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Global Stocks Trending in the News for January 11th, 2019

Jan 11, 2019

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Global Consumer Stocks Trending in the News

  • Anheuser-Busch Inbev (ENXTBR: ABI) is considering an IPO of its Asian unit, according to a report from Bloomberg.  Anheuser-Busch Inbev is talking to advisers about the potential deal that could raise up to USD$5 billion.  Anheuser-Busch Inbev has been looking for ways to unlock value for shareholders and this could be an obvious choice.  Anheuser-Busch Inbev would look to value to business at USD$70 billion, according to the report.  Anheuser-Busch Inbev is rated “Top Short” in our European Large-Cap Global Top Stock Ideas.
  • AO World (LSE: AO) updated 3Q sales, saying they are growing at 8.2%, slowing down from its first half run rate of 9.9%.  AO World maintained its recently lowered guidance.   Shore Capital noted that it is positive there was not another cut in guidance and reiterated its sell rating.  AO World is not rated is rated in our Global Top Stock Ideas.
  • Archer Daniels Midland (ADM) is acquiring Florida Chemical Company for USD$175 million from Flotek Industries (FTK).  Florida Chemical Company is a leading provider of citrus oils and fragrances and ADM is adding this acquisition to its stable of natural flavor solutions.  ADM commented that citrus is one of the fastest growing flavor categories.  ADM is rated “Neutral” in our US Large-Cap and “Top Buy” in our US Consumer Staples Global Top Stock Ideas.  Flotek is rated “Top Short” in our US Large-Cap Global Top Stock Ideas.
  • Autoliv (ALV) was upgraded at UBS to buy from hold.  UBS upgraded Autoliv in the wake of the departure of its CEO earlier this week.  Autoliv is not rated is rated in our 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.
  • 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.
  • 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.
  • 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. 
  • 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.
  • MGM Resorts International (MGM) now has Starwood Value as a shareholder, according to a Bloomberg report.  Starwood Value, known for its activist fund, has a position it plans to build on with plans to seek changes at MGM Resorts International, as it has with past investments.  MGM Resorts International shares rose on the news.  MGM Resorts International is rated “Top Short” in our US Large-Cap and “Neutral” in our US Consumer Discretionary.
  • 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.
  • PVH Corp (PVH) gave guidance that is above consensus estimates.  PVH expects 4Q EPS to be at least USD$1.75 while present consensus is USD$1.61.  PVH expects 4Q revenue of USD$2.4 billion, matching consensus estimates.  PVH is working on efforts to streamline its Calvin Klein operations.  PVH is rated “Neutral” in our US Large-Cap and “Neutral” 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. 
  • Tesco (LSE:TSCO) reported strong Christmas sales, beating consensus estimates.  Tesco Christmas UK same store sales grew 2.2%, double the 1.1% consensus.  Christmas group sales grew 1.5%.  Tesco said it “remains ang on track to deliver plans for year”.  Tesco is rated “Neutral” in our United Kingdom All-Cap Global Top Stock Ideas. 

Global Information Technology and Communication Services Stocks Trending in the News

  • Activision Blizzard (ATVI) is cutting ties to Bungie Inc, the developer of one of its most successful titles “Destiny”.  The Wall Street Journal is reporting that Activision Blizzard was not happy with the most recent version of the game and had decided to end a collaboration that began in 2008.  Neither company would comment on the story.  Activision Blizzard is rated  “Neutral” in our US Large-Cap and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • Alibaba (BABA) backed Megvii is considering an IPO that would value the company at up to USD$1 billion.  Megvii is the owner of Face++, the AI-powered facial recognition software.  Megvii hopes to raise USD$500 million, according to press reports.  Alibaba is rated “Unattractive” in our China All-Cap Global Top Stock Ideas.
  • Amazon’s (AMZN) IMDb will launch a free video streaming service that is ad supported.  This will be Amazon’s first ad supported video service and it will be called IMDb Freedive.  Amazon is looking to grab more of the USD$210 billion digital ad market with this service, a market where it had already risen to #3.  Amazon is hiring new ad sellers as it seeks to grow its advertising business.  Amazon is rated “Neutral” in our US Large-Cap and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas. 
  • Ericsson (OM:ERIC B) announced it will take a USD$687 million charge for its digital services unit.  This digital services unit has resisted efforts at turnaround, threatening Ericsson’s overall strategy to boost profitability.  The rest of Ericsson has seen improvements in the wake of its turnaround plan be implemented.  Ericsson is rated “Top Buy” in our European Large-Cap 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.  
  • Sharp Corp (TSE: 6753) had its price target cut to 1200 yen from 1400 yen by Morgan Stanley, sending the stock on a 10%+ rally.  Morgan Stanley raised the rating of Sharp Corp to equal weight from underweight.  Morgan Stanley believes its challenges will continue and that Sharp will struggle to hit its own targets.  Sharp is not rated is 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.
  • Xiaomi (SEHK:1810) will invest USD$1.48 billion in areas related to AI and Internet of Things (IoT) over the next 5 years, its CEO said.  Xiaomi’s CEO said AI and IoT will become parts of its “core development strategy over that time.  Xiaomi will also introduce its first 5G wireless phone in the second half of 2019.  Xiaomi is rated “Neutral” in our China All-Cap Global Top Stock Ideas.

Global Industrials Stocks Trending in the News

  • American Airlines (AAL) lowered guidance for revenue per mile growth to 1.5%.  Previous guidance from American Airlines had 1.5% as the low end of the range.  American’s warning follows a similar announcement from Delta Airlines (DAL) in the last week.   American Airlines is rated “Neutral” in our US Large-Cap and “Neutral” in our US Industrials Global Top Stock Ideas.  Delta Airlines is rated “Top Buy” in our US Large-Cap and “Top Buy” 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

  • BlackRock (BLK) announced it is laying off 500 employees, or 3% of its workforce, according to Bloomberg.  The cuts will be worldwide and the first since 2016.  BlackRock said in a note to employees “market uncertainty is growing…and the ecosystem we operate in is becoming increasingly complex” without detailing where the cuts would be.  BlackRock is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.
  • Danske Bank (CPSE:DANSKE) employees were “openly lying” to French authorities when responding to questions about money laundering, this according to the co-founder of Hermitage Capital.  Co-founder Bill Browder says he had proof to back up his allegations, he had been one of the driving forces behind the investigation into money laundering at Danske.  He made a presentation to the Danish parliament today.  Danske Bank is rated “Top Short” in our European Large-Cap Global Top Stock Ideas.
  • JP Morgan (JPM) is increasing its bonus pool for corporate and investments bankers.  JP Morgan will increase bonuses for equity traders the most as that unit has had the best year.  In the first 9 months of the year JP Morgan’s stock traders generated USD$5.57 billion of revenue, a 22% hike y/y.  JP Morgan is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.

Global Healthcare Stocks Trending in the News

  • Amarin (AMRN) shares surged after it was suggested by Street Insider that Pfizer (PFE) could be interested in the company.  Amarin recently gave a presentation at the JP Morgan healthcare conference that was very well received by investors.  Amarin and Pfizer both refused comment when asked about the news.  Pfizer is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.  Amarin is not rated in our Global Top Stock Ideas.

 

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