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Global Stocks Trending in the News for May 14th, 2019

May 14, 2019

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Global Consumer Stocks Trending in the News

  • Bed, Bath and Beyond (BBBY) shares traded higher after the company announced CEO Steven Temares will step down from his role after he came under the fire of activist investors for the lagging performance of the company. Mary Winston, a recent addition to Bed, Bath and Beyond’s Board of Directors, will serve as interim CEO while a committee searches for a permanent replacement. Bed, Bath & Beyond is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas.
  • Coca-Cola (KO) has a “clearly superior” growth outlook when compared to other consumer packaged goods companies, according to Morgan Stanley.   Coca-Cola was upgraded to overweight from equal-weight while its price target was hiked to $55 from $52.  Coca-Cola has “morphed into a structurally higher growth company” compared with its peers, Morgan Stanley adds.  Coca-Cola is rated “Attractive” in our US Large-Cap and “Top Buy” in our US Consumer Staples Global Top Stock Ideas
  • Marriott International (MAR) reported first quarter earnings that beat consensus.  Marriott posted first quarter EPS of $1.41, beating consensus of $1.34.  First quarter revenue of $5.01 billion trailed consensus of $5.13 billion.  Marriott gave EPS guidance for the second quarter of $1.52 to $1.58 while consensus is $1.62.  Full year EPS guidance of $5.97 to $6.19, consensus is $6.09.  Marriott International is rated “Neutral” in our US Large-Cap and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • Ralph Lauren (RL) reported fiscal fourth quarter earnings that beat consensus.  Ralph Lauren reported fiscal fourth quarter adjusted EPS of $1.07, beating consensus of 90 cents.  Ralph Lauren boosted its quarterly dividend to 68.75 cents, up from 62.5 cents.  Total sales rose 1% in the quarter.  Ralph Lauren sees sales growth for fiscal 2020 of 2% to 3% in constant currency.  Ralph Lauren is rated “Neutral” in our US Large-Cap and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas
  • Tesla (TSLA) is suffering in the US-China trade spat.  While cars are not on the list if imports being slapped with tariffs by China, many fear the day is getting close that that will happen.  Analysts fear the next move on tariffs by China will include cars.  China broke ground on a battery factory in China early in the year any disruption between the countries is already negative, tariffs on their imports of cars would be disastrous.  Tesla is rated “Unattractive” in our US Large-Cap and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Walmart (WMT) announced it will offer 1-day delivery on many of its most popular items, matching Amazon’s (AMZN) new offering.  Walmart said going to a 1-day service will actually save it money by streamlining shipping.  Amazon, in contrast, said it will spend $800 million to completely roll out its 1-day delivery.  Walmart’s service starts in Phoenix and will be rolled out to the rest of the country.  Walmart is rated “Attractive” in our US Large-Cap and “Attractive” in our US Consumer Staples Global Top Stock Ideas.  Amazon 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

  • Alphabet’s (GOOGL) Google is opening the Google Safety Engineering Center in Munich.  Google is creating a $10 million grant fund to hand out grants to groups focused on tackling hate and extremism.  Google will double the number of privacy engineers at the center to 200 making Munich a hub for privacy engineering.  Alphabet is rated “Top Buy” in our US Large-Cap and “Top Buy” in our US Information Technology Global Top Stock Ideas.  
  • Apple (AAPL) suffered a setback at the Supreme Court today.  The Supreme Court ruled that consumers can move ahead with their case against Apple alleging that it used its market dominance to artificially inflate prices at its App Store.  Apple will now be under further pressure to cut its 30% commission it charges sellers on its App Store.  Consumers are seeking hundreds of millions of dollars in damages in the case.  Apple is rated “Attractive” in our US Large-Cap and “Top Buy” in our US Information Technology Global Top Stock Ideas.  
  • Facebook’s (FB) WhatsApp is encouraging users to update their software to the most recent version after finding a vulnerability in the software.  Facebook said it found a vulnerability that could allow hacking into it using commercially available software from Israel.  Tracking software can be installed on a phone with the vulnerability.  Facebook is rated “Attractive” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.  
  • Motorola Solutions (MSI) received a favorable court ruling related to patents.  The US Patent and Trademark Office upheld Motorola’s patents after Hytera Communications (SZSE:002583)challenged their validity with the Patent Office.  The Patent Office rejected all claims submitted by Hytera in its written ruling.  Motorola Solutions is rated “Top Buy” in our US Large-Cap and “Top Buy” in our US Information Technology Global Top Stock Ideas.  Hytera Communications is not rated in our Global Top Stock Ideas.
  • Nvidia (NVDA) saw its price target raised to $170 from $148 at Morgan Stanley.  Nvidia’s equal-weight rating was maintained.   Nvidia could deliver upside on its gaming chips business as the bar is set very low there.  Morgan Stanley writes that Nvidia has one of the better secular outlooks among chip stocks.  Nvidia is rated “Top Short” in our US Large-Cap and “Attractive” in our US Information Technology Global Top Stock Ideas.  
  • Take-Two Interactive (TTWO) reported fiscal fourth quarter earnings that beat consensus.  Take-Two reported fiscal fourth quarter of 78 cents, beating consensus of 74 cents.  Take-Two gave full year EPS guidance of $3.75 to $4.00, well below consensus of $4.84 and full year adjusted revenue of $2.5 billion to $2.6 billion, below consensus of $2.76 billion.  Take-Two Interactive is rated “Attractive” in our US Large-Cap and “Top Buy” in our US Information Technology Global Top Stock Ideas.  
  • Tencent Music (TME) reported earnings that beat consensus.  Tencent Music reported first quarter adjusted EPS of 72 RMB cents, beating 70 RMB cents consensus.  First quarter revenue of 5.74 billion yuan, below 5.8 billion consensus.  Tencent Music reported 654 million online music MAUs.  Tencent Music is rated “Neutral” in our China All-Cap Global Top Stock Ideas.
  • Vodafone Group Plc (LSE: VOD) shares slipped lower intraday by the most in nearly 4 months after the Sunday Times reported that the phone carrier will announce a cut to its dividend alongside financials on Tuesday. The Sunday Times does not cite the source of its information but does say that the dividend cut would help Vodafone cover the cost of spectrum auctions in both Italy and Germany. Jefferies analyst Jerry Dellis told the Sunday Climes that Vodafone will need to cut its dividend by at least 40% to address debt concerns. Vodafone is rated “Unattractive” in our United Kingdom All-Cap Global Top Stock Ideas.
  • Walt Disney (DIS) again ruled the box office this past weekend with its “Avengers” film still #1 in ticket sales.  “Avengers” has hauled a total, so far, of $723 million in US ticket sales with a global total of $2.49 billion.  That total leaves it about $300 million behind the all-time top-grossing film, “Avatar.”  Walt Disney is rated “Attractive” in our US Large-Cap and “Attractive” in our US Information Technology Global Top Stock Ideas

Global Industrials Stocks Trending in the News

  • Bayer (DB:BAYN) suffered a huge defeat in a Roundup case in California.  A jury in California awarded $2.055 billion when it ruled Bayer’s Roundup was responsible for the couple’s cancer.  This is the third defeat for Bayer in court and shareholders are revolting over its acquisition of Monsanto that brought with it 13,400 Roundup cases.  Bayer Interactive is rated “Unattractive” in our European Large-Cap Global Top Stock Ideas
  • Boeing (BA) could see its 737 Max aircraft return to service as soon as this summer.  Boeing, however, will have a challenge convincing passengers and airlines that the plane.  Industry watchers agree this will be one of the greatest consumer-relations challenges in decades.   It is likely the grounding will be lifted in June with the planes returning to service later in the summer.  Boeing is rated “Top SHort” in our US Large-Cap and “Unattractive” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Deere & Co (DE) was downgraded to underweight from neutral at JP Morgan.  Deere also saw its price target dropped to $132 from $154 at the same time.  The new price target implies a 10% downside to the last price.  JP Morgan said the fundamentals of the US agro-business is rapidly deteriorating.  Deere & Co. is rated “Top Short” in our US Large-Cap and “Attractive” in our US Industrials Global Top Stock Ideas.  
  • Linde Plc (LIN) saw positive moves by 2 banks, with Deutsche Bank raising its target and BMO upgrading the stock.  Deutsche Bank hiked its price target to $205 from $190, maintaining its buy rating, saying it sees a solid 2019 ahead.  BMO upgraded Linde to outperform from market perform.  BMO also hiked its price target to $210 from $178.  Linde is not rated in our Global Top Stock Idea
  • Lockheed Martin (LMT) said if India decides to buy its new F-21 fighter jet, Lockheed will not sell the jet to any other country, as it tries to win the mega-order for 114 planes.  Lockheed has said that if it wins the deal, Lockheed will help India to develop its defense industry together with local players.  Lockheed Martin is rated “Attractive” in our US Large-Cap and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.  
  • Uber Technologies Inc. (UBER) shares continued their rout in Monday’s trading with shares of the ride-hailing giant falling as much as 11% intraday. After Uber sold 180 million shares at $45/share on Thursday, the stock closed down 7.6% at $41.57 in its first day of public trading. The rout in Uber shares follows an IPO earlier in the year by ride-hailing rival Lyft (LYFT), whose stock has fallen 29% from its IPO price. Uber Technologies is not rated in our Global Top Stock Ideas. Lyft is not rated in our Global Top Stock Ideas.
  • WestJet Airlines Ltd. (TSX: WJA) shares soared by more than 60% after the company announced it entered a definitive agreement to be acquired and taken private by Onex Corp. (TSX: ONEX) for CAD$31/share. The CAD$31/share price implies a 67% premium to WestJet Airlines shares as of its price close. The acquisition is expected to close in the second half of 2019 or in early 2020. WestJet Airlines is rated “Attractive” in our Canada All-Cap Global Top Stock Ideas. Onex Corp. is rated “Unattractive” in our Canada All-Cap Global Top Stock Ideas.

 

 

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Global Financials Stocks Trending in the News

  • Citibank (C) is intensely focused on digital banking, convinced that is the best way for it to grow.  Citibank has been shrinking its footprint while other players have expanded.  Citibank added over $1 billion in the first quarter with the vast majority coming from new customers.  More importantly, over half came from people who did not live close to a bank branch, reinforcing its decision to focus on digital and not physical locations.  Citibank is rated “Neutral” in our US Large-Cap Global Top Stock Ideas
  • Grayscale Bitcoin Trust (OTCPK: GBTC), Riot Blockchain (RIOT), and other cryptocurrency-focused stocks outperformed in today’s trading after major benchmark cryptocurrency Bitcoin (BTC) extended its rally to 11 days, sending the coin above $7,800 for the first time since July 2018. Grayscale Investment Trust is not rated in our Global Top Stock Ideas. Riot Blockchain is rated “Unattractive” in our US SMID-Cap Global Top Stock Ideas.
  • Metro Bank Plc (LSE: MTRO) shares continued to slide on Monday even though the British lender attempted to assure investors that its 350 million pound ($456 million) share sale was well advanced. The lender’s shares have lost three quarters of their value since regulators initially discovered Metro Bank assigned its mortgages incorrect risk weightings. Metro Bank is rated “Unattractive” in our United Kingdom All-Cap Global Top Stock Ideas.

Global Commodities & Energy Stocks Trending in the News

  • Royal Dutch Shell (LSE:RDSA) was upgraded to buy at HSBC.  Shell is set up for an extended period of growing free cash flow which should lead to greater cash distribution for shareholders.  HSBC is comfortable with Shell’s financial framework and likelihood for greater share buybacks.  Shell is rated “Top Buy” in our European Large-Cap and “Attractive” in our United Kingdom All-Cap Global Top Stock Ideas
  • ThyssenKrupp (XTRA:TKA) has abandoned its plan to split itself, separating its steel and capital goods businesses.  Since its announcement in September its stock has fallen 45%, reaching a 15-year low.   ThyssenKrupp is considering a listing of its prized asset, its elevator business.  ThyssenKrupp expects to make a final decision about that listing in the coming months.  ThyssenKrupp is rated “Top Short” in our European Large-Cap Global Top Stock Ideas.
  • Vale (VALE) announced it will take two to three years to reach its 400 million tons target it originally set for 2019.  Vale shuttered 93 million tons of production in the wake of its mine disaster.  Vale indicated little of that production is likely to return this year, pressuring ore iron prices which are about 30% higher.  Vale reiterated its 2019 production target of 307 to 332 million tons of production.  Vale is rated “Attractive” in our Brazil All-Cap Global Stock Ideas

Global Health Care Stocks Trending in the News

  • Insys Therapeutics Inc. (INSY) shares tanked by more than 75% after the opioid maker announced that it may seek bankruptcy protections after spending tens of millions of dollars relating to legal settlements and the defense of former company executives who are convicted of bribing doctors to prescribe powerful opioid medications. Insys Therapeutics is rated “Unattractive” in our US SMID-Cap Global Top Stock Ideas.
  • Mylan NV (MYL), Novartis AG (SWX: NOVN), and Teva Pharmaceuticals (TEVA) fell alongside other major generic drug makers following an announced lawsuit by over 40 US states that accuses 20 companies in their subsidiaries of colluding to price fix more than 100 different products in the US. The lawsuit filing represents the expansion of an initial 2016 lawsuit made by many of the states included in the most recent lawsuit. The names of more than a dozen executives from these 20 generic drug makers were also mentioned as a part of the civil complaint. Mylan NV is rated “Unattractive” in our US Large-Cap Global Top Stock Ideas. Novartis is rated “Neutral” in our European Large-Cap Global Top Stock Ideas. Teva Pharmaceuticals is not rated in our Global Top Stock Ideas.

 

 

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