Gapping up
In reaction to earnings/guidance:
- DLO +13.7%, AGYS +9.4%, TCS +8.9%, DT +6.7%, ADI +2.4%, TJX +1.5%
Other news:
- NCMI +17.9% (AMC discloses 6.8% stake in NCMI)
- MX +14.8% (report that private equity firms including Carlyle Group (CG) will bid for the company)
- SPNT +8.2% (Chairman and CEO resigns to pursue other opportunities)
- XAIR +6.4% (presents positive study update from the at-home LungFit GO Pilot Study)
- CWK +5% (acquires Cresa Partners of Los Angeles)
- NVST +4.6% (to acquire Osteogenics Biomedical)
- INSM +2.3% (Presents New Data Across Three Pillars at American Thoracic Society 2022 International Conference)
- TILE +1.8% (authorizes new $100 mln share repurchase program)
- EGY +1.5% (receives new five year $50 mln reserve based lending facility providing additional financial flexibility)
- SONY +1.3% (provides updates at Corporate Strategy Meeting)
- CASA +1.2% (stock offering)
- EXTR +1.1% (announces $200 mln share repurchase authorization over three-year period)
Analyst comments:
- EDR +3.3% (upgraded to Buy from Neutral at Goldman)
- PENN +2.8% (upgraded to Buy from Hold at Jefferies)
- AJX +1.8% (upgraded to Buy from Neutral at Compass Point)
- INT +1.6% (upgraded to Buy from Hold at Stifel)
- MNST +1.2% (upgraded to Outperform from Mkt Perform at Bernstein)
- CAH +0.9% (upgraded to Outperform from In-line at Evercore ISI)
Research Calls
- Upgrades:
- AeroVironment (AVAV) upgraded to Outperform from Sector Perform at RBC Capital Mkts; tgt raised to $100
- Canadian Nat'l Rail (CNI) upgraded to Outperform from Market Perform at BMO Capital Markets
- Cardinal Health (CAH) upgraded to Outperform from In-line at Evercore ISI; tgt raised to $68
- Cellectis (CLLS) upgraded to Outperform from Neutral at Robert W. Baird; tgt $10
- Endeavor Group (EDR) upgraded to Buy from Neutral at Goldman; tgt lowered to $29
- Expedia Group (EXPE) upgraded to Buy from Neutral at Redburn
- Great Ajax (AJX) upgraded to Buy from Neutral at Compass Point; tgt $16
- InterCure (INCR) upgraded to Buy from Speculative Buy at Canaccord Genuity; tgt $13
- Mercury (MRCY) upgraded to Outperform from Sector Perform at RBC Capital Mkts; tgt raised to $72
- Monster Beverage (MNST) upgraded to Outperform from Mkt Perform at Bernstein; tgt raised to $110
- On (ONON) upgraded to Hold from Sell at Williams Trading; tgt $19
- Penn Natl Gaming (PENN) upgraded to Buy from Hold at Jefferies; tgt $49
- Ventas (VTR) upgraded to Outperform from Neutral at Credit Suisse; tgt raised to $63
- Welltower (WELL) upgraded to Outperform from Neutral at Credit Suisse; tgt raised to $100
- World Fuel Services (INT) upgraded to Buy from Hold at Stifel; tgt $35
- Downgrades:
- Carrier Global (CARR) downgraded to Neutral from Buy at BofA Securities
- Century Aluminum (CENX) downgraded to Peer Perform from Outperform at Wolfe Research; tgt lowered to $14
- Comstock (CRK) downgraded to Underweight from Neutral at Piper Sandler; tgt lowered to $16
- Ginkgo Bioworks (DNA) downgraded to Underperform from Neutral at BofA Securities; tgt $3
- Hanmi Financial (HAFC) downgraded to Neutral from Buy at DA Davidson; tgt $25
- Hope Bancorp (HOPE) downgraded to Neutral from Buy at DA Davidson; tgt lowered to $16
- Industrial Logistics Properties Trust (ILPT) downgraded to Mkt Perform from Mkt Outperform at JMP Securities
- Plymouth Industrial REIT (PLYM) downgraded to Mkt Perform from Mkt Outperform at JMP Securities
- Warby Parker (WRBY) downgraded to Neutral from Buy at Goldman; tgt lowered to $18
- Others:
- Amplitude (AMPL) initiated with an Overweight at Piper Sandler; tgt $25
- Fidelity Nat'l Info (FIS) initiated with a Buy at Goldman; tgt $128
- Fiserv (FISV) initiated with a Neutral at Goldman; tgt $108
- Five9 (FIVN) resumed with a Buy at ROTH Capital; tgt $129
- Global Payments (GPN) initiated with a Neutral at Goldman; tgt $151
- Mastercard (MA) initiated with a Buy at Goldman; tgt $460
- PAR Technology (PAR) initiated with a Neutral at Goldman; tgt $43
- Performance Food Group (PFGC) initiated with a Buy at Berenberg; tgt $71
- PerkinElmer (PKI) initiated with an Underweight at Barclays; tgt $125
- Terreno Realty (TRNO) initiated with a Mkt Outperform at JMP Securities; tgt $75
- Warby Parker (WRBY) downgraded to Neutral from Buy at Goldman; tgt lowered to $18
- US Foods (USFD) initiated with a Buy at Berenberg; tgt $53
- Visa (V) initiated with a Conviction Buy at Goldman; tgt $282
- Vodafone PLC (VOD) resumed with a Buy at Citigroup
- VSE Corp (VSEC) downgraded to Sector Perform from Outperform at RBC Capital Mkts; tgt lowered to $48
- Waters (WAT) initiated with an Overweight at Barclays; tgt $375
- Western Union (WU) initiated with a Sell at Goldman; tgt $18
- Shift4 Payments (FOUR) initiated with a Neutral at Goldman; tgt $55
Early premarket gappers
- Gapping up:
- NCMI +22.8%, DLO +14%, AGYS +10.8%, SPNT +8.2%, XAIR +6.4%, TCS +5.1%, CWK +5%, NVST +4.6%, ROOT +3%, TGI +2.8%, AMR +2.4%, EGY +2%, AMC +1.9%, LFLY +1.8%, TILE +1.8%, AMWL +1.6%, DXC +1.3%, INSM +1.3%, SONY +0.9%, APPN +0.9%, BAH +0.8%, FFIC +0.8%
- Gapping down:
- DOCS -14.7%, NXGN -14.3%, EWCZ -7.8%, ACRE -6.6%, RES -6.1%, DOYU -4.6%, LAB -2.4%, LOW -1.5%, CASA -0.9%, APPS -0.8%, UNFI -0.7%, DWAC -0.5%
>>> Up
* Ahold Delhaize Raised to Overweight at JPMorgan; PT 32.50 euros
* Boskalis Raised to Add at AlphaValue/Baader
* ConvaTec Raised to Sector Perform at RBC; PT 210 pence
* Cellectis ADRs Raised to Outperform at Baird; PT $10
* Finsbury Growth & Income Trust/Fund Raised to Buy at Investec
* *KEYWORDS STUDIOS RAISED TO ADD VS HOLD AT PEEL HUNT
* Land Sec. Raised to Hold at Jefferies; PT 690 pence
* Rational Raised to Buy at HSBC; PT 670 euros
* Reckitt Raised to Outperform at RBC; PT 7,000 pence
* Repsol Raised to Buy at HSBC; PT 16.70 euros
* SEB Raised to Outperform at Exane; PT 133 kronor
* Vidrala Raised to Outperform at Exane; PT 83 euros
* WH Smith Raised to Overweight at JPMorgan; PT 1,900 pence
>>> Down
* Barry Callebaut Cut to Reduce at Baader Helvea
* Forsee Power Cut to Hold at Berenberg; PT 4.50 euros
* M&C Saatchi Cut to Hold at Peel Hunt; PT 208 pence
* Swedbank Cut to Neutral at Exane; PT 175 kronor
* Zalando Cut to Add at Baader Helvea; PT 41 euros
>>> Initiation
* Fidelity National Rated New Buy at Goldman
* Fiserv Rated New Neutral at Goldman; PT $108
* Global Payments Rated New Neutral at Goldman; PT $151
* ITM Power Rated New Outperform at Bernstein
* Pantheon Resources Rated New Sell at Peel Hunt; PT 50 pence
* Mastercard Rated New Buy at Goldman
* Nel Rated New Outperform at Bernstein
* Oscar Properties Rated New Buy at Pareto Securities; PT 9 kronor
* Visa Rated New Buy at Goldman
>>> Call
* Euronext 1Q Results Good, Open Up Prospect for More M&A: Citi
* Land Securities Upgraded at Jefferies on Valuation Grounds
* Pantheon New Sell at Peel Hunt With Risks Skewed to Downside
* Reckitt Upgraded on Optimism For Future Sales Growth, RBC Says
* Zalando Downgraded to Add at Baader on Lower Sales Expectations
A rally in stocks cooled in Asia on Wednesday while Treasuries edged up as investors weighed the latest China figures as well as hawkish comments from Federal Reserve Chair Jerome Powell. Shares rose in Japan but fell in China and Hong Kong. MSCI Inc.’s Asia-Pacific stock index remained higher for a fourth day, the longest streak since February. US futures dipped after the S&P 500 added 2% in a risk rebound. Chinese data showed home prices fell for an eighth month as steps to counter a real-estate downturn failed to revive confidence amid Covid outbreaks. Treasuries pared a slide from Tuesday, leaving the US 10-year yield at 2.97%. Bonds were pressured overnight after Powell said the Fed “won’t hesitate” to tighten policy beyond neutral to curb inflation. A gauge of the dollar steadied. Crude oil was trading around $113 a barrel. Cryptocurrencies extended a period of relative calm, with Bitcoin hovering around $30,300. Investor sentiment improved a little on robust US retail sales and factory output data, as well as stronger-than-expected euro-area expansion. The worry is that tougher times lie ahead as monetary settings tighten, Russia continues the war in Ukraine and China grapples with Covid. Powell said that the US central bank will raise interest rates until there is “clear and convincing” evidence that inflation is in retreat. The remarks at a Wall Street Journal live event were some of his most hawkish so far. Chicago Fed President Charles Evans said he expects the Fed to slow the pace of rate increases to 25 basis-point increments later this year. He expects the Fed to have completed any 50 basis-point hikes before December. the Biden administration is poised to fully block Russia’s ability to pay US bondholders after a deadline expires next week, a move that could bring Moscow closer to the brink of default. US After Hours DLO +16.9%, AGYS +13.9%, TCS +10.3% higher on earnings; DOCS -16.7% falls on earnings; NCMI +17.9% jump as AMC discloses stake
Nikkei +0,74% Hang Seng -0,09% CSI -0,27% Shanghai -0,08% Shenzen +0,36%
Eur$ 1,0533 CNH 6,7628 CNY 6,7499 JPY 128,98 GBP 1,2473 CHF 0,9942 RUB 64,6013 TRY 15,9270 WTI$ 113,31 Gold 1,809,15 -2,5% BTC 29,730 -1% ETH 2,035 -0,8%
S&P -0,09% Nasdaq -0,23% EuroStoxx +0,27% FTSE +0,07% Dax +0,28% SMI +0,0%
Macro :
- US Set to Block Russian Debt Payments, Raising Odds of Default
- Commodities Underweights Penalize Active EU Portfolio Managers
Keep an eye on :
- ABN NA : ABN AMRO 1Q Profit Meets Estimates
- AF FP : CMA CGM to Take Air France-KLM Stake in Air Cargo Partnership
- ALO FP : Alstom Consortium Wins EU2.6B Tel Aviv Rail Systems Project
- ARAMCO AB : Saudi Aramco Is Said to Weigh IPO of Trading Unit Amid Boom
- BEFB BB : Befimmo 1Q Adjusted EPS EU0.62 Vs. EU0.69 Y/y
- BRBY LN : Burberry FY Adjusted Operating Profit Meets Estimates
- CTM SS : Catena Media 1Q Adjusted Ebitda EU25.6M Vs. EU25.0M Y/y
- CBK GY : UniCredit Unit Mulled Approach to Commerzbank in Early 2022: FT
- DAE SW : Daetwyler Sees FY Ebit Margin 13% to 16%
- DMP GY : Dermapharm 1Q Adjusted Ebitda EU75.1M Vs. EU63.7M Y/y
- EDF FP : EDF May Repair Some Nuclear Reactors by Year-End, Watchdog Says
- ELI BB : Elia Doesn’t Foresee Direct Impact of War in Ukraine on Its Ops
- ELIOR FP : Elior Group 2Q Revenue Beats Estimates
- ELIOR FP : Elior Is in Final Stages of Picking New CEO: Gault
- ENX FP : Euronext 1Q Ebitda Beats Estimates
- ENX FP : Euronext Upgrades 2022 Cost Guidance as Earnings Beat Estimates
- ENX FP : Euronext 1Q Results Good, Open Up Prospect for More M&A: Citi
- COL SM : Inmobiliaria Colonial 1Q Ebitda EU58M Vs. EU55M Y/y
- LGEN LN : L&G New £4b Investment With West Midlands Combined Authority
- LOGN SW : Logitech Jumps as UBS Upgrades to Buy, Says Selloff Overdone
- MB IM : ECB May Bar Del Vecchio Raising Mediobanca Stake: MF
- RKT LN : Abbott, Gerber, Reckitt Officials Called to May 25 House Hearing
- RNO FP : Renault CEO Seeks to Ease Nissan, Mitsubishi Fears Over EV Split
- SGRE SM : Siemens Energy Is Said to Plan Buyout Offer for Siemens Gamesa
- SIGN SW : SIG Raises ~EU204M in Share Placement Priced at CHF19.40/Shr
- GLE FP : SocGen’s Survivor CEO Oudea Is Stepping Down After 15-Year Reign
- TSLA US : Musk Has a Bigger Problem Than Bots: A Huge Twitter Debt Burden
- TRUEB SS : Truecaller Holder Atomico UK Partners Offers Up to 21m Shares
- TUI1 GY : TUI's Equity Raise Helps Clean Up Pandemic Financing Mess: React UniCredit’s Workaholic Boss Bounces Back After $54 Million Win
- UCG IM :
EU plans for funding energy transition to spark opposition
Commission wants to raise money by selling €20bn worth of surplus carbon allowances
Carbon cash cow
Brussels is never short of ideas on how to raise extra funds and is proving quite creative with its most recent one: selling surplus carbon emissions permits to raise €20bn that could, inter alia, cover some of Hungary’s energy transition costs (and thus unblock the sixth Russia sanctions package), write Andy Bounds in Brussels and Alice Hancock in London.
Yet a less desirable side-effect of this plan is that by lowering the carbon price and making it cheaper to burn fossil fuels, it will risk thwarting the bloc’s climate policies, which aim at reducing carbon emissions by at least 55% by 2030, compared to 1990 levels.
The conundrum wasn’t lost on Luxembourg energy minister Claude Turmes: “The most important is how to keep on track on climate change in a moment where you have this huge security-of-supply issue?”
While the commission is considering a measure that would delay the application of its Fit for 55 package, the European parliament is going in the opposite direction when it comes to carbon allowances. Members of its environment committee approved — by a margin of 49 to 33 votes — to phase out free carbon emissions allowances for heavy industry by 2030. That is six years sooner than the commission proposed.
In addition, MEPs voted to accelerate the introduction of the carbon border adjustment mechanism (CBAM), a way of charging companies importing into the EU for their carbon emissions.
Eurofer, which represents European steel producers, said that the “disruptive vote” by the parliament’s environment committee put 30,000 jobs under threat and endangered €31bn in investments that would go into low carbon projects. Cepi, the paper and pulp industry body, said the proposals would make it “very challenging” for the sector to decarbonise.
CBAM and the end of free allowances under the EU’s emissions trading system are one of the most contested areas of Brussels’ efforts to decarbonise. Industrial executives also argue that plans for CBAM do not yet account for exports from the EU, making European industry wildly uncompetitive compared to global peers with lower and less expensive environmental regulations.
Industry groups may soon rejoice at the commission’s carbon-allowance selling plans, which would drive down the price of carbon and make it easier for them to adjust.
Elon Musk Says Twitter Deal Can’t Move Forward Without Clarity on Fake Accounts
Tesla CEO’s comments add to questions about whether he is committed to concluding a $44 billion deal struck during a selloff in tech stocks
Elon Musk said his $44 billion purchase of Twitter Inc. TWTR 2.49%▲ can’t move forward until the company is clearer about how many of its accounts are fake, casting fresh doubt on his planned takeover of the social-media company.
Mr. Musk’s latest comments add to questions about whether he is committed to concluding a deal that was struck amid a steep selloff in technology stocks. Last week, he said the deal was “on hold” over concerns about fake accounts on the platform—a problem that has long dogged social-media companies.
In a tweet early Tuesday, Mr. Musk said that Twitter’s chief executive had refused to show proof that less than 5% of Twitter’s accounts were fake. “This deal cannot move forward until he does,” he said.
Mr. Musk said his offer was based on Twitter’s filings with the Securities and Exchange Commission being accurate, and added: “20% fake/spam accounts, while 4 times what Twitter claims, could be *much* higher.”
Mr. Musk’s tweet was in response to an article covering his own estimate, made at a conference a day earlier, in which he estimated that fake users make up at least 20% of all Twitter accounts. Mr. Musk’s figure roughly matches one in a new report from a market-research firm, SparkToro. The firm says it includes in its figures automated accounts that could be considered legitimate, such as ones that post a feed of news headlines.
In securities filings, Twitter has long estimated that false or spam accounts represent less than 5% of its total number of active users, but has also said that the actual number “could be higher than we have estimated.”
In a statement Tuesday, Twitter said it “is committed to completing the transaction on the agreed price and terms as promptly as practicable.”
Twitter’s board said in a separate statement that Mr. Musk agreed to pay $54.20 a share for Twitter. “We believe this agreement is in the best interest of all shareholders,” it said. “We intend to close the transaction and enforce the merger agreement.”
On Monday, Twitter Chief Executive Officer Parag Agrawal defended his company’s efforts to fight spam.
“First, let me state the obvious: spam harms the experience for real people on Twitter, and therefore can harm our business,” Mr. Agrawal said as part of a series of posts on Monday. “As such, we are strongly incentivized to detect and remove as much spam as we possibly can, every single day. Anyone who suggests otherwise is just wrong.”
He said Twitter suspends more than half a million spam accounts a day and locks millions of accounts suspected of being fake weekly if they can’t be verified by humans.
Last week, Mr. Musk, the CEO of Tesla Inc., said he would try to verify Twitter’s numbers and said others should do the same. Mr. Agrawal suggested that external estimates of spam accounts wouldn’t be accurate.
“Unfortunately, we don’t believe that this specific estimation can be performed externally, given the critical need to use both public and private information [which we can’t share],” Mr. Agrawal said Monday. “Externally, it’s not even possible to know which accounts are counted as mDAUs on any given day,” he added, referring to monetizable daily active users.
Mr. Musk responded with a number of tweets, with one showing a poop emoji.
Twitter, in a regulatory filing early Tuesday that detailed how the deal came together, said that Mr. Musk had raised the prospect of a takeover early on in discussions with its board, well before his stake in the firm became public.
Mr. Musk initiated outreach on March 26, according to the filing, separately contacting Jack Dorsey, Twitter’s former CEO and current board member, and another director, Egon Durban, co-CEO of private-equity firm Silver Lake.
That led to a meeting the next day with Mr. Agrawal and Bret Taylor, Twitter’s chairman, in which they discussed Mr. Musk potentially joining the board. Mr. Musk also said he was considering taking Twitter private or starting a rival service, according to the filing.
That meeting came more than a week before Mr. Musk first publicly disclosed his Twitter stake, on April 4, when it had grown to around 9.2% of the company’s stock. He declared himself a passive investor, signaling he had no intention to change or influence control of the company. The disclosure, which came days after a required filing deadline, is now subject to a Securities and Exchange Commission probe.
Mr. Musk on April 9 said he wouldn’t join the board, and instead planned to make an offer to take the company private, which led to a deal on April 25 for him to buy the company.
Tuesday’s filing, which runs to 235 pages, contains no mention of discussions between Mr. Musk and Twitter officials about fake, spam or bot accounts.
Twitter stock closed up 2.49% at $38.32, leaving shares still well below the $54.20 a share at which Mr. Musk had agreed to buy the company, and below where Twitter’s shares traded before Mr. Musk first disclosed that he took a stake in the company on April 4.
Mr. Musk’s insistence on the issue of fake accounts has raised speculation that he may try to renegotiate or walk away from the purchase—though he has already signed an agreement and waived detailed due diligence on the deal. Mr. Musk and Twitter would each owe the other $1 billion if either walks away from the deal in certain circumstances, according to securities filings, but such a clause wouldn’t preclude a renegotiation—or a lawsuit.
Some outside analyses have found that Twitter may have more fake accounts than it discloses—though they use different methodology than Twitter and include accounts that the company excludes from its estimates.
SparkToro says its analysis of a representative sample of active Twitter accounts found that 19% fit what it calls a conservative definition of fake or spam accounts.
But SparkToro specifies that its definition of fake accounts includes all accounts that don’t regularly have a human composing their tweets, which are common on Twitter for sending such information as news updates, inspirational quotes and stock-price changes. Twitter offers tools for developers to build automated bots.