Stocks in focus: Shopify, Boeing, AT&T

Yahoo Finance’s Seana Smith and Dave Briggs break down why Shopify stock is soaring, Boeing's quarterly loss, and why investors are cheering AT&T stock following the company’s latest earnings report.

Video transcript

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- Here is your closing bell on Wall Street.

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SEANA SMITH: All right, that wraps up today's trading day. When you take a look at the numbers across the board, we didn't travel too far from the flat line. The Dow barely eking out gains, slipping back into positive territory in the final couple of minutes of trading, up just about 9 points, though. The S&P off by a fraction there, just below the flat line. The NASDAQ off just about 2/10 of a percent.

Let's get into some of the day's top movers. We got to start with Shopify. It was a major winner today, the company announcing price increases to three of its plans. And you can see the stock closing up nearly 11%.

Now merchants will now be charged $39 for the Basic plan. That's up from $29. $105 for the Shopify plan, an increase from 79 bucks. And the Advanced plan has the largest increase, moving from $299 up to $399.

Indeed, this is a welcome move by the Street, some analysts saying that this was a long overdue. Truist saying that price increases were due now for quite some time. So that increased by about 30%, 33% across the board for its plans. Clearly it looks like the Street is pretty bullish on that, given what that could potentially do to its revenue.

DAVE BRIGGS: Long overdue, yes, 12 years since they've increased their prices. But also, to your point there, these are massive price increases, essentially a third across the board, leaving you with that question of how many people are going to ditch Spotify because of that drastic a price increase in this economy, with inflation what it is, with the potential recession around the corner? Initially, I think, a lot of people may have to get rid of Shopify. But that's not what the analysts think because Baird says we don't think these prices warrant a change for the vast majority of merchants, given a couple of things, the time and effort required to shift platforms and, probably most importantly, that Shopify offers superior e-commerce functionality at a reasonable price. KeyBank analyst also agrees that people will not have to leave Shopify.

Again, in this economy, I'd be surprised, though you can lock in the annual prices. If you sign on an annual deal, you can lock in the current prices right now.

SEANA SMITH: Yeah, for a couple of months. I think it's also key to look at what some of its competitors have done. When you take a look at some of the other names in that space, Intuit, Wix.com, they implemented price increases here already. So the fact, I guess, Shopify now just catching up to them, maybe that's why some of these analysts aren't too worried about those churn numbers that you were just talking about.

Baird actually saying that this could add $200 million to subscription revenue for 2023. And they actually see that number rising to $300 million to $350 million in incremental revenue on an annualized basis going forward. So that, I think, is why we are seeing such a jump in the stock today.

DAVE BRIGGS: It's been a good start to the year for them as well, up 30%. But that stock lost almost half its market cap in 2022. So a long way until they recover.

Next up is Boeing, shares teetering near the flat line, slight gain today after the aircraft producer's fourth-quarter earnings release. The company's $19.98 billion fell short of Wall Street revenue estimates, while its adjusted loss per share came in at $1.75, more than a buck more than the Street had been expecting. Boeing attributed the lagging losses to supply chain issues while, despite rebounding sales and deliveries, again, they point to really some struggle in the supply chain, but labor issues as well, Seana.

SEANA SMITH: Yeah, jet engines, other components have certainly been a challenge here for Boeing. But when you take a look at the stock reaction, initially it caught me by a bit of surprise. A lot of that, though, has to do with the cash flow numbers that we did get from the company. They were pretty strong, when you take a look at the cash flow beating expectations there.

CEO Dave Calhoun, though, once again reiterating the fact that those challenges, the same challenges that we have been talking about, some of the supply chain issues do remain going forward. Revenue was about in line with expectations.

It's also going to be interesting to see what the demand is like from China. We talk about the reopening there, how quickly that could potentially come back online when we talk about their economy going forward. Once that gradually starts to reopen, or the reopening, I should say, picks up more steam, that could be a bullish sign for Boeing going forward.

DAVE BRIGGS: Calhoun said they've got more big orders in line right now than he's ever seen. And he said most of them are coming from outside the United States. FactSet surveyed 26 analysts. 18 have an overweight or a buy, 7 holds, and just 1 sell gives you a pretty good sampling of how investors feel about Boeing.

SEANA SMITH: Certainly does. RBC coming out saying not a lot of news in this, but not a lot of news in this case was good news for the stock. Again, the stock closing up just about 3/10 of a percent.

All right, let's take a look at AT&T, another important mover to keep on your radar. That stock closing up about 6 and 1/2% today. The pop coming after the company released its latest earnings report before the bell. The company produced earnings per share of $0.61, coming in higher than the Street's estimate of $0.57.

But really, it appears to be those subscriber numbers that are pushing this stock higher. AT&T added 217 million total subscribers across all divisions. That topped the Street's estimate by just about 2 million. Profit and free cash flow outlook missed the Street's expectations, but certainly, Dave, looks like those subscriber numbers clearly the huge headline. And that is what Wall Street is focusing on in this report.

DAVE BRIGGS: Yeah, John Stankey ecstatic, the CEO, about those numbers, saying, "This marks the best 10-quater stretch of wireless growth in more than a decade for AT&T," which is really a shocking number when you consider the environment that we're in at the moment. And for the exclamation mark point, Stankey says, what's our strategy? It's quite simple. Do it again. So not a whole lot to analyze there, pretty pleased with their performance, wants to keep it up.

SEANA SMITH: Certainly are pleased with the performance. And it looks like the strategy has been paying off when you look at the new phone sub, 656 million. It is important to point out that they are offering still some promotions here. That, of course, weighing on their business a bit.

They're spending on that 5G expansion. They're spending on the phone giveaways to bring in those new users. That is costing AT&T just a bit. But clearly subscribers, they are moving towards AT&T. We're seeing that reflected in those numbers.

DAVE BRIGGS: And that, friends, is what's moving the markets today.