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Global Stocks Trending in the News for June 13th, 2019

Jun 13, 2019

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Global Consumer Stocks Trending in the News

  • British American Tobacco (LSE: BATS) shares fell by the most intraday in 7 months after the company’s outlook for next generation products disappointed investor expectations. British American Tobacco said that sales growth in the first half of the fiscal year for its heating products, vaping, and new-style tobacco products approached the full-year guidance range of between 30% and 50% and is expected to accelerate heading into the second half of the fiscal year. British American Tobacco’s guidance range is dwarfed, however, by Jefferies’ full-year growth estimate of 79%. British American Tobacco is rated “Attractive” in our United Kingdom All-Cap Global Top Stock Ideas.
  • Dave & Buster’s (PLAY) reported first quarter earnings in line with revenue that trailed.  Dave & Buster’s posted first quarter EPS of $1.13, matching consensus.  First quarter revenue of $363.6 million, trailing consensus of $371.6 million.  Dave & Buster’s sees full year revenue of $1.3 billion to $1.39 billion, below consensus of $1.4 billion.  Dave & Buster’s is rated “Neutral” in our US Large-Cap and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • GrubHub Inc. (GRUB) shares surged higher after a report from GeekWire indicates that Amazon (AMZN) will shut down its restaurant food delivery service Amazon Restaurants. The report finds that Amazon Restaurants will be discontinued on June 24th and that its workplace lunch delivery service Daily Dish will close on June 14th. Still, Bloomberg analyst Andrew Eisenson believes, “GrubHub will likely continue to lose share amid intense competition from Uber Eats and DoorDash.” GrubHub is rated “Top Short” in our US Large-Cap 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.
  • Hertz Global (HTZ) announced it will distribute subscription rights to shareholders to buy almost 58 million shares.  Each right entitles holders to purchase 0.688285 shares at $12.95.  Carl Icahn and his affiliates, holders of 28.8% of outstanding shares, plan to fully subscribe.  Proceeds will be used to pay down debt.  Hertz Global is rated “Unattractive” in our US Large-Cap and “Attractive” in our US Industrials Global Top Stock Ideas.   
  • Lululemon (LULU) reported first quarter earnings that beat consensus.  Lululemon reported first quarter EPS of 74 cents, beating consensus of 70 cents.  First quarter same store sales in constant currency grew 8%, above 5.2% consensus.  Net revenue in the quarter of $782.3 million, beating $756.3 million consensus.   Lululemon gave full year revenue guidance of $3.73 billion to $3.77 billion.  Lululemon is rated “Attractive” in our US Large-Cap Global Top Stock Ideas.
  • Mattel (MAT) continues to be in the sights of MGA Entertainment, its closely held rival.  MGA has been trying to merge with Mattel for some time and MGA’s CEO said he may consider a hostile takeover if Mattel does not respond to his latest moves.  Mattel recently launched a film division as part of its turnaround and does not seem to be interested in any tie-up with MGA and rejected its latest overtures.  Mattel is rated “Unattractive” in our US Large-Cap and “Unattractive” in our US Consumer Discretionary Global Top Stock Ideas.
  • National Beverage (FIZZ) shares tanked after Business Insider reported on a new lawsuit that the company may be facing.  The new lawsuit claims that National Beverage’s president claimed its sparkling water cans were free of BPA months before that was, in fact, the case to create positive buzz for the company.   National Beverage had no comment on the story.  National Beverage is rated “Attractive” in our US SMID-Cap and “Neutral” in our US Consumer Staples Global Top Stock Ideas.
  • RH (RH), previously known as Restoration Hardware, upped guidance for the year and said it is mitigating the costs of the tariffs on China.  RH had imported 41% of its products from China and said it has renegotiated prices lower from suppliers to reduce the effects of the tariffs.  RH said full year sales will be $2.64 billion to $2.66 billion, up from $2.59 billion to $2.64 billion.  RH is rated “Neutral” in our US Large-Cap and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Target (TGT) announced a same-day delivery option is no available for online orders.  Target said it will offer $9.99 same-day delivery service using Shipt’s delivery service.  Target touts the options as it does not require any subscription to be bought.  Target said 65,000 items can now be delivered using the service.  Target is rated “Neutral” in our US Large-Cap and “Top Buy” in our US Consumer Discretionary Global Top Stock Ideas.
  • Tesla (TSLA) shareholders rejected new corporate governance measures that were put to a vote.  Tesla’s board had proposed measures in April to give shareholders a greater say in company decisions.  The moves came in the wake of the SEC accusing CEO Elon Musk of making misleading statements above Tesla’s plans to go private.  The measures would have shortened directors’ terms and made it easier for shareholders to pass corporate measures.  Tesla is rated “Top Short” in our US Large-Cap and “Neutral” in our US Consumer Discretionary Global Top Stock Ideas.
  • Tyson Foods (TYS) is entering the veggie protein market with a hybrid burger.  Tyson is set to introduce a burger patty that is half pea protein, half angus beef.  Tyson expects its patties to be a “billion-dollar brand.”  Tyson’s CEO said he expects to be a leader in the space.  Tyson Foods is rated “Attractive” in our US Large-Cap and “Neutral” in our US Consumer Staples Global Top Stock Ideas.
  • Volkswagen (XTRA:VOW3) and Ford (F) are near to completing an agreement to collaborate on self-driving cars, Bloomberg reports.  The report notes that the majority of the points have been agreed to and a formal announcement could come as soon as July.  The companies envision a comprehensive agreement that would create a global powerhouse in self-driving cars.  Volkswagen is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.  Ford is rated “Neutral” in our US Large-Cap and “Attractive” in our US Consumer Discretionary Global Top Stock Ideas.

Global Information Technology and Communication Services Stocks Trending in the News

  • Apple (AAPL) is in talks to acquire Intel’s (INTC) modem unit, according to the website The Information.   The news comes 2 months after Apple said it would stop using Intel’s modem in its products.  Intel in turns said it would quit the business.  Intel spent over a billion dollars trying to develop modems, to no avail.  The last generation of iPhones used Intel modems but the next will not.  Apple is rated “Neutral” in our US Large-Cap and “Attractive” in our US Information Technology Global Top Stock Ideas.  Intel is rated “Unattractive” in our US Large-Cap and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Cisco (CSCO) was downgraded to market perform from outperform at William Blair.  Cisco will see increasing competition in the coming year and the tailwinds that helped this past year will disappear.  William Blair sees “signs of tightening demand,” especially when compared to 2019.  Cisco is rated “Attractive” in our US Large-Cap and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • Dassault Systemes SE (ENXTPA: DSY) announced intentions to acquire software firm Medidata Solutions Inc. (MDSO) for $5.7 billion. The acquisition by the French technology company is a record deal that will allow Dassault to offer drugmakers a comprehensive set of service and enable a shift towards personalized medicine. Dassault Systemes is rated “Attractive” in our European Large-Cap Global Top Stock Ideas. Medidata Solutions is rated “Top Short” in our US Large-Cap Global Top Stock Ideas.
  • Facebook (FB) CEO Mark Zuckerberg allegedly knew about problematic privacy protections occurring within the tech giant, according to a new report from the Wall Street Journal. The Wall Street Journal report cites emails that were allegedly uncovered in the process of responding to a continuing federal privacy probe, according to a person familiar with the matter. Facebook’s knowledge of the emails is also reportedly a factor in the company’s desire to reach a quick settlement with the Federal Trade Commission. Facebook is rated “Neutral” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • Juniper Networks (JNPR) was upgraded at Rosenblatt Securities to neutral from sell.  Juniper’s target price was hiked to $27 from $24.   Juniper should see growing margins on increased spending to upgrade its installed MX routers ahead of the 5G roll-out.  Anti-Chinese sentiment will also help Juniper.  Juniper Networks is rated “Neutral” in our US Large-Cap and “Top Buy” in our US Information Technology Global Top Stock Ideas.
  • Lam Research (LRCX) was downgraded to in-line from outperform at Evercore ISI.  Lam Research’s price target was cut  to $195 from $225 as well.  Evercore sees a slower recovery in memory demand which will only come in the second half of 2020.  Lam Research will have trouble moving higher any time soon, Evercore notes.  Lam Research is rated “Neutral” in our US Large-Cap and “Attractive” in our US Information Technology Global Top Stock Ideas.
  • Netflix (NFLX) is experimenting with turning its shows into video games as it seeks to further leverage its media content.  Netflix will release a Stranger Things video game in conjunction with the release of its show by the same name.  Netflix does not develop the games itself but licenses the names for others to create the games.  Other games are planned in the near future.  Netflix is rated “Unattractive” in our US Large-Cap and “Neutral” in our US Information Technology Global Top Stock Ideas.
  • NXP Semiconductors (NXPI) was upgraded to overweight from equal-weight at Morgan Stanley.  NXP saw its price target hiked to $114 from $99 as well.  Morgan cites NXP’s attractive valuation and lower inventory levels.  NXP’s valuation discount to its rivals is the biggest in its history, Morgan notes.  NXP Semiconductors is not rated in our Global Top Stock Ideas
  • Nintendo Co. (TSE: 7974) shares fell the most intraday in a month after the gamemaker announced a delay of the release of Animal Crossing: New Horizon until 2020. Animal Crossing: New Horizon is one of Nintendo’s most popular game series and was slated for a holiday 2019 release prior to its delay. Still, at the popular E3 gaming expo this week, Nintendo reaffirmed that it is on schedule to release Luigi’s Mansion 3 in 2019 while announcing a highly anticipated sequel to blockbuster Switch launch title The Legend of Zelda: Breath of the Wild. Nintendo 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

  • Deutsche Bank (DB: DBK) has told about 1,000 of its investment banking clients that they must provide more detailed information on ownership.  Deutsche Bank is trying to close gaps in its compliance practices that were recently uncovered.  Deutsche Bank has told these clients that failure to provide the requested documents will result in those clients being cut off.  Deutsche Bank is rated “Neutral” in our European Large-Cap Global Top Stock Ideas.
  • BB&T (BBT) and SunTrust (STI) have chosen the name Truist for the new bank that will result from the merger of the two.  For months BB&T and SunTrust have been asked what the new name would be and it has arrived to underwhelming praise.  When the merger is complete, Truist will be the sixth largest bank in the US.  BB&T is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.  SunTrust is rated “Neutral” in our US Large-Cap Global Top Stock Ideas.

Global Industrials Stocks Trending in the News

  • American Airlines (AAL) said its managers will fly on test flights of the Boeing (BA) 737 Max before any passengers do.  American is trying to build confidence in the aircraft before it returns to service.  Executives at American plus other employees will.  American announced the move at its annual shareholders meeting.  American Airlines is rated “Unattractive” in our US Large-Cap and “Top Buy” in our US Industrials Global Top Stock Ideas.  Boeing is rated “Unattractive” in our US Large-Cap and “Unattractive” in our US Industrials Global Top Stock Ideas.   
  • Boeing’s (BA) 737 Max aircraft should be flying again by December, according to a senior FAA official.  The comments were made in an interview at a safety conference in Germany.  It is not possible to give an exact date given the nature of the work Boeing is doing but the official said December is very probable for the 737 Max return.  Boeing is rated “Unattractive” in our US Large-Cap and “Unattractive” in our US Industrials Global Top Stock Ideas.   

Global Health Care Stocks Trending in the News

  • Johnson & Johnson (JNJ) has a sales strategy with opioids similar to that of a drug dealer, a pharmaceutical-industry critic claimed in court testimony.  The critic said J&J’s use of coupons for free pain patches was improper and contributed to the opioid epidemic.  J&J objected to that characterization in court and the judge said he will not consider that testimony.  Johnson & Johnson is rated “Top Buy” in our US Large-Cap Global Top Stock Ideas
  • Waters Corp. (WAT) shares slid the most intraday in a month after Cleveland Research downgraded the company from neutral to underperform. Cleveland Research analyst Steve Willoughby cited softening demand amid increased competition as reasoning for the downgrade. Waters Corp. is rated “Neutral” in our US 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