Research Calls
- Upgrades:
- Casey's General (CASY) upgraded to Neutral from Underweight at JP Morgan; tgt raised to $211
- Empire State Realty Trust (ESRT) upgraded to Outperform from Market Perform at BMO Capital Markets; tgt $9
- First Solar (FSLR) upgraded to Buy from Neutral at UBS; tgt raised to $250
- Flowers Foods (FLO) upgraded to Hold from Sell at Deutsche Bank; tgt $27
- Kroger (KR) upgraded to Overweight from Neutral at JP Morgan; tgt $54
- Marathon Petroleum (MPC) upgraded to Buy from Hold at Jefferies; tgt raised to $157
- Procter & Gamble (PG) upgraded to Overweight from Neutral at JP Morgan; tgt raised to $155
- RadNet (RDNT) upgraded to Outperform from Mkt Perform at Raymond James; tgt $30
- Stellantis (STLA) upgraded to Outperform from Sector Perform at RBC Capital Mkts
- Downgrades:
- Altra Industrial Motion (AIMC) downgraded to Hold from Buy at Loop Capital; tgt $62
- BRP Group (BRP) downgraded to Mkt Perform from Outperform at William Blair
- CareDx (CDNA) downgraded to Mkt Perform from Strong Buy at Raymond James
- Chesapeake Energy (CHK) downgraded to Equal Weight from Overweight at Wells Fargo; tgt lowered to $87
- dLocal Limited (DLO) downgraded to Sell from Buy at UBS; tgt lowered to $14
- Domino's Pizza (DPZ) downgraded to Hold from Buy at Gordon Haskett; tgt lowered to $315
- Douglas Emmett (DEI) downgraded to Underperform from Market Perform at BMO Capital Markets; tgt lowered to $13
- FEMSA (FMX) downgraded to Equal Weight from Overweight at Barclays; tgt $100
- Hormel Foods (HRL) downgraded to Underweight from Neutral at JP Morgan; tgt lowered to $38
- Itron (ITRI) downgraded to Underweight from Neutral at JP Morgan; tgt lowered to $50
- FEMSA (FMX) downgraded to Equal Weight from Overweight at Barclays; tgt $100
- Tesla (TSLA) downgraded to Neutral from Outperform at KGI Securities; tgt $196
- Vornado Rlty Trust (VNO) downgraded to Underperform from Market Perform at BMO Capital Markets; tgt lowered to $18
- Others:
- Atlantic Union Bankshares (AUB) resumed with an Outperform at Raymond James; tgt $43
- CompoSecure (CMPO) initiated with a Buy at Compass Point; tgt $15
- Nextracker (NXT) initiated with an Overweight at Cantor Fitzgerald; tgt $40
- SmartFinancial (SMBK) resumed with a Mkt Perform at Raymond James
- The Trade Desk (TTD) initiated with a Neutral at BTIG Research
- Towne Bank (TOWN) resumed with an Outperform at Raymond James; tgt $34
Germany asks Switzerland to sell some of its Leopard tanks
Purchase of mothballed vehicles would allow allies to backfill their stocks as they cobble together shipments for Ukraine
Germany has asked Switzerland to sell some of its decommissioned Leopard 2 tanks as it struggles to cobble together two battalions of the fighting vehicles to send to Ukraine.
Berlin has requested that its neighbour sell some of its 96 mothballed Leopard 2 tanks to the German arms producer Rheinmetall. That could allow European countries to fill gaps in their own stocks after promising the modern fighting vehicles to Kyiv, or encourage nations that have been reluctant to spare tanks to increase their commitments.
The request from German defence minister Boris Pistorius and economics minister Robert Habeck was sent to Swiss defence minister Viola Amherd last week, German and Swiss officials said.
The request comes amid annoyance in Berlin that its western allies have pledged only disappointing numbers of tanks to Ukraine after spending months loudly urging Germany to do so.
Pistorius expressed frustration at last month’s Munich Security Conference, saying: “Obviously there are some nations who just preferred to hide behind Germany. It’s easy to say we would if you let us, and when we let them, they didn’t.”
Germany, which is the producer of the tanks that are used by armies across Europe, has been striving to secure enough commitments to fill two battalions of tanks — or 62 vehicles — to bolster the Ukrainian armed forces ahead of a possible spring offensive by Russian troops. Berlin has promised 18 of its Leopard 2s, while Poland has pledged 14. Sweden has said it will send up to 10.
In their letter to Switzerland, the German ministers offered assurances that the tanks would not be sold on to Ukraine, acknowledging the possible concerns of a nation that has neutrality enshrined in its constitution.
Amherd wrote back to Berlin on Wednesday indicating that a deal might be possible under the strict condition that the tanks or their parts were not to be sent onwards to Ukraine and would solely be used to plug European capability gaps.
An official at the Swiss ministry of defence told the Financial Times that a “limited number” of the 96 battle tanks that were in storage could be sent back to Rheinmetall from Switzerland’s stocks, based on a preliminary assessment of materiel ordered by Amherd. Most would need to be retained as part of Swiss military contingency planning, the official said.
Neither Switzerland’s constitutional neutrality nor its War Materials Act — which imposes strict conditions on weapons sales abroad — pose legal obstacles to the resale of Leopard 2s. But parliament’s approval is needed to formally release the stocks from military service.
The country’s largest political bloc, the rightwing populist Swiss People’s party, is likely to oppose any measures that will further call Switzerland’s non-aligned status into question. The party has vociferously opposed the Swiss government’s decision to match EU economic sanctions against Russia.
Other parties are more amenable to more military co-operation with European partners.
A decision last year to refuse Germany permission to give Ukraine Swiss-made ammunition held in German stockpiles caused anger in Berlin but triggered a debate within Switzerland about the limits of the country’s neutral status.
The Swiss government will make a recommendation to parliamentarians on the delivery of Leopard 2 tanks to Germany on Monday.
Gapping down
In reaction to earnings/guidance:
- CHPT -12.1%, ZS -11.5% (also announces 3% workforce reduction), MRVL -8.2%, VSCO -3.3%, DELL -3.1% (also increases dividend and names new CFO), PSO -3%, COST -2.1%, HIBB -0.8%
Other news:
- VERU -33.5% (FDA declines to grant request for EUA for sabizabulin)
- CDTX -18.2% (announces concurrent but separate offerings of its common stock and convertible preferred stock)
- BMBL -5.5% (prices secondary offering of 13750000 shares of common stock by certain selling stockholders at $22.80 per share)
- PRAX -3.8% (reports Topline Results from the Essential1 Study of Ulixacaltamide)
- MARA -3.2% (publishes Feb bitcoin production and miner installation updates)
- MIR -3% (prices offering of 9786153 shares of common stock by certain selling stockholders at $8.75 per share)
- JOUT -3% (to sell the Eureka! Military and Commercial Tents product lines of its Camping business segment to Rekord Group)
- RIOT -2.9% (to delay 10-K filing; also reports earnings)
- XMTR -1.9% (to delay 10-K filing)
- RVMD -1.7% (prices offering of 13636364 shares of common stock at $22.00 per share)
- NE -1.5% (to delay 10-K filing)
- RYTM -1.4% (files mixed securities shelf offering)
- ECVT -1.4% (announces that certain funds to sell remaining interest in co)
- ZM -1.2% (terminates employment of Greg Tomb as President) .
Analyst comments:
- DLO -5% (downgraded to Sell from Buy at UBS)
- ITRI -1.7% (downgraded to Underweight from Neutral at JP Morgan)
- DEI -1.5% (downgraded to Underperform from Market Perform at BMO Capital Markets)
- HRL -1.5% (downgraded to Underweight from Neutral at JP Morgan)
- DPZ -0.8% (downgraded to Hold from Buy at Gordon Haskett)
Gapping up
In reaction to earnings/guidance:
- ARDX +17.3%, AI +16.2%, XPOF +11.8%, IAS +7.7%, PAGS +6.4%, IOT +3.7%, HPE +3% (also acquires Axis Security), VMW +2.2%, AVGO +1.7%, NUTX +1.6%, COO +1.3%, JWN +0.6% (also will wind down Canadian operations)
Other news:
- CRMD +5% (announces regulatory and manufacturing updates)
- ERIC +3.4% (DOJ resolves 2019 deferred prosecution agreement breaches with Ericsson)
- STAR +3.4% (providing an update on recent legacy real estate asset monetization activities since its most recent earnings call on February 22 2023)
- SGMO +3.4% (recently engaged in discussions to explore a potential public offering; chosen not to move forward with a public offering of its securities at this time)
- WH +2.8% (increases dividend)
- SOI +2.4% (increases dividend and authorizes a $50 mln share repurchase program)
- PSNL +2.3% (names new CEO and COO)
Analyst comments:
- ESRT +2.4% (upgraded to Outperform from Market Perform at BMO Capital Markets)
- FSLR +1.5% (upgraded to Buy from Neutral at UBS)
- KR +1.3% (upgraded to Overweight from Neutral at JP Morgan)
- PG +1% (upgraded to Overweight from Neutral at JP Morgan)
- CASY +0.9% (upgraded to Neutral from Underweight at JP Morgan)
After Hours Summary: Most big names reporting earnings are lower: CHPT -13%, ZS -11.3%, MRVL -8.5%, ESTC -4.1%, DELL -2.9%, COST -2.5%, AVGO -1.1%; BMBL -7.3% falls on stock offeringAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: AI +17.3%, ARDX +9%, IAS +7.7%, XPOF +6.9%, PAGS +6.5%, VMW +1.6%, HPE +1.2% (also acquires Axis Security), IOT +1%
Companies trading higher in after hours in reaction to news: CRMD +8% (announces regulatory and manufacturing updates), SOI +7.2% (increases dividend and authorizes a $50 mln share repurchase program), MARA +1.1% (publishes Feb bitcoin production and miner installation updates), YOU +1% (to delay 10-K filing), RIOT +0.8% (to delay 10-K filing; also reports earnings), ASO +0.6% (increases dividend), NDAQ +0.3% (reports February 2023 volumes), C +0.1% (plans to lay off less than 1% of its workforce, according to Reuters)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: CHPT -13%, ZS -11.3% (also announces 3% workforce reduction), MRVL -8.5%, ESTC -4.1%, VSCO -3.3%, DELL -2.9% (also increases dividend and names new CFO), COST -2.5%, AVGO -1.1%, VVX -0.1%
Companies trading lower in after hours in reaction to news: VERU -39.2% (FDA declines to grant request for EUA for sabizabulin), CDTX -16% (announces concurrent but separate offerings of its common stock and convertible preferred stock), BMBL -7.3% (stock offering), MIR -4.2% (stock offering by selling shareholders), RYTM -2% (files mixed securities shelf offering), XMTR -1.9% (to delay 10-K filing), SIX -0.7% (to delay 10-K filing), LMND -0.7% (to delay 10-K filing), ECVT -0.4% (announces that certain funds to sell remaining interest in co), WMT -0.2% (CEO plans to stay on for at least three more years, according to WSJ), ZM -0.2% (terminates employment of Greg Tomb as President), FBRT -0.1% (to delay 10-K filing), RYI -0.1% (acquires BLP Holdings), SPWR -0.1% (to delay 10-K filing), NE -0.1% (to delay 10-K filing)
Early premarket gappers
- Gapping up:
- AI +15.9%, ARDX +13.5%, CRMD +11.1%, XPOF +8.3%, IAS +7.7%, PAGS +6.4%, PSNL +4.6%, STAR +3.4%, VMW +3.4%, ERIC +3.1%, SOI +3%, WH +2.8%, HPE +2.6%, IOT +2.5%, NUTX +2.3%, LMND +1.9%, COO +1.3%, FBRT +1.2%, YOU +1.2%
- Gapping down:
- VERU -31.2%, CDTX -17.1%, ZS -12%, CHPT -11%, MRVL -8.6%, EXEL -8%, BMBL -4.8%, ESTC -4.2%, VSCO -3.6%, MIR -3.3%, DELL -3.3%, MARA -3%, JOUT -3%, RIOT -2.9%, XMTR -2.7%, COST -2.5%, RVMD -1.7%, SPWR -1.5%, RYTM -1.4%, ZM -1.4%, PSO -1.3%, ECVT -1%
Tencent boss Pony Ma left out of China’s signature political gathering
Absence from National People’s Congress highlights sidelining of internet giants
Tencent founder Pony Ma has been left off a list of delegates to China’s annual parliamentary session this week as the country’s most prominent tech leaders lose sway in Beijing.
His absence from the signature National People’s Congress is another sign of changing times for China’s entrepreneurs. The sidelining comes after China’s leader Xi Jinping consolidated power last year with a third term at the helm of the Communist party and embarked on a campaign to limit the influence of the country’s wealthy elite.
Ma’s longtime rival for China’s tech crown, Alibaba founder Jack Ma, has largely disappeared from public view since criticising Chinese regulators two years ago and has recently been living outside China, including six months in Tokyo.
Tencent is China’s most valuable company by market capitalisation, with businesses spanning gaming, ecommerce, social media and entertainment. Ma remains its chair and chief executive.
Pony Ma’s absence from the NPC’s ranks, after two five-year terms, follows other internet titans’ departure from the Chinese People’s Political Consultative Congress, an advisory body that also meets starting from the weekend.
Robin Li, head of search giant Baidu, William Lei Ding, founder of gaming group NetEase, and Wang Xiaochuan, head of internet portal Sogou, all stepped down as CPPCC delegates, as did China’s leading venture capitalist Neil Shen.
Duncan Clark, founder and chair of Beijing-based consultancy BDA, said that previously at the NPC Tencent’s Ma “could play the discreet counterweight to the brash, ambitious Alibaba Ma”.
“But then the whole tech sector came into the government’s crosshairs. Given the trend of the party running everything, it doesn’t make sense to have such legacy figures in high-profile roles anymore,” he said.
Delegates to the NPC and the CPPCC are selected every five years based on candidate lists drawn up by the Communist party, with those attending this month’s meetings set to serve for the duration of President Xi’s third term in office.
“Re-election to the body is a matter of public opinion,” said a professor at the Central Party School, the party’s elite training institution, who asked not to be named. “For Ma and the others it is probably that their influence and political standing has declined, leading to them not being re-elected.”
Ma had served as an NPC deputy since 2013 and had used the platform to call for tighter regulation of internet businesses such as his own in 2021 as Beijing’s tech crackdown was gaining steam.
Among the ranks of almost 3,000 NPC delegates are many executives and engineers from China’s tech industry, including semiconductor and artificial intelligence firms.
Liu Qingfeng, chair of iFlytek, a partially state-owned AI group, has served on the NPC for more than 20 years and was re-elected to another term this year. Lei Jun, head of phonemaker Xiaomi, is also serving for a third term.
Other newcomers to the ranks of delegates hail from sectors that Beijing is determined to strengthen amid growing technological rivalry with Washington.
Guo Huiqin, an engineer at China’s largest chipmaker Semiconductor Manufacturing International Corp, said she hoped to focus “on breakthroughs” in technological areas where the west had a chokehold on China’s development.
“We need to uphold the party’s leadership . . . [and] we need self-reliance and self-improvement in science and technology,” Qi Xiangdong, a newly elected delegate to the CPPCC and head of cyber security group QAX, told local media.
Zhang Suxin, chair of contract chipmaker Hua Hong Semiconductor, was also newly elected to the NPC.
Tencent did not respond to a request for comment.