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Global Stocks Trending in the News for January 9th, 2019

Jan 09, 2019

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Global Consumer Stocks Trending in the News

  • Advanced Auto Parts (AAP)  was upgraded by Merrill Lynch to buy from neutral.  Merrill Lynch hiked Advance Auto Part’s price target to USD$187, up from USD$160.  Advance Auto Part’s average price target is presently USD$200.  In the last week, Barclay’s also upgraded Advance Auto Part to buy and raised its target to USD$205.  Advance Auto Part is rated “Neutral” in our US Large-Cap and “Top Buy” in our US Industrials Global Top Stock Ideas.
  • AutoNation Inc (AN) announced cost-cutting plans that include shrinking its 3 regions into 2.  AutoNation expects a challenging year and announced a plan to cut USD$50 million in costs.  AutoNation has lost a number of key executives and will not replace all of them as part of its cost-cutting measures.  AutoNation is rated “Unattractive” in our US Large-Cap and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Greggs Plc (LSE: GRG) reported 4Q sale-store-sales growth of 5.2% at company managed stores.  Greggs raised its earnings forecast for pretax profit of 88 million pounds, up from 86 million pounds.  Shore Capital reiterated its hold ratings, saying the company is fully valued at these levels.  Greggs is rated “Attractive” in our United Kingdom All-Cap Global Top Stock Ideas.
  • Mattel (MAT) is finally making a live-action Barbie movie.  Mattel created a Mattel Films division over the last year and has been trying for some time to make a Barbie movie, with multiple attempts ending in frustration.  The film will start Margot Robbie.  Mattel is rated “Top Short” in our US Large-Cap and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Sears Holdings (SHLD) has rejected Chairman Eddie Lampert’s bid to save the company, setting the retailer on a path to liquidation after 126 years. Sears rejected a USD$4.4bn bid from Lampert’s ESL Investments as it was deemed insufficient by Sears’ advisors. Sears is rated “Top Short” in our US SMID-Cap and “Top Short” in our US Consumer Discretionary Global Top Stock Ideas.

Global Information Technology and Communication Services Stocks Trending in the News

  • Carbonite (CARB) was upgraded from equal-weight to overweight at Barclays with a USD$38/share price target. Barclays cites an out-of-line valuation as reasoning for the upgrade. Carbonite shares fell 23% in the most recent quarter. Carbonite is rated “Attractive” in our US SMID-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Delta Airlines (DAL) was downgraded at Imperial Capital to in-line from outperform.  Imperial lowered Delta Airlines’ price target to USD$53 from USD$77.  Delta Airlines’ consensus price target is presently USD$67.81.  Imperial expects fewer fare hikes and an overall more challenging environment in 2019.  Delta Airlines is rated “Top Buy” in our US Large-Cap and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Facebook (FB) and Alphabet’s (GOOGL) Google are violating cyber laws in Vietnam, according to regulators there.  Facebook and Google are allowing anti-government content on their sites, inciting anti-government sentiment, which is against Vietnamese law.  Authorities said Facebook and Google have one year to fix the problems and must work with authorities to make that happen.  Facebook is rated “Attractive” in our US Large-Cap and “Top Buy” in our US Information Technology Global Top Stock Ideas.  Alphabet  is rated “Neutral” in our US Large-Cap and “Attractive” in our US Information Technology Global Top Stock Ideas
  • Frontier Communications (FTR) was downgraded by Wells Fargo Securities to underperform from market perform.  Frontier Communications also saw its price target cut to USD$1.75 from USD$5.  Frontier Communications is working on a plan to deal with its upcoming debt maturities.  Frontier Communications is rated “Unattractive” in our US SMID-Cap Global Top Stock Ideas.
  • Maxar Technologies (MAXR) reported the failure of its Worldview-4 global imaging satellite.  It appears its gyroscopes have failed at making it remain stable on an axis.  Maxar was downgraded by Credit Suisse to underperform from neutral on the news.  Maxar Technologies is rated “Unattractive” in our US SMID-Cap and “Unattractive” in our US Industrials Global Top Stock Ideas.
  • Orange S.A. (ENXTPA: ORA) is being fined 14mm euros (USD$16mm) by Romania’s Competition Council for abuse of its dominant position. The Competition Council said that Orange restricted access to its network from 2011 through 2015 in order to deny local companies access to sending commercial text messages to Orange clients. Orange is rated “Neutral” in our European Large-Cap Global Top Stock Ideas. 
  • Samsung (KOSE: A005930) reported revenue and operating income for fiscal 4Q that missed estimates.  Samsung revenue came at 59 trillion won, below 63.6 trillion expected, a drop of 11%.  Operating income of 10.8 trillion won came below the 13.8 trillion consensus expectation.  Samsung is feeling the pinch of softer demand in its 2 key export markets of the US and China.  Samsung is not rated in our Global Top Stock Ideas.
  • Tencent (TCEHY, SEHK: 700) will soon introduce its own digital assistant called “Xiaowei” for WeChat.  Tencent is introducing the digital assistant that will link to a large variety apps , allowing users to do things like play music or order food.  Tencent has not made clear how and when Xiaowei will be rolled out.  Tencent is rated “Attractive” in our China All-Cap Global Top Stock Ideas.
  • Ubisoft Entertainment SA (ENXTPA: UBI) shares are trading notably higher after being upgraded to buy from hold at Kepler Cheuvreux. Additionally, Kepler Cheuvreux raised its price target for Ubisoft from 80 euros/share to 90 euros/share, implying a 27% upside from Monday’s closing price. Ubisoft is rated “Neutral” in our European Large-Cap Global Top Stock Ideas. 
  • Verizon Communications (VZ) announced it added 1.2 million new wireless subscribers in its fiscal 4Q.  This is Verizon Communications’ seventh straight quarter of strong additions.  This is preliminary data and matched gains from a year ago.  Verizon Communications’ CEO commented that the company has “seen continued momentum, with an outstanding fourth quarter”.  Verizon Communications is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.
  • Billions of Xiaomi Corp. (SEHK: 1810) shares will be free of their six-month lock lockup period on Wednesday, causing investors to question if it will exacerbate the stock’s drop from a listing price of HK$17/share to HK$11.10/share as of its last close. More than 3bn shares accounting for about 19% of shares outstanding will be unlocked Wednesday. JPMorgan Chase & Co. also cut its buy recommendation for Xiamoi yesterday. Xiaomi is rated “Neutral” in our China All-Cap Global Top Stock Ideas.
  • Weibo (WB) was downgraded yesterday by Morgan Stanley to equal-weight from overweight.  Weibo is feeling the pinch of competition from smaller players and has seen margin compression, both were cited as reasons for the downgrade.  Weibo’s next earnings report is February 12th.  Weibo is rated “Neutral” in our China All-Cap Global Top Stock Ideas.

Global Industrials Stocks Trending in the News

  • Duerr AG (DB: DUE) shares are trading lower after being downgraded to underperform from neutral at Bank of America Merrill Lynch. Bank of America Merrill Lynch cited slowing momentum in the company’s HOMAG unit as demand slows in China as a reason for the downgrade. Additionally, the company lacks an M&A catalyst and auto exposure. Duerr is rated “Unattractive” in our European SMID-Cap Global Top Stock Ideas. 
  • Fiat Chrysler Automobiles NV (BIT: FCA) is reportedly near settling a two-year long criminal investigation by the US Justice Department. The investigation concerns if Fiat Chrysler knowingly sold diesel vehicles that violated emissions rules. In October, Fiat Chrysler allocated USD$810mm to deal with expenses related to diesel probes by the US Justice Department. Fiat Chrysler is not rated in our Global Top Stock Ideas.
  • Geely Automotive (SEHK: 175) provided guidance that implies its challenges will continue.  Geely sees sales growth in 2019 of just 1% while many analysts are expecting double-digit sales growth.  Merrill Lynch cut its price target to HK$10 from HK$19.  Credit Suisse cut its target to HK$11 from HK$29.  Geely Automotive is rated “Neutral” in our China All-Cap Global Top Stock Ideas.
  • General Dynamics (GD) had its shares downgraded at Jefferies to hold from buy.  Jefferies cut the price target of General Dynamics to USD$164 from USD$197.  General Dynamics won a USD$898 million cyber engineering contract for the US Navy, it also announced.  General Dynamics is rated “Top Buy” in our US Large-Cap and “Attractive” in our US Industrials Global Top Stock Ideas.
  • Illumina Inc. (ILMN) shares are slipping lower after reporting preliminary FY4Q2018 financials that Goldman Sachs thinks are , “somewhat underwhelming,” considering that the company usually beats sales estimates by roughly USD$35mm. Illumina generated USD$865mm of sales in FY4Q2018 while analysts’ consesnus called for USD$861.2mm. Illumina is rated “Attractive” in our US Large-Cap Global Top Stock Ideas. 
  • Lennar (LEN) reported 4Q18 net earnings of USD$796.1 million or USD$2.42 per diluted share.  Lennar delivered 14,15 new homes, up 64% y/y.   Backlog of USD$6.6 billion is up 85% y/y.  Total revenues of USD$6.5 billion is up 71% y/y.  Lennar is rated "Attractive" in our US Large-Cap and "Neutral" in our US Consumer Discretionary Global Top Stock Ideas.
  • Nissan (TSE: 7201) CEO Hiroto Saikawa said on Monday that he wants to, “discuss whether there need to be some sorts of initiatives or changes,” as the company continues its partnership with Renault (ENXTPA: RNO). Saikawa also stressed that the alliance itself is, “not in danger.” Nissan is rated “Top Buy” in our Japan Large-Cap Global Top Stock Ideas. Renault is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • Sika AG (SWX: SIKA) will acquire private equity-owned Parex Group for 2.5bn Swiss francs (USD$2.6bn). The acquisition will enable Sika to expand its building materials operations into construction markets from France to China. Sika AG is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • Union Pacific Corp (UNP) was upgraded at Seaport Securities to buy from neutral.  Seaport Securities raised the Union Pacific Corp price target to USD$165, implying a 19 upside to yesterday’s close.  Union Pacific is rated “Attractive” in our US Large-Cap and “Attractive” in our US Industrials Global Top Stock Ideas.
  • United Continental Holdings, Inc. (UAL) has been downgraded by Imperial Capital from in-line to underperform while its price target was slashed from USD$110/share to a street-low USD$73/share. Imperial Capital cites potential weakness in China and valuation re-rating due to low fuel prices as reasons for the downgrade. United Continental is rated “Neutral” in our US Large-Cap and “Attractive” in our US Industrials Global Top Stock Ideas.

Global Financials Stocks Trending in the News

  • Capital One Financial’s (COF) rating of hold was reaffirmed at Morgan Stanley yesterday.  Morgan Stanley also reaffirmed its USD$100 price target on Capital One Financial in a note to clients yesterday.  Capital One Financial is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Morgan Stanley (MS) was upgraded to buy from hold at Citi Bank. Across industry ratings, Morgan Stanley maintains 20 buy recommendations, 9 hold recommendations, and 0 sell recommendations. Morgan Stanley is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.

Global Commodities Stocks Trending in the News

  • Hornbeck Offshore Services (HOS) shares are trading notably higher after drawing on its remaining USD$136.68mm available under the company’s first-lien delayed-draw term loan credit facility. The company’s term loan is now fully funded at USD$300mm, according to the company. Hornbeck is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas. 
  • PG&E (PCG) shares fell sharply yesterday on new it is exploring bankruptcy.  PG&E is considering bankruptcy because liabilities from wildfires has reached a potential USD$30 billion for the company with USD$10 billion in market cap.  The company is seeking help from the state of California for a potential bailout, though no specifics have been mentioned.  PG&E is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.

Global Healthcare Stocks Trending in the News

  • Danaher Corp. (DHR) Chief Executive Officer Thomas Joyce, Jr. is set to comment on the company’s performance at the J.P. Morgan Healthcare Conference in San Francisco yesterday. Ahead of the conference, Danaher sees its FY4Q core revenue growth above its prior forecasts with its adjusted EPS expected to be, “at or near the high-end,” of previously announced guidance. Danaher is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.

 

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