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Morgan Stanley lists Lucid Motors as Underweight, Herbalife shares decline after cutting earnings guidance, Apple shares pop ahead of iPhone event today

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Yahoo Finance's Brian Sozzi and Julie Hyman break down the day's latest stock movers including the Lucid Motors underweight rating from Morgan Stanley, Herbalife's stock decline following the company's recent guidance, and Apple shares rising ahead of the iPhone reveal.

Video Transcript

JULIE HYMAN: I want to mention another mover that I'm watching here this morning. And I don't have a lot of details on it, but it caught my eye this morning because it was active in the pre-market on a lot of volume. And that is Lucid Motors. Now, Lucid-- it got downgraded. Or actually, it got initiated with a pretty negative rating, here. Initiated over at Morgan Stanley with a recommendation of underweight. The price target is $12 a share. You can see it's trading at $19.41 this morning. The average price target, by the way, is 28. So this is a decidedly more bearish view. And I'm guessing if it's Morgan Stanley, it's probably Adam Jonas who made this call, considering he's the guy who covers autos over there.

So influential analysts coming out with this underweight rating, not good news for Lucid stock here this morning, Soz.

BRIAN SOZZI: Yeah, I'll just add too, I don't think the Street knows what to do with the company like Lucid. A high-end EV maker. They have not delivered any autos yet. But I look back to-- what-- late last week, you have Citigroup's analyst, Itay Michaeli, initiate Lucid with a $28 price target for Lucid. Overweight recommendation. They expect Lucid to deliver about $2.5 billion worth of electric vehicles next year. So it's a-- how do we say it, Julie? A battleground stock. That is what Lucid is right now.

JULIE HYMAN: Interesting. All right. Let's talk about a one time battleground stock-- not so much anymore. I chose this one for today partially for nostalgia, I got to admit. Because I miss the days of yore when Bill Ackman and Carl Icahn were fighting over this next mover. It is, of course, Herbalife. The company coming out with a forecast that was below. It cut its revenue guidance, in fact. And you can see the shares are trading pretty sharply lower, here.

The company said it's seeing lower distributor activity because of the pandemic. Net sales going to fall 6.5%-- 3.5% to 6.5%, I should say. And so, that's lower than what the company was expecting before. It's also cutting its earnings per share guidance. The CEO of the company says it's "uncertainty in global markets fueled by the extended period of the pandemic has brought about unique challenges in predicting behavior in the channel."

Now, it didn't go to zero like Ackman once predicted, but it's going down here today, Soz.

BRIAN SOZZI: Julie, I'll say that's a little-- this is a strange just overall earnings with these-- or guidance from the company. So, to your point, they are coming out of there lowering guidance for. For third quarter, looking for $1 a share to $1.20 a share, in terms of earnings. A couple of months ago, they were looking for $1.05 to $1.25, in terms of earnings.

Now they're coming out here and it looks to be raising their full year outlook, despite this pretty hefty earnings morning, looking for earnings of $4.55-- they were looking for about almost $5 in earnings right now. And they were looking for something even higher than that before. It's a strange earnings release, but I think the takeaway is they're looking for-- they're holding an optimistic outlook for the fourth quarter, slashing their third quarter outlook.

So some confusion here on, who do you believe? Do you believe the guidance cut for the third quarter? Do you believe that they can rally back in the fourth quarter? I think it's really unclear at this point. And that's why I've seen the stock really, really hammered.

JULIE HYMAN: In the meantime, I was just looking it up, it looks like Carl Icahn finally exited his entire stake in Herbalife earlier this year after, effectively, winning that war of words with Ackman when the two were arguing over this company several years ago. So, got out before this latest downturn it looks like.

Finally, just want to mention a stock that could be on the move today, and that is Apple. Of course, the company having its latest product launch announcement, it's scheduled for 1:00 PM today. We're going to talk about that a lot more in the next hour. I also have to mention, the company had to release an emergency update of its operating system after an Israeli company discovered a security vulnerability, which doesn't happen too often with Apple. So that's something that I think people are paying some attention to as well, Soz.

BRIAN SOZZI: Yeah. I don't really care about this new iPhone, Julie. I mean, I'm not due for an upgrade for close to a year. I got the new iPhone 12 5G, so I'm still liking that. But obviously, the market will care about it. Apple's been a top trending ticker on the Yahoo Finance platform for about a week into this product release event.

If anything, I think the Street is really looking at it to see what the prices are on the new Apple Watch and the new iPhone. There's been a lot of commentary into this release from the Street that they are expecting really sizable price increases because a lot of supply chain inflation that Apple and many of its component makers are feeling right now. So you really could be paying up to get that next iPhone if you want it-- maybe a lot more than people think.

JULIE HYMAN: Did you your security update?

BRIAN SOZZI: We have one?

JULIE HYMAN: Oh, my gosh. Soz. PSA-- Sozzi, everyone else, please do your security update that Apple released on a emergency basis.

BRIAN SOZZI: I don't even know what that is. I'm on the Yahoo Finance app, Julie. I don't have time for that security stuff.

JULIE HYMAN: Oh, my goodness. OK. We'll take this offline, Soz.

BRIAN SOZZI: See ya later. OK.