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

Apr 18, 2019

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Global Consumer Stocks Trending in the News

  • Amazon (AMZN) CEO Jeff Bezos argues against those who complain of its market power in the company’s annual letter to shareholders.  Critics complain that Amazon earns 50 cents of every dollar spent online in the US and the power it wields is immense.  For many sellers who originally viewed Amazon as a partner now see them as a competitor.  Many sellers complain that Amazon now sells products similar to theirs, at prices that undercut them in spots on the site that are more prominent than theirs.  Most sellers on Amazon are loathed to invite regulations but at least seem willing to listen to proposals.  Amazon is rated “Neutral” in our US Large-Cap and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • Domino’s Pizza (DPZ) was upgraded to overweight from equal-weight at Morgan Stanley.  Morgan raised Domino’s price target to $283 from $268 as well.  Morgan thinks concern over decelerating US trends “are overdone.”  Investors are pricing in same-store-sales growth of only 2-3% and Morgan believes this is too bearish given its experience and the fact that Domino’s in the “best in class operator.”   Morgan writes that Domino’s has a “superior consumer value proposition” as it upgrades the stock.  Domino’s Pizza is rated “Attractive” in our US Large-Cap and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • Geely Automobile Holdings (SEHK: 175), Great Wall Motor Company (SEHK: 2333), and other Chinese auto manufacturers saw their shares soar today as investors are speculating that the NDRC is seeking consultation to ease controls over the number of auto licenses distributed in major Chinese cities. The news comes from CIMB Securities Ltd. analyst Danny Chen, who cites a consultation paper form the NDRC that mentions new measures to encourage the purchase of new-energy citizens by citizens. Geely Automotive is rated “Neutral” in our China All-Cap Global Top Stock Ideas. Great Wall Motors Company is rated “Neutral” in our China All-Cap Global Top Stock Ideas.
  • Las Vegas Sands (LVS) reported first quarter adjusted EPS of 91 cents, beating consensus of 86 cents.  Revenue of $3.65 billion beat $3.5 billion consensus.  Macau revenue of $2.33 billion came ahead of $2.2 billion expected.  Las Vegas Sands confirmed work on the Four Seasons Suites Macau and Londoner Macau “is progressing.”  Las Vegas Sands is rated “Unattractive” in our US Large-Cap and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Pepsi (PEP) reported first quarter results that beat expectations on strength in sales of its drinks and snacks.  Pepsi’s first quarter adjusted EPS of 97 cents beat the 91 cents consensus.  First quarter revenue of $12.9 billion beat consensus slightly.  Snacks saw a jump of over 5% in revenue.  Pepsi said it would continue strong advertising to maintain the momentum.  Pepsi is rated “Neutral” 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

  • IBM (IBM) reported first quarter revenue that showed a drop in cloud computing and artificial intelligence revenue.  IBM blamed the drop on foreign exchange headwinds, saying without that revenue in those units grew 12%.  IBM first quarter EPS of $2.25 matched $2.22 consensus.  Revenue of $18.2 billion missed $18.4 billion consensus.  IBM expects to close the acquisition of Red Hat later this year, its largest acquisition ever and one hoped to fuel its growth.  IBM is rated “Neutral” in our US Large-Cap and “Attractive” in our US Information Technology Global Top Stock Idea
  • Intel (INTC) said it is not going to continue its efforts to grab a larger share of the mobile handset chip market.  Intel has spent years trying to break into the market and had planned to launch 5G chips in 2020.  But with Apple (AAPL)and Qualcomm (QCOM) resolving their dispute which involves Apple returning to Qualcomm chips, Intel has decided to abandon its efforts to gain share in the space.  Intel said new fifth-generation wireless systems will give it opportunity for growth and it will focus there.  Intel is rated “Unattractive” in our US Large-Cap and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.  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.  
  • Netflix (NFLX) reported second quarter guidance with subscriber additions that trailed consensus together with its first quarter results.  Netflix expects to add 5.0 million net subscribers in the coming quarter, well below the 6.09 million consensus.  Netflix reported first quarter adjusted EPS of $0.76 ahead of $0.58 consensus.  First quarter revenue of $4.52 billion matched $4.50 billion consensus.  Netflix added 9.6 million subscribers in the first quarter beating 8.96 million consensus.    Netflix is rated “Unattractive” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.  
  • Qualcomm (QCOM) and Apple (AAPL) have come to a final agreement to end all litigation between the two companies.  Qualcomm and Apple signed a 6-year supply agreement with a 2-year option to extend.  Qualcomm said the deal will add $2.00 to EPS as deliveries ramp up.  The agreement ends all litigation with contract manufacturers as well.  The deal is effective April 1, 2019.  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.
  • Sprint (S) and T-Mobile (TMUS) have been told by US Justice Department officials that their merger deal is not likely to be approved the way it is presently structured.  The threat to their $26 billion merger is the anti-trust division of the Justice Department.  There is fear the deal could present an unacceptable threat to competition, as they are the #3 and #4 players in the telecom sector.  The proposed merger has been discussed for years as both companies are seeking scale with the merger.  Sprint is rated “Top Short” in our US Large-Cap and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.  T-Mobile is rated “Neutral” in our US Large-Cap and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • Telefonaktiebolaget LM Ericsson (OM: ERIC) shares traded notably higher after the company reported first quarter net sales that edged past analyst consensus by just 1.1%. Ericsson also generated adjusted operating profit of SEK5.1bn in its most recent quarter, notably beating analyst expectations for SEK4.05bn in adjusted operating profit. Ericsson is rated “Attractive” in our European Large-Cap Global Top Stock Ideas.

Global Industrials Stocks Trending in the News

  • CSX (CSX) reported first quarter EPS of $1.02, beating 91 cents consensus.  CSX first quarter revenue of $3.01 billion matched consensus of $3.0 billion.  CSX had an operating ratio of 59.5% in the first quarter, down from 60.3% in the previous quarter.  CSX does not expect the ratio to remain below 60%.  CSX expects capex of $1.6-$1.7 billion this year as it remains focused on service improvements.  CSX is rated “Attractive” in our US Large-Cap and “Attractive” in our US Industrials Global Top Stock Ideas.  
  • Jet Airways India (BSE: 532617) shares continued to slide after the Indian carrier was forced to ground all flights and shut operations as it runs out of funds and searches for a new investor. Lenders have denied Jet Airways interim funding. The company’s last flight will operate today before the carrier shuts operations. Jet Airways India is rated “Top Short” in our India All-Cap Global Top Stock Ideas. 
  • Kansas City Southern (KSU) reported first quarter adjusted EPS that beat consensus. First quarter EPS of $1.54 beat $1.44 consensus while revenue of $674.8 million came above the $667.7 million consensus.  Kansas City Southern reported an operating ratio of 76.2%, well above the 65.8% reported a year ago.  Volumes fell 1% versus a year ago due to one-time service interruptions.  Kansas City Southern is rated “Neutral” in our US Large-Cap and “Neutral” in our US Industrials Global Top Stock Ideas.
  • Honeywell (HON) posted earnings that beat expectations and increased guidance for 2019.  Honeywell first quarter EPS of $1.92 came better than $1.83 consensus.  Revenue of $8.88 billion came in line with $8.63 billion consensus with organic sales growing 8%.  Honeywell EPS guidance for 2019 of $4.87-$5.23, a slight cut from $4.90-$5.25 previously.  Honeywell is rated “Attractive” in our US Large-Cap and “Attractive” in our US Industrials Global Top Stock Ideas.
  • Schlumberger (SLB) reported first quarter earnings that matched expectations.  Schlumberger reported first quarter EPS of 30 cents, matching consensus.  First quarter revenue of $7.88 billion came ahead of $7.80 billion.  Revenue in North America and Latin America grew while Europe and Middle East revenue was lower.  Schlumberger sees a good 2019 commenting “we expect oil market sentiment to steadily improve over the course of 2019.”  Schlumberger is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.  
  • Textron (TXT) shares soared by double-digits after the company posted first quarter financials that notably beat consensus estimates. Textron generated an EPS of USD$0.76 in its most recent quarter, more than 11% higher than consensus for USD$0.68/share. Bloomberg analyst Douglas Rothacker wrote to clients on Textron’s financials that, “Recent cost actions and improving Aviation profitability are expected to propel profit growth, with aggressive share repurchases supporting the company’s drive to boost EPS.” Textron is rated “Neutral” in our US Large-Cap and “Attractive” in our US Industrials Global Top Stock Ideas.
  • Union Pacific (UNP) reported results for the first quarter that beat consensus.  Union Pacific reported first quarter EPS of $1.93 that beat $1.88 consensus.  Operating revenue for the first quarter was $5.38 billion, below $5.49 billion consensus.  Energy and agricultural freight revenues fell while Industrial and Premium freight revenues grew versus a year ago.  First quarter operating ratio was 63.6%.  Union Pacific is rated “Attractive” in our US Large-Cap and “Neutral” in our US Industrials Global Top Stock Ideas 
  • United Rentals (URI) reported first quarter results that beat expectations.  First quarter EPS of $3.31 beat $3.03 consensus.  United Rentals first quarter revenue was $2.12 billion, ahead of $2.06 billion consensus.  United Rentals reaffirmed revenue guidance for full year 2019 of $9.15-$9.55 billion.  United Rentals CEO said he expects a strong year saying “customer sentiment remains positive.”  United Rentals is rated “Neutral” in our US Large-Cap and “Neutral” in our US Industrials Global Top Stock Ideas

 

 

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Global Financials Stocks Trending in the News

  • American Express (AXP) reported weaker than expected first quarter results.  American Express saw loan-loss provision grow 4% and expenses that grew 11% versus a year ago.  First quarter adjusted  EPS of $2.01 was a touch better than $1.98 consensus.  First quarter revenue at American Express was $10.36 billion, trailing $10.50 billion consensus.  American Express reported $809 million in loan-loss provisions, above $755 million from a year ago.  American Express reaffirmed full year 2019 EPS guidance of $7.55-$8.35.  American Express is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.  
  • Bank of New York Mellon (BK) reported first quarter earnings that missed consensus.  Bank of New York Mellon’s first quarter EPS of 96 cents trailed the 96 cents expectation.  First quarter net interest margin of 1.20% missed expectation of 1.26%.  Bank of New York Mellon reported $1.8 trillion in assets under management with $34.5 trillion of assets under administration.  First quarter common equity tier 1 ratio of 11%.  Bank of New York Mellon is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • E-Trade Financial (ETFC) reported first quarter results that beat consensus expectations.  First quarter EPS of $1.09 beat $0.93 consensus.  E-Trade Financial first quarter revenue was $755 million, ahead of $738 million consensus.  First quarter net interest income was $492 million.  Daily average trades were 279,405.  E-Trade Financial is rated “Neutral” in our US Large-Cap Global Top Stock Ideas 
  • GAM Holding AG (SWX: GAM) shares traded higher by the most in more than 6 months after the company reported it would soon complete the liquidation of its scandal-ridden bond fund. The Swiss fund manager erased declines seen this year as the stock traded higher by double digits on the announcement. GAM is targeting full liquidation of the fund by mid-2019. GAM Holding is rated “Neutral” in our European SMID-Cap Global Top Stock Ideas.
  • Interactive Brokers (IBKR) reported first quarter adjusted EPS of $0.64 ahead of $0.60 consensus.  First quarter revenue of $558 million beat $505 million consensus, increasing 5.9% y/y.  Interactive Brokers increased declared a $0.10 quarterly dividend, matching consensus.  Interactive Brokers saw a 13% jump in net interest income to $29 million.  Interactive Brokers is rated “Top Short” in our US Large-Cap Global Top Stock Ideas.
  • Morgan Stanley (MS) reported first quarter results that came above consensus.  Morgan Stanley reported first quarter EPS of $1.33, beating consensus of $1.16.  Morgan Stanley delivered $3.73 billion in trading revenue, a touch above consensus.  Like other banks, stock trading revenues were lower as was fixed income trading revenue, though the latter beat consensus.  Morgan Stanley called its results “solid” and described it as “well positioned” to serve its clients, though highlighted the “risks to the global environment remain.”  Morgan Stanley is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas

Global Commodities & Energy Stocks Trending in the News

  • Alcoa (AA) reported first quarter results that were worse than expected.  Alcoa reported a 23 cents per share loss in the first quarter, worse than the 9 cents per share loss expected.  Adjusted ebitda of $467 million was better than the $403 million expected.  Revenue in the first quarter of $2.72 billion trailed the $2.81 billion expectation.  Alcoa cut its aluminum demand growth forecast to 2-3%, down from 3-4%.  Alcoa also cut its global aluminum deficit guidance to 1.5-1.7 million metric tons, down from 1.7-2.1 million metric tons.  Alcoa is rated “Top Short” in our US Large-Cap Global Top Stock Ideas
  • Vallourec SA (ENXTPA: VK) shares edged higher after Chairman Philippe Crouzet said that recent upticks in oil prices reaffirm the company’s FY2019 earnings forecast. Crouzet also said that the tube maker’s free cash flow may be positive for a “part” of 2019 and completely positive by FY2020’s end. Vallourec is rated “Unattractive” in our European SMID-Cap Global Top Stock Ideas.

Global Health Care Stocks Trending in the News

  • Abbott Labs (ABT) reported first quarter results that came generally in line with consensus.  Abbott reported first quarter EPS from continuing operations of 63 cents, beating 61 cents consensus.   Net sales of $7.54 billion came in line with $7.48 billion consensus.  Abbott’s Freestyle Libre diabetes treatment grew 70% fueling the strong growth of its Diabetes Care unit.  Abbott provided second quarter EPS guidance of 79-81 cents while expecting full year EPS to be in the range of $3.15-$3.25.  Abbott Labs is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.
  • Ionis Pharmaceuticals, Inc. (IONS), Insmed Incorporated (INSM), and Crispr Therapeutics AG (CRSP), shares fell alongside broader biotechnology stocks amid growing fears of “Medicare for All” legislation introduces on Capitol Hill. Ionis Pharmaceuticals fell the most among constituents of the Nasdaq Biotech Index after its partner Roche (SWX: ROG) said on a conference call that their Huntington-disease drug treatment may need further testing. Ionis Pharmaceuticals is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas. Insmed is rated “Unattractive” in our US SMID-Cap Global Top Stock Ideas. Crispr Therapeutics is not rated in our Global Top Stock Ideas. Roche is rated “Top Buy” in our European Large-Cap Global Top Stock Ideas.

 

 

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