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September 2017

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Twitter’s recent initiative towards streaming service hints its intention towards new opportunities

Twitter Inc (NYSE:TWTR) has lately been in the limelight as it seeks to revive itself by diversifying offerings. Last month, the company announced its turn towards the VR world, as recently, the short-messaging app has also started streaming sports event in an attempt to gain traction from the users. As the company seeks new opportunities, there is also an increase in interest by the investors as they have been active in taking fresh positions lately.

Earlier in March, CEO Jack Dorsey suggested that it is high time for the company to change itself and look for new opportunities. He also reckoned the possibility that his company would go for Virtual Reality as a preference. However, it was clear that Twitter needed an acquisition to mark its presence; therefore, it acquired Magic Pony technologies last month. Yesterday, the company showed a glimpse of its future when it tested a live-stream of Wimbledon tennis, which showed its intention to be the Netflix for sporting events. Twitter is in talks with NBA and other sports bodies to get rights to cover events.

A positive outlook can be seen on the investor side too. The Country Caller also published an article in mid-June, in which we discussed the possibility of a new 52-week low level for Twitter. However, the recent developments have urged it to take long position and the stock has risen more than 20% since then. Street houses, such as SunTrust Banks and MKM Partners, have also recommended investors to buy and hold the stock as they feel that it has a significant potential. If Twitter can make its presence in the streaming business, there is a good chance for it to revive itself and come out as a profitable and stronger player in the media industry.

Pandora Media has been reiterated as Outperform by Wedbush, on potential to improve profit margins in the future

Music discovery platform company Pandora Media Inc. (NYSE:P) stock rating was maintained as Outperform by analyst Michael Pachter at Wedbush. The reiteration in stock rating was on the back of the belief that the company has the capability of converting its two million One Subscribers to on-demand, and also has the potential to attract both 1-2 million of international on-demand subscribers and 1-2 million further US on-demand subscribers, later by 2017.

Moreover, the analyst further mentioned that the company has the potential to improve its margins in the future, and could also return back to profitability in the long-run. The analyst stated that it is just an addition to execution of the company’s line events venture, core international expansion coupled with on-demand subscription services.

Also, analyst at SunTrust Robinson Humphrey upgraded his stock rating to Buy, alongside an increase in its Price Target by 50% from $12.00 to $18.00. The analyst mentioned that direct deals with the music labels could serve as a near-term upside catalyst driver for the stock, and could result in addition of around four million subscriptions on yearly basis for the company.

The analyst at SunTrust further stated that the Buy rating is merely not because of speculations of a possible acquisition opportunity, but he mentioned that a substantial portion of the activist shareholding has been in the favor of such a deal, hence could be a possible option for the company.

In addition to reiteration in its stock rating of Outperform, Wedbush’s analyst maintained its Price target of around $15 for the stock, which presents an upside potential of around 9.25% from its current price of $13.73. Stock’s performance in the past six months has just been substantial, with a mouth-watering return of around 33.69%, which reflects the ever increasing investors’ confidence in the stock. Earlier in August this year, Bank of America in a research note on Pandora reiterated its Neutral rating for the stock, while increasing its Price Target for the stock from $12.00 to $14.00.

The Country Caller takes a look at how Schlumberger is looking to go through the second quarter

Schlumberger Limited.’s (NYSE:SLB) President of Operations, Patrick Schorn spoke at the Wells Fargo Wells Coast Energy Conference. The conference was revolving around the current fundamentals and the future outlook surrounding the oil and gas industry.

Schlumberger is a leading company in the oil field service providing field, but that hasn’t stopped it from the weak fundamentals surrounding the oil industry. The US shale revolution, lack of demand and persistence of the Organization of Petroleum Exporting Countries (OPEC) to maintain output has caused the crude oil prices to fall sharply from its highs of $115 per barrel.

Crude oil prices in February touched their 12 year lows but have recovered over 80% from those levels, following supply disruptions in Canada and in Nigeria. Crude oil prices, however, again came back to their declining trend today. Mr. Schorn, in the latest energy conference, has given a sigh of relief to the companies in the oil and gas space.

Schlumberger believes effects of the lower crude oil prices are now coming into play. In the US, for instance, high cost shale production is losing momentum. Other than the US, members of the OPEC such as Nigeria, Libya and Venezuela are webbed into troubles of their own and may not be able to maintain production.

Other than the supply disruptions, the largest oil service provider expects the demand for the commodity to be resilient in the long-run. There are recent speculations going around in the market of crude touching $80 per barrel mark by the end of 2018. The EIA also expects demand to kick in few years time.

Schlumberger, in its press release, also gave a roundup on its four groups along with a future outlook. The company’s Characterization group revenue fell by 20% in the first quarter and is expected to drop by the same in the upcoming quarter. Its drilling group’s revenues fell by 16% in the first quarter and is expected to drop by a further 20%. Production group’s revenue fell by 11% and Schlumberger expects revenues to decline by another 10%.

Schlumberger’s fourth group, Cameron also saw a plunge in earnings in the first quarter and expects this to continue in the second quarter as well. The merger is expected to bring in cost synergies and new innovations in the technological space.

Alibaba sees robust growth in its retail business along with removal of fake goods from online marketplace

Alibaba Group Holding Ltd (NYSE:BABA) is China’s online retail business platform that offers its services in the form of consumer-to-consumer, business-to-consumer and business-to-business sales by the use of its online web portal, Alibaba.com. The company also owns a large amount of business that deal in online payment solutions, product search engine, health, insurance, cloud computing, data services, etc. It was founded in 1999 by Mr. Jack Ma who is also currently the chairman of the company.

Alibaba has always somehow managed to stay on the wrong side of authorities as is evident from its long history of legal scuffles. The e-commerce giant is currently facing a scrutiny from the Securities and Exchange Commission (SEC) over its dodgy accounting practices related to a small part of its business.

According to recent news, Alibaba’s management now expects its business to be doubled by the year 2020. In a narrative issued by Alibaba’s management during the recent investor day meeting, it was signified that the company now sees a viable path to double total transaction volume. The management believes that its recent drive to curb fake branded products is expected to help restore consumers’ confidence, which will result in robust recovery and excellent growth over the next few financial periods.

The company expects the total Gross Merchandise Value (GMV) to be well over $900 billion during the year 2020, which is more than twice the GMV of the year 2016. Furthermore, the management expects 423 million active buyers in 2016 to grow to more than 2 billion active customers by 2036.

The analyst opinion for BABA stock has 38 ratings out of which 13 are Strong Buy, 20 are Buy, 4 are Hold and only 1 is Sell. The stock now trades at $78.14, almost 3.6% up from its opening price.

The analyst views Delta as the most well-positioned among the big three airlines

Delta Air Lines, Inc. (NYSE:DAL) has been added to the coverage list at Imperial Capital with an initial rating of in-line. Analyst Michael Derchin offered his first commentary on the stock and said that he believes Delta to be the best-positioned airline stock in the market. The analyst seems optimistic. The initial price target has been set at $41, which is about $4.4 ahead of the current trading price, and provides for about 10% of upside potential in the near to mid-term.

The analyst believes that Delta’s awareness of risks associated with its core business is a huge positive and his analysis suggests that not many stocks in the industry have a control as Delta has. The management has devised long term plans in order to address the underlying concerns and reduce the associated risk while creating wealth for its shareholders by setting SMART financial goals. The analyst went as far to say that Delta might be the best stock among the big three airlines in the United States. The analyst’s big-three list includes American Airlines and United Airlines alongside Delta.

The analyst, despite his positive view, remains cautious regarding Delta, as he believes the airline industry is very volatile and very responsive to macroeconomic turbulence. It is to be noted that Imperial Capital yesterday announced the inclusion of United Airlines to its coverage list, which makes it obvious that the research firm might look to establish a proper airlines industry research unit. The analyst believes that unless Delta creates some opportunities to expand margin the investors are likely to ignore it.

The analyst has given the stock an initial rating of Neutral along with a price target of $41. The stock closed at a price of $36.69, yesterday. The analyst opinion for Delta has 8 Buy, 5 Outperform and 1 Hold rating, which constitutes the average of 1.50 which is highly positive.

The company successfully attracted investors through its dividend policy

Lockheed Martin Corporation (NYSE:LMT) was assigned Hold from Buy rating by Vetr with a target price of $260.42. Many firms and analysts assigned Buy rating to the company throughout the year 2016. The shares gained a maximum 17.2% last year and benefited the most from the aerospace and defense sector which gained 13%.

Lockheed was able to attract investors through its solid dividend policy and 10% dividend hike. This followed with $2 billion buyback authorization. Lockheed has always been successful in securing contracts from the US Navy and the US Air Force. This has resulted in its defense division profits soaring.

Recruitment Event

Lockheed stated that it is going to hold a recruitment event today. The event will happen at Destiny USA Mall in New York. It will help to recruit for 100 vacancies that are available at the company. These vacancies belong from the technical and manufacturing positions.

Stock Update

The stock traded at $253.99 rocketing by 0.27% at the closing bell on Wednesday. It traded in the 52-week range of $200.47-$269.90. It has a market capitalization of $75.42 billion. This is massive for investors.

It has a year-over-year (YoY) increase of 16.97%. The return on assets for the trailing 12-month period stands at 7.9%. This comes with a return on equity of 123%. The return on investment is 21.9%. It has a price to earnings (P/E) ratio of 20.73.

Tesla has reportedly decided to open its Spanish headquarters in Barcelona amid accelerated expansion in the country

Last month, The Country Caller reported that Tesla Motors Inc. (NASDAQ:TSLA) started posting job openings for its upcoming retail, service, and Supercharger locations in Spain. It also laid down where it plans to open those locations.

Over the weekend, Euro Weekly News reported Tesla has decided to open its Spanish headquarters in Barcelona, despite the potential secession of Catalonia from the country. The headquarters would be used as a base from where Tesla cars and accessories would be distributed within Spain.

The Official Bulletin of the Commercial Register showed at the end of the last month the automaker registered its Spanish subsidiary, Tesla Spain SL. This has been seen as a vote of confidence from the Government of Catalonia, but the company has not officially announced the news.

The company has deposited initial capital of €3,000 ($3,228) and made Tesla International BV its sole partner in the venture, according to the official documents. The company has already announced a store opening and Service Centers in Barcelona and Madrid, the two markets where electric vehicles have the most popularity.

Tesla is also looking for people who could install its Superchargers at locations across Spain. The company already has seven charging stations in Cullar, Girona, L’Aldea, Lleida, Murcia, Tarragona, and Valencia. It is currently constructing a Supercharger station in Burgos and has received a permit to build another in Ariza. It is also seeking personnel for sales, marketing, and specialist positions at its retail and service locations.

While the automaker has been operating in Scandinavia, it faces several regulatory issues in Spain, particularly related to its charging locations, delaying the launch of its technologically-advanced vehicles in the country.

Tesla’s premium sedan, the Model S, retails within a €64,000-127,000 range, while its premium SUV – the Model X – has a price range of €83,000-128,000. The company will also launch its compact sedan, the Model 3, by late 2017 or 2018 in Spain.

The company recently reported $5.4 million in Exondys Q4 revenue

Needham & Company weighed in on Sarepta Therapeutics Inc (NASDAQ:SRPT) and assigned a Buy rating along with a price target of $81 on the stock, reflecting a 120.52% upside potential over Thursday’s closing price of $36.73.

During Thursday’s trading session, SRPT shares closed up 3.32% after Sarepta reported $5.4 million Exondys revenue in the fourth quarter of fiscal 2016 (4QFY16). Analyst Chad Messer of Needham & Company stated: “While it is still early days, these metrics seem to have been sufficient to allay investor fears. Based on management commentary, we expect another quarter or two of slow progress but we continue to expect that the vast majority of the 1,400-1,700 eligible DMD boys in the US will be on therapy by next year.”

Mr. Messer believes Sarepta provided a positive guidance on Exondys regulatory growth in Europe. The company also discussed recent additions to its product pipeline with gene therapy and utrophin modulators. However, Mr. Messer believes there is little or no value allocated to the ex-US Exondys factors.

In the recently held J.P. Morgan Healthcare Conference, CEO Ed Kaye revealed that more than 250 young patients have started the process of receiving treatment with the Duchenne muscular dystrophy drug. Approximately 60% of the patients receiving Exondys treatment are under commercial insurance while 40% are covered by Medicaid.

The company has a total market capitalization of $1.88 billion. SRPT stock has a 52-week price range of $63.73–$8. Out of a total of 17 analysts covering Sarepta, 11 rate it as a Buy, five recommend a Hold and tagged it as Overweight stock. For the current quarter, Sarepta’s consensus loss per share (LPS) estimate stands at $1.23. The company reported a loss of $1.18 per share in the previous quarter

Looks like Cloud Based Streaming for games the next move for Microsoft

For some time now, Microsoft Corporation (NASDAQ:MSFT) has emphasized the placement of cloud computing and streaming in its strategy for Xbox One. The company has pitched the power of the cloud as an important part of its overall Xbox One plan and while the company has been very quiet on that front for quite a while, it looks like its plan has been going forward in full force.

According to recent reports, Microsoft is testing its cloud streaming in partnership with Square Enix and Ubitus, a major player in the field in China. The company has silently kicked off its beta program for the service and the details are posted on its official website for the Chinese region.

As you would have expected, all of the details on the website are in the region’s native language but one Twitter user has translated the text into English which has helped reveal some more details about the new program. As of right now, the only game available on the streaming service is Final Fantasy XIII and it is not clear as to when and if more games are going to be added to the service. The translated text also reveals that the service is exclusive to Xbox One users in Mainland China only and that only 400 people are going to be selected to beta test the new service. In order to play games through the new steaming service, a 160MB file must be downloaded.

This is certainly very interesting news and it could mean that Microsoft is following Sony Corp’s (NYSE:SNE) route with streaming games to the Xbox One. But, it is worth noting that the Xbox One has support for native backwards compatibility and new games are being added to its library as well. It would be interesting to see how Microsoft places this new service in the Xbox One ecosystem when a similar service is already present.

GoPro Inc’s (GPRO) annual filings guide for potential net loss in the first quarter and limited full year profitability

GoPro Inc’s (NASDAQ:GPRO) Annual Filings paint a gloomy picture for the company’s year, especially for the first quarter. The company reported how it had grown its revenue since 2013 to 2015 from $986 million to $1.62 billion, which represented compound annual growth of 45%, but warned investors that slowing growth and growing operational expenses could see them in the red in the first quarter of 2016.

According to the annual filings, GoPro has warned investors that its historic trends of high growth are about to be rendered invalid as a basis for judging where the company is headed in the future. The action camera manufacturer reported 16% in annual revenue growth but also zeroed in to the 31% decline year over year in the last quarter of the year. GoPro’s thinks that its history of high growth is behind it for now and its outlook is for slow growth, revenue or in a worst case scenario, declining revenue year over year for 2016.

For the first quarter as well as the full year, the company predicts revenue decline but also an increase in operating expenses. This will lead to limited profitability for GoPro at best; at worst it could see the company report losses. GoPro’s Q4 earnings result has already reported that it expects around $95 million in negative adjusted EBITDA, give or take $2.5 million.

GoPro stock has fallen 70% over the last year as it failed to grow its user base in the action camera segment that it had defined. GoPro’s next product offerings are in the oversaturated drone market, where it is a relative latecomer, and investors will be looking for GoPro to release a new, clearly differentiated product before they see hope for it to return to a successful growth business.