Ad
Ad
Ad
Archive

January 2017

Browsing

Evercore’s Ken Sena increases Amazon stock price target from $930 to $1015 on expected 44% CSOI margin

Following the release of its second quarter of fiscal year 2016 (2QFY16) earnings release, Wall Street has been incrementally optimistic over Amazon.com, Inc. (NASDAQ:AMZN) shares. Today, the stock of the US biggest e-commerce force receives two major price target boosts from RBC Capital Markets and Evercore ISI.

Amazon stock increased as much as 1.21% and hit an intra-day high of $779.00. Just half an hour after the opening bell, the stock was 1.10% and 1.17 million shares were traded compared to average daily trading of 2.25 million.

Ken Sena, analyst at Evercore, maintained Buy rating on Amazon stock and increased price target by $85 to $1015. He believes that the company could save as much as 80% per unit through automating various aspects of e-commerce business by using artificial intelligence, Cloud automation, and machine learning.

Given the massive potential savings, the analyst expects that Fulfillment by Amazon drag on profit and loss margin will be lower than previously projected. There changes in retail margin let to increase in the price target. Using a hypothetical automation cost analyst of the profit and loss of the company’s core retail business, the sell-side firm estimates potential cost alleviation of about 6%. The reduction could lead to 44% in consolidated segment operating income (CSOI) margin, placing the company in the range of 17%.

Additionally, RBC’s Mark Mahaney bumped up Amazon’s price target from $840 to $1,000, while maintaining Outperform rating. The price target was increased after conducting the fourth Annual Online Survey on Germany, Japan and the US, as well as “4th Pillar Potential” of Amazon’s Alexa/Echo platform.

While being ranked as the top e-commerce player in Germany and the US, Amazon was the second-best online shopping platform in Japan, behind the local giant Rakuten. Additionally, awareness and ownership of Amazon Alexa has been increasing rapidly.

The Country Caller discusses whether or not the steps taken by oil and gas giants are sufficient to combat crude price declinesHalliburtonApache CorporationShellBP plc

After oil price declined to historical lows, almost all energy companies felt the heat. Some downsized their workforce, some reduced their capital expenditure, while others sought strategic decisions like mergers and acquisitions, and still others reduced employees’ compensation packages. The Country Caller explains how these companies have responded back to the challenge.

Halliburton

In order to make up for the losses it suffered as a result of crude price crashes last year, Halliburton Company (NYSE:HAL) recently confirmed that it will reduce top executives’ bonuses as well as base salaries. As part of that disclosure, it also revealed that it will no longer make the 4% discretionary contribution to employees’ retirement and savings plans, and has suspended annual raises for all employees.

In order to survive, the oilfield service provider took further drastic steps. Last month, it said it will lay off 5,000 employees, representing about 8% of its total workforce. Since 2014, the company has cut around 27,000 employees, including the recent round of layoffs.

Apache Corporation

In 2015 Apache Corporation (NYSE:APA) laid off around 20% employees, which made up over 1,000 of its workforce. It also announced asset sales of its Liquefied Natural Gas (LNG) in Canada and Australia to keep its ship afloat. In addition, the company has also reduced capital expenditure over the past four quarters.

 

1QFY15

2QFY15

3QFY15

4QFY15

Capital Spending

$(2.08) billion

$(1.12) billion

$(1.002) billion

$(705) million

 

Shell

Royal Dutch Shell plc (ADR) (NYSE:RDS.A) recently announced that it has cut down the CEO’s annual compensation by 8% for 2015. It also reduced its workforce by 7,500 employees, and lowered capex by $8.4 billion last year. Despite these measures, the company’s performance was not satisfactory, as its profitability declined an astonishing 80% to $3.34 billion, mainly attributable to the oil and gas business which plunged by $5.7 billion.

BP plc

What sets BP plc (ADR) (NYSE:BP) apart from its peers is that it hasn’t taken any such action to combat the declines in oil prices. In fact, the company raised its CEO’s annual compensation from $16.4 million to $19.6 million, representing a 20% increase. Surprisingly, it also paid out $20.8 billion since its 2010 oil spill in Gulf of Mexico in lieu of penalties and compensation.

Such decisions heavily dented investor confidence in the company, as they might take a toll on company’s profitability in near future. The Company experienced wither period in 4QFY15, and it plans to divest about $8 billion worth of assets over the next two years. It also announced 4,000 job cuts from its upstream segment and another 3,000 from its downstream segment.

Initialize ads

The Country Caller is of the opinion that oil and gas giants should employ a combination of dividend reduction or suspension, asset disposal, and capex cuts to effectively combat the crude price declines. Depending merely on layoffs would not be enough.

The company was in line with consensus expectations on both ends

FBR Capital has chosen to reaffirm Verizon Communications Inc. (NYSE:VZ) at Outperform rating following strong quarterly results. For the third quarter, the company was able to meet consensus expectations, which according to FBR Capital analyst David Dixon, is quite impressive. According to the analyst, macroeconomics trends and increased competition created some headwinds for Verizon Communications during the quarter, but the company was able to sustain execution and managed to report an in-line quarter.

For the third quarter of the fiscal year 2016, Verizon Communications was able to report topline (revenue) of $30.9 billion slightly behind the Street estimate of $31.08 billion, which according to the analyst, is partly because of the deteriorating macro environment. On the other hand, the earnings per share for the quarter was reported at $1.01 against the consensus of $0.99. The decline in the wireless segment amounted to 3.9% y/y surprisingly more than the decline in wired segment that was reported to be 2.3% y/y.

Mr. Dixon believes that Verizon is susceptible to some losses in market share due to heightened competition. The ongoing promotions war between the carriers related to the launch of iPhone 7 is expected to create some margins headwind. The analyst believes that Verizon is still in a dominant position and has one of the best networks in the segment, but due to the competition, it might need to use the pricing tactics in order to retain market share. Another positive for Verizon is the upcoming launch of 5G; the analyst believes that Verizon will seek to accelerate in order to differentiate its offering from the rest of the carriers.

The analyst has reaffirmed Outperform rating on Verizon with price target of $57. The analyst opinions for Verizon communications are 4 Buy, 5 Outperform, 20 Hold and 1 Underperform. Verizon traded at $48.19 and declined about 1.93% on the news of revenue miss.

Higher trading volume and contraction in monetary policy has driven Bank of America stock

Major US bank stocks have come alive as the Financial Select Sector (XLF) rose more than 14% since the Election Day. Several banks have recovered from the market sell-offs in 2016. Strong rally has given investors more than one reason to believe in the banking stocks. However, Bank of America (NYSE:BAC) seems to be the biggest beneficiary from the election result.

Bank of America rose the highest amongst the major US banks with a more than 26% increase. Whereas, Morgan Stanley rose 23%, Goldman Sachs jumped 24%, and JPMorgan Chase rose 16%. It is important to note that Bank of America has the highest trading volume amongst the major banks. Therefore, a bullish sentiment for the banking sector can take Bank of America higher than its peers. The trading volume recorded on Thursday was about 199 million, as compared to its average trading volume of 120 million. On average, Bank of America trading volume remains at least 400% higher than trading volumes of other banks.

Higher interest rates, less regulation on banks, and lower tax rates remain tailwinds for the banking sector, as investors expect such polices in the Republican era. President-elect Donald Trump is expected to make regulations less stringent on banks, altering the Dodd-Frank Law. Moreover, Federal Reserve is likely to increase interest rates which would directly impact banks’ profitability. Half of Bank of America’s net income is generated from net interest income which is expected to increase after higher rates, given the yield curve steepens. Steep curve will allow banks to have a higher margin between buying short-term loans and selling long-term. Long-term yields are significantly driven by the health of the economy.

However, several analysts have downgraded Bank of America after the election day, as they believe many banks have reached their full valuation and may have limited upside potential for the next 12-months.

Microsoft has confirmed that it will be releasing two additional updates for the Windows 10 by end of 2017

Microsoft Corporation (NASDAQ:MSFT) has confirmed that it will be releasing two additional updates to Windows 10 after recently rolling out the Windows 10 anniversary update, codenamed Redstone 1. The software giant has planned two additional updates for Windows 10, one which is expected to roll out in early 2017 and the second update is expected before the end of 2017. Interestingly, the latest rumor states that Microsoft has planned to release a Beta version of the second update, codenamed Windows 10 Redstone 2, for the company’s insiders to try out before the operating system is officially launched. It is highly anticipated that the Windows 10 Redstone 2 will come preinstalled with the next generation Surface devices.

Microsoft has recently made a swift change in its policy where the software giant has basically forced its users to update their Windows devices. The move seems to make an impression that Microsoft “knows what is best” for its customers and they should happily comply with the move. Also, Microsoft made an attempt to increase the number of users making the shift towards Windows 10 by no longer offering Windows 10 for free after a specific date. Since, no Windows user in their right mind would pay hundreds of dollars for downloading Windows 10, there has been a drastic increase in the number of shifts towards Windows 10.

Furthermore, numerous reliable sites are stating that the upcoming Windows 10 Redstone 2 will come pre-installed with the next generation Microsoft Surface devices. This refers to the upcoming Surface Pro 5 and the Surface Book 2. Both devices are expected to hit the market by Spring 2017 which is the same time when Microsoft should be rolling out its Windows 10 Redstone 2 update.

If the rumor regarding Microsoft releasing a Beta version turns out to be true, then we might just get a few inside leaks regarding the performance of the upcoming operating system. Stay tuned as we will update you all if any news breaks regarding the upcoming Windows 10 Redstone 2.

Many Samsung Galaxy Note 7 users are experiencing an overheating problem which has resulted in production recall

Apple Inc. (NASDAQ:AAPL) is only a few days away from kicking off its September Event where the tech giant will unveil its next generation iPhone model. The Cupertino based tech giant would not have believed its luck when there were numerous reports and cases involving the recently released SAMSUNG ELECTRONIC’s KRW5000 (OTCMKTS:SSNLF) Galaxy Note 7 unexpectedly heating up.

Both Apple and Samsung are each other’s biggest competition in the smartphone world and the former is set to take advantage of the struggles of the latter. Samsung has confirmed a manufacturing defect in the Galaxy Note 7 and has immediately recalled worldwide production of the respective smartphone device. Also, the Korean based tech giant has promised to replace any damaged Galaxy Note 7 units which have already been sold.

The Samsung Galaxy Note 7 is a significantly powerful device than the current generation iPhone model and it was highly expected that the next generation iPhone model would also struggle to outperform the powerful performance of the latest flagship in the Galaxy Note lineup. Fortunately for Apple, the Galaxy Note 7 has an unwanted manufacturing defect which causes the device’s battery to heat up and damage the entire device.

Also, there are a few cases where this heating problem has caused the Galaxy Note 7 to heat up at an extremely high level and catch fire. Fortunately, there have been no cases where any Galaxy Note 7 user has been injured due to the manufacturing defect but no one wants to see their precious belongings to unwantedly catch fire.

Apple fully understands that its main rival’s reputation as a top smartphone manufacturer has taken a serious hit and it will definitely take full advantage of this latest mishap. The opportunity has presented itself for Apple to portray itself as the superior smartphone manufacturer and win back the smartphone market from its biggest rival. This just couldn’t be a better time for the iPhone maker!

Apple claims that resellers in the country are setting their own price

Apple Inc. (NASDAQ:AAPL) has denied about setting prices at which iPhone handsets are being sold at retail in the Russian market, after an investigation was launched by the Russian Federal Anti-Monopoly Service.

The investigation was launched because of the allegations by a customer who pointed out that iPhone models, both iPhone 6S and 6S Plus, were being sold at the same retail price at not one, not two, but 16 of the biggest retailers in the country. After the Russian FAS launched the investigation, Apple responded with an email comment stating that the company was not involved in price-fixing in the Russian markets and the retailers in the country had been setting their own prices, not unlike any other country where Apple iPhone is sold.

Apple denied obliging the retailers in Russia to respect a fixed price for iPhone 6S and 6S Plus, implying that an accord of sort had been in practice in the country between the retailers to not sell below the pre-determined price. Apple’s comments came after the Russian FAS indicated that it was looking into the possibility of Apple’s alleged involvement in fixing the price for its products, citing the customers’ reports of identical pricing for other iPhone models as well.

In case of FAS finding any involvement on Apple’s part in price-fixing in Russia, it could exercise its power to impose a fine upon the Cupertino company on account of manipulating the market in the country. We will keep you informed of the developments in the case, but for now, it looks like FAS would have to find some solid evidence that would link Apple to the price-fixing.

100 new emoji and the usual bug fixes and improvements are all part of the latest iOS update

Apple Inc. (NASDAQ: AAPL) has today released its latest iOS 10.2 update for the general public. The wider roll-out has started today after the developer preview was released at the end of October.

On October 31, Apple rolled out iOS 10.1.1 for the general public, and iOS 10.2 for developer testing. It is reported that seven beta tests were held before it was made available for download for all users. That could be due to the sheer number of problems and niggling issues that had popped up following the release of 10.1.1, including the App Store access bug, battery drain bug, and the Calendar notifications spam issue.

As for the new features in 10.2, an all-new Apple TV app is included in the latest update which replaces the Videos app in the previous versions. There are four tabs in the new app: Library for your videos, Watch Now for movie and TV show recommendations, Store to manage your iTunes purchases, and Search. Three new wallpapers have also been added to the latest update, and a Preserve setting for the stock Camera app has also been introduced that will remember the user’s choice of photo capture method, like Square, Panorama, or Portrait.

An updated Headphones icon will be displayed after you update your iOS device to the latest version, and last but not the least, at least 100 new emoji have been added to iOS 10.2 to spice your conversations up and allow for easier expression. You can get iOS 10.2 by connecting to iTunes and updating, or through the Over The Air (OTA) method by navigating to Settings > General > Software Update.

Analyst tells clients to buy the stock heading into the new product cycle

Paul Coster, JPMorgan analyst weighed in on GoPro Inc. (NASDAQ:GPRO) ahead of its second quarter earnings and expects the second quarter results to meet or beat the Street expectations. Despite his expectations from Q2, Mr. Coster believes that the clients should buy the stock, which is heading into a new product cycle. The analyst reiterated an Overweight rating on the stock and a price target of $17, which hints toward a 51.8% potential upside over the last close of $11.23.

“We expect GoPro to post 2Q results that meet or beat low expectations, to reiterate full year revenue guidance, and to provide constructive commentary regarding introduction of the next Hero product family, shipments of which should start in late September,” said Mr. Coster. He expects fourth quarter of 2016 to be the inflection point for GoPro earnings and so he is looking for a positive surprise in Q3 to come in the form of earlier return on equity.  

He expects the GoPro business to run on long side in second half of the year, encouraged by latest products launches including, Karma, Hero 5, and Omni. However, he believes that the sustainable appreciation of these new products depends upon how well their pricing and features are able to revive year over year sales growth, and annual profitability.

Unfortunately, the upcoming Q2 conference is unlikely to unveil new details related to the products, according to Mr. Coster. “That said, we like the set-up here, against elevated investor skepticism (36% of the float is short) and recommend buying GPRO into the 2Q print,” Mr. Coster commented.

GoPro will announce its Q2 financials on Wednesday, July 27. Shares of the action camera manufacturer jumped 3.03% in yesterday’s trading session after JP Morgan analyst shared his bullish views over GoPro stock. Over the past 12 months, GoPro stock has plunged 80% in the wake of disappointing sales and low expectations.

Dodging makes winning gyms, a piece of cake

Pokemon GO, the game that has taken by the world by storm, is an augmented reality, mobile title by the developers of a similar game called Ingress, Niantic. The game brings the generation-long franchise, Pokemon, into the real life with features like catching and training different types of Pokemon. With that being said, it seems there are quite a few other features in the game which players have to master to become the very best.

In Pokemon GO, almost everyone can capture Pokemon, but battling and winning fights with them is another thing. To take control of Pokemon Gyms located in the game, players have to either conquer unclaimed Gyms or if they have been taken over by the members of the two other factions. They have to fight them for the Gyms control using their six best Pokemon.

Winning Gym battles was quite easy at first as all you had to do was tap like a maniac and swipe when needed to. However, after the game’s most recent update, quite a few things have been changed which includes the brand new buffering system in Gym battles.  This system allows players to queue up on moves. So no more button mashing. Players are forced to think before they swipe or tap on the screen.

However, with our Dodge guide here, winning battles would not a problem for you. But before we begin, always remember to choose a type of Pokemon which can counter your opponent’s Pokemon.  

Timing is key when it comes to dodging perfectly but with the help of our guide and few practice matches, achieving that would be a piece of cake. So let’s begin. In Pokemon GO, whenever the enemy Pokemon attacks, the screen flashes a yellow light. This light is your indicator. Whenever it flashes, you have a second to respond. If you swipe in that second, you’ll dodge the attack. However, there are a couple of moves in Pokemon GO which can’t be dodged for instance Blizzard.

Moreover, since the enemy Pokemon is being controlled by an AI, its attack rate is fixed. According to what we know so far, the AI Pokemon attack every 2 seconds, with the exception of the first two attacks. As soon as the battle begins, the enemy AI will attack twice, one after the other. So remember to dodge twice as soon you begin the battle.