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March 2017

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There’s inspiration, emulation and then there’s just ripping off to the point of cloning a product. That’s what Huawei has done with the P9, which, at an angle, is literally indistinguishable from the Apple iPhone

At this point Huawei should be carving out a niche for itself in the smartphone market instead of pandering to a certain demographic. It scored a major victory last year by developing the Nexus 6P for Google so it shouldn’t revert to the practices of its inferiors just to make a buck. Look at the LG G5, it has a 16MP sensor sitting atop another 8 MP sensor. This feature, if rumors are true, is being copied by Apple Inc. (NASDAQ:AAPL) for the iPhone 7 ready to debut in September 2016. LG has really come in to its own while Huawei’s knee jerk reaction has been unoriginal.

The co-founder of IFixIt, Kyle Wiens, did a piece on wired in which he expressed his disdain about this feature. He stated that great artists do steal features from other artist’s best work but the pentalobe screw is a nuisance more than a great feature and Huawei’s decision to copy it is purely aesthetic and not at all functional.

The screw inhibits users from getting in to the device and is a problem for recyclers that break down a phone in to its components. While this might be a win for secure design, it’s a loss for Apple’s policy to make its products green. However, the battery in the Huawei P9 is much more easily accessible according to iFixit due to its ‘not tricky to carry out’ adhesive removal technique.

There are some features that differ including the smooth back that Huawei had the good sense to include in their phone. The camera bump in the iPhone 6 and 6S sets is conspicuously absent. However, the aluminum finish, the silver antenna bands and the chamfered edges all make the P9 a definitive iPhone clone.

And by copying Apple, Huawei has taken no steps forward and two steps back.

Analyst at Piper Jaffray reiterates Neutral rating and raises price target to $57 from $55 following strong second quarter financials

David Amsellam, analyst at Piper Jaffray, reiterated its rating on Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) stock to Neutral, but raised his Price target from $55 to $57 following the second quarter earnings report. The current price target indicates a 5.41% upside potential over the last close of $54.21, Friday August 5. Teva posted earnings of $1.25 per share on a non-GAAP adjusted basis, while revenue came in at $5.04 billion.

Mr. Amsellam commented: “Teva also provided more color on why it believes that generic competition on Copaxone 40 mg is not a nearer-term threat. That said, we would still argue that the longer-term earnings growth outlook is murky given that we will see lower court and appellate court decisions in the 2017/2018 timeframe.”

The Israeli multinational company is trading at 9 times its 2017 price to earnings ratio and 10 times its Enterprise Value to EBITDA ratio. The firm continues to believe that Teva has a limited potential for further value creation in the absence of any mergers and acquisitions. Given that, the firm believes it a foremost responsibility of Teva to significantly boost its brand commercial pipeline and portfolio. Thus, the firm has raised its PT by 3.63% as the discounting period utilized in their target price calculation has rolled forward.

The company has a market capitalization of $55.84 billion and 28.22 price to earnings ratio. The stock has a 52-week high of $71.08 and a 52-week low of $48.01. Out of the total analysts covering TEVA stock, 20 rate it a Buy, 7 rate it a Hold, while one rate it an Overweight. Share of Teva pharmaceuticals were down 2.24% yesterday.

Moreover, the company has recently announced to acquire generics business of Allergan in a deal valued at $500 million. Teva estimates the combined generics segment to garner $25 billion FCF and $1.4 billion in operational and tax savings in 3 years from now.

The Country Caller takes a look at the deal offered by Cheniere Energy to Cheniere Partners

Cheniere Energy, Inc  (NYSEMKT:LNG), the US natural gas exporter, in a press release today, indicated merging with Cheniere Energy Partners.

The current stake of Cheniere in Cheniere Partners is around 80.1%. However, now with the latest development, the US-based natural gas exporter is seeking to augment this stake. As mentioned in the press release the company is now proposing a consideration of its 0.5049 shares for each share that is held by Cheniere Partners and that are publically traded and outstanding.

Cheniere seems to be highly optimistic and bullish on this proposed merger with Cheniere Partners. The company is willing to offer $21.90 of every common share that is held by Cheniere Partners. As mentioned in the press release that when the offered price is compared with the 30 day average of Cheniere Energy Partners LP/ Cheniere Energy, it would represent a premium of 7%.

Cheniere has managed to submit the proposal to the board of directors of Cheniere Partners. In order for the matter to be approved, considerable negotiation is required. The President and CEO of Cheniere Energy, Jack Fusco in the press release outlined some of the reasons why he felt that the deal was important.

Mr. Fusco mentioned that if the deal was approved, it would bring about a great deal of benefits to Cheniere Partners. He indicated that: “We believe the proposed transaction is attractive to investors in Cheniere Partners Holdings who, as new Cheniere Energy shareholders, would have the opportunity to participate in the future success of the entire Cheniere complex.” In addition, he also indicated that the shareholders of Cheniere Partners would receive a lucrative premium which would further enhance the trading liquidity of their investments.

Analyst believes a buyer would be interested in Valeant’s gastroenterology portfolio rather than entire asset portfolio

Last week, reports surfaced that Valeant Pharmaceuticals Intl. Inc. (NYSE:VRX) has rejected the joint takeover bid by TPG and Takeda Pharmaceuticals. Following that development, comments from the Street continue to pour in. After Mizuho Securities updated its thesis on the stock last week, Piper Jaffray analyst David Amsellem has reiterated his Underweight rating on the stock.

Mr. Amsellem views the chatter of Valeant’s rejection as illogical because of its prevalent tough market position. After the Canadian pharmaceutical company received the joint takeover offer by the two bidders, shares closed up 5.49% at $28.42 Friday.

The offer was made prior to the appointment of new CEO Joseph Papa, who is reportedly mapping out Valeant’s course of action. Based on this, Valeant Pharmaceutical declined to discuss takeover offers.

The analyst does not see Valeant’s complete asset portfolio worthy enough to be acquired by a financial or strategic buyer as he says its market value is lesser than the company’s total debt pile of $31 billion. Nevertheless, he believes Valeant’s gastroenterology segment should be appealing for a buyer. He said: “Though we do believe that there would be significant strategic interest in VRX’s gastroenterology (GI) assets (i.e., Xifaxan, Relistor, Apriso and Uceris), we find it difficult to fathom why a strategic or financial buyer would have interest in the entire asset portfolio.”

Mr. Amsellem anticipates a strategic activity for the $10.25 billion company to strike in the form of either an asset sale or a split off. Valeant has made massive changes at the helm of its business but analysts are still skeptical about its growth and view a tough road ahead. The specialty pharmaceutical company is facing sharp scrutiny since August 2015, resulting from a series of negative news adding to which are its dubious business operations.

The Street’s mean 12-month price target stands at $60.61 on Valeant Pharma’s stock. The estimate indicates a meaningful upside potential of 113.3% over the last close of $28.42.

As per the estimates of market watchdogs, the oil and gas major is expected to grow its cash flow position to $25 billion in four years, given that oil prices reach $60 per barrel

Having brought about production at exceptionally low costs with cash operating costs around $15 per barrel throughout the year, Royal Dutch Shell plc (ADR) (NYSE:RDS.A) is expected to post a commendable  cash flow growth in the long cycle. With West Texas Intermediate and Brent crude currently above $50 per barrel, the Anglo Dutch company is likely to benefit. As per the estimates of market watchdogs, the oil and gas major is expected to grow its cash flow position to $25 billion in four years given that oil prices reach $60 per barrel.

Reductions made in its capital spend has largely helped Shell. Given that the company continues to lower its capital expenditure with more projects coming online, the operating cash flows are likely to reach near $50 billion in over the next four years. At an operating cash flow of $50 billion and a price to cash flow ratio of 15, Shell’s market capitalization is set to triple in the coming four years. The recent price rally in energy prices has paved ways for the company in lucrative ways. This is because WTI and Brent are currently trading in the $53-56 range, which happens to be quite close to the company’s target price of $60 per barrel where it can execute strong cash flow performance.

Stock price of the company would also enjoy strong gains, given that the price per barrel reaches $60-that is quite likely given it is already close to the range. In addition, coming ahead of the positive sentiment raised from the OPEC meeting with other oil producers over the stabilization of the energy market rout, investors are hopeful that the oil price would soar to $70 per barrel. With production cuts in outputs likely to be implemented from next month, demand for crude would surpass the oversupply by nearly 600,000 barrels daily.

Twitter fought off other high profile rivals for the NFL deal and now Apple TV could get the live streaming experience

Apple Inc.’s (NASDAQ:AAPL) Apple TV could soon get live National Football League (NFL) streaming via the official Twitter Inc. (NYSE:TWTR) app, according to a report published by New York Times.

Millions of Apple TV users could now watch the live streaming of NFL games via the official Twitter app which is reported to be coming to the platform, as Twitter seeks to broaden its appeal through live streaming of events including sports. Twitter signed its NFL live streaming deal last March when it saw off major rivals and other social networks including Facebook, agreeing to pay $10 million for 10 live games.

Emphasis was placed upon Thursday Night Football games in the deal by Twitter, which reportedly drew around 13 million live viewers. That deal has been followed by other agreements for live streaming with major players like CBS News, NBA, Major League Baseball, and the NHL. Moreover, deals with the Major League Soccer and the PGA are also reportedly in the pipeline, as it seems Twitter is banking on live events to drive their survival – and hopefully the revival – of the social network.

Providing the live streams of major sporting events like these is, without a doubt, a move that could define the company’s future. Tapping into the huge audience that Apple TV boasts could also prove instrumental in Twitter’s battle to keep up with the high tide against it. More people would be drawn to Twitter for the live sporting events, and Twitter would be able to sell lucrative ads embedded in the streams. From where we stand, it is a win-win for all.

Pacific Crest thinks buy-side expectations are below sell-side and thus remain Sector Weight on the name

Pacific Crest weighed in on Fitbit Inc (NYSE:FIT) early Wednesday and reduced its 2017 EPS, revenue and unit estimates. The firm noted that Fitbit’s inventory remains well above estimated levels at nearly eighteen days. Consequently, the firm has maintained a Sector Weight rating on Fitbit stock as it sees risk to first quarter estimates of the company. Following the research note, Fitbit shares were trading modestly down on Wednesday trading session to close down 1.08% at $7.36, near its 52-week low price $7.30.

Brad Erickson of Pacific Crest carried out channel checks in the United States that indicated “days of inventory have continued higher exiting the quarter, introducing risk to Q1 Street estimates.” The analyst highlighted that Alta and Blaze sales volumes were held up modestly better than targeted, but he believes “Charge 2 inventory is particularly bloated in certain parts of the country and Flex 2 demand has proven disappointing throughout.”

As a result of channel checks, Mr. Erickson has reduced 2017 estimates. The firm now sees modeling units to decline 45% quarter over quarter versus prior expectation of 41% decline. It also expects units to decline in 2017 by 15% versus the previous estimate of 7% decline. “Our estimates are considerably below the Street for next year, but we believe we buy-side expectations are also well below sell-side,” added Mr. Erickson.

Pacific Crest has reduced the company’s 2017 revenue estimate from $2.193 billion to $1.998 billion and EPS estimate from $0.25 to $0.01 EPS. In contrast, the Street anticipates 2017 revenue to clock in at $2.440 billion on $0.65 EPS.

The fitness device maker has a total market capitalization of $1.64 billion. The stock price has a 52-week high of $30.96 and 52-week low of $7.30.

Tesla Model S and Model X buyers will not get incentives if the new EV incentive program is approved in France

In May, Tesla Motors Inc (NASDAQ:TSLA) issued a blog post on its German website, claiming that it was purposely left out of the new electric vehicle (EV) incentive program. Under the program that was partly funded by German car manufacturers, only vehicles with retail prices of less than €60,000 ($67,500) could quality for discounts, compared to Model S base price of €76,600 in Germany.

Now, another European powerhouse, France, is trying to follow its neighboring country by changing the policy of its existing policies for EV incentives, excluding the young Californian EV maker, Electrek reported (via Autoactu). The government will provide discounts on new battery-powered vehicles that has price of lower than €40,000, while the Model S starts at €70,900 in the country.

The changes, which would effectively exclude both the Model S and Model X, still requires to be approved into the “Finance Act” in December to ensure that the new rules are applicable next year. French customers considering purchasing a Tesla car must place orders now to get their deliveries before the end of this year.

While the new price cap is the biggest change, there were some other adjustments in the program. The government will reduce the incentives for buying a new EV by €300 to €6,000; however, the buyers will be given additional €4,000, if they agree to trade a diesel engine vehicle having life of at least 10 years.

Moreover, the incentive of €750 on hybrid electric vehicles will be waived off, while maintaining the inventive of €1,000 on plug-in hybrid electric vehicles.

Currently, there are incentives worth €6,300 for Tesla cars in France; yet, the automaker cannot sell large number of vehicles in the country. According to registration data collected by EV Sales Blogspot, Tesla sold just 485 Model S’ in the country during the first eight months of 2016, and 708 sedans in 2015. French consumers usually opt for their local brand, Renault, and its strategic partner Nissan.

Only Tesla Model 3 will be able to qualify for the incentives in France, which means that Tesla sales will decline through the next year till the compact sedan is available for the French public. The company has 11 stores, four service centers, 41 Superchargers, and 100 Destination Charging locations in the country.

More confirmations of Nintendo’s upcoming console have surfaced ahead of the event

Nintendo Co., Ltd. (ADR) (OTCMKTS:NTDOY) is all set to unveil Switch’s details at a special event on January 12 this week, and new rumors are surfacing online. Earlier today, Nintendo’s subreddit was able to confirm a piece of information sent to them, and that was Switch’s price.

Reportedly, a new product has appeared on Best Buy’s price system. The SKU name “Nintendo N2” apparently has a price tag of $249.99. This is the second time we are hearing of the $249 price point, as most recently, Nikkei reported that Switch will be set at the aforementioned price. As for the name of the SKU, it could just be a placeholder. The price, however, doesn’t seem to be a placeholder considering we are very close to Nintendo’s official event and retailers must be privy to such information ahead of possible impending pre-order opening.

A $249 price tag will be ideal for Switch as many gamers have voiced their opinion that anything higher is considerably expensive for a handheld device not in the same visual ballpark as its competition. Both the PlayStation 4 and the Xbox One have a price tag of $249 and are in a different league entirely in terms of horsepower and the multiplatform games they receive. But if history has taught as anything, it is that games sell systems and Nintendo is known to focus on that aspect. There is clearly great hype surrounding Switch and all eyes are on Nintendo now.

Tesla stock moves to new highs as excitement over the Model 3 continues to increase

The man behind Tesla Motors Inc (NASDAQ:TSLA) and its chief executive, Elon Musk, spent most of the weekend on Twitter updating thousands of followers regarding Model 3 reservations and answered most of their queries related to the mass-market sedan. Following the weekend, Tesla shares opened the market higher and went on to hit the $250 mark. Tesla shares jumped as high as 5.64% to a six-month high of $250.98 on Monday, closing the day at $246.99, up 3.96%.

By the end of Saturday, Mr. Musk announced three-day reservations climbing to 276,000, implying $276 million in deposits and $11.60 billion worth of backlog (average selling price of $42,000 with options). He also said that a full-week update will be given on Wednesday evening.

The executive also admitted that Model 3 demand was stronger-than-expected and Tesla will be focusing closely on the accelerating production ramp. Regarding the sedan’s specification, Mr. Musk stated that while some of the features like wheels and black color matte will likely end up in the production model due to high demand, some unappealing features like dashboard and steering will be modified by the Model 3 unveil Part 2. He also highlighted expansion plans for Asia and Europe.

Additionally, Global Equities Research’s Trip Chowdhry had projected reservations numbers to cross 300,000 by April 3(first week-end). He believes customers have “seen and appreciated” the Model 3. With those pre-order numbers, Tesla would create another world record in Consumer Tech industry of receiving over $10 billion worth of reservations (considering base-price of $35,000).

From Model 3 test drives, Mr. Chowdhry thinks it is fast and spacious with superb handling and exceptional comfort. Model 3 with continuous pane of glass is an extension from the windshield, he stated. The analysts also said there are “no traditional gauges” in the mass-market vehicle and it is “very simplistic and elegant.”

The research firm is betting that Model 3 will be delivered as per schedule, without delays. With elegant and simple design, Model 3 production would be like “breeze.” Tesla is expected to optimize mass manufacturing with combination of aluminum and steel.

 “Looking at the Model 3 inside and out…we think Model 3 supply chain is at least simpler by a factor of 3,” Mr. Chowdhry noted.