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Global Stocks Trending in the News for January 4th, 2019

Jan 04, 2019

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Global Consumer Stocks Trending in the News

  • Cal-Maine (CALM) reports FY2Q2019 financials that miss the lowest analyst estimates. Cal-Maine generated EPS of USD$0.45/share in FY2Q2019 while analyst estimates ranged between USD$0.50/share and USD$0.55/share. Additionally, Cal-Maine’s sales of USD$356mm missed analyst estimates that ranged between USD$357mm and USD$369mm. Cal-Maine is rated “Neutral” in our US SMID-Cap and “Unattractive” in our US Consumer Staples Global Top Stock Ideas.
  • 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.
  • MGM Resorts International (MGM) announced “MGM 2020” plan, its new strategy to reduce costs and improve margin.  MGM Resorts International expects to increase ebitda by USD$300 million across its resorts.  MGM Resorts International will look to improve operational efficiencies, especially using digital technology.  MGM Resorts International is rated “Top Short” in our US Large-Cap and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • NEXON Co. Ltd. (TSE: 3659) founder Kim Jung- ju said in a statement that he is considering ways to make the company more competitive. Kim detailed further that he will announce when detailed measures are decided. Nexon is not rated in our 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.
  • Investors suing Tesla (TSLA) over its CEO’s tweets are attempting to drag his girlfriend at the time into the case.  Plaintiffs say Tesla CEO Elon Musk was with his girlfriend when he sent the texts about taking Tesla private that are the source of the case and that she may have relevant information about the case.  Musk is vehemently against her being subpoenaed.  Tesla is rated “Unattractive” in our US Large-Cap and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Zalando SE (XTRA: ZAL) shares are trading notably higher after Marcel Muench, founder of German-Chinese trading start-up DONGXii, said in an interview that the company could be an acquisition target of Alibaba Group Holding Limited (BABA). Muench said, “I assume that Alibaba will soon invest in companies in Europe. Zalando is a takeover candidate.” Zalando is rated “Top Short” in our European SMID-Cap Global Top Stock Ideas. Alibaba is rated “Unattractive” in our China All-Cap Global Top Stock Ideas. 

Global Information Technology and Communication Services Stocks Trending in the News

  • Alphabet’s (GOOGL) Verily division, formerly known as Google Life Sciences, has raised USD$ 1 billion in funding to grow its business.  This round of funding was led by Silver Lake, an investment fund backed by a host of large international companies.  Verily is involved in a number of projects including glucose monitoring contact lenses and a medical monitoring smart watch for older adults.   Alphabet is rated “Top Buy” in our US Large-Cap and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • AMS AG (SWX: AMS) shares are tanking after Apple (AAPL) cut its revenue guidance for the first time in two decades. Neil Campling, an analyst at Mirabaud, warned, “expect a ton of Apple supplier warnings in coming days.” AMS AG is rated “Top Short” in our European Large-Cap Global Top Stock Ideas. Apple is rated “Top Buy” 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.
  • Apple (AAPL) shares fell 10% yesterday in the wake of its guidance cut for 1Q revenue.  Apple’s action sent global markets lower yesterday.  Apple is now the 5th largest seller of mobile phones in China now, with 4 local players selling more phones and often at a price point well below what Apple sells its iPhones for and now with most if the same features.  Analysts say many local players are more in tune with the tastes of Chinese consumers than Apple.  Apple is rated “Top Buy” in our US Large-Cap and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • Intel Corporation (INTC) has been upgraded to buy from neutral at Bank of America Merril Lynch. Bank of America also raised its price target for Intel from USD$52/share to USD$50/share. In a note to clients, Bank of America cited that Intel, “provides attractive exposure to growth trends in cloud computing, AI, advanced autos, and 5G.” Intel is rated “Attractive” in our US Large-Cap and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • Lumentum Holdings (LITE) shares are fell along with other Apple (AAPL) suppliers yesterday, however, analysts are noting the selling is overdone. B. Riley FBR analyst Dave Kang is recommending “aggressive” buying of Lumentum on the weakness, citing that estimates already reflect weakness in Apple guidance. DA Davidson analyst Mark Kelleher, meanwhile, defended his buy recommendation on Lumentum. Lumentum is rated “Attractive” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Mellanox Technologies (MLNX) fell the most intraday in since April 2017 after naming Doug Ahrens as the company’s new Chief Financial Officer. According to Piper Jaffray’s James Fish, the hire coupled with reports of a slowdown, “is a potential indicator that Mellanox is not selling itself.” Mellanox is rated “Top Buy” in our US Large-Cap and “Attractive” in our US Information Technology Global Top Stock Ideas. 
  • Snap (SNAP) was downgraded at Goldman Sachs today to neutral from buy.  Snap's price target was reduced to USD$6 from USD$10. Goldman's target for Snap implies just 5.6% upside to last close.  Snap is rated “Unattractive” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Texas Instruments (TXN) has been downgraded from buy to neutral at Bank of America Merril Lynch. Additionally, Texas Instruments has its price target lowered from USD$117/share to USD$105/share, implying an 18% upside from Thursday’s close. Texas Instruments is rated “Top Buy” in our US Large-Cap and “Top Buy” in our US Information Technology Global Top Stock Ideas.

Global Industrials Stocks Trending in the News

  • American Airlines (AAL) shares were down sharply after one of its jets made an emergency landing due to a smoke condition.  Flight AA10 from Los Angeles to New York was diverted to Phoenix after reports of smoke in the cabin.  American Airlines confirmed the diverted flight but has not released details yet.  American Airlines is rated “Neutral” in our US Large-Cap and “Neutral” in our US Industrials Global Top Stock Ideas.
  • Daimler AG (XTRA: DAI) investors are launching a class action lawsuit in Germany against the company over its diesel engines scandal.  Daimler was late to inform clients too late about its use of defeat devices in its diesel vehicles.  The case has been filed in Stuttgart.  Daimler is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • Delta Air Lines Inc. (DAL) shares plunged the most in 3 years after cutting revenue guidance for the second time in two months, citing lower ticket prices. Other airline companies are falling in sympathy with Delta, including American Airlines (AAL), which is down the most in 5 years. Delta is rated “Top Buy” in our US Large-Cap and “Top Buy” US Industrials Global Top Stock Ideas. American Airlines is rated “Neutral” in our US Large-Cap and “Neutral” in our US Industrials 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.
  • Ford (F) reported December light-vehicles sales that were worse than expected.  Ford reported light-vehicle sales that fell 8.8% while consensus was for a 6.2% drop. Ford branded vehicles dropped while Lincoln sales rose.  Ford is rated “Neutral” in our US Large-Cap and “Attractive” in our US Consumer Discretionary 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.
  • Jet Blue (JBLU) initiated the first fare sale of the new year, offering fares as low as $44 one-way.  Most fares deals are centered on the Long Beach and Boston region.  No response from any other airlines yet.  Jet Blue is rated “Neutral” in our US Large-Cap and “Neutral” in our US Industrials Global Top Stock Ideas.
  • United Continental (UAL) is starting its new rules for support animals on its flights today.  United Continental is limiting emotional support animals on flights to only dogs and cats, with no animals less than 4 months old.  United Continental has seen an increase in incidents on longer flights where, it says, animals are not accustomed to being for so long.  United Continental is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.

Global Financials Stocks Trending in the News

  • 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.
  • UBS Group AG (SWX: UBSG) Chairman Axel Weber said that European banks need to get bigger in order to compete with US banks. “What Europe needs in order to catch up with American firms is European champions, banks that are larger in size.” Weber went on to call for consolidation among European banks. UBS Group is rated “Neutral” in our European Large-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
  • 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.
  • PG&E (PCG) is being sued by California power generator Calpine (CPN) blaming PG&E for the Camp Fire.  Calpine is seeking USD$20mn for damages its Geysers Power generating plant suffered in the fire.  Calpine is alleging PG&E’s equipment was to blame for starting the fire.  PG&E is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.  Calpine is not rated in our Global Top Stock Ideas.

Global Healthcare Stocks Trending in the News

  • Bayer (DB: BAYN) are trading higher after receiving a favorable ruling in its Roundup case.  The judge has limited the evidence that can be presented by the plaintiffs, a ruing that could potentially benefit Bayer.  Plaintiffs will not be able to allege that Bayer’s Monsanto unit tried to influence regulators who were overseeing its use in agriculture.  Bayer is rated “Unattractive” in our European 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.
  • 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​

 

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