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Global Stocks Trending in the News for April 30th, 2019

Apr 30, 2019

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Global Consumer Stocks Trending in the News

  • Amazon (AMZN) announced with its results that it will be transitioning its Prime free 2-day shipping to 1-day shipping.  Analysts estimate it will add $800 million in costs to transition to that service completely.  Competitors are moaning as most now match Amazon’s 2-day delivery and few expected the 1-day announcement.  Amazon is targeting many everyday items like toothpaste with its 1-day service, items it has had trouble competing in.  Amazon is rated “Neutral” in our US Large-Cap and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas
  • Fielmann (DB: FIE) shares edged higher after Marc Fielmann, son of the company’s founder who will soon take over as CEO, promised investors to deliver faster growth and a larger market share for prescription glasses. When he takes over as CEO, Marc Fielmann will become the youngest Chief Executive among major German-listed companies. Fielmann intends to sell 12 million pairs of eyeglasses annually be 2025 compared to 8.15 million pairs in 2018. Fielmann is rated “Attractive” in our European SMID-Cap Global Top Stock Ideas.
  • General Motors (GM) reported first quarter adjusted earnings that beat with revenue that trailed expectations.  General Motors first quarter EPS of $1.41 came ahead of $1.10 expected.  Revenue in the first quarter was $34.9 billion while $35.48 billion was expected.  GM’s Cruise unit, focused on self-driving cars, lost $169 million in the quarter and those losses will grow in 2019 as it gets ready to launch a robo-taxi service.  General Motors is rated “Unattractive” in our US Large-Cap and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas
  • Lumber Liquidators (LL) reported a first quarter loss that was worse than expected.  Lumber Liquidators first quarter loss per share was 17 cents, worse than the 13 cents expected.  Net sales for the first quarter came in line at $266.2 million while consensus was for $268 million.  Lumber Liquidators reaffirmed it full year 2019 forecast.  Lumber Liquidators is rated “Neutral” in our US Large-Cap and “Top Short” in our US Consumer Discretionary Global Top Stock Ideas
  • MGM Resorts (MGM) reported first quarter revenue that beat consensus but earnings that trailed.  First quarter adjusted EPS of 5 cents trailed consensus of 21 cents.  MGM first quarter revenue of $3.18 billion came ahead of $3.13 billion consensus.  MGM saw revenue drop a touch in Las Vegas while growing 23% in China.  MGM is rated “Top Short” in our US Large-Cap and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas
  • Restaurant Brands (QSR) reported first quarter results that trailed consensus.  Restaurant Brands reported same-store-sales at Tim Horton’s that fell 0.6%, well below the 1.9% growth expected.  Restaurant Brands first quarter earnings of 55 cents per share missed consensus of 58 cents per share.  There was no explanation for the miss at Tim Horton’s, which management said remains a strong franchise.  Burger King saw same-store-sales growth of 2.2%, in line.  Restaurant Brands is rated “Attractive” in our Canada All-Cap Global Top Stock Ideas
  • Starbucks (SBUX) was downgraded at Wells Fargo Securities to market perform from outperform.  Wells cut Starbucks’ price target to $80 from $83.  Starbucks reported solid first quarter results and even upped EPS guidance at the same time.  Wells, though, sees all of Starbucks growth opportunities priced into its present valuation, hence the downgrade.  Starbucks is rated “Top Buy” in our US Large-Cap and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas
  • Target (TGT) was upgraded to overweight from equal-weight at Barclays.  Target saw its price target hiked to $115 from $85 as well.  Barclays wrote that Target has the potential to gain market share from rivals, especially its weaker retail competitors.  Barclays also cited Target’s strong traffic trends in its upgrade.  Target 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

  • Adobe (ADBE) shares edged higher after Morgan Stanley upgraded the stock from equal-weight to overweight, citing the firm’s, “durable” potential for earnings growth. The price target for Adobe shares was also hiked from $282/share to a Street-high $340/share at Morgan Stanley. According to Morgan Stanley, Adobe shares continue to trade at, “a discount to large cap software peers.” Adobe is rated “Attractive” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Alphabet (GOOGL) reported first quarter 2019 results that trailed consensus.  Alphabet first quarter revenue ex-TAC of $29.48 billion trailed $30.04 billion consensus.  Adjusted EPS of $11.90 beat $10.65 consensus, the adjusted number does not contain the $1.7 billion EU fine.  The trends continue in the same direction for Alphabet’s Google-growing at a somewhat slower pace with earnings per clicking dropping, 19% in the most recent quarter.  Alphabet is rated “Neutral” in our US Large-Cap and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Apple (AAPL) is due to report after the close today.  Investors are keen to see if there is a reason for Apple to continue the 44% run from its low in January.  Investors were spooked by the demand outlook for Apple’s flagship iPhone.  Its foray deeper into services was well received and now investors will get a better idea of what’s to be expected for the rest of 2019.  Revenue is expected to come at about $30.5 billion.  Only 22 of 46 analysts have a buy rating on Apple, the lowest number in over 2 years.  Apple is rated “Neutral” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.  
  • Mastercard (MA) delivered first quarter revenue and earnings that beat expectations.  Mastercard first quarter revenue of $3.9 billion beat $3.85 billion consensus.  First quarter adjusted EPS of $1.78 beat $1.66 consensus.  Mastercard first quarter dollar volume and purchase volume both rose 12%.  Mastercard said it expects revenue to grow “in the low teens.”  Mastercard is rated “Neutral” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.  
  • McDonalds (MCD) reported first quarter same store sales well above consensus.  McDonald’s first quarter same store sales grew 4.5%, well above the 3% expected.  Total sales grew 5.4%, above 3.5% expected.  First quarter EPS of $1.72 trailed $1.75 expected by a touch.  First quarter revenue of $4.96 billion matched $4.95 billion consensus.  McDonald’s results were helped by strong breakfast sales and its delivery initiatives.  McDonald’s is rated “Attractive” in our US Large-Cap and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas
  • Momo Inc. (MOMO) shares slid after the Chinese social media company’s Tinder-like dating application was the target of a government crackdown. Several Chinese app stores removed Momo’s Tantan dating application at the request of authorities, according to spokespeople from Momo. Analysts hastily pointed out that the temporary suspension of Tantan should do little to affect Momo’s top-line revenue growth in 2019. Momo is rated “Top Buy” in our China All-Cap Global Top Stock Ideas.
  • ON Semiconductor Corporation (ON) shares edged lower after the company’s revenue and gross margin outlook for FY2019 disappointed analyst expectations. In response to the guidance, Morgan Stanley analyst Craig Hettenbach warned clients, “Investors should be reducing positions in ON. We simply can’t endorse a narrative of a 2H snapback considering the excessively high levels of inventory,”. ON Semiconductor is rated “Unattractive” in our US Large-Cap and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • Spotify (SPOT) reported it reached 100 million paid subscribers, close to the high end of expectations.  Spotify reported a loss of 47 million euros in the first quarter, better than the 68 million.  Revenue of 1.51 billion euros came a touch ahead of 1.47 billion expected.  Spotify gave second quarter guidance of 107-111 million paid subscribers with revenue of 1.51 to 1.71 billion euros.  Spotify is not rated in our Global Top Stock Ideas.
  • Universal Display Corp. (OLED) shares were downgraded from positive to neutral at Susquehanna, sending the stock price lower. Susquehanna analyst Mehdi Hosseini maintained the price target for Universal Display Corp. At $180/share, explaining that Susquehanna believes, “the best case earnings scenario (of high single digit $/share) is now dialed into the share price.” Universal Display Corp. is rated “Neutral” in our US Large-Cap and “Unattractive” in our US Information Technology Global Top Stock Ideas.
  • Visa (V) and Mastercard (MA) have completed an agreement with EU regulators to resolve its investigation into credit card fees for non-European visitors in Europe.  Visa and Mastercard will reduce fees charged as part of their settlement with EU regulators.  Interregional fees on debit cards will be lowered to 0.2% from 0.3%, the same as credit cards.  Online transactions will be charged 1.15% for debits cards and 1.5% on credit cards.  Visa is rated “Top Buy” in our US Large-Cap and “Attractive” in our US Information Technology Global Top Stock Ideas.  Mastercard is rated “Top Buy” in our US Large-Cap and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Western Digital (WDC) reported fiscal third quarter earnings that trailed consensus with revenue in line.  Western Digital’s first quarter EPS of 17 cents was well below the 45 cents consensus.  Revenue of $3.67 billion matched $3.68 billion consensus.  Western Digital said it expands a strong demand environment for the rest of 2019.  Western Digital is rated “Unattractive” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.

Global Industrials Stocks Trending in the News

  • Boeing’s (BA) problem continue to worsen with the news that an additional sensor on 737 Max aircraft was not working as airlines anticipated because of mistakes from Boeing.  There exists a separate sensor that was not working to back up the MCAS system that is believed to be involved in the 2 737 Max crashes so far.  Boeing put out a statement yesterday that indicated it either missed or overlooked the sensor problem when the plane was certified.  Boeing has not commented on what exactly happened, given the investigation that is underway.  Boeing is rated “Top Buy” in our US Large-Cap and “Neutral” in our US Industrials Global Top Stock Ideas
  • General Electric (GE) reported negative free cash flow from industrial operations that was better than expected.  General Electric reported adjusted negative free cash flow from industrial operations of $1.22 billion, much better than the $2.9 billion negative free cash flow expected.  First quarter adjusted EPS of 14 cents beat 9 cents consensus.  General Electric said, “Power’s better-than-expected performance was principally driven by timing.”  General Electric is rated “Unattractive” in our US Large-Cap and “Unattractive” in our US Industrials Global Top Stock Ideas
  • Ingersoll-Rand (IR) reported first quarter earnings and revenue well above consensus.  Ingersoll-Rand said Gardner Denver Holdings Inc. (GDI) ill combine with Ingersoll-Rand’s industrial division.  Ingersoll-Rand first quarter EPS of 89 cents beat 80 cents expectations.  First quarter revenue of $3.58 billion beat $3.50 billion consensus.  Ingersoll-Rand provided full-year EPS to about $6.35.  Ingersoll-Rand is not rated in our Global Top Stock Ideas. Gardner Denver Holdings is rated “Neutral” in our US Large-Cap and “Neutral” in our US Industrials Global Top Stock Ideas.
  • Parker Hannifin Corp (PH) agreed to acquire Lord Corp, the privately-held materials-sciences company, in a $3.68 billion deal.  The deal is all cash.  Parker Hannifin said it expects the deal to close within 4 to 6 months.  The deal will allow Parker Hannifin to expand into the materials-sciences products for the aerospace industry.  Parker Hannifin is rated “Top Buy” in our US Large-Cap and “Neutral” in our US Industrials Global Top Stock Ideas
  • Transocean (RIG) reported first quarter results better than expected.  Transocean’s first quarter loss of 30 cents per share was better than the 32 cents loss expected.  Transocean reported a backlog of $12.1 billion, down from $12.5 billion a year ago.  Contract drilling revenue of $754 missed the $763 million consensus.  First quarter rig utilization of 56% was an improvement from 52% a year ago.  Transocean is not rated in our Global Top Stock Ideas

 

 

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We Crunch the Numbers, You Make the Trade.We Crunch the Numbers, You Make the Trade.

Global Financials Stocks Trending in the News

  • American Express (AXP) was downgraded to neutral from buy at UBS.  American Express saw its price target raised to $118 from $113 together with the downgrade.  UBS sees a deceleration in growth at American Express and is cited as a key reason for the downgrade.   UBS no longer sees upside to consensus EPS forecasts.  American Express is rated “Attractive” in our US Large-Cap Global Top Stock Ideas
  • DBS Group Holdings (SGX: D05) shares jumped following the company’s first quarter financials release, which contained a surprise beat in profit. DBS Group saw net income growth of 9% while the average analyst expected a decline in earnings. Growth in DBS Group’s lending and trading business helped to offset a decline in the company’s wealth management fees. DBS Group Holdings is not rated in our Global Top Stock Ideas.

Global Commodities & Energy Stocks Trending in the News

  • Anadarko (APC) prefers the offer from Occidental Petroleum (OXY), valued at $38 billion, over the offer from Chevron (CVX), according to a report in FT.  Anadarko is “preparing to endorse” the offer from Occidental, the report notes.  Anadarko’s board has determined the Occidental offer is superior and should announce so soon.  Anadarko Petroleum is rated “Top Short” in our US Large-Cap Global Top Stock Ideas.  Occidental Petroleum is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.  Chevron is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Transocean (RIG) reported first quarter results better than expected.  Transocean’s first quarter loss of 30 cents per share was better than the 32 cents loss expected.  Transocean reported a backlog of $12.1 billion, down from $12.5 billion a year ago.  Contract drilling revenue of $754 missed the $763 million consensus.  First quarter rig utilization of 56% was an improvement from 52% a year ago.  Transocean is not rated in our Global Top Stock Ideas

Global Health Care Stocks Trending in the News

  • Eli Lily (LLY) won an appeal court ruling today on the validity of a patent on its Alimta lung-cancer drug.  The US Court of Appeals rejected claims from other manufacturers that wanted to sell lower-cost versions of the drug.  Eli Lily is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.
  • Pfizer (PFE) reported first quarter earnings and revenue that beat consensus.  Pfizer first quarter EPS was 85 cents while consensus was 76 cents.  Pfizer reported revenue of $13.12 billion in the first quarter, ahead of $12.99 billion consensus.  Pfizer provided full year EPS guidance of $2.83 to $2.93, up from $2.82 to $2.92; consensus is $2.89.  Pfizer is rated “Attractive” in our US Large-Cap Global Top Stock Ideas
  • Royal Philips NV (ENXTAM: PHIA) shares traded slightly higher after double-digit order growth in some of the company’s products, such as its electric toothbrushes and image-guided therapy, propelled its earnings to meet analyst expectations. Royal Philips generated an adjusted ebit of 364 million euros ($405.6 million) during the first quarter beat analyst expectations of 358.0 million euros. Royal Philips is rated “Neutral” in our European Large-Cap 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