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December 2018

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The shares plunged as a response to the company’s continued struggle to derive growth amid iPhone weakness

The weak quarterly performance by Apple Inc. (NASDAQ:AAPL) has now plunged the stock into chaos as the stock went below the $100 mark in the premarket trading yet again. What soon followed was sell side updates either downgrading the stock or cutting the price target harshly as Apple now seeks to bet everything on the iPhone 7. The company missed consensus estimates for both revenue and EPS and also slashed the guidance numbers for Q3 significantly.

Piper Jaffray analyst Gene Munster believes that Apple is destined to recover as what lies ahead are easy comps and a new product cycle. Despite the obvious weakness, there are a few positives for Apple in Q2 and Q3 as Mr. Munster believes growth will return for AAPL by the end of the year. The growth expectations at Piper Jaffray are 5% for Q4FY16, 18% for Q1FY17 and 19% for Q2FY17 largely driven by the iPhone 7. The stock remained the top pick at Piper Jaffray for 2016, however, PT goes to $153 from $172 with a reaffirmed Outperform rating. The analyst expects some long term hindrances post iPhone 7.

Abhay Lamba remained unfazed by the Q2 earnings and weak guidance as the Mizuho analyst remained bullish about Apple based on the franchise value. Mr. Lamba believes that Apple remains well positioned and will return to growth at the end of iPhone 6 product cycle. The analyst reaffirmed a Buy rating and a price target of $120.

Despite lowering his estimates, Stifel analyst Aaron Rakers sees Apple setup as positive towards the end of 2016. The current valuation of the stock points towards $90, however, the analyst maintained his $120 price target on EPS estimate for the year 2017 with 10x P/E ratio. The analyst remained positive on Apple stock as he believes that growth in the installed user base remains strong and the total is now above 625 million users globally.

The analyst opinion for AAPL has 17 strong Buy, 21 Buy, eight Hold and one Sell rating. The stock is currently hovering around the $96 mark during premarket.

The Store is many things, but apparently, reliable is not one of them

Microsoft Corporation’s (NASDAQ:MSFT) message to gamers with Windows 10 was to show accentuated support, to finally treat PC gaming seriously. DirectX 12, being the new API, was promised to improve performance, bringing new level of efficiency to the Windows platform. Microsoft’s plan took motion when Xbox One exclusives began turning up on the PC as well, and since Killer Instinct and Dead Rising 3, many exclusives have embraced Windows including the Forza franchise.

A key component in Microsoft’s road to success was Windows Store. The Store that no one really cared about until Microsoft decided to distribute its published games exclusively through the Windows Store. It stands that if gamers want to play games like Gears of War: Ultimate Edition, ReCore, Forza Horizon 3, they must sign up for Windows 10 and effectively use Microsoft’s own distribution platform. It’s a smart way to drive more people in to using the new OS and make Windows Store stand out in times when Steam is the dominant distribution platform. Since such key games in Microsoft’s umbrella are only available through Windows Store making it such a pivotal component, they must have made sure their platform is reliable, right? Turns out that Windows Store is anything but that.

Gears of War 4 is out now and like many people I had it preordered days before. I love the Gears of War franchise and I was genuinely excited to play the next installment for the first time in 60fps on the kind of visuals only PC can provide. I was happy to preorder it once performance of the game was confirmed to be rock-solid. Everything seemed only a matter of installing the game from then on, but I was actually in for a roller coaster of a disappointment. I had heard about the horror stories of Windows Store which had me cautious but since Microsoft released an update for Windows 10 right when Gears of War 4’s preload began; I was optimistic that my experience with Windows Store will not be like the others. But oh boy was I dead wrong. It is now past Gears of War 4’s launch and I still haven’t been able to download the game. Not because of the humongous 73GB file size but because of the Windows Store download system that is apparently kind of someone who holds a map upside down and then doesn’t understand where to go.

I have downloaded nearly 30GBs THRICE before the download management decided that starting from scratch after I resume is a fun game we can play. I do not have a fast internet connection that would allow me to download the game within hours and I have exceeded the 100GB mark in just trying to download it. I have now reached the peak of my patience and I’m simply not willing to deal with the broken store anymore.

I am not the only one, folks around various forums such as NeoGAF and Reddit have similar stories to share. The download issues that plague Windows Store have given traffic to a “Fiddler” method that allows you to download the file using your browser or download manager. On top of the dreadful download management in place, the monumental courage of Windows Store can be realized from the fact that if you decide to apply a simply patch, it asks you to have as much EXTRA space available as the game takes up in that drive. So if I was to update Gears of War 4, I would be required to have 80GB of storage space available on top of the 80GB the game already consumes. And did I mention you will lose download progress in case of a power interruption?

Such issues have blocked users from downloading the biggest Microsoft exclusive of the year. These are the kind of experiences that alienate consumers from a product. Even with meaningful updates such as choosing which directory to install apps in (which should have been there from the start), Microsoft is clearly not building a compelling case for their Store. It’s unfortunate that after Microsoft has made significant improvements with recent UWP titles the Windows Store remains a thorn in the whole experience. I will applaud Microsoft for the Xbox Play Anywhere program though, it will be my savior when I buy an Xbox One as a last resort to play Gears of War 4.

Facebook’s Instagram announced surge in monthly active users which suggests growth remains strong

Baird analyst sharpened his pencils on Facebook Inc (NASDAQ:FB) over the news from a member of its empire, Instagram, that announced yesterday that its monthly active users have surged to more than half a billion. The photo sharing service reported 500 million MAU and 300 million daily active users. The analyst, Colin Sebastian reiterated a price target of $135 and an Outperform rating on the stock. The current price target suggests an 18.02% potential upside on the last close of $114.38.

According to Mr. Sebastian, Instagram surpassing 500 million MAUs is a milestone which “highlights the second leg of the growth stool.” He further noted strong growth of the company as it reported 300 million MAUs in fourth quarter of fiscal year 2014 and 200 million DAU in 1QFY15. This suggests more than 67% growth in MAUs and 50% rise in DAU figure. Instagram’s strong DAU figure compares to 310 million of Twitter’s MAU, despite its large user base comparatively.

Mr. Sebastian highlighted that Instagram remains one of the most downloaded applications in the App store. The app stands as the third most famous app leaving behind Snapchat and Messenger. “Given some concerns around usage patterns on the core Facebook app, we note that incremental engagement on Instagram declined slightly, which suggests that either A) newer users are more passive than previous cohorts, and/or B) legacy users are engaging less frequently,” he commented.

Moreover, he noted user engagement trends for both Facebook and Instagram and analyzed that compared to Facebook, Instagram users are less engaged. Facebook reported 66% in DAU/MAU ratio in 1QFY16, against Instagrams DAU/MAU ratio of nearly 60%. In 2010, Facebook’s DAU/MAU engagement ratio was about 54%, below that of Instagram at a similar stage of growth. The firm anticipated Instagram’s engagement trends to stabilize given its improved functionality i.e. suggested videos feature.

The pharmaceutical company seems to be at the court’s mercy for the Copaxone patent trial, despite new developments

Teva Pharmaceutical Industries Ltd (ADR) (NYSE:TEVA) is currently undergoing a 7-day district court hearing for its Copaxone FY20 patents protection. Copaxone is a new version of the drug used for treating Multiple Sclerosis. In this regard, the pharmaceutical’s developments are being covered by Evercore ISI and its analyst Umer Raffat.

The analyst expressed that the hearing is largely uneventful and he believes that things are not looking great for the Isreali business. However, he did highlight few points which may be considered as new developments when it comes to MS drug.

Raffat believes that the hearing exhibited new evidence, which has the potential to weaken the drugmaker’s case further. The business has been reported of submitting a Gala trial protocol to the FDA recently. Gala is the label name for Copaxone 40 mg.

He further stated that there were three new developments in the case hearing that should be noted. He commented that one of the persons skilled in art did not have access to the drug as the trial protocol was not largely public. Moreover, Judge Sleet has not yet decided whether the trial is acceptable under the testimony of Mylan NV’s (NASDAQ:MYL) Dr. Green. Even if it is not acceptable, the judge’s decision could be influenced, stating that the trial was probably obvious.

Despite this, Mr. Raffat believes that the hearings provide little reason to believe that the court would provide a different decision than Inter Partes Review conducted for the FY30 three patents. The board is known for declining three of its patents for FY30 period. He thinks that none of the evidence provided during the first few days proved that the decision may move in their favor. Thus, the pharmaceutical is believed to be in some serious trouble as the proceedings follow.

Raffat also believes that the drugmaker is at the mercy of the court and may try to postpone the proceedings to buy time for gathering and introducing additional arguments and witnesses. Thus, its investors remain bullish on future decisions and developments in the court proceedings. Teva Pharmaceuticals has been reviewed by FactSet Fundamentals to receive 21 Buy, one Overweight, and six Hold ratings. It has also earned average PT of $255.66, with about 425% upside potential factored in above last closing price.

The App Store is also reportedly going to feature paid search results

There is no denying that finding anything on Apple Inc.’s (NASDAQ:AAPL) App Store can be quite a hassle. According to Bloomberg, the iPhone manufacturer is seriously considering giving the App Store a much needed facelift. Additionally, the company is also rumored to integrate paid search results, just like Google.

The reason for making such a move is simple; the new changes would highly improve user-experience as well as benefit app developers. For instance, Google could purchase specific keywords like ‘Search’, and ensure that its primary app would appear every time the keyword is used. What this means is that users will no longer have to go through cloned apps to find what they were looking for in the first place.

In the very same report, Bloomberg has also stated that the team responsible for making this concept a reality is being headed by none other than Todd Teresi, Vice President of the company.  

As amazing as the whole concept may be, it is unlikely that Apple would take such a step. Even though the rumor does make a lot of sense, Apple is not exactly known for undermining new developers attempting to get their apps noticed. But then again, nothing can be said for certain, at least for now.

The Country Caller highlights latest earnings whispers for the two California-based businesses ahead of their respective financial earnings calls later in the evening today

After the market closes on Tuesday, January 31, Apple Inc. (NASDAQ:AAPL) and Electronic Arts Inc. (NASDAQ:EA) will announce earnings for first quarter of fiscal year 2017 (1QFY17) and 3QFY17, respectively. Both businesses have held great quarterly performances historically. Consistent with previous results, the estimates suggest that both companies are likely to exceed analysts’ expectations on bottom line whereas EA is also expected to outperform on net sales.

Apple Inc. 

For the first quarter, Wall Street analysts have provided Apple Inc with consensus earnings per share (EPS) prediction of $3.22, about 92% higher on quarter-over-quarter (QoQ) basis. However, the number suggests a decline of roughly 1.83% year-over-year (YoY). In contrast, Earningswhispers.com predicts the iPhone maker to remain consistent with the higher end of the company’s 1Q EPS guidance of $3.06-3.23, with its profits per share estimate of $3.23.

Apple is also predicted to report $76.93 billion net sales for the holiday quarter, up 64% QoQ. It also marks an increase of 1.35% YoY as the iPad maker published $75.9 billion revenues in prior year quarter. However, Estimize.com believes that the $639.56 billion business will report slightly lower revenues of $76.92 billion, meeting the company’s 1Q top line outlook of $76-78 billion.

Electronic Arts 

For the third quarter, Electronic Arts has received consensus EPS estimate of $2.31, marking a remarkable recovery from previous quarter’s loss per share of $0.13. The company’s previous year 3Q EPS was observed to come in at $1.83. This suggests that Earningswhispers.com expects an EPS growth of about 27% YoY, with its bottom line estimate of $2.33.

Reportedly, the $25.75 billion company’s 3QFY16 and 2QFY17 revenues were published at $1.8 billion and $898 million. This quarter, the analysts expect revenues to rise considerably to $2.06 billion. On the other hand, Estimize.com expects further increase on top line, to $2.07 billion.

It is a long time coming and a perfect opportunity for the next sequel

Capcom’s Devil May Cry series holds a very special place in the hearts of many gamers out there. The franchise began back with the release of PlayStation 2 and quickly became one of the most popular games on the platform. The series redefined hack-and-slash games with a stylish take on the genre.

The game’s protagonist, Dante, is termed as one of the coolest video game characters of all time. The series has thus far spawned four titles. While not all of them were an equal hit, it is safe to say the franchise has a big fan-following that is eager to play the next installment.

It feels so long when we last saw the face of Devil May Cry. The last game was released seven years ago in 2008 – an incredibly long time. I am one of those fans who do not consider DmC: Devil May Cry as a Devil May Cry game, as it served as a reboot to the franchise. While it was an enjoyable game on its own standing, it earned little appreciation from hardcore fans like me. The old series is not dead. Capcom had confirmed after the announcement of the reboot that it exists in an alternate reality.

After DmC: Devil May Cry did not meet Capcom’s expectations, it is very likely that the publisher started considering bringing back the old series to life. This week, the two actors who play Dante and Nero from the series were spotted posing for a picture together. While it is perfectly normal for two friends to hang out together, it was the nature of this photo and where it was taken which caught everyone’s attention. The two actors were in a motion-capture studio with their suits on. The picture was removed later on, giving strength to speculation.

A Devil May Cry related announcement could be imminent, and quite possibly the next installment in the series. E3 2016 is a great time to announce the project; it makes perfect sense to reintroduce the iconic series back to fans.

The price target for the stock was also raised significantly implying upside in high twenties

Alphabet Inc (NASDAQ: GOOG) has been upgraded at Pivotal Research, only days before the Q1 earnings call. The earnings report for the first quarter of the fiscal year 2016 will be released at the close of market on April 21. The sell side firm has also raised the price target which suggests a significant 28% upside to the current levels.

Analyst at Pivotal Research, Brian Wieser, remained largely positive during his commentary and believes trends around core and quarterly reports have been very positive. In his view, the revenue growth will be massive but will also be softened by the forex headwinds, considerably and would equal to net growth 16% in revenues ex-TAX year over year growth of 18% in revenue. On the advertisement front, Google and Facebook remain obvious leaders and trends suggest that the domination is likely to be sustained for the next few years. Growth in advertisement should be in significantly higher, with little to no movement in market share.

Supporting growth areas such as YouTube and Google Display Network related revenues from related programming remain strong and will continue to grow at an accelerated pace. Google has also launched a variety of new projects and is engaged in diversification. The launch of Google analytics 360 Suite and growing investment in marketing technologies can further enhance growth in the advertisement sector and will capture the attention of marketers leading to greater spending on Google’s advertisements in the near future.

The analyst concluded that there’s not much that could go wrong, if at all, and the company remains well positioned to drive growth further. The analyst upgraded the stock to buy from hold and raised the price target to $970 from $800, suggesting a 28% upside potential. The analyst opinion for Google has 5 strong buy and 7 buy ratings. The stock is currently trading at $724.51, up 0.45% as of Monday, 09:53 AM.

Expected upcoming results of Capital One Financial and Chipotle Mexican Grill earnings

Capital One Financial Corp. and Chipotle Mexican Grill, Inc. are ready to release their earnings after the closing bell today. Both companies will release their financial results for the third quarter of fiscal year 2016 (3QFY16). Historically, the companies have disappointed their investors and missed on Street expectations. Estimize.com expects both to outperform on top line, whereas only Capital One is expected to beat the Street on bottom line.

Capital One Financial

For 3QFY16, analysts predict Capital One Financial to announce earnings per share (EPS) of $1.94. Earningswhispers.com expects EPS of $1.99, suggesting a beat of four cents over Street. The company reported $1.69 and $1.98 in 2QFY16 and 3QFY15, respectively. Consensus estimate indicates 2.02% year-over-year (YoY) decline.

Street expects $38.61 billion company to announce $6.36 billion in net sales. This estimate implies 0.87% sequential increase over $6.3 billion, reported for 2QFY16. Estimize.com estimates stand at $6.37 billion. The company reported $5.9 billion in 3QFY15, indicating a positive surprise for the analysts.

Chipotle Mexican Grill

Chipotle Mexican Grill is expected to report $1.63 in EPS for the quarter. Earningswhispers.com forecasts it to miss the Street on bottom line, with its estimate of $1.59. Consensus estimates indicate an EPS decline of 64.49% YoY, as it announced $4.59 in 3QFY15. However, the company is likely to observe EPS increase of 87.36% sequentially over $0.87, reported for the previous quarter.

The Colorado based company is expected to report revenues at $1.09 billion, equivalent to estimates provided by Estimize.com expectation. Revenue is expected to decline 9.33% YoY, if it realizes Street estimate. However, it is likely to observe sequential revenue growth of 8.97%. The company reported $1.2 billion and $998.4 million in 3QFY15 and 2QFY16, respectively.