We're lowering our price target on a financial stock, but a valuation premium is still warranted

Published Mon, Apr 14 20252:34 PM EDT

Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street. Markets: Stocks are in the green Monday, though they're off their highs of the morning. The S & P 500 , which initially jumped around 1.5%, was up around 1% in afternoon trading. Meanwhile, the tech-heavy Nasdaq had more than 2% shortly after the opening bell. It was up less than 1% around 2:30 p.m. ET. Investors on Monday are chewing over the Trump administration's exemptions for smartphones, laptops, and other electronics from the steep 125% "reciprocal" tariffs on Chinese imports. However, those items remain subject to a 20% tariff put in place earlier this year tied to fentanyl-related concerns. The news, which was disclosed late Friday, brought much-needed relief to the battered tech sector. Within the portfolio, some of the biggest beneficiaries include Apple , Microsoft , Nvidia , Broadcom and DuPont . Apple and DuPont, which also caught an analyst upgrade , added around 3%. Not all those companies are participating in the stock rebound, though, as the market absorbed last week's sharp moves. For example, Broadcom was one of the biggest gainers in the S & P 500 last week thanks in part to CEO Hock Tan opportunistically announcing a new $10 billion share repurchase program on April 7. But the stock is actually lower by more than 1% Monday. Nvidia, another big gainer last week, is modestly higher in afternoon trading. The market wanted to take the exemption news as a definitive "all clear" signal, but we think there are still risks. Much remains unresolved. The continued inconsistency in trade policy messaging suggests these exemptions may be only temporary. Semiconductors and the broader electronics supply chain will likely be targeted in the upcoming Section 232 investigations, which could give President Trump the authority to limit imports deemed a national security risk. This new overhang could be part of the reason why the semiconductor rebound did not sustain. Meanwhile, investigations into copper, timber, and lumber imports are already in progress. Other sectoral tariffs, such as those targeting the pharmaceutical industry , loom too. Our view: We've got plenty of cash on the sidelines and are looking to put some of it to work as prices come in. At the same time, we don't want to be idle during this rebound either. Jim Cramer explained Sunday — and then again in Monday's Morning Meeting — that our plan to use some of the recent strength to reposition and lighten up in areas most exposed to tariff risks and the ongoing trade war with China. For example, Jim mentioned the plan to scale back our Apple position into strength. Other stocks call for it too, Jim said, like Nvidia. New PT: We are reducing our BlackRock price target to $1,050 from $1,150 following its first quarter earnings report Friday. This new price target is roughly in line with the updated mean analyst price target of $1,021, according to FactSet. We're nudging lower our price target to account for softness in assets under management and management fees as a result of the recent market volatility. Bigger picture, we still think BlackRock's stock is deserving of a higher price-to-earnings multiple as its push into private markets and technology services through its Aladdin data platform play out, but in the near term, there is some risk from market pressure. Up next: There are no major earnings after the closing bell on Monday. Before the opening bell on Tuesday, we'll see earnings from Bank of America , Citigroup , PNC Financial Services and Johnson & Johnson . The conference call from J & J could be useful as we try to gauge what impact the pharma tariffs, if they come to fruition, could have on the industry's earnings. There are no major economic data releases set for Tuesday. (See here for a full list of the stocks in Jim Cramer's Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Every weekday, the CNBC Investing Club with Jim Cramer releases the Homestretch — an actionable afternoon update, just in time for the last hour of trading on Wall Street.