revenue improved 12% year over year and deliveries reached a record 497,099. But the lower prices of those vehicles have weighed on margins and put a damper on profits, as Tesla tries to compete with lower-cost Chinese EV makers, including BYD. Now, Tesla’s board of directors will hold a vote on whether to pay CEO Elon Musk the record $1 trillion (!) compensation package he’s demanding. That seems like a steep price to pay for someone whose involvement with the new administration has actually hurt sales this year, but then again, Elon Musk is Tesla’s brand. Without him (and he’s threatening to walk if he doesn’t get the pay package he’s requested), it’s possible the stock could be in for a significant re-valuation. Meanwhile, for all the bad news associated with Tesla this year, TSLA shares are having another solid year, up more than 13% and inching back toward their December 2024 highs. Lots going on here. Let’s keep the stock at Hold. HOLD

If you have any questions, don’t hesitate to email me at chris@cabotwealth.com.

Here, too, is the latest episode of Cabot Street Check, the weekly podcast I host with my colleague Brad Simmerman. This week we asked the question: What do truly matters in the market right now? We arrived at one over-riding answer...

The next Cabot Stock of the Week issue will be published on November 3, 2025.

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