>>> US Research Calls

Research Calls

  • Upgrades:
    • Fortune Brands Home & Security (FBHS) upgraded to Neutral from Underperform at BofA Securities; tgt raised to $84
    • Fortune Brands Home & Security (FBHS) upgraded to Overweight from Sector Weight at KeyBanc Capital Markets
    • Forward Air (FWRD) upgraded to Buy from Hold at Stifel; tgt raised to $136
    • Grocery Outlet (GO) upgraded to Buy from Underperform at BofA Securities; tgt raised to $37
    • Hub Group (HUBG) upgraded to Overweight from Neutral at JP Morgan; tgt raised to $92
    • IQVIA (IQV) upgraded to Overweight from Neutral at Piper Sandler; tgt raised to $255
    • Reliance Steel (RS) upgraded to Outperform from Peer Perform at Wolfe Research; tgt $226
    • Roku (ROKU) upgraded to Neutral from Sell at MoffettNathanson; tgt $100
    • Sprouts Farmers Market (SFM) upgraded to Buy from Underperform at BofA Securities; tgt raised to $40
    • Travel + Leisure Co (TNL) upgraded to Buy from Hold at Jefferies; tgt raised to $79
    • VTEX (VTEX) upgraded to Outperform from Neutral at Credit Suisse; tgt lowered to $8
  • Downgrades:
    • Accolade (ACCD) downgraded to Equal-Weight from Overweight at Morgan Stanley; tgt lowered to $9
    • Accolade (ACCD) downgraded to Mkt Perform from Outperform at SVB Leerink; tgt lowered to $8
    • Accolade (ACCD) downgraded to Neutral from Buy at BofA Securities; tgt lowered to $9
    • Accolade (ACCD) downgraded to Neutral from Buy at BTIG Research
    • Accolade (ACCD) downgraded to Neutral from Outperform at Credit Suisse; tgt lowered to $9
    • Comcast (CMCSA) downgraded to Neutral from Buy at BofA Securities; tgt lowered to $50
    • Domino's Pizza (DPZ) downgraded to Neutral from Buy at BTIG Research
    • Mastercard (MA) downgraded to Underweight from Neutral at Piper Sandler; tgt lowered to $357
    • Old Republic (ORI) downgraded to Outperform from Strong Buy at Raymond James; tgt lowered to $28
    • Stanley Black & Decker (SWK) downgraded to Neutral from Buy at Mizuho; tgt lowered to $145
    • VeriSign (VRSN) downgraded to Neutral from Outperform at Robert W. Baird; tgt lowered to $210
    • Visa (V) downgraded to Neutral from Overweight at Piper Sandler; tgt lowered to $239
  • Others:
    • Allbirds (BIRD) initiated with an Outperform at Wedbush; tgt $8
    • Columbia Sportswear (COLM) downgraded to Underperform from Neutral at BofA Securities; tgt lowered to $80
    • Constellation Energy (CEG) initiated with an Outperform at RBC Capital Mkts; tgt $72
    • Crocs (CROX) initiated with an Outperform at Wedbush; tgt $90
    • Deliveroo plc (DROOF) initiated with a Neutral at Credit Suisse
    • lululemon athletica (LULU) initiated with an Outperform at Wedbush; tgt $430


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Portfolio Ticker Matches:  CALLS


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>>> US Gapping down

Gapping down
In reaction to earnings/guidance:

  • ACCD -36.9%, TRUP -13%, HOOD -9.9%, NATI -9.8%, AMZN -9.6%, WU -8.2%, TEAM -6.5%, LYLT -5.3%, CL -4.9%, NWG -4.6%, EBS -4.4%, SSNC -4.4%, VRSN -4.1%, INTC -3.9%, COLM -3.9%, IMAX -3.8%, CENX -3.3%, CASH -3.2%, RMD -3%, ATR -3%, CUZ -3%, CUBE -2.7%, CINF -2.6%, AAPL -2.5% (also hikes dividend 5%; increases share repurchase program by $90 bln), SHLX -2.5%, DXCM -2.3%, MGA -2.3%, SM -1.9%, BMY -1.8%, WFG -1.7%, FIBK -1.6%, WDC -1.4%, HIG -1.4%, SKYW -1.3%, AZN -1.2%, CVX -1.2%, NWE -1%, XOM -1%

Other news:

  • ALDX -11.2% (CFO to resign to pursue other career opportunities)
  • SEV -9.2% (prices follow-on offering of 10 mln ordinary shares at $4.00 per share)
  • TSVT -4.9% (stock offering)
  • LBRT -4.3% (commences underwritten public secondary offering of 14.5 mln shares of its Class A common stock by Schlumberger Technology Corporation)
  • FEAM -3.2% (commences construction on US-based boron facility) 
  • INCY -2.6% (enters into a development agreement with Maruho for ruxolitinib cream)
  • GRPN -1.9% (large investor increases active stake to 10%)
  • CLPT -1.7% (receives FDA clearance for version 1.1 of SmartFrame Array)
  • PH -1.5% (increases dividend)
  • PLUG -1.1% (OLN and PLUG to partner to produce green hydrogen)

Analyst comments:

  • MA -1.5% (downgraded to Underweight from Neutral at Piper Sandler)
  • DPZ -1.4% (downgraded to Neutral from Buy at BTIG Research)
  • CMCSA -1.1% (downgraded to Neutral from Buy at BofA Securities)

>>> US Gapping up

Gapping up
In reaction to earnings/guidance:

  • HUBG +16.3%, LNTH +14.2%, MHK +13.7%, NOV +8.8%, FBHS +7.7% (also to split into two publicly traded cos), FIVN +7.2%, AEM +7%, BZH +6.9%, WETF +6.1%, WIRE +6%, ROKU +4.8%, TEX +4.4%, NVO +4.4%, MITK +4.3%, TFII +4.2%, MERC +4.2%, AVTR +4.1%, SYNH +4.1%, COOP +3.9%, LTC +3.6%, SLCA +3.6%, CAMP +3%, OMF +3%, FTAI +3%, CE +2.5%, PSO +2.5%, LYB +2.5%, CSL +2.4%, LNT +2.3%, PEGA +2.2%, OLN +2.2% (also to partner with PLUG for green hydrogen), HON +2%, SXT +2%, BIO +1.9%, DLR +1.7%, X +1.7%, KLAC +1.6%, ULCC +1.5%, ZEN +1.4%, CRI +1.2%, SWN +1.1%

Other news:

  • GTYH +119.1% (entered into a definitive agreement to be acquired by GI Partners )
  • FNCH +54.3% (announces removal of FDA clinical hold on CP101 IND)
  • ZYME +43.3% (confirms receipt of non-binding proposal from All Blue Falcons for $10.50 per share in cash)
  • NARI +7% (to join S&P MidCap 400)
  • CVGI +6.8% (reaches mutual pricing agreement with top two customers)
  • TPH +6.5% (to move to S&P SmallCap 600 from S&P MidCap 400)
  • MNTS +5.9% (received a license from the FCC supporting the inaugural flight of the Vigoride orbital transfer vehicle on the upcoming SpaceX Transporter-5 mission targeted for launch in May 2022)
  • IMAB +4.3% (names new COO)
  • RWT +3.3% (to acquire Riverbend Funding)
  • INFU +2.4% (enters into master service agreement with global healthcare tech co)
  • LFG +2.3% (to acquire NextGen Power for $215 mln)
  • TECK +1.6% (expects technology transformation initiatives to generate $1.1 bln in annualized benefits) 

Analyst comments:

  • GO +3.4% (upgraded to Buy from Underperform at BofA Securities)
  • FWRD +1% (upgraded to Buy from Hold at Stifel)

>>> US Early premarket gappers

Early premarket gappers

  • Gapping up:
    • ZYME +48%, FNCH +36.7%, HUBG +15.8%, MHK +10.1%, FIVN +7.2%, CVGI +6.8%, IMAB +6.7%, TPH +6.3%, NARI +6.2%, ROKU +5.2%, CE +4.9%, BZH +4.8%, TEX +4.4%, TFII +4.2%, MERC +4.2%, AVTR +4.1%, COOP +3.9%, WIRE +3.9%, FBHS +3.9%, MITK +3.8%, X +3.6%, SLCA +3.5%, NVO +3.4%, RWT +3.3%, OMF +3.2%, CAMP +3%, AEM +2.6%, NOV +2.6%, INFU +2.4%, CSL +2.4%, CLPT +2.3%, LFG +2.3%, LNT +2.3%, KLAC +2.2%, PEGA +2.2%, PSO +2.2%, BIO +1.9%, WY +1.9%, DLR +1.7%, ZEN +1.4%, OLN +1.4%, SYK +1.2%, SM +1%, MRO +0.9%
  • Gapping down:
    • ACCD -36.4%, HOOD -11.5%, ALDX -11.2%, TRUP -10.1%, NATI -9.8%, AMZN -8.6%, SEV -8%, TEAM -6.1%, COLM -6%, CENX -5.5%, LYLT -5.3%, NWG -5.1%, CINF -5%, TSVT -4.9%, VRSN -4.5%, EBS -4.4%, DXCM -3.9%, IMAX -3.8%, INTC -3.3%, COHU -3.3%, FEAM -3.2%, RMD -3%, SSNC -3%, ATR -3%, CUZ -3%, GTLS -2.9%, CUBE -2.7%, INCY -2.6%, CLX -2.6%, SKYW -2.5%, WDC -2.5%, AAPL -2.4%, TECK -2.3%, LTC -2.3%, AZN -2.3%, GRPN -1.9%, WFG -1.7%, ULCC -1.7%, FIBK -1.6%, PH -1.5%, HIG -1.4%, EMN -1.3%, CRI -1.2%, NWE -1%

(ZH) After Secretly Pillaging Billions In Turkish Assets To Prop Up Lira, Erdoga

After Secretly Pillaging Billions In Turkish Assets To Prop Up Lira, Erdogan Is Going After Foreigners' Dollars

Back in December, when the crashing Turkish lira mysteriously soared higher on a government and central bank mandated short squeeze, which we later learned was funded by tens of billions in US Dollars soft confiscations, we wrote that "Erdogan Is Secretly Pillaging Billions In Turkish Assets To Prop Up The Lira, And His Rule."
Confirming what many have dreaded for a while - that Erdogan is literally making up healthy economic numbers for international consumption while pillaging the country out of the back door without reporting it, Bloomberg reported that while the government has said it didn’t intervene in the currency market, it lied and the fall of $5.9 billion probably signals a backdoor intervention similar to operations carried out over two years from October 2018, when state lenders sold dollars - typically those belonging to local private savers - to support the local currency.
What was even more alarming is that Erdogan actually thinks the international community is so stupid, nobody will notice what is going on. As Bloomberg showed, net foreign assets dropped by $5.9 billion to minus $5.1 billion on in just days.
Alas since, then Turkey's reserve position has only deteriorated and gone from bad to worse, and according to Goldman, as of April 27, the TCMB's net foreign assets were US$7.4bn, down by US$0.33bn from a week ago. TCMB bank swaps and the stock of the FX deposit facility increased by US$1bn to US$41.8bn compared with a week ago due entirely to a rise in swaps, which picked up to US$41.2bn. The stock of the FX deposit facility has again remained flat at around only US$0.6bn.
According to Goldman's estimates, net foreign assets excluding swaps with banks and other central banks continued to decrease to negative $57.4bn, down by US$1.3bn since a week ago.
Of course, if and when Turkey runs out of domestic FX - read dollars - which it can confiscate and buy lira with, the domestic currency, which ended 2021 as one of the world' performers and has gone nowhere since then thanks to non stop government intervention, will crater and resume its freefall.
So what sis Erdogan to do? Simple: having confiscated most domestic gold and hard currencies, the Turkish president is now hoping to confiscate foreigners' dollars.
But how? Doesn't he have to make it desirable and attractive to put one's hard currencies into the kleptocrat nation?
Bingo... and that's precisely why Bloomberg reports that Turkey is working on a plan to attract inflows of hard currency by offering lira funding, free of interest and with a "guaranteed" 4% return in dollars, to foreign investors willing to park their money for at least two years. Needless to say, but any time Turkey "guarantees" anything, run.
Under the plan, the central bank would provide lira liquidity to foreigners for investment in local bonds with a maturity of at least two years, according to a person with direct knowledge of the deliberations. Besides extending zero-yield swaps, the monetary authority would also guarantee a 4% return in dollar terms when the securities mature, the person said.
Translation: please give us your dollars and we promise to take good care of them and even give you a much higher yield than you can earn (for now) in the US.
Remarkably, nobody has dared to speak up and point out that the Turkish dictator (and currency) is naked. Instead, investors are actually buying the worthless Turkish lira, which was headed for its first gain in over two weeks, trading 0.2% stronger against the dollar.
Bloomberg came the closest to pointing out the sheer audacity of the plan, writing that "the outreach to investors marks a new tack for Turkey and would represent a major U-turn by the central bank, a reflection of pressure on authorities to reverse capital outflows. It’s used similar measures to shore up the currency at home by rolling out state-backed deposit accounts that shield savers from lira weakness."
Indeed, after a currency crisis in 2018, Turkey introduced numerous restrictions on foreign transactions to defend the lira, placing limits on swaps with local banks to deter short sellers. But as a side effect, foreign holdings of Turkish stocks and bonds have fallen to a historic low... and in the case of net assets ex swaps, are actually negative to the tune of $57 billion!
Meanwhile, deepening trade imbalances and the world’s most negative interest rates when adjusted for prices have made the $800 billion economy increasingly vulnerable at a time of intensifying global tightening led by the U.S. Federal Reserve.
Furthermore, courtesy of the lunacy that is Erdogonmics, where the central bank "fights" near record inflation by cutting rates, instead of using higher rates to make lira assets more appealing, Turkey has introduced a series of unconventional policies to attract hard currency and boost the central bank’s reserves.
Deposits in so-called FX-protected accounts reached 782 billion liras ($52 billion) as of April 22, according to data compiled by the banking regulator. This month, the central bank revised some reserve requirement rules for banks in an effort to encourage conversion of foreign exchange into the local currency.
Expect some gullible and extremely naive investors, those who are unaware what depth Erdogan can plumb to preserve his authoritarian status quo for just one more day, to hand over a few billion in USD assets which will promptly be "repossessed" and used by Turkey to prop up the lira for as long as possible. Then when everything crashes, and when Erodgan finally disappears into some non-extradition country, good luck to all trying to recoup their money.

WSJ : Elon Musk’s Twitter Funding Puts More of His Tesla Holdings at Risk

Elon Musk’s Twitter Funding Puts More of His Tesla Holdings at Risk
Car company previously warned investors that its CEO might need to sell stock to cover loans; now he is borrowing more against his stake

Tesla Inc. Chief Executive Elon Musk has for years intertwined his personal business ventures with his stake in the auto maker. Using those holdings to help finance his $44 billion purchase of Twitter Inc. TWTR 0.97%▲ brings that connection to a deeper level.

A key part of the funding plan includes borrowing $12.5 billion from loans backed by more than $62.5 billion worth of Tesla shares that Mr. Musk owns—or about 40% of his stake at Wednesday’s closing price of $881.51. Tesla and several banks have put in place rules that would require him to put up more collateral if the company’s share prices fall.

Using Wednesday’s price, Mr. Musk would need to satisfy the banks with more collateral if Tesla shares were to fall 43% to around $504. In that case, the banks would require a rebalancing that would call for an additional $14 billion, or 28.5 million shares at that level. That’s on top of the 70.9 million shares needed at Wednesday’s price for the original collateral.

Similarly, Tesla has long capped the amount Mr. Musk is allowed to borrow against his shares at 25% of the total value of the pledged stock. This suggests that if the deal used Wednesday’s share price, he’d need to pony up more if those shares fell more than 20% to below $705 and Tesla enforces its policy. These arrangements mean that in certain scenarios, he could be pressured to sell Tesla shares.

Tesla didn’t respond to a request for comment.

Mr. Musk sold roughly $4 billion worth of Tesla stock in the two days after agreeing to buy Twitter, selling a total of more than 4.4 million shares on Tuesday and Wednesday at prices ranging from around $870 and $1,000 a share, according to regulatory filings made public late Thursday.

The overarching story of Tesla’s stock has been one of growth, rising more than 18,000% since going public in 2010. But, like Tuesday, when it fell 12% as investors digested, among other things, what Mr. Musk’s involvement in Twitter might mean for other parts of his empire, the stock has been highly volatile. The Tesla shares are down more 20% since April 4 after he balked at joining the Twitter board, setting him on a path to bidding for the company.

Since 2010, positive and negative stock swings of 5% or more in a single day have totaled 318, according to FactSet data, including Tuesday when Tesla fell to $876.42 a share. In that same period, Apple has seen 57 similar days while General Motors Co. had 90.

At the end of 2021, Mr. Musk had 173 million Tesla shares, not counting his options. About half of his stake was already promised as collateral for personal loans, according to the most recent public record last year. Pledging doesn’t necessarily indicate that actual borrowing against those shares has occurred, the filing said. The most recent public filing in late 2020 said Mr. Musk personally owed a combined $515 million to Morgan Stanley, Goldman Sachs and Bank of America.

The business tycoon has long built his personal financial house on a complicated web of loans backed by his ownership stakes in the companies he backed, including his privately held rocket company, Space Exploration Technologies Corp.

Tesla has previously warned investors of the risk that a stock sale by Mr. Musk to cover loans could cause share prices to fall.

“If the price of our common stock were to decline substantially and Mr. Musk were unable to avoid a sale of the pledged shares (for example, by contributing additional collateral or reducing his leverage), Mr. Musk may be forced by one or more of the banking institutions to sell shares of our common stock,” the company wrote in a 2020 regulatory filing.

Along with competing for his attention, Tesla and SpaceX have over the years shared employees and resources—the Model S sedan prototype was developed under a tent inside SpaceX’s Hawthorne, Calif., headquarters.

In 2016, Mr. Musk led Tesla’s controversial acquisition of a struggling solar panel company called SolarCity Corp., where he was chairman and the largest individual shareholder. Opponents of the deal described it as a bailout for Mr. Musk, while he said it would fuel natural synergies. A Delaware judge ruled Wednesday that the deal was lawful.

Mr. Musk’s unusual finances are in part a legacy of the struggles Tesla and SpaceX faced during the Great Recession in 2008. He plowed what was left of his fortune from his involvement in PayPal into those ventures and was reluctant to sell his ownership stakes later as those businesses improved.

That history had left him a cash-poor billionaire for much of his career even while the Bloomberg Billionaires Index ranks him as the world’s richest man with a fortune of more than $250 billion.

To fund his life and investments, Mr. Musk has borrowed money against his shares in Tesla and SpaceX to avoid having to sell them, a common practice among some of the wealthiest Americans. Before Mr. Musk began selling billions of dollars of shares late last year to help cover taxes on his options that vested, the company reported in June that about half of the Tesla shares he held were being used as collateral for personal borrowing.

His finances have benefited by the fact that the valuations of Tesla and SpaceX have continued to grow, allowing him to borrow more with fewer shares down.

But Tesla shares have fallen precipitously on occasion, often triggered by events or predictions tied to the company’s prospects for growth.

Shares fell 21% on Sept. 8, 2020, after Tesla failed to be included in the S&P 500 as expected. Later that autumn they rose 8.2% the day after it was announced that the company would be included in the benchmark gauge of U.S. equities.

In early 2019, a dark cloud descended over Tesla as shares fell 43% in May from the year’s start among concerns about the company’s outlook. Mr. Musk was struggling to export the Model 3 compact car to China and Europe and with efforts to lower the vehicle’s price in the U.S.

Once those challenges were addressed and Tesla opened its first China assembly plant, the stock would begin the run that took it to new heights as the world’s first auto maker valued at more than $1 trillion in 2021.

Twitter will become a private company if Elon Musk’s $44 billion takeover bid is approved. The move would allow Musk to make changes to the site. WSJ’s Dan Gallagher explains Musk’s proposed changes and the challenges he might face enacting them. Illustration: Jordan Kranse
During those times when Tesla shares have fallen dramatically, attention often focuses on the margin call price for Mr. Musk’s shares.

In May 2019, for example, some short sellers—those investors who benefit from a decline in share price—were pushing a theory on what the trigger price would be for a selloff as Mr. Musk moved to cover his position.

That didn’t happen, but his family has clearly felt that pressure before. In 2015, Tesla board member and Mr. Musk’s younger brother, Kimbal Musk, faced a possible margin call on shares of SolarCity which had fallen to half their value from the start of the year, according to court records. Under financial pressure, he sought a loan from his brother.

“You know that I don’t actually have any cash, right?” Mr. Musk responded, according to records released in litigation dealing with the acquisition. “I have to borrow.”

>>> Europe : Brokers Upgrades & Downgrades - 29th of April 2022 V2(+)

>>> Up
* Atea Raised to Neutral at SpareBank; PT 120 kroner
* Boliden Raised to Buy at Handelsbanken
* Europris Raised to Buy at Arctic Securities; PT 60 kroner (+)
* Fortnox Raised to Buy at SEB Equities; PT 59 kronor
* Handelsbanken Raised to Buy at SEB Equities; PT 111 kronor
* Illimity Raised to Accumulate at Banca Akros (+)
* Inwido Raised to Hold at Handelsbanken
* LeadDesk Raised to Buy at Inderes; PT 14 euros
* Nivika Fastigheter Raised to Buy at SEB Equities; PT 80 kronor
* Nordea Bank Raised to Buy at OP Corporate Bank; PT 11.20 kronor (+)
* Red Electrica Raised to Equal-Weight at Morgan Stanley
* Repsol Raised to Neutral at Exane; PT 15.50 euros
* Terna Raised to Equal-Weight at Morgan Stanley; PT 7.50 euros
* X-Fab Silicon Foundries Raised to Buy at Deutsche Bank

>>> Down
* COIMA RES Cut to Neutral at Mediobanca SpA; PT 10 euros (+)
* Edenred Cut to Hold at HSBC; PT 51.75 euros
* Hoist Finance Cut to Hold at SEB Equities; PT 32 kronor
* RELX Cut to Hold at HSBC; PT 2,460 pence
* Thales Cut to Hold at SocGen; PT 131 euros
* VP Cut to Hold From Add at Peel Hunt
* Wacker Chemie Cut to Sell at SocGen; PT 135 euros (+)
* Wolters Kluwer Cut to Reduce at HSBC; PT 80 euros

>>> Initiation
* Adesso SE Rated New Buy at Jefferies; PT 225 euros
* Bike24 Holding Rated New Hold at Hauck & Aufhaeuser (+)
* Deliveroo Rated New Neutral at Credit Suisse; PT 130 pence (+)
* DFS Furniture Reinstated Buy at Stifel; PT 225 pence (+)
* Eni 1Q Results Show ‘Solid’ Start to the Year: RBC Capital (+)
* Heliad Equity Rated New Buy at Berenberg; PT 10.50 euros
* Lululemon Rated New Outperform at Wedbush; PT $430
* Oriola Reinstated Buy at Nordea; PT 2.60 euros (+)

>>> Call
* Aixtron Raised, PT to Street-High on Strong Momentum: Jefferies
* BASF 1Q Boosted by Upstream With Momentum Maintained: Jefferies (+)
* BBVA 1Q Beat Helped by NII, Trading, Provisions: Jefferies (+)
* CaixaBank’s 1Q Capital Strong, Fees Weaker, Jefferies Says
* Cranswick Cut at Peel Hunt as U.K. Pig Prices to Squeeze Margins
* Danske Bank’s 1Q NII Beat Outweighs Profit Miss: Handelsbanken (+)
* Essity Raised at Goldman Sachs as Downgrade Cycle Comes to End
* Proximus 1Q Beat Driven by All Business lines, Citi Says (+)
* Reckitt’s 1Q Sales Beat Shows Good Start to Year, Jefferies Says (+)
* Safran 1Q Revenue a ‘Slight’ Beat, Guidance Unchanged: Bernstein (+)