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Global Stocks Trending in the News for January 10th, 2019

Jan 10, 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.
  • Bed, Bath & Beyond (BBBY) reported fiscal 3Q EPS of 18 cents, above 17 cents consensus.  Bed, Bath & Beyond fiscal 3Q net sales came in line at USD$3.03 billion, USD$3.04 billion was the average consensus.  Same-store sales fell 1.8%, worse than the 0.2% fall that was expected.   Bed, Bath & Beyond is rated “Neutral” in our US Large-Cap and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Big Lots (BIG) was downgraded to neutral from buy at Goldman Sachs.  Big Lots’ price target was cut to USD$34 from USD$48.  The downgrade follow 2 disappointing quarters of results and concerns over margin compression.  Big Lots is rated “Top Short” in our US Large-Cap and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Columbia Sportswear (COLM) was downgraded to hold from buy at Needham & Co.  Needham believes Columbia is fully valued at this price level.  Columbia Sportswear should hit its growth targets in 2019 but Needham thinks its multiple of 20.5 times earnings is not a good entry point.  Columbia Sportswear is rated “Top Buy” in our US Large-Cap and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • Constellation Brands Inc. (STZ) shares are falling after reporting FY3Q2018 financials that disappointed analyst expectations. Constellation Brands also warned that it expects a decline in both profit and sales from its wine and spirits business for the current fiscal year. Higher transportations costs and larger investments in marketing are also hurting the company. Constellation Brands is rated “Attractive” in our US Large-Cap and “Neutral” in our US Consumer Staples Global Top Stock Ideas. 
  • Fast Retailing (TSE:9983) reported fiscal 1Q operating income that missed consensus.  Fast Retailing fiscal 1Q operating income was 104.67 billion yen while 117.52 was consensus estimate.  Fiscal 1Q net sales of 644.47 trillion yen came below 656.76 billion yen expected.   Full year sales guidance of 2.3 trillion yen was maintained.  Fast Retailing is rated “Neutral” in our Japan Large-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.
  • Ford (F) announced a major restructuring of its European operations as it looks to raise its stock price.  Ford is in talk with its unions about jobs cuts that are likely to run into the thousands.  Ford is likely close multiple production plants in Europe as part of the plan, specifics have yet to be announced.  Ford is rated “Neutral” 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.
  • KB Home (KBH) reported fourth quarter that beat average consensus estimates.  KB Home 4Q EPS of 96 cents beat 93 cents consensus.  4Q revenue came at USD$1.35 billion, a touch above USD$1.33 billion consensus.  KB Home delivered 3.389 home in the fourth quarter.  KB Homes is rated “Neutral” in our US Large-Cap and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Kering (ENXTPA:KER) had its rating cut by USB to neutral from buy.  UBS lowered Kering’s price target to 450 euros from 575 euros.  UBS says the Gucci momentum that Kering has seen is topping out and led UBS to cut some of its 2019 assumptions, causing the rating cut.  UBS sees 11% organic growth in 2019.  Kering is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Kohl’s Corp (KSS) reports November/December SSSs of +1.2% vs. +6.9% for the period in CY2017.  The market is interpreting this result as negative even though management tightened its FY EPS guidance to USD$5.50 to USD$5.55 from USD$5.35 to USD$5.55.  Target is rated “Attractive” in our US Large-Cap and “Attractive” in our US Consumer Discretionary 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.
  • Macy’s (M) reports holiday season (November and December) SSSs of +0.7% and cuts its full-year guidance for sales and EPS.  Macy’s now sees FY EPS in a range of USD$3.95 to USD$4.30 from previous guidance of USD$4.10 to USD$4.30.  Macy’s is rated “Attractive” in our US Large-Cap and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Nike (NKE) is the focus of a EU tax investigation of companies that use Dutch law to lower their tax payments.  The EU alleges Nike and others have used the Netherlands to set up structure that “unduly reduce their tax burden”, and that is unfair.  The EU probe will focus on the structure of royalty payments and how they are taxed.  Nike is rated “Neutral” in our US Large-Cap and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • Target (TGT) reports November/December SSSs of +5.7%.  Target management reaffirms its full-year guidance for revenues and EPS.  In unrelated news, Target also announces that CFO Cathy Smith will be retiring and that the company is conducting an extensive search for its next CFO.  Target is rated “Neutral” in our US Large-Cap and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas. 
  • Ted Baker Plc (LSE: TED) shares are soaring more than 30% after the company reported a strong Christmas sales update. Ted Baker’s stock has faced turmoil amid reports of inappropriate behavior by its founder towards staff. Ted Baker is not rated in our 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.
  • 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
  • Samsung (KOSE:A005930) is set to unveil its new flagship S10 cell phone lineup on February 20th, the Wall Street Journal is reporting.  Samsung will introduce a version of the phone that is foldable and fully functional.  There will be 4 versions of the S10 unveiled on the 10th anniversary of the phone.  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 of 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.
  • T-Mobile US (TMUS) reported preliminary wireless additions for the fourth quarter of 1.4 million, well above the consensus expectation of 985,000.    Of those 1.4 million, 1 million were telephone customers.  Additionally, T-Mobile’s COO said the company is confident its merger with Sprint (S) will winregulatoryr approval.  T-Mobile US is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.  Sprint is rated “Top Short” in our US Large-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

  • 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.
  • The Greenbrier Companies (GBX) shares erased gains as high as 8.5% from early in the day after Cowen called the company’s most recent reporting period, “a somewhat noisy quarter.” In reporting financials for FY1Q2019, Greenbrier generated revenue that topped the largest analyst estimate and reported an EPS that beat analysts’ consensus estimate. Greenbrier is rated “Neutral” in our US SMID-Cap and “Neutral” 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.
  • Wacker Chemie AG (XTRA: WCH) shares are rallying on news that China will begin to promote grid-parity solar and wind power projects. Bloomberg Intelligence analyst James Evans wrote on the news that, “Any acceleration of subsidy-free solar projects within China would encourage more sustainable long-term demand for suppliers across the value chain.” Wacker Chemie is rated “Unattractive” in our European SMID-Cap Global Top Stock Ideas.  

Global Financials Stocks Trending in the News

  • Man Group Plc (LSE: EMG) shares are edging slightly lower after reports that Kuwait's Public Institution for Social Security (PIFSS) is suing the world’s largest public hedge fund firm for USD$156mm. The lawsuit relates to, “secret contracts with a former PIFSS executive between 1996 to 2013,” according to a statement from the government-run institution. Man Group is rated “Neutral” in our United Kingdom All-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 Healthcare Stocks Trending in the News

  • Akorn Inc. (AKRX) shares are falling after saying that the company received a warning letter from the US Food and Drug Administration (FDA). The warning letter from the FDS pertained to poor aseptic and sterilization practices in April and May of 2018 at the generic drug maker’s plant in Decatur, Illinois. Akorn is rated “Top Short” in our US Large-Cap and “Neutral” in our US SMID-Cap Global Top Stock Ideas. 

 

 

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