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Global Stocks Trending in the News for January 3rd, 2019

Jan 03, 2019

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Global Consumer Stocks Trending in the News

  • Lumber Liquidators (LL) had its price target cut by Loop Capital, it was slashed to USD$10 from USD$24.  Lumber Liquidators rating was cut to hold from buy.  Loop Capital expects lower sales and margins for Lumber Liquidators in 2019, the main reason for the downgrade.  Lumber Liquidators is rated “Neutral” in our US Large-Cap and “Top Short” in our US Consumer Discretionary Global Top Stock Ideas.
  • Netflix (NFLX) has removed a TV from streaming in Saudi Arabia at the request of regulators there.  Netflix removed a show that is critical of the US-Saudi Arabia relationship after regulators said the show runs afoul of Saudi Arabia’s cybersecurity laws.  Netflix is rated “Unattractive” in our US Large-Cap and “Unattractive” in our US Consumer Discretionary Global Top Stock Ideas. 
  • Next Plc (LSE: NXT) reported sales growth during the holiday season.  Next reported a 1% rise in sales in the properties it manages, surprising most investors.  Analysts called the holiday sales data “excellent”.  Next is rated “Top Buy” in our United Kingdom Global Top Stock Ideas.
  • Tesla Inc. (TSLA) shares are falling after its Model 3 deliveries missed analyst estimates in CY4Q2018. Tesla delivered 63,150 Model 3 vehicles, missing analysts’ consensus of 63,698 vehicles. Additionally, Tesla announced that it will cut the price of its vehicles in the US by USD$2,000 in an effort to absorb the federal EV tax credit that was cut in half on Tuesday. Tesla is rated “Top Short” in our US Large-Cap and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.  

Global Information Technology and Communication Services Stocks Trending in the News

  • Akami (AKAM) was downgraded yesterday to market perform from outperform at JP Morgan.  Akami’s price target was cut to USD$73 from USD$86.  Akami will see lower top-line growth than previously expected.  Akami is rated “Attractive” in our US Large-Cap and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • Apple (AAPL) cut its revenue forecast for fiscal 1Q19, its first guidance cut in close to 20 years.  Apple said unexpected weakness in China demand caused it to cut guidance, with USD$84 billion now expected, down from USD$89-93 billion originally expected.   Apple is rated “Top Buy” in our US Large-Cap and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • Baidu Inc. (BIDU) Chairman Robin Li said in an open letter yesterday that the firm will focus on opportunities in artificial intelligence (AI) technology in 2019. In the open letter, Li highlighted the enormous opportunities for growth and augmentation in the technology. Baidu is rated “Neutral” in our China All-Cap Global Top Stock Ideas.
  • Facebook (FB) Messenger is likely set to introduce a dark mode, according to reports. Jane Machun Wong, a tech tipster, posted a screenshot on Twitter that appears to be a work in progress of a dark mode interface for Facebook Messenger. A dark mode for Facebook Messenger would effectively make the application easier to use at night while saving battery for Android users. Facebook is rated “Neutral” in our US Large-Cap and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Windstream Holdings Inc. (WIN) shares are soaring after the network communications and technology solutions provider announced the sale of its EarthLink consumer internet business to Trive Capital. Trive Capital will pay USD$330mm in cash for EarthLink, indicating an EV/sales multiple of roughly 2x and an EV/EBITDA multiple of about 4x. Windstream is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas. 

Global Industrials Stocks Trending in the News

  • ArcelorMittal (ENXTAM: MT) and Evraz Plc. (LSE: EVR) shares are plunging in sympathy with mining companies after Caixin Media and HIS Markit China’s December manufacturing purchasing managers’ index fell from November levels. December’s value for the index neared with 2018 lows. ArcelorMittal is rated “Neutral” in our European Large-Cap Global Top Stock Ideas. Evraz is rated “Top Buy” in our European SMID-Cap and “Top Buy” in our United Kingdom All-Cap Global Top Stock Ideas. 
  • BAE Systems (LSE: BA) announced that it won a USD$78.8mm contract from the US Navy to perform maintenance and modernize the USS Shoup, an Arleigh Burke-class guided-missile destroyer. If all options are exercised, the deal could be valued at as much as USD$87.6mm. BAE Systems is rated “Neutral” in our United Kingdom All-Cap Global Top Stock Ideas.
  • Elbit Systems of America (TASE: ESLT) has been awarded a contract by Raytheon (RTN) to develop the Two Color Laser System (TCLS) for the Multi-Spectral Targeting System. The contract concerns development in 2019. Additionally, Elbit said that its IMI Systems unit will no longer continue its cluster munitions activities. Elbit is not rated in our Global Top Stock Ideas. Raytheon is rated “Attractive” in our US Large-Cap and “Attractive” in our US Industrials Global Top Stock Ideas.
  • Entegris (ENTG) shares have seen strong buying over the last 5 sessions, rising 20% over that time.  Entegris lost 37% in 2018 over fears of reduced chip spending.  Entegris, a maker of products that reduce contamination in chip factories, has seen a rebound recently as analysts comment its selloff seemed overdone.  Entegris is rated “Neutral” in our US Large-Cap and “Top Short” in our US Information Technology Global Top Stock Ideas.
  • Geely Automotive (SEHK: 175) released the first photos of its new models as it seeks to broaden its automotive offerings.  Geely Automotive released photos of a new coupe SUV that is based on its new modular architecture.  Geely did not give a data it will go on sale nor a price for the vehicle.  Geely Automotive is rated “Neutral” in our China All-Cap Global Top Stock Ideas.
  • Geely Automotive (SEHK: 175) was downgraded to underweight from equal weight at Morgan Stanley.  Geely Automotive had its price target slashed to USD$8 from USD$15.  Geely’s price target implies 38% downside from its last close.  Geely Automotive is rated “Neutral” in our China All-Cap Global Top Stock Ideas.
  • Louisiana-Pacific (LPX) was downgraded yesterday by Merrill Lynch to neutral from buy.  Merrill Lynch cut Louisiana-Pacific’s price target to USD$24 from USD$28.  Louisiana-Pacific will start to feel the effect of lower panel prices that began to be observed in 4Q18.  Louisiana-Pacific is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • Tata Steel Ltd (BSE: 500470) has its stock downgraded yesterday by CLSA.  Tata Steel was downgraded to sell from neutral at CLSA.  Tata Steel’s price target was slashed to 460 rupees from 815 rupees, implying an 8.6% downside from its last price.  Tata Steel is not rated in our Global Top Stock Ideas.

Global Financials Stocks Trending in the News

  • Aflac Inc. (AFL) has been downgraded by JPMorgan Chase & Co. to neutral from overweight. JPMorgan Chase & Co. forecasts a price target of USD$51/share for Aflac, implying a 12% upside from Monday’s close. Across industry estimates, Aflac maintains an average price target of USD$46.50. Aflac is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.
  • Banca Carige (BIT: CRG) saw its operations placed under temporary administration by the European Central Bank.  Banca Carige saw this happen after it failed to raise additional capital last week.  A team from the ECB will help the bank lower risk and potentially find a partner.  Banca Carige is rated “Unattractive” in our European SMID-Cap Global Top Stock Ideas.
  • Equity Bancshares (EQBK) saw its shares downgraded to market perform from outperform at Keefe, Brunette & Woods.  Equity Bancshares had its price target lowered to USD$45 from USD$47.  Equity Bancshares shares are fully valued at this level, which was cited as the main reason for the rating cut.  Equity Bancshares Apple is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas.

Global Commodities Stocks Trending in the News

  • American Electric Power (AEP) was downgraded by Mizuho Securities to neutral from buy.  American Electric Power had its price target cut to USD$70 from USD$76.  American Electric Power’s target implies 4% downside from its last close.  American Electric Power consensus target is USD$78.94.  American Electric Power is rated “Attractive” in our US Large-Cap Global Top Stock Ideas
  • Centrais Electricas Brasileiras S.A. - Electrobras (BOVESPA: ELET6) is trading higher after CEO Wilson Ferreira Jr. Said that he was invited to stay by Brazil’s new government to carry out a possible privatization of the state-controlled utility. “We’re still going to study what is the best way forward,” Ferreira told reporters, adding, “I will sit down with the government to define what will be the capitalization model.” Electrobras is rated “Neutral” in our Brazil All-Cap Global Top Stock Ideas.
  • DNO ASA (OB: DNO) has extended a hostile bid to Faroe Petroleum Plc (AIM: FPM) after unsuccessfully convincing shareholders to sell their stock. Of late, DNO has criticized Faroe management in an attempt to convince shareholders they are better off selling. Faroe shareholders recently voted down a USD$713mm acquisition offer by DNO -- the offer only received 43% of votes despite DNO owning 30% of Faroe. DNO is rated “Unattractive” in our European SMID-Cap Global Top Stock Ideas. Faroe is not rated in our Global Top Stock Ideas.
  • First Solar (FSLR) was upgraded to buy from neutral at Goldman Sachs.   First Solar’s price target was hiked to USD$57, up from USD$48.  Goldman Sachs says it sees “green shoots” in the solar industry with a better 2019 likely.  First Solar is rated “Unattractive” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Ophir Energy Plc. (LSE: OPHR) shares are rising the most in its history after the company confirmed reports of a possible cash takeover bid from PT Medco Energi Internasional Tbk. (IDX: MEDC). The potential deal would see Medco become the seventh-largest non-state energy producer in Southeast Asia. Ophir Energy is not rated in our Global Top Stock Ideas. Medco is not rated in our Global Top Stock Ideas. 

Global Healthcare Stocks Trending in the News

  • Abbott Labs (ABT) was downgraded to sell from neutral at Citi yesterday.  Abbott Labs’ price target was lowered to USD$68 from USD$72.  Abbott Labs’ price target implies 8% downside from its last close.  Abbott Labs is rated “Neutral” in our US Large-Cap Global Top Stock Ideas
  • Becton, Dickinson & Co (BDX) was named a top large-cap pick at JP Morgan for 2019.  Becton, Dickinson will see 6-7% growth in 2019, growing faster than peers.  Becton, Dickinson will see margin expansion in 2019 in the wake of its acquisition of Bard, 2019 will see full integration of the Bard business.  Becton, Dickinson & Co is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • BioMarin Pharmaceutical Inc. (BMRN) has been downgraded by Raymond James from outperform to market perform. BioMarin currently maintains 22 buy recommendations, 6 hold recommendations, and 0 sell recommendations across industry ratings. Over the last year, analysts have raised BioMarin’s consensus price target by 0.8%. BioMarin is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • Bristol-Myers Squibb (BMY) will acquire Celgene (CELG) in a deal the values the biopharmaceutical company at USD$74bn. Celgene shareholders will receive USD$50 and one Bristol-Myers share for each Celgene share owned. Bristol-Myers is rated “Neutral” in our US Large-Cap Global Top Stock Ideas. Celgene is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Globus Medical Inc (GMED) saw its stock downgraded by Morgan Stanley yesterday to market weight from overweight.  Morgan Stanley cut Globus Medical’s price target cut to USD$49 from USD$64.  Morgan Stanley sees headwinds that will “likely temper investor enthusiasm for robotics near term”.  Global Medical is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Johnson & Johnson (JNJ) saw its sales in India fall 3% in 2018.  Total sales in India were USD$829mm, according to a regulatory filing from Johnson & Johnson.  Johnson & Johnson’s sales fell after the Indian government decided to cap price for medical devices.  Johnson & Johnson is rated “Attractive” in our US Large-Cap Global Top Stock Ideas
  • Neogen (NEOG) announced that it is acquiring the Delta Genomics Centre in Canada, a major animal genomics lab there.  Neogen did not disclose the price paid though said the center will be renamed Neogen Canada.  Neogen is rated “Top Short” in our US SMID-Cap Global Top Stock Ideas.
  • Wright Medical Group (WMGI) was chosen as a 2019 top picks among medical technology companies by Piper Jaffray.  Wright Medical Group should see “solid growth” in 2019 in a sector it says “is cheap”.   Wright Medical Group is not rated in our Global Top Stock Ideas.

Global Real Estate Stocks Trending in the News

  • Omega Healthcare (OHI) announced that it will acquire MedEquities Realty Trust (MRT) in a deal that values MedEquities at USD$600mm in enterprise value. The acquisition will see Omega take on USD$34mm in mortgage loans while diversifying the firm’s property portfolio to 7 different states. Omega Healthcare is rated “Neutral” in our US Large-Cap Global Top Stock Ideas. MedEquities is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas.

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