TheChek News Flow

>>> US Gapping up

Gapping up
In reaction to earnings/guidance:

LRN +25.8%, TMHC +5.9%, ENVA +5.5%, JBT +5%, NTRS +4.5%, WPP +4.4%, VBTX +4.2%, EVR +3.8%, VICR +3.6%, TXN +3.5%, WFRD +3.4%, T +3%, PKG +2.9%, LII +2.9%, BPOP +2.1%, PB +2%, VLRS +1.7%, RRC +1.2%, TRU +1.2%, BSX +1.1%, TNL +1%

Other news:

SEIC +5% (increases buyback authorization by $400 mln)
ORIC +4.9% (presents data further supporting potential best-in-class profile of ORIC-114 to treat EGFR Exon 20 insertions and other atypical mutations at the EORTC-NCI-AACR Symposium on Molecular Targets and Cancer Therapeutics)
RPTX +3.7% (presents updated data highlighting the benefits of its individualized schedule for the management of anemia in the Phase 1 MYTHIC clinical trial treating patients with the combination of lunresertib and camonsertib)
WEN +3.6% (in sympathy with E. coli outbreak at MCD)
DOUG +3.5% (CEO to retire, names new CEO)
LNZA +3.5% (determined to settle the forward purchase agreement in cash and paid to ACM $7,500,000 in maturity consideration and $2,539,350 in share consideration)
COGT +2.9% (announces the addition of a potent and selective KRAS inhibitor to its pipeline)
JANX +2.7% (RA Capital disclosed the purchase of 1,200,000 shares in a private transaction)
QSR +2.6% (in sympathy with E. coli outbreak at MCD)
CDNA +1.9% (CareDx and Dovetail Genomics announce a strategic partnership to drive the next wave of innovation in HLA genotyping for organ and stem cell transplant matching)
RVMD +1.8% (presents updated data from RMC-6236 monotherapy study in patients with advanced pancreatic ductal adenocarcinoma)
GLUE +1.7% (announces the company will present preclinical data at the 36th EORTC-NCI-AACR Symposium, on the potential of its cyclin E1-directed molecular glue degraders for the treatment of CCNE1-amplified solid tumors)
REFI +1.5% (closes on $50 million unsecured term loan to fund deployment of new investments)
MTX +1.3% (expands partnership with AIM Intelligent Machines)
SDGR +1.3% (presents SGR-3515 preclinical data at 2024 EORTC-NCI-AACR Symposium)
BYON +1% (to reduce workforce by 20%)

Analyst comments:

AMLX +8.2% (upgraded to Buy from Neutral at BofA Securities)
SNAP +2.4% (upgraded to Mkt Outperform from Mkt Perform at JMP Securities)

>>> Europe : Brokers Upgrades & Downgrades - 23rd of October 2024 V3(++)

>>> Up

* Adecco Raised to Buy at Deutsche Bank (+)

* Banca Mediolanum PT Raised to 13.10 euros at Banca Akros (+)

* BioMerieux Raised to Buy at TP ICAP Midcap; PT 117 euros (++)

* Fabege Raised to Buy at Kepler Cheuvreux; PT 97 kronor (++)
* Forterra Raised to Buy at Jefferies; PT 235 pence

* Freelance.com Raised to Buy at Stifel; PT 3.80 euros

* Lloyds PT Raised to 83 pence from 64 pence at Deutsche Bank (+)

* Munters Raised to Buy at Nordea

* Munters Raised to Buy at Kepler Cheuvreux; PT 210 kronor (++)

* Porsche Raised to Buy at Citi; PT 85 euros

* Scatec Raised to Hold at DNB Markets; PT 80 kroner (+)

* Tele2 Raised to Buy at DNB Markets; PT 120 kronor (+)

* Texas Instruments Raised to Buy at Summit Insights

* Tomra Raised to Buy at Danske Bank Markets; PT 165 kroner (+)

>>> Down

* Adidas Cut to Hold at HSBC; PT 260 euros

* Boliden Cut to Sell at UBS; PT 300 kronor (++)

* Corticeira Amorim Cut to Neutral at Grupo Santander

* DNB Bank Cut to Hold at Arctic Securities; PT 250 kroner

* Gjensidige Cut to Hold at DNB Markets; PT 206 kroner (+)

* Haulotte Cut to Reduce at Gilbert Dupont; PT 2.60 euros (++)

* Italgas Cut to Hold at Kepler Cheuvreux; PT 6 euros (++)
* JM Cut to Sell at SEB Equities; PT 167 kronor

* Kempower Cut to Sell at SEB Equities; PT 9.50 euros

* KGHM Cut to Sell at Erste Group; PT 122.40 zloty

* Klepierre Cut to Reduce at Bank Degroof Petercam; PT 28 euros (+)

* McDonald's Cut to Neutral at Baird; PT $290

* Munters PT Cut to 160 kronor from 200 kronor at Carnegie (+)

* Pierer Mobility Cut to Sell at Stifel; PT 12.81 euros

* Sandvik Cut to Sell at UBS; PT 200 kronor (++)

* Starbucks Cut to Hold at Punto Casa de Bolsa; PT $98

* Torm Cut to Hold at Pareto Securities; PT 220.52 kroner (++)

* Volution Cut to Neutral at Davy (+)

>>> Initiation
* Comet Rated New Buy at Berenberg; PT 400 Swiss francs

* LISI Rated New Hold at TP ICAP Midcap; PT 25 euros (+)

* Meta Platforms Rated New Buy at Founder Securities; PT $640

* Oracle Rated New Sector Perform at RBC; PT $165

* SAP Rated New Outperform at CICC; PT 230 euros

>>> Call

* Adidas Falls as HSBC Cuts to Hold on Lack of Near-Term Catalysts (++)

* Akzo Nobel’s 3Q Miss Disappointing, Morgan Stanley Says (+)

* Trump Tariff Risk Priced Into European Equities: Barclays’ Cau (+)
* Comet Set for Strong Margin Expansion, New Buy at Berenberg

* Porsche Offers Positive Earnings Story, Raised to Buy at Citi

FT : Russian oligarch still owned Italian resort months after sanctions, filing

Russian oligarch still owned Italian resort months after sanctions, filing shows

Disclosure raises questions over why Rome did not move to freeze the asset

Russian oligarch Musa Bazhaev still owned a Sardinian luxury resort more than two months after the EU imposed sanctions on him following Russia’s full scale invasion of Ukraine, a corporate filing shows.

The disclosure was made in an annual statutory document filed in Cyprus on June 26 2022 by Retivia Investments, a Cyprus-based entity that owns the famed Forte Village hotel as well as other assets in Sardinia worth more than €700mn.

The filing raises questions over why Italian authorities did not move to freeze the assets in the weeks following April 8 2022, when Bazhaev was put on the EU sanctions list. French authorities seized the oligarch’s villa in Saint-Jean-Cap-Ferrat at the end of April.

Bazhaev’s ownership of the Forte Village was public knowledge since at least 2014 and the Russian donated €500,000 to the Sardinian civil protection agency during the Covid-19 pandemic.

The Italian financial police, the Guardia di Finanza, declined to comment, citing “lack of authorisation to discuss the matter”.

The June filing also contradicts another publicly available document filed to the Cypriot company registry a month later, on July 26 2022, stating Retivia Investments had been sold to a relative of Bazhaev on February 25 2022, a day after the invasion.

The discrepancy over the assets’ ownership in the June and July filings raises questions about the timing or reality of the transfer of these assets.

A spokesperson for Bazhaev did not respond to requests for comment.

A spokesperson for the Cyprus company registry said the ownership changes submitted in July were examined and processed according to the law and with the permission national sanctions authorities in Cyprus.

The EU has struggled to close loopholes in its sanctions regime against Russia to limit its funding for the war in Ukraine.

In early 2023 Retivia Investments and its assets, including Forte Village, was transferred to Kazakh businessman Shukhrat Ibragimov, according to company records. He is the chief executive of Luxembourg-based Eurasian Resources Group, one of the world’s largest producers of cobalt and copper.

A spokesperson for Ibragimov declined to comment.

Built in the 1970s and named after hotelier Sir Charles Forte, the Forte Village is located in Pula on the southern coast of Sardinia. It is a favourite among celebrities and jet-setters willing to pay more than €10,000 a person for a week’s stay during the high season.

Bazhaev, who was born in Chechnya, is one of Russia’s richest men with interests spanning the oil, metals and commodities sectors. The 58-year-old is president of the JSC Alliance Group, which according to the EU “supports a number of significant companies in the Russian gas, oil, and telecommunications sectors”.

He is also chair of Russian Platinum which Brussels said provides a “substantial source of revenue to the Government of the Russian Federation”. Bazhaev has remained on the EU and UK sanctions lists.

Retivia’s current owner Ibragimov was Bazhaev’s co-investor in Jeruy, Kyrgyzstan’s second-largest gold mine. The mine was inaugurated in 2021 by the country’s president Sadyr Japarov and Russia’s leader Vladimir Putin.

In late 2022, Ibragimov’s 40 per cent stake in the gold mine was transferred to a Russian company owned by the Bazhaevs, which became its sole shareholder, Cypriot company records show.

>>> US Research Calls I

Research Calls I

Upgrades:
- Amylyx Pharmaceuticals (AMLX) upgraded to Buy from Neutral at BofA Securities; tgt raised to $10
- A.O. Smith (AOS) upgraded to Neutral from Sell at UBS; tgt raised to $80
- BXP, Inc. (BXP) upgraded to Overweight from Neutral at Piper Sandler; tgt raised to $105
- Canadian Nat'l Rail (CNI) upgraded to Buy from Reduce at Veritas
- Quest Diagnostics (DGX) upgraded to Outperform from Neutral at Robert W. Baird; tgt raised to $182
- Snap (SNAP) upgraded to Mkt Outperform from Mkt Perform at JMP Securities; tgt $17
- Texas Instruments (TXN) upgraded to Buy from Hold at Summit Insights
- TFI International (TFII) upgraded to Buy from Reduce at Veritas
Downgrades:
- Alto Neuroscience (ANRO) downgraded to Neutral from Buy at Rodman & Renshaw
- A.O. Smith (AOS) downgraded to Neutral from Buy at DA Davidson; tgt $80
- Ardmore Shipping (ASC) downgraded to Hold from Buy at Stifel; tgt lowered to $17
- CoStar Group (CSGP) downgraded to Sector Perform from Outperform at RBC Capital Mkts; tgt lowered to $83
- Enphase Energy (ENPH) downgraded to Sell from Neutral at Guggenheim; tgt $73
- Genco Shipping & Trading (GNK) downgraded to Hold from Buy at Stifel; tgt lowered to $17
- International Seaways (INSW) downgraded to Hold from Buy at Stifel; tgt lowered to $56
- Interpublic (IPG) downgraded to Underweight from Equal Weight at Wells Fargo; tgt lowered to $26
- McDonald's (MCD) downgraded to Neutral from Outperform at Robert W. Baird; tgt lowered to $290
- McDonald's (MCD) downgraded to Neutral from Buy at Guggenheim; tgt lowered to $285
- Medpace (MEDP) downgraded to Neutral from Outperform at Robert W. Baird; tgt lowered to $349
- Parsons (PSN) downgraded to Outperform from Strong Buy at Raymond James; tgt $115
- Scorpio Tankers (STNG) downgraded to Hold from Buy at Stifel; tgt lowered to $65
- Star Bulk Carriers (SBLK) downgraded to Hold from Buy at Stifel; tgt lowered to $21
- TFI International (TFII) downgraded to Hold from Buy at Stifel; tgt lowered to $142
- UP Fintech (TIGR) downgraded to Sell from Buy at Citigroup; tgt raised to $5.50
Others:
- Artivion (AORT) initiated with a Mkt Outperform at JMP Securities; tgt $33
- Beyond, Inc. (BYON) resumed with a Buy at Needham; tgt $13
- Charles River (CRL) initiated with an Underperform at CLSA; tgt $167
- Coinbase Global (COIN) initiated with a Neutral at B. Riley Securities; tgt $185
- Corteva (CTVA) initiated with a Buy at Citigroup; tgt $68 and opens 30-day positive catalyst watch
- Disc Medicine (IRON) initiated with a Buy at Jefferies; tgt $89
- eBay (EBAY) resumed with a Buy at Needham; tgt $72
- FMC Corp (FMC) initiated with a Neutral at Citigroup; tgt $67
- Gladstone (GLAD) initiated with a Neutral at B. Riley Securities; tgt $23
- Grab (GRAB) initiated with an Outperform at Daiwa Securities; tgt $4.60
- Oracle (ORCL) initiated with a Sector Perform at RBC Capital Mkts; tgt $165
- Smurfit Westrock plc (SW) initiated with a Buy at Citigroup; tgt $57
- Telecom Argentina (TEO) resumed with a Sell at Goldman
- thredUP (TDUP) resumed with a Hold at Needham
- Wayfair (W) resumed with a Buy at Needham; tgt $60
- Xos (XOS) initiated with a Buy at ROTH MKM; tgt $15

>>> AT&T beats by $0.03, reports revs in-line; guides FY24 EPS in-line

AT&T beats by $0.03, reports revs in-line; guides FY24 EPS in-line

Reports Q3 (Sep) earnings of $0.60 per share, excluding non-recurring items, $0.03 better than the FactSet Consensus of $0.57; revenues fell 0.5% year/year to $30.2 bln vs the $30.5 bln FactSet Consensus.
- 403,000 postpaid phone net adds with an expected industry-leading postpaid phone churn of 0.78%.
- 226,000 AT&T Fiber net adds; 200,000+ net adds for 19 consecutive quarters.
Co issues in-line guidance for FY24, sees EPS of $2.15-2.25, excluding non-recurring items, vs. $2.20 FactSet Consensus.
- Wireless service revenue growth in the 3% range.
- Broadband revenue growth of 7%+.
- Adjusted EBITDA growth in the 3% range.
- Free cash flow in the $17-$18 billion range.
The Company continues to expect to achieve net debt-to-adjusted EBITDA in the 2.5x range in the first half of 2025.
On track to pass 30 million-plus consumer and business locations with fiber by the end of 2025.

>>> US Early premarket gappers

Early premarket gappers

Gapping up:
- LRN +24.4%, VICR +11.2%, ENVA +5.7%, SEIC +5%, JBT +4.6%, VBTX +4.2%, PKG +3.9%, WPP +3.7%, DOUG +3.5%, TXN +3.4%, WFRD +3.4%, WEN +2.7%, QSR +2.6%, MTX +1.3%, RRC +1.2%, CX +0.9%
Gapping down:
- ANRO -60.8%, ENPH -14.5%, VLRS -12.7%, MCD -7.5%, EDU -6.8%, VRT -6%, SEDG -5.3%, STX -5%, SBUX -4.9%, CSGP -4.6%, MMYT -3.6%, CSTM -3.5%, MANH -3.4%, HLT -3.4%, RHI -3%, EWBC -3%, TMHC -2.8%, LW -2.7%, DB -2.4%, HRTG -2.2%, CAPR -2.1%, RVMD -2.1%, BKR -1.7%, TSN -1.6%, RUN -1.6%, RPTX -1.4%, PRQR -1.1%, CMA -1%, VMI -1%

The Information : OpenAI, in Duel With Anthropic, Doubles Down on AI That Writes

OpenAI, in Duel With Anthropic, Doubles Down on AI That Writes Software

The Takeaway

• Anthropic’s AI recently showed it had an edge in coding over OpenAI’s by some measures

• OpenAI’s coding products could threaten GitHub Copilot, Cursor and other startups

• OpenAI has developed a tool to help its AI researchers, including by generating code

OpenAI’s ChatGPT has become a multibillion-dollar business in large part because programmers use it to write and check their code, fix bugs and translate code into different programming languages.

Now, facing competition from rival artificial intelligence startup Anthropic, OpenAI is putting more effort into improving the tools it offers for software programming. Some products or features under development aim to make it easier to use OpenAI’s AI for coding tasks inside major code-editing programs like Microsoft’s Visual Studio Code, while others aim to take on bigger software development tasks.

For instance, OpenAI has worked on a product to handle software engineering tasks that might take a human hours or days, and to automatically write and execute code for complex applications based on customers’ instructions, said a person who has heard from OpenAI leaders about it.

It isn’t clear when OpenAI would launch such a product.

Coding tasks became an early application of large language models developed by OpenAI, in part because AI-generated code can quickly be tested to see if it works or not. Microsoft’s GitHub unit used OpenAI’s LLMs to power an AI Copilot product, starting in 2021, that gives code suggestions to programmers while they type.

But the launch of ChatGPT in late 2022 provided a more widely accessible and free alternative that quickly gained popularity. OpenAI then convinced millions of programmers to pay for an upgraded version of ChatGPT—and get access to upgraded LLMs before GitHub Copilot did—that could respond to conversational requests for handling such tasks. Those capabilities powered what is now a subscription product on pace to generate about $3 billion annually.

AI firms also believe models that can generate good code also can generate better answers to other types of queries.

Now OpenAI is somewhat on its back foot in AI coding because rival AI startup Anthropic has become a formidable competitor. On Tuesday, Anthropic announced new software that can use computers the way humans do to take actions on behalf of people, such as moving a cursor, clicking buttons and typing text.

The Anthropic software can theoretically help programmers with tasks like building a website and improving the way it looks. OpenAI has been developing a similar product, known as a computer-using agent, for months but hasn’t launched it.

By some metrics OpenAI uses to evaluate models’ coding abilities, Anthropic’s models recently had an edge, according to a person who has talked to senior OpenAI leaders about the issue.

Anthropic co-founder Daniela Amodei recently told The Information that AI coding can’t fully replace engineers yet and needs “some coaching,” but its Claude chatbot has boosted its developers’ productivity to the point where Anthropic might alter its hiring plans. Anthropic has projected that by the end of 2024, it would generate revenue at a pace of $1 billion annually, or $83 million per month. That’s 25% higher than its original projection at the start of the year, though Anthropic shares a bigger portion of its revenue with sales and cloud partners like Amazon Web Services than OpenAI does with its cloud partner Microsoft.

Internal Research Assistant

OpenAI’s internal tools show the broad potential of its AI for coding-related tasks. The company has developed an internal research assistant tool to help AI researchers work faster, including by generating code for their experiments related to AI models, according to an employee. The product is popular internally, this person said, but it’s unclear whether the company would ever release it publicly.

The internal tool appears to be a step toward the development of AI that can conduct AI research on its own—a skill that requires far more than coding, including generating ideas for new experiments, and that OpenAI leaders have publicly said was likely to happen in the coming years.

A spokesperson for OpenAI declined to comment.

OpenAI employees have also considered developing a version of the company’s Canvas product—a new ChatGPT interface making it easier for users to draft documents and code—that can integrate with developers’ code repositories, according to a person who has spoken to OpenAI managers about the idea.

Such a feature would provide the AI with a better understanding of a user’s existing code base and the types of projects they’re working on, but users would likely still need to undergo the arduous task of copying and pasting their code in and out of the chatbot.

Eventually, OpenAI hopes to offer more general-purpose computer-using agents that can control customers’ computers to handle a broader range of tasks beyond writing code, similar to the one Anthropic announced on Tuesday. OpenAI has internally demonstrated a preliminary version of an agent that would use the user’s computer to do tasks like order food for delivery, according to a person who has seen the demonstration. An autonomous agent tasked with a coding or app development assignment might be able to consult web-based sources for help if it runs into issues.

Competing With Customers

The OpenAI products under development could threaten customers of its application programming interface business who sell coding assistants. Among them is Cursor, which uses OpenAI models for its product and has taken venture capital from OpenAI.

OpenAI’s future coding products may overlap with open-source coding assistants such as Continue or SWE-agent, which use LLMs to help users write code and fix bugs.

The new products also could compete with GitHub Copilot. Microsoft’s financial disclosures in July implied that GitHub Copilot was on track to generate $300 million annually from subscriptions. The company has used the tool’s popularity to sell customers on its other AI products, such as its suite of Copilot features for Office 365 apps like Word, Outlook, Excel and PowerPoint. In cases where customers buy multiple products, Microsoft has discounted the price of GitHub Copilot and other products.

Spokespeople for Microsoft and Cursor didn’t immediately respond to a request for comment.

LYST : Q3 2024 : LYST Index

The Lyst Index is a quarterly ranking of fashion’s hottest brands and products compiled by Lyst, the world's biggest and most intelligent fashion shopping platform. With 200m shoppers a year and the biggest data set in fashion, Lyst is a unique source of global fashion intelligence. The formula behind The Lyst Index takes into account Lyst shoppers’ behavior, including searches on and off platform, product views and sales. To track brand and product heat, the formula also incorporates social media mentions, activity and engagement statistics worldwide, over a three month period

FT : WPP returns to sales growth but warns over economic uncertainty

WPP returns to sales growth but warns over economic uncertainty

Advertising agency’s revenues rise in US and Europe but fall more than a fifth in China

WPP returned to net sales growth in the third quarter but the advertising agency warned of continued economic uncertainty and a tougher end to the year.

The London-based marketing group said like-for-like revenue when removing pass-through costs — the fees paid to external suppliers — was up slightly in the third quarter by 0.5 per cent to £2.8bn.

However, WPP said this measure for the full year would be between 1 per cent lower to flat, warning that recent client wins would only start to benefit the company next year. Shares in the group rose almost 4 per cent to 804p, taking its market capitalisation to £8.7bn.

Revenue growth in the US and western Europe was offset by a fall of more than a fifth in China, which WPP blamed on client losses and “persistent macroeconomic pressures impacting both our media and creative businesses”.

UK revenues were flat for the quarter. Mark Read, WPP chief executive, said consumers were being cautious ahead of next week’s UK Budget, which had caused a similar slowdown in marketing activity. He said the long wait for a Budget widely expected to bring tax rises had “not helped”.

“It has been a little bit wait and see,” he said, adding that while “people are expecting tougher times ahead financially”, clarity on the Budget “will make things easier to see”.

Read said US consumers were also feeling pressure, especially in the lower income brackets, but that the country’s economy remained strong ahead of the election next month.

WPP this summer was forced to downgrade its revenue forecasts for the rest of the year, but Read said the “momentum” behind the company was better given recent successes in gaining and retaining clients.

“It’s an important first step to demonstrate the competitiveness of our offer,” he said, pointing to the adoption of AI in its businesses and services offered to clients.

He predicted that using AI tools would make WPP staff “20 per cent more productive”, but said the impact of the technology on job numbers was not clear as he expected that AI would also “make more work”.

“We are encouraged by progress during the quarter, but with recent new business wins primarily impacting 2025 and continuing macroeconomic pressures, our expectations for the full year remain unchanged.”

Analysts at Shore said the company had shown “a positive revenue performance, progress against strategic goals, client wins and retentions and a reiteration of full-year guidance”.

But they added that “WPP’s performance, although improved, remains some way below best in class” rivals such as Publicis.

The planned disposal of a majority stake in corporate public relations firm FSG Global to KKR is on track to close in the fourth quarter, with expected net proceeds of about £604mn

WPP, with its partner Bain Capital, is also looking to sell Kantar Media, a division of the Kantar market research group that runs the UK’s TV audience measurement system. The sale has attracted interest from a number of private equity groups, according to people close to the talks.

>>> Europe : Brokers Upgrades & Downgrades - 23rd of October 2024 V2(+)