Tag: Microsoft Corp

Bank of America execs blew $93.6 billion. Here’s how they did it.

Post By Stock , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

In several notes to clients this month, Odeon Capital Group analyst Dick Bove has pointed out that Bank of America’s big spending on stock buybacks over the past five years has been a waste for its shareholders, with the bank’s stock price declining slightly during that period.

The idea behind repurchasing shares on the open market is that they reduce a company’s share count and therefore boost earnings per share and support higher share prices over time. This doesn’t seem to be a bad idea, especially for a company such as Apple Inc.
AAPL,
+1.01%,
which has generated excess capital and has appeared to be firing on all cylinders for a long time. For a company that is continuing to expand its product and service offerings while maintaining high profitability, buybacks can be a blessing to shareholders.

But for banks, for which capital is the main ingredient of earnings power, a more careful approach might be in order. The data below show how buybacks haven’t helped the largest banks outperform the broad stock market over the past five years. And now, banks face the prospect of regulators raising their capital requirements by 20%, according to a Wall Street Journal report.

Before showing data for the 20 companies among the S&P 500 that have spent the most money on buybacks over the past five years, let’s take a look at how share repurchases are described in a misleading way by corporate executives — and by many analysts, for that matter. During Bank of America’s
BAC,
-0.79%
first-quarter earnings call on April 18, Chief Financial Officer Alastair Borthwick said the bank had “returned $12 billion in capital to shareholders” over the previous 12 months, according to a transcript provided by FactSet.

Borthwick was referring to buybacks and dividends combined. Neither item was a return of capital. In fact, Bove summed up the buybacks elegantly in a client note on June 9: “The money that the company uses to buy back the stock is simply given away to people who do not want to own the bank’s stock.”

It is also worth pointing out that the term “return of capital” actually means the return of investors’ own capital to them, which is commonly done by closed-end mutual funds, business-development companies and some real-estate investment trusts, for various reasons. Those distributions aren’t taxed and they lower an investor’s cost basis.

Dividends aren’t a return of capital, either, if they are sourced from a company’s earnings, as they have been for Bank of America.

One more thing for investors to think about is that large companies typically award newly issued shares to executives as part of their compensation. This dilutes the ownership stakes of nonexecutive shareholders. So some of the buybacks merely mitigate this dilution. An investor hopes to see the buybacks lower the share count, but there are some instances in which the count still increases.

How buybacks can hurt banks

Banks’ management teams and boards of directors have engaged in buybacks because they wish to boost earnings per share and returns on equity by shedding excess capital. But Bove made another industry-specific point in his June 9 note: “If the bank buys back stock it must sell assets that offer a return to do so; it lowers current earnings.” Buybacks can also hurt future earnings. Less capital can slow expansion, loan growth and profits.

According to Bove, Bank of America CEO Brian Moynihan, who took the top slot in 2010 and saw the bank through the difficult aftermath of its acquisition of Countrywide and Merrill Lynch in 2008, “is one of the brightest, most capable executives for operating a banking enterprise.”

But he questions Moynihan’s ability to manage the bank’s balance sheet. Bove expects that Bank of America will need to issue new common shares, in part because rising interest rates have reduced the value of its bond investments.

In a June 5 note, Bove wrote: “Mr. Moynihan indicated twice [during a recent presentation] that the bank has excess cash that apparently could not be invested profitably. Possibly he is unaware that the cost of deposits at the bank in [the first quarter of] 2023 was 1.38% while the yield in the Fed Funds market can be as high as 5.25%.” In other words, the bank could earn a high spread at little risk with overnight deposits with the Federal Reserve.

That is a very simple example, but if Bank of America had grown its loan book more quickly over recent years while focusing less on buybacks, it might not face the prospect of a near-term capital raise, which would dilute current shareholders’ stakes in the company and reduce earnings per share.

Top 20 companies by dollars spent on buybacks

To look beyond banking, we sorted companies in the S&P 500
SPX,
+0.51%
by total dollars spent on buybacks over the past five years (the past 40 reported fiscal quarters) through June 9, using data suppled by FactSet. It turns out 11 have seen prices increase more quickly than the index. With reinvested dividends, 12 have outperformed the index.

Company

 Ticker

 Dollars spent on buybacks over the past 5 years ($Bil)

 5-year price change

 5-year total return with dividends reinvested
Apple Inc.

 AAPL,
+1.01% 		$393.6

 279%

 297%
Alphabet Inc. Class A

 GOOGL,
+0.84% 		$180.6

 116%

 116%
Microsoft Corporation

 MSFT,
+0.87% 		$121.5

 221%

 239%
Meta Platforms Inc.

 META,
+1.58% 		$103.4

 42%

 42%
Oracle Corp.

 ORCL,
+6.11% 		$102.6

 140%

 161%
Bank of America Corp.

 BAC,
-0.79% 		$93.6

 -2%

 10%
JPMorgan Chase & Co.

 JPM,
-0.18% 		$87.3

 27%

 47%
Wells Fargo & Co.

 WFC,
-1.01% 		$84.0

 -24%

 -13%
Berkshire Hathaway Inc. Class B

 BRK.B,
-0.80% 		$70.3

 70%

 70%
Citigroup Inc.

 C,
+0.09% 		$51.4

 -29%

 -16%
Charter Communications Inc. Class A

 CHTR,
+1.09% 		$48.5

 20%

 20%
Cisco Systems Inc.

 CSCO,
+1.00% 		$46.5

 15%

 34%
Visa Inc. Class A

 V,
+0.75% 		$45.6

 66%

 72%
Procter & Gamble Co.

 PG,
-1.26% 		$42.1

 89%

 116%
Home Depot Inc.

 HD,
+1.01% 		$41.0

 51%

 71%
Lowe’s Cos. Inc.

 LOW,
+1.92% 		$40.8

 111%

 131%
Intel Corp.

 INTC,
+4.67% 		$39.0

 -40%

 -31%
Morgan Stanley

 MS,
+1.04% 		$36.7

 67%

 93%
Walmart Inc.

 WMT,
+0.33% 		$35.6

 82%

 99%
Qualcomm Inc.

 QCOM,
+2.12% 		$35.1

 101%

 130%
S&P 500

 SPX,
+0.51% 		55%

 69%
Source: FactSet

Click on the tickers for more about each company or index.

Click here for Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page.

The four listed companies with negative five-year returns are three banks — Citigroup Inc.
C,
+0.09%,
Wells Fargo & Co.
WFC,
-1.01%
and Bank of America — and Intel Inc.
INTC,
+4.67%.

Don’t miss: As tech companies take over the market again, don’t forget these bargain dividend stocks

Source link

#Bank #America #execs #blew #billion #Heres

Jim Cramer’s top 10 things to watch in the stock market Friday

Post By Oil and Gas , , , , , , , , , , , , , , , ,

My top 10 things to watch Friday, May 5

1. Club holding Apple (AAPL) delivered better-than-expected quarterly results Thursday, with its installed base of active devices expanding to more than 2 billion. Apple’s board authorized a program to repurchase up to $90 billion worth of stock, while raising its quarterly dividend to 24 cents a share.

2. A slate of banks increased their price targets on Apple on Friday. These included Morgan Stanley, which raised its target to $185 per share, from $180, and Deutsche Bank which lifted its target to $180, from $170. Both firms reiterated the equivalent of buy ratings. Piper Sandler, meanwhile, was an outlier — lowering its price target on Apple to $180, from $195, even as it maintained an overweight rating on shares.

3. Shares of Club name Advanced Micro Devices (AMD) closed up more than 6% Thursday on a Bloomberg report that Microsoft (MSFT), another Club stock, is helping the chipmaker expand into artificial intelligence processors.

4. Club holding Coterra Energy (CTRA) delivered a first-quarter earnings beat Thursday, while reaffirming its commitment to regularly return at least half of its free cash to shareholders. Currently, Coterra said it plans to return a total of $420 million to shareholders, representing about 76% of its free cash flow in the first quarter. 

5. Barclays raised its price target on Bausch + Lomb (BLCO) to $18 a share, from $17, citing its “attractive growth profile.” The firm maintained an equal weight rating on BLCO shares. The eye-health products company holds the key to saving Club holding Bausch Health (BHC), which is in the process of unravelling its majority stake.

6. JPMorgan raised its price target on Kellogg (K) to $72 a share, from $68, while upgrading its rating to neutral, from underweight. The firm cited improved fundamentals at the food manufacturing giant.

7. DoorDash (DASH) received three price target raises following strong first-quarter earnings. Barclays increased its target to $75 a share, from $70, and maintained an equal weight rating. UBS lifted to $70 a share, from $68, maintaining a neutral rating. Oppenheimer raised to $85 a share, from $80, and reiterated an outperform rating.

8. Shares of Peloton Interactive (PTON) closed down more than 13% Thursday after the company reported a greater-than-expected loss for its fiscal third quarter — though, the reason why remains impenetrable.

9. Manufacturing firm Parker-Hannifin (PH) delivered a quarterly earnings beat Thursday, and there is no sign of a slowdown. Baird on Friday raised its price target on PH to to $415 a share, from $411, while maintaining an outperform rating on the stock.

10. Wells Fargo raised its price target on Royal Caribbean Cruises (RCL) to $88 a share, from $78, and kept its overweight rating on the stock. The firm cited “robust” cruise demand and RCL management’s solid execution following the company’s first-quarter results.

(See here for a full list of the stocks in Jim Cramer’s Charitable Trust.)

As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade.

THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, TOGETHER WITH OUR DISCLAIMER.  NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB.  NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Source link

#Jim #Cramers #top #watch #stock #market #Friday

Britain blocks Microsoft’s $69 billion acquisition of Activision Blizzard

Post By Business , , , , , , , , , , , , ,

LONDON — Britain’s top competition regulator on Wednesday moved to block Microsoft‘s acquisition of video game publisher Activision Blizzard.

The measure marks a major blow for the U.S. tech giant, as it seeks to convince authorities that the deal will benefit competition. Microsoft said it plans to appeal the decision.

Shares of Activision Blizzard slumped more than 8% in early U.S. trading. Microsoft shares were up 7% but this was largely linked to the company’s strong earnings report Tuesday.

The U.K. Competition and Markets Authority said it opposed the deal as it raises competition concerns in the nascent cloud gaming market. The CMA previously held concerns about competition in games consoles being undermined but ruled out this concern in a preliminary decision in March.

Microsoft could make Activision’s games exclusive to its cloud gaming platform, Xbox Game Pass, cutting off distribution to other key industry players, the CMA said.

Microsoft has reached its iPhone moment in terms of excitement but not applications, says Tim Horan

Cloud gaming is a technology that enables gamers to access games via companies’ remote servers — effectively streaming a game like you would a movie on Netflix. The technology is still in its infancy, but Microsoft is betting big on it becoming a mainstream way of playing games.

“Allowing Microsoft to take such a strong position in the cloud gaming market just as it begins to grow rapidly would risk undermining the innovation that is crucial to the development of these opportunities,” the CMA said in a press release Wednesday.

Microsoft offered the CMA remedies in an attempt to resolve its concerns — including “requirements governing what games must be offered by Microsoft to what platforms and on what conditions over a ten-year period.” However, the regulator rejected the proposals.

“Given the remedy applies only to a defined set of Activision games, which can be streamed only in a defined set of cloud gaming services, provided they are purchased in a defined set of online stores, there are significant risks of disagreement and conflict between Microsoft and cloud gaming service providers, particularly over a ten-year period in a rapidly changing market,” the CMA said.

‘Flawed understanding of this market’

Microsoft Vice Chair and President Brad Smith said in a statement that the company remains “fully committed to this acquisition and will appeal.”

“The CMA’s decision rejects a pragmatic path to address competition concerns and discourages technology innovation and investment in the United Kingdom,” Smith said Wednesday.

“We have already signed contracts to make Activision Blizzard’s popular games available on 150 million more devices, and we remain committed to reinforcing these agreements through regulatory remedies. We’re especially disappointed that after lengthy deliberations, this decision appears to reflect a flawed understanding of this market and the way the relevant cloud technology actually works.”

Activision Blizzard subsequently released its first-quarter earnings report early following the CMA’s announcement. In the report, the company said it “considers that the CMA’s decision is disproportionate, irrational and inconsistent with the evidence,” reiterating that it believes the transaction will go through.

The firm reported earnings per share of 93 cents, almost doubling from 50 cents a year earlier. Net revenue grew 34% to $2.38 billion from $1.77 billion. The company canceled its earnings call.

Bobby Kotick, CEO of Activision Blizzard, told employees in a letter Wednesday that the company and Microsoft have “already begun the work to appeal to the UK Competition Appeals Tribunal.”

“We’re confident in our case because the facts are on our side: this deal is good for competition,” he said. 

“At a time when the fields of machine learning and artificial intelligence are thriving, we know the U.K. market would benefit from Microsoft’s bench strength in both domains, as well as our ability to put those technologies to use immediately,” Kotick added. “By contrast, if the CMA’s decision holds, it would stifle investment, competition, and job creation throughout the UK gaming industry.” 

‘UK is clearly closed for business’

An Activision Blizzard spokesperson said the CMA’s decision represented “a disservice to UK citizens, who face increasingly dire economic prospects.”

“We will reassess our growth plans for the UK. Global innovators large and small will take note that – despite all its rhetoric — the UK is clearly closed for business,” the spokesperson said.

Microsoft announced its intention to acquire Activision Blizzard in January 2022 for $69 billion, in one of the biggest deals the video game industry has seen to date.

Executives at the Redmond, Washington-based technology giant believe the acquisition will boost its efforts in gaming by adding lucrative franchises like Call of Duty and Candy Crush Saga to its content offerings.

However, some of Microsoft’s competitors contested the deal, concerned it may give Microsoft a tight grip on the $200 billion games market. Of particular concern was the prospect that Microsoft may shut off distribution access to Activision’s popular Call of Duty franchise for certain platforms.

Sony, in particular, has voiced concern with Microsoft’s Activision purchase. The Japanese gaming giant fears that Microsoft could make Call of Duty exclusive to its Xbox consoles in the long run.

Microsoft President Brad Smith says it's a 'good day for gamers' after Nintendo, Nvidia deals

Microsoft sought to allay those concerns by offering Sony, Nintendo, Nvidia and other firms 10-year agreements to continue bringing Call of Duty to their respective gaming platforms.

Microsoft contends it wouldn’t be financially beneficial to withhold Call of Duty from PlayStation, Nintendo and other rivals given the licensing income it generates from keeping the game available on their platforms.

Microsoft’s Smith told CNBC last month that the company is offering Sony the same agreement as it did Nintendo — to make Call of Duty available on PlayStation at the same time as on Xbox, with the same features. Sony still opposes the deal.

The CMA had raised concerns with the potential for Microsoft to hinder competition in the nascent cloud gaming market via its Xbox Game Pass subscription service, which offers cloud gaming among its perks. Microsoft has committed to bring new Call of Duty titles to Xbox Game Pass on day one of its release.

Cloud gaming, or the ability to access games via PC or mobile devices over the internet, is still in its infancy and requires a strong broadband connection to work well. Cloud gaming made up only a fraction of global internet traffic in 2022.

Microsoft still needs to convince other regulators not to block the deal. The EU continues to probe the merger to assess whether it hurts competition, while the U.S. Federal Trade Commission has sued to block the deal on antitrust grounds.

Source link

#Britain #blocks #Microsofts #billion #acquisition #Activision #Blizzard

Jim Cramer’s top 10 things to watch in the stock market Tuesday

Post By Oil and Gas , , , , , , , , , , , , , , , , , , , , ,

My top 10 things to watch Tuesday, April 11

1. Truist Bank downgraded natural gas producer EQT Corporation (EQT) to hold from buy, while lowering its price target to $28 per share, from $41, on “potentially lower volumes.” Meanwhile, the bank raised its price target on Club holding Coterra Energy (CTRA) to $29 per share, from $26, on the expectation the oil-and-gas producer will “significantly outperform” the broader market in the second half of the year and in 2024. Truist maintained a hold rating on Coterra.

2. Barclays cut its price target on Club holding Constellation Brands (STZ) to $277 per share, from $279, while maintaining an overweight rating. The move is somewhat meaningless given how far the target is from where the stock is, with shares of STZ closing at $224.60 apiece on Monday. The bank also lowered its price target on Lincoln National (LNC) to $20 per-share, from $29, while maintaining an equal weight rating.

3. JPMorgan is positive on Netflix (NFLX) going into its first-quarter earnings, but sees a risk to the second quarter due to its new paid-sharing policy. The bank maintained a price target of $390 per share, along with an overweight rating.

4. Wells Fargo upgraded natural gas exploration-and-production group Range Resources (RRC) to overweight from equal weight, while raising its price target to $31 per share, from $30. The bank expects RRC to “relatively outperform” other gas players in a weak gas price environment. Meanwhile, the bank downgraded Southwestern Energy (SWN) to underweight, or sell, from equal weight, while lowering its price target to $5 per share, from $6 — largely a result of limited capital returns and weak cash flow generation.

5. Guggenheim lowered its price target on Club holding Walt Disney (DIS) to $130 a share, from $140, on the back of moderating growth at its parks and resorts — a target that is very far off. Shares of Disney closed at $100.81 apiece on Monday.

6. Citi reiterated neutral ratings on chipmakers Intel (INTC) and Club holding Advanced Micro Devices (AMD), a result of ongoing weak cloud demand. Still, computer notebook shipments were up 41% in March, month-over-month, 18% above Citi’s estimate.

7. KeyBanc raised its price target on Club holding Nvidia (NVDA) to $320 per share, from $280, citing strengthening demand for artificial intelligence (AI).The semiconductor firm’s graphics processing units (GPUs) have proven central to the proliferation of AI, which reached a tipping point late last year with the launch of OpenAI’s viral chatbot, ChatGPT.

8. Morgan Stanley raised its price target on Club holding Humana (HUM) to $637 per share, from $620, saying the health insurer has “the strongest earnings growth story in managed care through 2025.” The bank maintained an overweight, or buy, rating on the stock. But Morgan Stanley chose UnitedHealth (UNH) as its top pick in the sector, replacing Cigna (CI).

9. UBS lowered its growth estimates on Club holding Microsoft‘s (MSFT) Azure cloud business, suggesting customers will continue to cut back on cloud spending amid slower economic growth. The bank maintained a neutral rating and price target of $275 per share.

10. Despite recent price cuts, electric vehicle maker Tesla (TSLA) should be able to maintain “industry leading” operating margins and is better positioned than competitors to navigate economic headwinds, Baird argued. The firm maintained an outperform, or buy, rating and price target of $252 per share.

(See here for a full list of the stocks in Jim Cramer’s Charitable Trust.)

As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade.

THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, TOGETHER WITH OUR DISCLAIMER.  NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB.  NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.

Source link

#Jim #Cramers #top #watch #stock #market #Tuesday

Starbucks workers contend company is busting unions. ‘This will be a priority for me,’ congressman says.

Post By Stock , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,

SANTA CLARA, CALIF. — Starbucks Corp. employees met with U.S. Rep. Ro Khanna at his California office on Friday and contended the company is retaliating against employees who unionize or are trying to organize, and is not bargaining in good faith.

The giant coffee chain denies those allegations. But what the Democratic congressman from Silicon Valley heard Friday from Starbucks
SBUX,
-0.41%
employees and union representatives in a meeting attended by MarketWatch echoes other complaints from around the nation that the company is engaging in union-busting — and he vowed to continue to try to help make sure the employees are treated fairly.

Edith Saldano, who works at a location in Santa Cruz County, sat next to the congressman and told him that the company “has embarrassed us over and over again and has not respected us.” Saldano said that during her store’s first bargaining session in November, Starbucks’ lawyers walked out after three minutes.

Saldano fought back tears as she recounted that she had “waited all day” and lost out on a day’s worth of work, which she really needed because she was “houseless” at the time in an area known for its high cost of living. She handed Khanna the employees’ contract proposal.

“We’re asking that you read it over and that you talk to them,” said Saldano, who added that she also sits on the national bargaining committee.

Khanna agreed to take a look and told Saldano: “I appreciate you for fighting not just for yourself but for everyone.”

The congressman has prided himself on being pro-labor and standing with low-wage workers, including Silicon Valley janitors and California’s fast-food workers, through the years. Khanna told the Starbucks employees Friday he has also met with the company’s unionized workers in Los Angeles, and that he hopes to help persuade the company — which is in transition and is set to have its new chief executive officially take over in a couple of months — change its approach to the growing movement to unionize at hundreds of its stores.

The National Labor Relations Board has accused Starbucks of illegally firing workers who have unionized, and the company is facing hundreds of charges of violating labor laws. Judges have ruled against the company in some of those cases. Starbucks in turn has filed complaints with the NLRB, accusing the union of not bargaining in good faith.

In-depth: Unions’ push at Amazon, Apple and Starbucks could be ‘most significant moment in the American labor movement’ in decades

A couple of other Starbucks employees who asked to remain anonymous for fear of reprisal at a Bay Area store where they’re seeking to unionize also gave emotional testimonies at Khanna’s office on Friday. They spoke of having their hours reduced to the point where they don’t qualify for benefits, and being understaffed and overworked in physically demanding jobs.

“They run us into the ground until we’re too fatigued, and we’re replaced with cheaper baristas,” one of the employees said. “We’re organizing because we’re powerless as individuals.”

The other said Starbucks “is dominating the market by any means necessary,” and that employees “need the support of congressmen” and other leaders.

Brandon Dawkins, vice president of organizing for SEIU Local 1021, said possible retaliation by the company is also “putting fear into stores that want to unionize… they see what the unionized workers are going through.”

Khanna thanked the employees for their “courage,” and said “this will be a priority for me just like last Congress,” and outlined how he plans to continue to try to help.

Starbucks spokesman Andrew Trull said Friday that allegations that the company has not bargained in good faith are “simply false.” Trull said Starbucks has “come to the table” for more than 85 bargaining sessions at different stores since October.

“At each of these sessions with Workers United, Starbucks has been met by union representatives who insist on broadcasting in-person sessions to unknown individuals not in the room and, in some instances, have posted excerpts of the sessions online,” Trull said.

As for the allegations that Starbucks is reducing the number of hours available for employees who unionize, Trull said “Starbucks has a longstanding practice of adjusting store hours to reflect seasonal changes in customer demand.”

A spokesperson for Starbucks Workers United said longtime Starbucks employees say “the current pattern of reducing hours does not fit the history in the company.” In addition, the union spokesperson said the company is complicating scheduling of meetings by not allowing bargaining committee members unpaid time off; that the union and the company have agreed to virtual bargaining sessions; and that the union introduces participants for every meeting.

Outgoing Starbucks Chief Executive Howard Schultz refused to appear before a Senate committee last week that wanted to ask him about the accusations of labor-law violations by the company.

The company’s letter to Sanders said that since Schultz is on his way out as CEO, the company was offering its chief public affairs officer, Al Jones, to appear before the committee instead.

The chair of the Senate Health, Education, Labor and Pensions Committee, Democratic Sen. Bernie Sanders, said in a statement lasst week that he intends “to hold Mr. Schultz and Starbucks accountable for their unacceptable behavior.”

In October, Khanna and 30 other lawmakers sent a letter to Schultz, urging him and the company to work with the unions that have formed at hundreds of Starbucks stores around the nation.

For more: Starbucks urged to work with unions in letter from members of Congress

Since then, the congressman’s staff has been in touch with the company, whose representatives have told them that Starbucks is allowing workers to exercise their rights under the National Labor Relations Act.

Khanna told the employees on Friday that he has corresponded with new Starbucks CEO Laxman Narasimhan and expects to meet with him after he takes over April 1.

“I’m hopeful that between the approach to him and the approach to some of the board members, who I know, that they may see the light — allowing for reasonable unionization and reasonable terms,” Khanna said. He mentioned that Microsoft Corp.
MSFT,
-1.56%
last year came to a neutrality agreement with the Communications Workers of America; Microsoft CEO Satya Nadella is a Starbucks board member.

Source link

#Starbucks #workers #contend #company #busting #unions #priority #congressman

Top Wall Street analysts like these stocks for the long haul

Post By Business , , , , , , , , , ,

A Peloton exercise bike is seen after the ringing of the opening bell for the company’s IPO at the Nasdaq Market site in New York City, New York, U.S., September 26, 2019.

Shannon Stapleton | Reuters

Investors are trying to make sense of big corporate earnings, seeking clues about what lies ahead as macro headwinds persist. It’s prudent for investors to choose stocks with an optimistic longer-term view in these uncertain times.

Here are five stocks picked by Wall Street’s top analysts, according to TipRanks, a service that ranks analysts based on their past performance.

Costco

Wholesaler Costco (COST) is known for its resilient business model that has helped it navigate several economic downturns. Moreover, the membership-only warehouse club has a loyal customer base and generally enjoys renewal rates that are at or above 90%.

Costco recently reported better-than-anticipated net sales growth of 6.9% and comparable sales growth of 5.6% for the four weeks ended Jan. 29. The company delivered upbeat numbers despite continued weakness in its e-commerce sales and the shift in the timing of the Chinese New Year to earlier in the year.

Following the sales report, Baird analyst Peter Benedict reaffirmed a buy rating on Costco and a $575 price target. Benedict stated, “With a defensive/staples-heavy sales mix and loyal member base, we believe shares continue to hold fundamental appeal as a rare megacap “growth staple” – particularly in the face of a difficult consumer spending backdrop.”

Benedict’s convictions can be trusted, given his 55th position out of more than 8,300 analysts in the TipRanks database. Apart from that, he has a solid track of 71% profitable ratings, with each rating delivering 16.3% average return. (See Costco Hedge Fund Trading Activity on TipRanks)​

Amazon

2022 was a challenging year for e-commerce giant Amazon (AMZN) as macro pressures hurt its retail business and the cloud computing Amazon Web Services division.

Amazon’s first-quarter sales growth outlook of 4% to 8% reflects further deceleration compared with the 9% growth in the fourth quarter. Amazon is streamlining costs as it faces slowing top-line growth, higher expenses and continued economic turmoil.

Nonetheless, several Amazon bulls, including Mizuho Securities’ Vijay Rakesh, continue to believe in the company’s long-term prospects. Rakesh sees a “modest downside” to Wall Street’s consensus expectation for the 2023 revenue growth for Amazon’s retail business. (See Amazon Website Traffic on TipRanks)

However, he sees more downside risks to the Street’s consensus estimate of a 20% cloud revenue growth in 2023 compared to his revised estimate of 16%. Rakesh noted that Amazon’s cloud business was hit by lower demand from verticals like mortgage, advertising and crypto in the fourth quarter and that revenue growth has slowed down to the mid-teens so far in the first quarter.

Consequently, Rakesh said that AMZN stock could be “volatile near-term given potential downside revision risks.” Nonetheless, he reiterated a buy rating on AMZN with a price target of $135 due to “positive long-term fundamentals.”

Rakesh stands at #84 among more than 8,300 analysts tracked by TipRanks. Moreover, 61% of his ratings have been profitable, with each generating a 19.3% average return.

Peloton 

Fitness equipment maker Peloton (PTON), once a pandemic darling, fell out of favor following the reopening of the economy as people returned to gyms and competition increased. Peloton shares crashed last year due to its deteriorating sales and mounting losses.

Nevertheless, investor sentiment has improved for PTON stock, thanks to the company’s turnaround efforts under CEO Barry McCarthy. Investors cheered the company’s fiscal second-quarter results due to higher subscription revenue even as the overall sales dropped 30% year-over-year. While its loss per share narrowed from the prior-year quarter, it was worse than what Wall Street projected. 

Like investors, JPMorgan analyst Doug Anmuth was also “incrementally positive” on Peloton following the latest results, citing its cost control measures, improving free cash flow loss and better-than-anticipated connected fitness subscriptions. Anmuth highlighted that the company’s restructuring to a more variable cost structure is essentially complete and it seems focused on achieving its goal of breakeven free cash flow by the end of fiscal 2023.

Anmuth reiterated a buy rating and raised the price target to $19 from $13, given the company’s focus on restoring its revenue growth. (See PTON Stock Chart on TipRanks) 

Anmuth ranks 192 out of more than 8,300 analysts on TipRanks, with a success rate of 58%. Each of his ratings has delivered a 15.1% return on average.

Microsoft

Microsoft’s (MSFT) artificial intelligence-driven growth plans have triggered positive sentiment about the tech behemoth recently. The company plans to power its search engine Bing and internet browser Edge with ChatGPT-like technology.

On the downside, the company’s December quarter revenue growth and subdued guidance reflected near-term headwinds, due to continued weakness in the PC market and a slowdown in its Azure cloud business as enterprises are tightening their spending. That said, Azure’s long-term growth potential seems attractive. 

Tigress Financial analyst Ivan Feinseth, who ranks 137 out of 8,328 analysts tracked by TipRanks, opines that while near-term headwinds could slow cloud growth and the “more personal computing” segment, Microsoft’s investments in AI will drive its future.

Feinseth reiterated a buy rating on Microsoft and maintained a price target of $411, saying, “Strength in its Azure Cloud platform combined with increasing AI integration across its product lines continues to drive the global digital transformation and highlights its long-term investment opportunity.”

Remarkably, 64% of Feinseth’s ratings have generated profits, with each rating bringing in a 13.4% average return. (See MSFT Insider Trading Activity on TipRanks)

Mobileye Global 

Ivan Feinseth is also optimistic about Mobileye (MBLY), a rapidly growing provider of technology that powers advanced driver-assistance systems (ADAS) and self-driving systems. Chip giant Intel still owns a majority of Mobileye shares.

Feinseth noted that Mobileye continues to see solid demand for its industry-leading technology. He expects the company to “increasingly benefit” from the growing adoption of ADAS technology by original equipment manufacturers.  

The company is also at an advantage due to the rising demand in the auto industry for sophisticated camera systems and sensors used in ADAS and safe-driving systems. Furthermore, Feinseth sees opportunities for the company in the autonomous mobility as a service, or AMaaS, space.

Feinseth said there is potential for Mobileye’s revenue to grow to over $17 billion by 2030, backed by the company’s “significant R&D investments, first-mover advantage, and industry-leading product portfolio, combined with significant OEM relationships.” He projects a potential total addressable market of nearly $500 billion by the end of the decade.

Given Mobileye’s numerous strengths, Feinseth raised his price target to $52 from $44 and reiterated a buy rating. (See Mobileye Blogger Opinions & Sentiment on TipRanks)

Source link

#Top #Wall #Street #analysts #stocks #long #haul

Top Wall Street analysts pick these stocks to celebrate the new year

Post By Business , , , , , , , , , , , ,

Apple CEO Tim Cook poses in front of a new MacBook Airs running M2 chips display during Apple’s annual Worldwide Developers Conference in San Jose, California, June 6, 2022.

Peter Dasilva | Reuters

With the brutal 2022 behind us, we look ahead to a year of relatively predictable challenges. This calls for careful investing with a longer-term view. To help the process, here are five stocks chosen by Wall Street’s top analysts, according to TipRanks, a platform that ranks analysts based on their track record.

DoubleVerify Holdings

As its name suggests, DoubleVerify (DV) helps to improve the safety and security of online advertising. A pioneer in this area, the company’s services are employed by customers in the financial services, retail, automotive, travel, telecom, and pharmaceutical sectors. (See DoubleVerify Holdings Stock Chart on TipRanks)

Truist analyst Youssef Squali sees multiple growth opportunities, especially in the social media field. Interestingly, DoubleVerify’s social media client roster includes names such as TikTok, Microsoft (MSFT)-owned LinkedIn, Reddit, Amazon’s (AMZN) Twitch, Meta’s (META) Facebook and Instagram, and YouTube. Looking at this, Squali expects “social media as a channel has unlocked incremental spend for DV to attack within walled gardens, which advertisers value vs. letting these platforms ‘grade their own homework.'”

Moreover, the analyst pointed out that DoubleVerify’s sophisticated software solutions help client companies safeguard their brand reputation while maximizing their return on ad spend. This is particularly important as the digital advertising ecosystem is growing and so is competition. A safe, fraud-free, and appropriately targeted ad environment also helps companies draw traffic.

Squali is “incrementally bullish” on DoubleVerify, with a Buy rating and $36 price target. The analyst stands 92nd among more than 8,000 analysts tracked on TipRanks. Moreover, 57% of his ratings have been profitable, bringing 17.6% returns per rating on average.

Apple

Investors may be spooked by Apple’s (AAPL) weakening demand and production issues right now (as evident from the sharp decline in stock value). However, taking into account the value that the company has returned to shareholders in the past years, even through market downcycles, these headwinds seem to be mere hiccups in the company’s long-term journey.

Tigress Financial Partners analyst Ivan Feinseth agreed, adding that the “near-term production headwinds create a long-term buying opportunity, and its massive installed user base, increasing ecosystem, and growing Services revenue will continue to drive accelerating Business Performance trends, and greater shareholder value creation.”

Feinseth is particularly upbeat about the company’s foray into the metaverse with the launch of its mixed-reality headset this year.

Moreover, strong balance sheet and cash flow generating capabilities should enable Apple to continue to invest in growth-driving initiatives and enhance shareholder returns through share repurchases and dividend hikes. (See Apple Dividend Date & History on TipRanks)

The analyst reiterated a Buy rating on AAPL stock with a price target of $210. “AAPL is on our Research Focus List and in our Focus Opportunity Portfolio,” emphasized Feinseth, who holds the #269 position among more than 8,000 analysts on TipRanks.

The analyst’s ratings have been profitable 59% of the time and each rating has generated average returns of 10.5%.

Booking Holdings

Booking Holdings (BKNG) is an online platform for making travel and restaurant reservations, which, needless to say, has been benefiting lately from the easing of Covid-related travel restrictions. The stock joins Apple in Ivan Feinseth’s “Research Focus List” and “Focus Opportunity Portfolio.”

Continued travel demand has been transcending the current macroeconomic uncertainties, and that is a boon for Booking. Feinseth also points out that the reopening of China after a prolonged period of strict zero-Covid policy “creates a massive upside catalyst.” (See Booking Holdings Hedge Fund Trading Activity on TipRanks)

The company is also gaining increased penetration in the direct travel booking market thanks to its Genius loyalty program and its concept of travel integration. “BKNG’s ability to optimize its market reach and profitability through new technology, including machine learning and other forms of AI (Artificial Intelligence), enables it to expand its global reach, drive more competitive pricing, and increase profitability,” said the analyst.

Feinseth reiterated a Buy rating on Booking, with a price target of $3,210.

Bumble

The challenging economic environment has led to too many problems for the public to be thinking about love. This has left investors swiping left on online dating service provider Bumble (BMBL), leading to a sharp drop in share prices.

Nonetheless, Stifel Nicolaus analyst Mark Kelley maintains a solid relationship with Bumble. “We view Bumble as one of the most innovative companies in the global online dating space offering a compelling and differentiated value proposition for consumers, which we believe will lead to a long runway of paying user/ARPPU growth, and a multi-year operating leverage story,” noted Kelley.

In the last quarter, Bumble launched its message-before-match feature, “Compliments,” which is expected to boost user engagement and thus, support monetization efforts. (See Bumble Blogger Opinions & Sentiment on TipRanks)

Additionally, the analyst believes that Bumble’s mission to prioritize user safety, accountability, and control helps the company stand out in the crowd of competing platforms. Importantly, Kelley also believes that Bumble may be heading into its best days as users increasingly open up to real-life dating after the COVID-19 pandemic disrupted the dating ecosystem since 2020.

Despite reducing the near-term price target to $27 from $30, Kelley maintains a Buy rating on Bumble.

The analyst’s track record shows that his conviction is worthy of consideration. Kelley has a 103rd ranking among more than 8,000 analysts. Moreover, 70% of his ratings have been successful, generating 31.5% average returns per rating.

Perion Network

Global technology player Perion Network (PERI) is another stock that Mark Kelley has vouched for recently. The analyst’s optimism was reflected in the reiteration of his buy rating and higher price target ($34 from $29). Its recent quarterly results showed positive trends, which led to the renewed conviction.

The analyst views Perion as a “unique ad tech offering,” boasting a portfolio of technology for helping advertisers and publishers scale their business. Perion’s growth journey has been a combination of organic expansion and expansion through acquisitions. Together, they have built a suite of assets that serve the “three pillars of digital advertising” — search, social media, and display/CTV. (See Perion Network Financial Statements on TipRanks)

Kelley expects the global digital advertising market to reach $650 billion by the end of this year. Within that, the analyst estimates the exact opportunity of Perion in terms of TAM (total addressable market) to be around $190 billion, keeping aside the $460 billion TAM estimate for Google search.

Source link

#Top #Wall #Street #analysts #pick #stocks #celebrate #year