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Global Stocks Trending in the News for January 16th, 2019

Jan 16, 2019

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Global Consumer Stocks Trending in the News

  • Marks & Spencer (LSE: MKS) has announced the next 17 store closures and the elimination of 1,045 jobs.  Marks & Spencer previously announced 100 stores will be closing, it has thus far announced 48 before yesterday’s 17 closures.  The closures are part of a radical restructuring of Marks & Spencer’s retails operations.  Marks & Spencer is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • McDonald’s (MCD) lost a case in the EU that cost it its right to the trademark for the term “Big Mac”.   The EU Intellectual Property Office ruled McDonald’s does not have the right to the name, instead granting that right to Ireland’s Supermac chain.  McDonald’s is rated “Top Buy” in our US Large-Cap and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • Netflix (NFLX) raised prices for its subscriptions for the first time since 2017 and the stock has been reacting positively.   Netflix said its most popular plan would rise to USD$13 from USD$11.  Netflix has risen 40% since Christmas Eve before yesterday’s news and the stock keeps climbing.  Netflix is rated “Unattractive” in our US Large-Cap and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Nordstrom (JWN) was downgraded to market perform from outperform at Telsey Advisory Group.  Telsey cut Nordstrom price target to USD$56 to USD$72, an 18% upside from last close.  Nordstrom is rated “Neutral” in our US Large-Cap and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Walmart (WMT) will no longer participate in CVS’ (CVS) pharmacy network after the two could not come to an agreement on pricing.  Walmart was demanding higher reimbursements from CVS in their negotiations and CVS refused.   Walmart ended their pharmacy arrangement shortly thereafter.  Walmart is rated “Attractive” in our US Large-Cap and “Consumer Staples” in our US Consumer Discretionary Global Top Stock Ideas.   CVS is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.

Global Information Technology and Communication Services Stocks Trending in the News

  • Bytedance is launching a new chat service in China to take on Tencent’s (TCEHY, SEHK: 700) WeChat.  The new service was launched yesterday in a live-streamed event in Beijing and is called “Duoshan”.  Bytedance wants to grab some of the 1 billion users that WeChat presently has.  Tencent is rated “Attractive” in our China All-Cap Global Top Stock Ideas.
  • Boohoo Group (LSE: BOO) increased full-year guidance after a strong holiday season.  Boohoo as previously said revenue would rise 38-43%, now it has upped that to 43-45% growth.  Boohoo’s social media strategy has paid off handsomely.  Boohoo is rated “Attractive” in our United Kingdom All-Cap Global Top Stock Ideas.
  • Facebook (FB) said it is going to invest USD$300 million in local news over the next 3 years.  Facebook will offer grants to local newsrooms and invest in local news non-profits.  Facebook is making the efforts as local news programs continue to suffer.  Facebook is rated is rated “Attractive” in our US Large-Cap and is rated “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • Fiserv (FISV) reports preliminary financials for CY4Q2018 while announcing the all-stock acquisition of First Data Corporation (FDC). The acquisition by Fiserv values First Data at an about USD$22bn. Additionally, Fiserv reported that it expects CY4Q2018 EPS between USD$0.84/share and USD$0.85/share while analysts’ consensus calls for USD$0.87/share. Fiserv is rated “Top Buy” in our US Large-Cap and “Attractive” in our US Information Technology Global Top Stock Ideas. First Data is rated “Neutral” in our US Large-Cap and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Sage Group (LSE: SGE) said it will post a profit of 23 million pounds on the sale of iSolved HCM, its payroll outsourcing operations.  Upon the sale closing, Sage will receive 73 million pounds in cash with 5 million pounds additional as a contingency payment.  Sage is rated “Attractive” in our United Kingdom All-Cap Global Top Stock Ideas.
  • Snap Inc. (SNAP) shares are falling after an SEC filing revealed the resignation of Chief Financial Officer Tim Stone. The Snap SEC filing details that the CFO’s resignation is not related to, “any disagreement with us on any matter relating to our accounting, strategy, management, operations, policies, regulatory matters, or practices (financial or otherwise).” Snap is rated “Unattractive” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Zix Corp (ZIXI) has agreed to acquire AppRiver in an effort to create a cloud-based email security provider to small and medium-sized businesses.  Zix secured a total of USD$300 million in convertible financing to complete the deal.  The new combined company will have ~USD$180 million in revenue.  Zix is rated is rated “Attractive” in our US SMID-Cap and is rated “Neutral” in our US Information Technology Global Top Stock Ideas.

Global Industrials Stocks Trending in the News

  • Ablemarle (ALB) was downgraded yesterday to neutral from buy at Nomura Instinet.   Ablemarle’s price target was lowered to USD$85 from USD$90.  Nomura Instinet is at the low end of consensus, with the average price target USD$113.50 for Ablemarle.  Ablemarle is rated is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Delta Airlines (DAL) reported 4Q EPS of USD$1.30, a touch above USD$1.28 expected.  For the coming quarter, Delta Airlines sees revenue growing 4-6% while expecting costs to grow below inflation.  Delta expects 1Q revenue of USD$10.4 billion, up 5% y/y.  For full-year 2019, Delta Airlines expects EPS of USD$6-7.  Delta Airlines is rated “Top Buy” in our US Large-Cap and “Top Buy” in our US Industrials Global Top Stock Ideas.
  • DSV A/S (CPSE:DSV), the Danish freight concern, is bidding USD$4 billion for Panalpina Welttransport Holding (SWX:PWTN), its Swiss rival.  DSV is looking to create a shipping concern that would be #4 in global logistics.  This is DSV’s second bid for a sector player in the last 6 months.  DSV is rated “Top Buy” in our European Large-Cap Global Top Stock Ideas.  Panalpina Welttransport Holdings is rated “Neutral” in our European SMID-Cap Global Top Stock Ideas.
  • Ford (F) reported a preliminary 2018 profit of USD$1.30, a touch below USD$1.32 consensus.  CFO Bob Shanks said he expects 2019 to see an improvement in ebitda , though that cannot be guaranteed.  Ford is entering 2019 with plans to abandon the sedan market, focusing mostly on SUVs.  Ford is rated “Neutral” in our US Large-Cap and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Glencore (LSE: GLEN) is being described as “Far, far too cheap” by Bernstein in a note.  Bernstein says the stock is trading at 4.8x EV/ ebitda versus its historical average of 8.0x.  Bernstein reiterates its outperform rating at 500 pence price target.  Glencore is rated is rated “Neutral” in our European Large-Cap and is rated “Neutral” in our United Kingdom All-Cap Global Top Stock Ideas.
  • Norsk Hydro (OB: NHY) shares are reacting positively after regulators said it can reopen its Alunorte mine.  Brazilian environmental regulators said Norsk Hydro can resume production at the mine, removing the embargo that was in place.  Norsk Hydro is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • United Continental (UAL) reported 4Q18 EPS of USD$2.41, well above consensus of USD$2.04.  4Q18 revenue grew 11% to USD$10.49 billion, also ahead of USD$10.377 billion.  4Q18 PRASM grew by 5%.  United Continental expects 1Q19 capacity to grow 5-6%.  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

  • Bank of America (BAC) reported CY4Q2018 earnings that broadly beat analysts’ consensus estimates led by the bank’s retail business. Bank of America generated EPS of USD$0.70/share in CY4Q2018 while analysts expected USD$0.63/share. Bank of America also increased its efficiency ratio from 58% a year ago to 65% in CY4Q2018. Bank of America is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • BlackRock (BLK) reported 4Q18 EPS of USD$6.08 versus USD$6.28 consensus.  4Q18 revenue of USD$3.43 billion came in-line with consensus.  BlackRock increased quarterly dividend 5% to USD$3.30.  BlackRock is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.
  • Deutsche Bank AG (DB: DBK) Chief Executive Officer Christian Sewing detailed on Tuesday that the bank launched a further internal investigation into its role as a correspondent bank for Danske Bank’s (CPSE: DANSKE) Estonian unit. At an event in Berlin on Tuesday, Sewing said that Deutsche Bank probed its role in Danske Bank’s tax evasion scheme, “long before the cases became public.” Deutsche Bank is rated “Neutral” in our European Large-Cap Global Top Stock Ideas. Danske Bank is rated “Top Short” in our European Large-Cap Global Top Stock Ideas.
  • Goldman Sachs (GS) reports CY4Q2018 financials that largely please investors and analysts. Goldman Sachs generated an EPS of USD$6.04/share in CY4Q2018 while analysts’ consensus called for USD$5.30/share. Goldman Sachs’ revenue fell 0.5% y/y to USD$8.08bn although it still beat analysts’ consensus by USD$580mm. Goldman Sachs is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • JP Morgan (JPM) reported 4Q results that missed estimates, with fixed income trading revenue missing estimates significantly.  4Q EPS of USD$1.98 was well below USD$2.21 and came below the lowest estimate.  Fixed income trading revenue of USD$1.86 billion was well below USD$2.29 billion expected.  Equity sales and trading revenue of USD$1.32 billion was in-line.  JP Morgan reported USD$2 trillion in assets under management.  JP Morgan is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • Wells Fargo (WFC) said it will operate under a Federal Reserve asset cap until the end of 2019, longer than anticipated; the cap was due to end in the middle of 2019.  Wells Fargo needs more time to fully correct the problems in its consumer business that led to the cap.   The Federal Reserve rejected parts of the turnaround plan Wells Fargo presented last year, also contributing to the additional time of the cap.  Wells Fargo is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.

Global Commodities Stocks Trending in the News

  •  PG&E (PCG) confirmed it has secured USD$5.5 billion in debtor-in-possession financing for its imminent bankruptcy filing.  PG&E skipped a USD$26 million interest payment on bonds from its gas and electric unit, as expected, given its coming bankruptcy.  The San Francisco Public Utilities Commission will study the potential purchase of some of PG&E’s asset to assure supply for the city.  PG&E is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.

Global Healthcare Stocks Trending in the News

  • Bayer (DB: BAYN) shares suffered after a French court ruled that its weed killer RoundUp causes cancer.  The ruling caused Bernstein to reiterate its buy on Bayer, saying the ruling will have minimal financial impact on results and any weakness should be used as an opportunity to buy.  Bayer is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • Boston Scientific (BSX) and Edwards Lifesciences (EW) agreed to settle all patent claims between them.  Edwards Lifesciences will make a one-time payment to Boston Scientific of USD$180 million to settle all claims with no further royalties due.  Both companies agreed to not litigate any further.  Boston Scientific is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.  Edwards Lifesciences is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas.
  • Bristol-Meyers Squibb (BMY) was upgraded at SocGen to buy from sell.  SocGen’s double upgrade comes as it looks favorably on Bristol-Myers Squibb’s takeover of Celgene (CELG).  SocGen sees an 80% probability of the deal closing as hiked its price target to USD$60 from USD$47.  Upon closing of the deal, the target will jump to USD$64.  Bristol-Meyers Squibb 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.
  • United Healthcare (UNH) reported fourth quarter results that beat estimates.  Adjusted earnings came at USD$3.28, beating the USD$3.21 average consensus.  United Healthcare saw its medical care ratio decline 50 basis points to 81.6%.  United Healthcare maintained 2019 revenue guidance of USD$243-245 billion.  United Healthcare is rated is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.
  • Walgreens Boots-Alliance (WBA) is joining forces with Microsoft (MSFT) to create “digital health corners” in Walgreens stores.  The “digital health corners” will promote the sale of personal health devices.  Walgreens will move its data operation to the Microsoft Azure cloud.  Walgreens Boots-Alliance is rated “Neutral” in our US Large-Cap and “Attractive” in our US Consumer Staples Global Top Stock Ideas.  Microsoft is rated “Attractive” in our US Large-Cap and “Top Buy” in our US Information Technology Global Top Stock Ideas.  

 

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