On October 25, Denny’s Corp (NASDAQ: DENN) received a boost when Citi analysts upgraded the stock to a “Buy” from “Neutral.”

The upgrade came alongside a revised price target of $7.50 from $7, reflecting increased optimism around the company’s strategic initiatives.

Citi’s analysts highlighted improvements in cost discipline and the closure of weaker stores as key factors influencing their positive outlook.

The target implies a potential upside of about 20% from the previous close, driven by expectations of enhanced free cash flow and investor optimism.

Denny’s shares surged by 5% on Friday, signaling a favorable response to the analysts’ note.

Q3 Earnings reveal mixed results

For the third quarter, Denny’s reported total revenue of $111.8 million, a 2.1% year-over-year decline that fell short of consensus expectations by approximately $3.6 million.

Domestic system-wide same-restaurant sales were flat at -0.1%, with company-owned stores seeing a 0.4% drop.

The quarter saw a slight decrease in company restaurant sales to $52.7 million, down from $53.2 million a year ago, primarily due to the closure of four Denny’s units.

The adjusted company restaurant operating margin fell to 11.8% from 14.3% last year, with the margin pressure attributed to increased marketing investments and higher occupancy costs.

Adjusted EPS came in at $0.14, missing consensus estimates by $0.01, indicating ongoing profitability challenges.

Business performance and strategic shifts

Despite ongoing challenges in the family dining segment, Denny’s has made strategic moves to stabilize performance.

The company’s closure of weaker stores aims to improve profitability metrics, with management committing to a net increase in store openings over the next two years—marking a positive shift since 2017.

Denny’s has introduced initiatives like the $2-$4-$6-$8 value menu and expanded its virtual brand presence to capture off-premise dining.

These efforts are complemented by tech upgrades at company restaurants to enhance customer experience and drive sales growth.

Management is also optimistic about Keke’s restaurant chain, with beverage upgrades and off-premise expansion expected to drive future growth.

Valuation reflects potential upside

Denny’s stock is currently trading at an estimated 6.1x Citi’s CY25E EBITDA, indicating that investors may be underestimating the potential upside from ongoing initiatives.

The free cash flow yield stands at a robust 9%, suggesting a favorable risk-reward profile.

Analysts see value in Denny’s ability to capitalize on store closures, tech investments, and remodels to enhance sales growth.

While industry challenges persist, Citi’s revised target price of $7.50 hints at potential for substantial returns from current levels.

Navigating industry challenges

The family dining sector faces persistent challenges, with traffic declining by over 20% since 2019, according to industry data.

Denny’s strategy of pruning weaker stores and reworking its menu and promotions to cater to shifting consumer preferences aims to address these pressures.

Despite sluggish industry sales, Denny’s efforts to relaunch its value menu and expand digital brand initiatives indicate its focus on regaining lost ground.

The third-quarter relaunch of the $2-$4-$6-$8 value menu, along with improvements in customer experience through tech upgrades, is expected to mitigate some of the pressures.

Strategic focus on store closures and remodels

Citi’s report highlighted that Denny’s store closures have helped clear underperforming locations, leading to a stronger base for future growth.

With a pipeline of 150 new global stores in development, Denny’s expects to achieve a net increase in store count over the next two years.

The brand’s focus on remodeling and maintaining a relevant marketing message appears to be addressing some of the historical challenges faced by the family dining sector.

In addition, initiatives like Xenial tech upgrades, which include QRPay and portable servers, aim to improve operational efficiency and customer engagement.

With store closures on track and strategic initiatives like the revamped rewards program and digital brand expansion in place, Denny’s appears positioned to weather near-term challenges while paving the way for a more stable future.

Now, let’s delve into the stock’s technical trajectory to gain deeper insights into what the charts reveal about Denny’s future price movements.

Short-term momentum change

Denny’s stock continues to be in a long-term downtrend since it made its all-time high near $24 in 2019.

Source: TradingView

However, the recent surge in stock’s price after the company reported its Q3 results has changed the short-term momentum upward.

Taking that into account investors who have a bullish view on the company like analysts at Citi can initiate long position at current level with a stop loss below recent swing low at $5.40.

Traders who continue to remain bearish on the stock must refrain from initiating fresh short position at current levels.

A short position must only be considered if the stock bounces back to levels above $8.80.

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Waymo, Alphabet’s autonomous vehicle arm, has closed a significant $5.6 billion funding round to drive the growth of its robotaxi service, primarily in the US but with plans for global expansion.

This latest series C funding, led by Alphabet, was joined by major investors like Andreessen Horowitz, Silver Lake, and Tiger Global, CNBC reported.

The investment will allow Waymo to broaden its presence in major cities, such as Los Angeles, San Francisco, and Phoenix, and to pursue technological advancements in autonomous driving.

The funding round also underscores Waymo’s unique position as one of the only US companies to operate a commercial robotaxi service in multiple cities.

Focus on expanding robotaxi service

Waymo co-CEOs Tekedra Mawakana and Dmitri Dolgov emphasized that this funding will expand their Waymo One robotaxi service in key US cities. In a statement to CNBC, the CEOs said,

With this latest investment, we will continue to welcome more riders into our Waymo One ride-hailing service in San Francisco, Phoenix, and Los Angeles, and in Austin and Atlanta through our expanded partnership with Uber.

The series C funding brings Waymo’s total capital raised to $11.1 billion after it raised $3.2 billion and $2.5 billion in two earlier rounds.

Alphabet CFO Ruth Porat announced in July that the parent company would commit to a multiyear investment of up to $5 billion in Waymo.

Waymo has seen steady growth in demand for its robotaxi services.

Its vehicles currently conduct more than 100,000 weekly trips across Los Angeles, Phoenix, and San Francisco, attracting diverse riders — particularly women and parents — who prefer the enhanced safety they feel comes with a driverless vehicle.

The Waymo One app facilitates easy access for riders to hail these autonomous rides, making them increasingly popular in these cities.

Partnerships and competition in the AV landscape

Waymo’s rise is not without challenges. Although Tesla and GM’s Cruise have each invested in AV technology, only Waymo currently operates at scale across multiple metro areas.

Cruise, Waymo’s main US competitor, had to halt operations in San Francisco after an October 2023 accident, although it is working to reinstate its service.

Waymo has recently broadened its reach with partnerships.

An expanded agreement with Uber launched Waymo robotaxis in Austin, Texas. Waymo is also collaborating with automakers to bring new vehicles into its fleet, including Hyundai’s Ioniq 5 electric car and Geely’s Zeekr, both equipped with custom AI “Driver” sensors designed for enhanced navigation and passenger safety.

Addressing safety and regulatory challenges

Despite Waymo’s achievements, concerns remain among the public.

A Pew Research Center survey showed that nearly two-thirds of US respondents expressed reluctance to use driverless vehicles.

Safety incidents have also drawn attention; Waymo’s AVs have encountered traffic problems and minor collisions, though these incidents have not resulted in severe injuries.

Waymo has worked proactively to address these concerns.

The company reported that its vehicles crash far less frequently than human-driven cars, based on data shared with the public.

Additionally, Waymo has initiated software updates to further enhance the safety of its vehicles and is exploring driverless operations in challenging weather conditions to prepare for expansion beyond the Sunbelt.

A vision for global expansion

Waymo’s ambitions extend beyond its current market.

The company announced it will soon test its AV technology in colder climates, including Michigan and upstate New York, aiming to demonstrate the versatility of its vehicles in harsher conditions.

In time, Waymo hopes to establish an international footprint, capitalizing on the growth of autonomous vehicle infrastructure globally.

With $11.1 billion raised over multiple funding rounds, Waymo has the resources to accelerate the future of autonomous transportation, but it faces a complex regulatory and competitive landscape.

As it expands, Waymo will continue to shape the future of mobility, navigating the path toward safer and more accessible autonomous driving.

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US benchmark equity averages rose on Friday as the market ended a three-day losing streak. 

At the time of writing, the Dow Jones Industrial Average was up 0.3%, while S&P 500 rose 0.8% from the previous close.

The Nasdaq Composite gained more than 1.3% on Friday. 

Nasdaq and S&P 500 ended in the green on Thursday buoyed by positive earnings results of Tesla and as Treasury yields fell in the US. 

The 10-year Treasury yield fell from its three-month highs touched on Wednesday. 

Shares of Centene and Microsoft rise

Shares of Centene are rallying after the health insurer’s third quarter profits exceeded expectations, driven by rate increases in Medicaid programs and higher membership in its health insurance exchange business. 

Microsoft’s stock gained after Chief Executive Officer Satya Nadella was given a pay package worth over $79 million for fiscal year 2024, a 63% increase from last year.

The package would have been $5 million higher if Nadella had not taken a pay cut to reflect cybersecurity risks in the company. 

Meanwhile, shares of Colgate-Palmolive fell on Friday despite beating third-quarter earnings expectations and raising guidance. 

Viking Therapeutics’ stock soars

Shares of Viking Therapeutics surged nearly 10% on Friday after the biotech company’s third quarter earnings beat analysts’ expectations. 

According to Yahoo Finance, Wall Street currently holds 13 buy ratings on the stock. 

Additionally, shares of Deckers Outdoor surged 14%, following its robust earnings results.

Deckers posted earnings of $159 per share, comfortably beating expectations of $124 per share earnings by analysts from LSEG. 

Meanwhile, shares of real estate investment trust Digital Realty Trust surged 11% before the opening bell after reporting record lease bookings for the third quarter.

Capri Holdings slump, while Tapestry rise

The stock of Capri Holdings slumped over 40% after a US judge blocked a pending merger. 

The merger was set to take place between the parent company of Michael Kors and Jimmy Choo and handbag maker Tapestry. 

Shares of Tapestry soared 15% on Friday. 

Additionally, shares of Apple fell nearly 1% before recovering all of its losses on Friday after data showed that iPhone sales in China fell in the third quarter, suffering from severe domestic competition. 

Positive economic data from the US

New orders for key US-manufactured capital goods increased more than expected in September. 

Additionally, investors will be monitoring the release of the GDP data from the US for the third quarter. 

Also, the monthly jobs report from the US will be released.

Traders will focus on the data, especially after the previous report came in hotter-than-expected.

That led to reduced bets for an oversized US Federal Reserve interest rate cut. 

Crude heads for weekly gains

Crude oil prices were on track for weekly gains after dropping by 7% last week. 

Oil prices were on the rise on increasing geopolitical tensions in the Middle East and uncertainties ahead of the US Presidential elections. 

At the time of writing, Brent crude prices were up 2.1% at $75.94 per barrel, while West Texas Intermediate oil was at $71.71 per barrel, up 2.2% from the previous close. 

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Blackstone Mortgage Trust (BXMT) looks like a good dividend company to invest in. It has an exciting dividend yield of almost 10%, trades below book value, and is part of Blackstone, the biggest private equity company in the world.

The BXMT stock price was trading at $18.55 on Friday, the same level it has been at in the past few weeks. It remains 35% above its lowest point in 2023, giving it a market cap of $3.31 billion, much lower than its $19.3 billion loan portfolio.

What is Blackstone Mortgage?

Blackstone Mortgage is a leading company that dividend-focused investors love for its long track record of dividend growth. It is a real estate finance company that provides senior loans collateralized by commercial real estate in the US, Europe, and other countries. 

The idea behind BXMT is relatively simple. It provides loans to developers and real estate companies and uses the same property as collateral. This is an important business since its manager is Blackstone, the biggest real estate investor in the world. 

Companies like BXMT have become more popular in the real estate industry after the Global Financial Crisis (GFC) of 2008/9 since banks have lowered their exposure because of strict regulations. 

BXMT’s portfolio is made up of loans across most areas in the real estate sector. Most of these loans are in the multifamily segment, followed by offices, hospitality, industrial, and non-US office. 

High interest rates

BXMT has also benefited recently from the high interest rates in the United States and its other markets. The Federal Reserve pushed interest rates to between 5.25% and 5.50% to deal with the post-Covid-19 inflation. Similarly, the European Central Bank (ECB) and the Reserve Bank of Australia (RBA) all hiked rates. 

BXMT often benefits when interest rates are higher because most of its portfolio is on floating interest rates. 

However, higher rates can be affected by higher default rates as maturities near. In the past few years, this has been talk about the wall of maturities as over $1 trillion of loans tied to the commercial real estate (CRE) sector mature.

The fear explains why BXMT stock remains about 24% below its 2021 highs. However, there is a light at the end of the tunnel as the CRE industry has avoided a 2008/9 implosion that some analysts were expecting.

There are also signs that more companies are forcing their staff to go back to the office, which is a good thing. 

Read more: Blackstone Mortgage (BXMT) stock could crash by 21% soon

Blackstone Mortgage earnings

The most recent catalyst for the BXMT stock price was its earnings for the three months to September. 

These results were fairly weaker than what it reported last year. Its interest and related income dropped to $430 million from $519 million a year earlier. Its nine-month interest income also dropped from $1.5 billion to $1.3 billion. 

Blackstone Mortgage also reported a loss during the quarter as its net loss came in at $55 million from a profit of $30.5 million. 

This loss was mostly because of credit quality, which led to higher loan losses. Worse, the management expects the losses to continue, as it added $132.5 million to its current expected credit loss (CECL). Its total CECL reserve this year has moved to over $1 billion.

These results explain why BXMT trades at a big discount to its book value. It has a price-to-book ratio of 0.8, while Starwood Property Trust (STWD), which has a better credit quality has a multiple of 1.01x. Ladder Capital Corp has a multiple of 0.95.

BXMT stock return challenges

The other thing to consider when investing in BXMT is that you should mostly ignore the 10% dividend yield and consider the total return. Ideally, in most cases, you should consider investing in a company that, at least, beats the S&P 500 index.

Blackstone Mortgage Trust has a poor record of doing that. Data shows that its total return this year was minus 4.4%. In contrast, the VOO ETF returned about 23%. As shown above, the company’s total return in the last five years was minus 18.8% compared to VOO’s 107%.

This is notable since the S&P 500 index pays a minimal dividend because of its historical performance. 

A point can also be made on investing in government bonds instead of BXMT for now since the ten-year is yielding over 4%. This means that it is doing better than BXMT.

BXMT chart by TradingView

On the positive side, the BXMT stock has formed a triangle pattern on the weekly chart, meaning that it could stage a strong comeback in the coming months. If this happens, the stock will climb from $18.7 to $24.5, its highest level in 2022, which is about 32% above the current level.

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Shares of Lilium, the electric vertical take-off and landing (eVTOL) vehicle manufacturer, plunged by more than 61% on Thursday after the company announced in a regulatory filing that its two main subsidiaries would likely file for insolvency in the coming days.

The dramatic drop in stock price comes as the aerospace startup faces a severe financial crunch, unable to secure the state guarantees it desperately sought from the German government.

In a regulatory filing with US authorities, Lilium, which is listed on the Nasdaq, revealed that it had been unable to secure enough additional funding to maintain operations at its two main subsidiaries, Lilium GmbH and Lilium eAircraft GmbH.

As a consequence, the management of these subsidiaries concluded that they are “overindebted” and will soon be unable to meet their financial obligations.

“The management of the Subsidiaries has informed the Company that they have to file for insolvency under German law and in doing so will apply for self-administration proceedings in Germany,” the company said in the filing.

After filing for insolvency, the subsidiaries will not be required to repay any debts incurred before the application, Lilium noted, and creditors will generally be “prohibited from foreclosing against the companies on any claims they may have.”

The planned insolvency filings by the subsidiaries could lead to Lilium’s delisting from the Nasdaq Global Select Market or suspension of its shares.

German government refuses loan to company

The company had requested €50 million from the German federal government to remain solvent.

However, the budget committee of the Bundestag declined the request, leaving Lilium scrambling to find alternative funding sources.

In a statement released last week, Lilium confirmed that it “received an indication that the budget committee of the parliament of the Federal Republic of Germany will not approve a €50 million guarantee.”

The proposed loan would have been provided by KfW, and the rejection left the company in a precarious financial position.

The German government’s refusal to support Lilium has sparked criticism from some industry voices.

Bavaria’s economy minister, Hubert Aiwanger, described the decision as “regrettable,” emphasizing the importance of supporting innovative industries like electric aviation.

Danijel Višević, co-founder of climate technology investors World Fund, expressed his disappointment, suggesting that the German government’s stance reflects a narrow view of eVTOL vehicles.

Višević argued that lawmakers incorrectly see air taxis as a luxury product for the wealthy when in reality, they represent a crucial step in the transition to zero-emission transportation.

The fall of Europe’s flying car hope

Lilium’s current struggles mark a dramatic fall from grace for a company once hailed as Europe’s most promising player in the future of air mobility.

The startup, founded in 2015, aimed to revolutionize short-distance travel with zero-emission electric aircraft designed to operate like flying taxis.

The concept of eVTOL vehicles captured imaginations worldwide, with Lilium attracting early support from notable investors such as Atomico, Earlybird, and Chinese tech giant Tencent.

In 2021, Lilium capitalized on the Special Purpose Acquisition Company (SPAC) boom and went public on the Nasdaq through a merger with Qell Acquisition Corp.

At the time of its listing, Lilium projected aggressive growth, including €240 million in revenue by the end of 2024 and profitability by 2025.

However, since its IPO, Lilium’s share price has plummeted by more than 95%, and the company has struggled to meet its ambitious milestones.

Lilium’s jets can cost as much as $9 million. The company also had a six-seater version in development, which would have set a buyer back about $7 million.

Lilium’s challenges are not unique. The eVTOL industry, while promising, has proven financially demanding, and many competitors have also faced difficulties.

Volocopter, another German electric aviation startup, was on the verge of insolvency earlier this year and had sought similar state guarantees from two German states and the federal government.

While Volocopter has secured new funding, it too remains in a vulnerable position.

In the US, eVTOL companies have fared slightly better, with Joby Aviation receiving $600 million in state support from the American government.

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Elon Musk, the world’s richest person, saw his net worth soar by $33.5 billion on October 24, after Tesla Inc. recorded its largest share jump in over a decade.

Tesla’s stock rose by 22% following the announcement of the company’s third-quarter earnings, which revealed the electric vehicle (EV) giant’s most profitable quarter since mid-2023.

Musk’s net worth now stands at $270 billion, according to the Bloomberg Billionaires Index, placing him $61 billion ahead of Amazon founder Jeff Bezos.

This surge puts Musk on track to potentially become the world’s first trillionaire by 2027, according to a report by Informa Connect Academy, thanks to Tesla’s market dominance and future-focused initiatives.

Tesla’s rally sparks trillionaire speculation

Tesla’s recent performance has fueled speculation that Musk may reach the trillion-dollar milestone within the next few years.

Informa’s report notes that Musk’s wealth has grown by an average of 110% annually, making him the leading candidate to achieve trillionaire status.

Tesla’s value, now estimated at $710 billion, plays a central role in Musk’s financial success.

With a 13% stake in the automaker, Musk’s Tesla holdings are currently valued at $93 billion.

Additionally, Musk holds 303 million stock options linked to a controversial compensation package that has faced legal and shareholder scrutiny.

“Musk has positioned himself to achieve new heights as Tesla capitalizes on self-driving technology, robotaxis, and future EV developments,” said Dan Ives, senior equity analyst at Wedbush Securities.

Rising competition and setbacks ahead

Despite Tesla’s impressive performance, challenges remain. The company faces increasing competition, particularly from lower-cost rivals in China.

Tesla’s stock experienced a significant decline in 2022 due to softening demand and multiple vehicle recalls, including a software issue with its Autopilot feature.

Musk also recalled past difficulties, highlighting Tesla’s near-bankruptcy in 2008.

“We were days away from insolvency before securing a critical loan,” he shared.

His controversial actions, such as the “funding secured” scandal in 2018, have further complicated Tesla’s journey.

Musk continues to diversify his ventures, with stakes in SpaceX, tunnel-digging firm The Boring Company, AI startup xAI, and Neuralink, a brain-chip implant company.

Tesla’s outlook and Musk’s future vision

Tesla’s positive Q3 earnings have renewed investor optimism.

Musk anticipates 30% growth in vehicle sales and revealed that the company’s much-anticipated Cybertruck project generated its first quarterly profit.

Speaking after the earnings release, Musk forecasted the rollout of Cybercab robotaxis in 2026, with plans to manufacture 2-4 million units annually.

“My prediction is Tesla will become the most valuable company in the world, and probably by a long shot,” Musk told investors via webcast.

Meanwhile, Musk’s ownership of SpaceX, valued at $210 billion, adds further weight to his financial empire.

His ventures also extend to the controversial social media platform X (formerly Twitter), which has drawn criticism for its content policies and Musk’s erratic posts.

Path to a trillion-dollar fortune

While Tesla’s growth positions Musk as a frontrunner in the race to become the first trillionaire, the future remains uncertain.

In addition to competition from Nvidia’s AI boom and potential challengers like Meta’s Mark Zuckerberg and Indian billionaires like Gautam Adani, and Mukesh Ambani, Musk’s wealth will largely depend on Tesla’s continued success.

“It’s much harder to restart operations than to shut them down, so doing this right is critical,” Musk emphasized regarding Tesla’s future.

With a big backlog of orders, the company remains optimistic but cautious in its strategy.

Though Musk has faced numerous obstacles over the years, including regulatory challenges and operational hurdles, his determination has helped Tesla and his other ventures thrive.

As Ives noted, “Musk has faced setbacks, but he has a knack for turning things around—he’s the Teflon kid.”

The coming years will determine whether Musk can sustain his momentum and reach unprecedented financial heights, cementing his legacy as both an industry pioneer and potentially the world’s first trillionaire.

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