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Global Stocks Trending in the News for March 18th, 2019

Mar 18, 2019

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Global Consumer Stocks Trending in the News

  • BMW AG (DB:BMW) Oracle reported a 7.9% drop in ebit to 9.12 billion euros.  BMW declared a full year dividend of 3.50 euros per shares, below the 3.86 consensus.  BMW’s CEO said the coming year is full of significant challenges for BMW, the company will shrink its lineup to deal with these challenges.  BMW sees a slight rise in deliveries in 2019.  BMW AG is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.
  • Disney (DIS) has rehired director James Gunn to direct the third “Guardians of the Galaxy” film after firing him eight months ago.  He was fired then after offensive tweets of his from years ago were published.  In a surprise move, Disney announced he is set to return after a backlash from fans demanding his return.  Disney is rated “Neutral” in our US Large-Cap and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • H&M (OM:HM B) reported fiscal first quarter sales of SEK51.02 billion, beating consensus of SEK50.05 billion.  H&M saw sales growth of 4% in the quarter in local currency.  RBC commented that while the progress in inventory management is positive the valuation is still not attractive enough to change it neutral rating.  H&M is rated “Top Short” in our European Large-Cap Global Top Stock Ideas.
  • Live Nation (LYV) was downgraded to neutral from buy at Citi while its price target was raised to USD$63 from USD$59.   Live Nation is unlikely to make any acquisition near-term as it digests its recent acquisitions.  These have been the main driver for the stock’s recent strong run-up, which Citi does not see continuing near-term.  Live Nation is rated “Unattractive” in our US Large-Cap and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Lumber Liquidators (LL) reported fourth quarter adjusted EPS of USD$0.17 beating consensus of USD$0.14.  Lumber Liquidators reported fourth quarter revenue of USD$268.9 million a touch below consensus of USD$272.3 million.  Lumber Liquidators saw same store sales growth of +9.4%, well above 7.9% consensus.  Lumber Liquidators gave same store growth guidance of negative low single digits.  Lumber Liquidators is rated “Attractive” in our US SMID-Cap and “Top Short” in our US Consumer Discretionary Global Top Stock Ideas.
  • Marriott International (MAR) outlined its 3-year guidance which includes the return of up to USD$11 billion to shareholders.  Marriott intends to add between 275k and 295k rooms by 2021.  Marriott sees EPS of USD$7.65-8.50 by 2021 with a compound growth rate of 11-15% over 2018 adjusted results.  Marriott sees dividends payouts of ISD$1.9-2 billion with share repurchases of USD$7.6-9 billion.  Marriott International is rated “Neutral” in our US Large-Cap and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Tesla (TSLA) unveiled its newest vehicle, the Model Y.  The Model Y is set to be cheaper than its larger SUV brother and higher-end versions should ship to customers late 2020 with basic models, priced at USD$39,000, to ship mid-2021.  Tesla CEO Elon Musk presented the new model in a rather subdued manner, noticeably different than his charismatic self.  Telsa is rated “Top Short” in our US Large-Cap and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Ulta Beauty (ULTA) reported fourth quarter EPS of USD$3.61 beating consensus of USD$3.56.  Ulta Beauty reported fourth quarter revenue of USD$2.12 billion in line with consensus of USD$2.11 billion.  Ulta saw same store sales growth of +9.4%, well above 7.9% consensus.  Ulta Beauty gave 2019 EPS guidance of around USD$12.65-12.85.  Ulta Beauty is rated “Attractive” in our US Large-Cap and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.

Global Information Technology and Communication Services Stocks Trending in the News

  • Adobe (ADBE) Oracle reported fiscal first quarter 2019 EPS of USD$1.71 beating consensus of USD$1.62.  Oracle reported fiscal first quarter 2019 revenue of USD$2.60 billion beating consensus of USD$2.55 billion.  Adobe gave second quarter EPS guidance of around USD$1.77.  Adobe is rated “Attractive” in our US Large-Cap and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Apple (AAPL) is targeting prestigious awards with its new streaming service, according to a report in Bloomberg.   Apple is hiring established talent from Hollywood, seeking to build a platform that will complete with Netflix (NFLX) and big Hollywood studios.  Apple has put together an awards strategy team to realize its ambitions.  Apple is rated “Neutral” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.  Netflix is rated “Unattractive” in our US Large-Cap and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Cree (CREE) announced it is selling its lighting unit to Ideal Industries (IFX) for a total of USD$310 million.  Cree will receive USD$225 million cash and up to USD$85 million in earn out payments over the next 12 months that starts 2 years after closing of the deal.  Cree gave fiscal third quarter recurring revenue guidance of USD$271-277 million.  Cree is rated “Top Short” in our US Large-Cap and “Unattractive” in our US Information Technology Global Top Stock Ideas. Ideal Industries is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Facebook (FB) was downgraded to hold from buy at Needham in a note highlighting concern over its recent pivot toward privacy and encrypted messages.  Facebook saw its price target cut to USD$187 from USD$205.  Needham also noted the growing risk of government regulations and its likely negative effects on Facebook.  Facebook has seen some key executives depart recently, further adding to the concerns for Needham.  Facebook is rated “Neutral” in our US Large-Cap and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Fidelity National Information Services (FIS) agreed to acquire Worldpay Inc (WP) for close to USD$34 billion in cash and stock.  FIS will also assume Worldpay’s debt load, which brings the enterprise value of the deal to about USD$43 billion.  Upon closure of the deal, FIS shareholders will hold 53% of the new company with Worldpay holders owning 47%.  Worldpay shareholders will receive USD$11 per share cash and 0.93 shares of FIS.  Fidelity National Information Services is rated “Neutral” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.  Worldpay is rated “Neutral” in our US Large-Cap and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Lam Research (LRCX) saw its price target raised at Citi to USD$215 saying it sees a pickup in NAND orders.  Citi believes prices for NAND have hit a trough and increased demand will come going forward.  Lam Research remains the top equipment pick at Citi.  Lam Research is rated “Neutral” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Micron (MU) was downgraded at Cross Research to hold from buy.  Merill Lynch maintains its buy rating and USD$50 price target but warns of falling selling prices in the second quarter of 2019.  This is expected to be temporary with a turnaround coming by the fourth quarter.  Micron is rated “Unattractive” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Oracle (ORCL) reported fiscal third quarter 2019 EPS of 87 cents beating consensus of 84 cents.  Oracle reported fiscal third quarter 2019 revenue of USD$9.62 billion in line with consensus of USD$9.59 billion.  Oracle increased its quarterly dividend to 24 cents per share from 19 cents.  Oracle is rated “Neutral” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Qualcomm (QCOM) won its first patent infringement case against Apple (AAPL) in the United States.  Qualcomm was awarded USD$31.6 million in damages in a San Diego court, giving the company the full amount it asked for.   Qualcomm contends its portfolio of technology patents provides significant value to smartphones.  Qualcomm is rated “Unattractive” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.  Apple is rated “Neutral” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Snap Inc. (SNAP) shares surged to their highest levels since September 2018 after BTIG announced a Street-high price target of USD$15/share. In a note to clients, BTIG analyst Rich Greenfield wrote, “Virtually everything that could go wrong for Snapchat over the past couple years since going public has gone wrong.” Greenfield believes that overseas advertisers will take advantage of Snap Inc.’s relatively low bid prices for ad inventory in the US, driving a stronger FY2019 than the previous year. Snap Inc. is rated “Top Short” in our US Large-Cap and “Unattractive” in our US Information Technology Global Top Stock Ideas.
  • Spotify’s (SPOT) CEO commented today his company has suffered greatly from the restrictions Spotify alleges Apple (AAPL) has placed on it.  These alleged restrictions are the reason Spotify complained to the EU, demanding an investigation of Apple’s business practices.  He added that one of the biggest complaints from customers is their inability to get Spotify to work on Apple’s products.  The EU antitrust regulator said it would take the complaint seriously.  Spotify is not rated in our Global Top Stock Ideas.  Apple is rated “Neutral” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Synaptics (SYNA) was downgraded to neutral from buy at Mizunho Securities.  Synaptics saw its price target cut to USD$39 from USD$48 as well.  Mizunho highlights Synaptics’ loss of market share in multiple product lines as well as the recent announcement that its CEO is leaving.  Synaptics is rated “Neutral” in our US SMID-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.

 

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Global Financial Stocks Trending in the News

  • Allianz (DB:ALV) shares are rising on speculation it could combine its assets with DWS (DB:DWS), the asset management arm of Deutsche Bank.  With news of Deutsche Bank (DB:DBK) discussing a possible merger many are speculating it may shed assets with DWS being described as a prime target.  DWS has one of the largest offerings of ETFs and real estate business among European asset managers.  Deutsche Bank is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.  DWS is rated “Unattractive” in our European SMID-Cap Global Top Stock Ideas.  Allianz is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • Commerzbank’s (DB:CBK) potential merger with Deutsche Bank (DB:DBK) finally got the green light to start formal merger talks.  Germany’s Finance Minister has said he will not oppose the massive jobs cuts that will be needed to make a merger of the two banks work.  Last week labor leaders at Deutsche Bank expressed the same opposition to any merger with Commerzbank.   Commerzbank is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.  Deutsche Bank is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas.

Global Industrials Stocks Trending in the News

  • Air Canada (TSX:A C) has suspended financial guidance for the coming quarter and full year given the grounding of the 737 Max jets.  Air Canada said it is devising a contingency plan for the loss of the jets but does not have anything to announce yet.  Macquarie is recommending clients use the weakness in the stock as a buying opportunity.  Air Canada is rated “Attractive” in our Canada All-Cap Global Top Stock Ideas. 
  • Alstom (ENXTPA:ALO) was upgraded to buy from hold at Kepler Cheuvreux.  Alstom’s price target was raised to 43.50 euros from 38.50 euros.   Alstom has a healthy backlog with potential for winning further business in 2019.  Alstom is rated “Attractive” in our European Large-Cap Global Top Stock Ideas.
  • Boeing’s (BA) crisis deepens as preliminary evidence from the 737 Max crash indicates the plane was set to dive, similar to the situation found in the first crash, according to a report in Bloomberg.  Investigators have downloaded all the information from both the flight-data recorder and cockpit voice recorder.  Press reports indicate very similar circumstances preceding this crash as the first crash.  Boeing is rated “Attractive” in our US Large-Cap and “Neutral” in our US Industrials Global Top Stock Ideas.
  • Equifax (EFX) was initiated at Exane BNP Paribas with a neutral.  Equifax saw its price target set at USD$106.  The average price target in the market is USD$117.64 presently.   S&P downgraded Equifax’s credit rating to BBB- with a negative outlook saying its revenues will continue to be pressured by one-time costs and investment spending.  Equifax is rated “Neutral” in our US Large-Cap and “Unattractive” in our US Industrials Global Top Stock Ideas.

Global Commodities & Energy Stocks Trending in the News

  • ArcLight Capital Partners has agreed to acquire the rest of American Midstream Partners (AMID) that it does not already own.   A price of USD$5.25 was agreed upon and the deal is expected to close by the end of the second quarter.  ArcLight cut its bid price to USD$4.50 from USD$6.10 in January after American Midstream said it would not pay its first quarter dividend.  A revised price was agreed up since then.  American Midstream Partners is rated “Neutral” in our US SMID-Cap Global Top Stock Ideas.
  • ExxonMobil (XOM) said today it intends to lower the cost of pumping oil in the Permian Basin to USD$15 per barrel.  For comparison, that is a low cost that can only be found in the huge fields of the Middle East.  The Permian Basin total production is close to 4 million barrels per day, equal to all the production in Iraq today.  ExxonMobil is deploying 55 rigs there by 2024 and total production there is expected to double by that time.  ExxonMobil is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • Nucor (NUE) provided guidance today for first quarter EPS that came below consensus.  Nucor guided EPS of USD$1.45-1.50 while consensus is presently USD1.63.  Nucor is blaming lower average selling prices and wet weather limiting shipments for the miss.  Nucor is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.

Global Healthcare Stocks Trending in the News

  • BioScrip (BIOS) and Option Care Enterprises have agreed to merge in an all stock transaction.  Upon completion, the resulting company will be 80% owned by investment funds that are affiliated with Madison Dearborn Partners and Walgreens Boots Alliance (WBA).  The company will remain listed in Nasdaq.  Bioscrip is rated “Attractive” in our US SMID-Cap Global Top Stock Ideas.  Walgreens Boots Alliance is rated “Attractive” in our US Large-Cap and “Neutral” in our US Consumer Staples Global Top Stock Ideas.

 

 

Global Top Stock IdeasTOP LONG & TOP SHORT STOCK IDEAS FOR GLOBAL MARKETSMONTHLY TOP IDEAS FROM OUR MULTI-FACTOR QUANTITATIVE MODELS
Global Top Stock IdeasTOP LONG & TOP SHORT STOCK IDEAS FOR GLOBAL MARKETSMONTHLY TOP IDEAS FROM OUR MULTI-FACTOR QUANTITATIVE MODELS