Research Calls
- Upgrades:
- Aerojet Rocketdyne (AJRD) upgraded to Overweight from Neutral at JP Morgan; tgt raised to $49
- AutoNation (AN) upgraded to Overweight from Neutral at JP Morgan; tgt lowered to $130
- Berry Petroleum (BRY) upgraded to Overweight from Neutral at Piper Sandler; tgt raised to $14
- Centennial Resource Development (CDEV) upgraded to Overweight from Neutral at Piper Sandler; tgt raised to $13
- Coupa Software (COUP) upgraded to Outperform from In-line at Evercore ISI; tgt raised to $140
- Cullen/Frost (CFR) upgraded to Outperform from Underperform at Wolfe Research; tgt raised to $171
- Laredo Petroleum (LPI) upgraded to Overweight from Neutral at Piper Sandler; tgt raised to $115
- LPL Financial (LPLA) upgraded to Mkt Outperform from Mkt Perform at JMP Securities; tgt $242
- Mission Produce (AVO) upgraded to Buy from Neutral at Citigroup; tgt lowered to $18
- Murphy Oil (MUR) upgraded to Overweight from Neutral at Piper Sandler; tgt raised to $54
- PJT Partners (PJT) upgraded to Outperform from Peer Perform at Wolfe Research; tgt $83
- Sylvamo (SLVM) upgraded to Outperform from Sector Perform at RBC Capital Mkts; tgt raised to $43
- YETI Holdings (YETI) upgraded to Buy from Hold at Berenberg; tgt lowered to $92
- Zeta Global (ZETA) upgraded to Outperform from Perform at Oppenheimer; tgt $20
- Downgrades:
- Blackstone (BX) downgraded to Neutral from Outperform at Exane BNP Paribas; tgt $135
- CMS Energy (CMS) downgraded to Sector Weight from Overweight at KeyBanc Capital Markets
- Dana Inc (DAN) downgraded to Equal Weight from Overweight at Barclays; tgt lowered to $18
- Fifth Third (FITB) downgraded to Peer Perform from Outperform at Wolfe Research; tgt lowered to $47
- Ford Motor (F) downgraded to Equal Weight from Overweight at Barclays; tgt lowered to $17
- Group 1 Auto (GPI) downgraded to Neutral from Overweight at JP Morgan; tgt lowered to $200
- Houlihan Lokey (HLI) downgraded to Underweight from Neutral at Piper Sandler; tgt lowered to $76
- Lazard (LAZ) downgraded to Underperform from Peer Perform at Wolfe Research; tgt $39
- Prosperity Bancshares (PB) downgraded to Underperform from Peer Perform at Wolfe Research; tgt lowered to $69
- Rayonier Adv. Materials (RYAM) downgraded to Sector Perform from Outperform at RBC Capital Mkts; tgt lowered to $6
- Regions Fincl (RF) downgraded to Peer Perform from Outperform at Wolfe Research; tgt lowered to $24
- Rite Aid (RAD) downgraded to Sell from Hold at Deutsche Bank; tgt lowered to $1
- RPM Inc (RPM) downgraded to Hold from Buy at Fermium Research; tgt $92
- Sonic Automotive (SAH) downgraded to Neutral from Overweight at JP Morgan; tgt lowered to $57
- Southern (SO) downgraded to Sector Weight from Overweight at KeyBanc Capital Markets
- Telefonica Brasil (VIV) downgraded to Sector Perform from Sector Outperform at Scotiabank; tgt $11.50
- Vapotherm (VAPO) downgraded to Underweight from Overweight at Piper Sandler; tgt lowered to $8
- Washington Trust (WASH) downgraded to Neutral from Overweight at Piper Sandler; tgt lowered to $56
- Wayfair (W) downgraded to Underweight from Equal Weight at Wells Fargo; tgt lowered to $100
- Others:
- Accolade (ACCD) initiated with a Neutral at Guggenheim
- Altus Power (AMPS) initiated with an Equal-Weight at Morgan Stanley; tgt $10.50
- Ambrx Biopharma (AMAM) initiated with an Outperform at Robert W. Baird; tgt $16
- Charles River (CRL) initiated with an Overweight at Stephens; tgt $377
- Convey Health (CNVY) initiated with a Buy at Guggenheim; tgt $12
- Cyxtera Technologies (CYXT) initiated with an Outperform at Credit Suisse; tgt $15
- Deutsche Boerse (DBOEY) initiated with a Neutral at Credit Suisse
- Doximity (DOCS) initiated with a Buy at Guggenheim; tgt $70
- FIGS, Inc. (FIGS) initiated with a Buy at Truist; tgt $32
- Frontier Communications Parent (FYBR) initiated with an Overweight at Wells Fargo; tgt $37
- GoodRx (GDRX) initiated with a Buy at Guggenheim; tgt $24
- HealthEquity (HQY) initiated with a Buy at Guggenheim; tgt $89
- Oxford Industries (OXM) initiated with a Buy at Truist; tgt $126
- Pinnacle Finl (PNFP) initiated with a Hold at Jefferies; tgt $100
- Roblox (RBLX) initiated with a Buy at Citigroup; tgt $59
- Steris (STE) initiated with an Outperform at Wolfe Research; tgt $275
- Shift4 Payments (FOUR) resumed with a Buy at Citigroup; tgt $81
- Synaptics (SYNA) initiated with an Equal Weight at Wells Fargo; tgt $185
- Teladoc (TDOC) initiated with a Buy at Guggenheim; tgt $96
- Unity Bancorp (UNTY) initiated with an Overweight at Piper Sandler; tgt $33
- Unity Software (U) initiated with a Buy at Citigroup; tgt $125
- Wesdome Gold Mines (WDOFF) initiated with a Sector Perform at RBC Capital Mkts
Early premarket gappers
- Gapping up:
- HPQ +15.4%, SPRO +9.6%, SKIL +6.3%, NETI +6.2%, RGP +5.6%, SLP +4.9%, GENI +4.5%, CXM +4.1%, LEVI +3%, RNW +2.4%, KEYS +2.3%, RLGT +1.7%, GRPN +1.3%, FB +1.2%, SENS +1.1%, DOMO +0.7%, AXON +0.6%, AMZN +0.5%, COST +0.5%, AHT +0.5%
- Gapping down:
- VAPO -22.7%, CCCS -10.9%, IRNT -9.5%, SOFI -4.7%, SELB -4.6%, VAXX -3.4%, AVB -2.3%, ADVM -1.6%, SHEL -0.5%, COF -0.5%
Shell expects $5bn hit following Russia exit
Energy group warns cash flows from operations would be ‘negatively impacted’
Shell expects to take a hit of up to $5bn in the first quarter of 2022 following its decision to exit Russia.
The London-listed energy group made the announcement on Thursday after saying in February it would withdraw from all three of its joint ventures with Gazprom, the Kremlin-backed gas producer.
It later announced it would stop new purchases of Russian oil after the Financial Times revealed it had made $20mn buying a cargo of Russian crude.
Shell was one of many companies to withdraw from Russia following its full-scale invasion of neighbouring Ukraine on February 24, as western groups reassessed their ties with Moscow and in some cases tore up business relationships that were decades in the making.
The oil major previously said the decision to quit the joint ventures in Russia would trigger impairment charges but had not provided a figure.
“For the first quarter 2022 results, the post-tax impact from impairment of non-current assets and additional charges (writedowns of receivable, expected credit losses, and onerous contracts) relating to Russia activities [is] expected to be $4bn to $5bn,” the company said in a trading update.
Shell also said its cash flow from operations would be “negatively impacted by very significant working capital outflows”.
“Reflecting the unprecedented volatility in commodity prices prevailing up to the end of the quarter, material additional movements could be seen in CFFO from margining effects on derivatives, changes in inventory volumes and in accounts payable and receivables,” it said.
In early March, Shell made a purchase of Russian oil when many traders were already avoiding new cargoes from the country.
Ben van Beurden, Shell’s chief executive, said at the time he was “acutely aware that our decision to purchase a cargo of Russian crude . . . was not the right one and we are sorry”.
>>> Up
* AJ Bell Raised to Buy at Liberum; PT 370 pence (+)
* Hurricane Energy Raised to Hold at Canaccord; PT 9 pence
* Julius Baer Raised to Buy at SocGen; PT 67.50 Swiss francs
* Swedbank Raised to Add at AlphaValue/Baader
>>> Down
* Addlife Cut to Hold at SEB Equities; PT 275 kronor
* Brewin Dolphin Cut to Market Perform at KBW; PT 515 pence
* Cargotec Cut to Hold at Handelsbanken
* Energean Cut to Hold at Jefferies; PT 1,300 pence
* Ford Cut to Equal-Weight at Barclays; PT $17
* Gjensidige Cut to Sell at SEB Equities; PT 215 kroner
* Granges Cut to Hold at Handelsbanken
* Hargreaves Lansdown Cut to Hold at Liberum; PT 1,140 pence (+)
* PagSeguro Cut to Neutral at Banco BTG Pactual; PT $23
* Sampo Cut to Hold at HSBC; PT 49 euros
* Selvaag Bolig Cut to Hold at Pareto Securities; PT 53 kroner
* Target Healthcare REIT Cut to Hold at Berenberg; PT 120 pence
* Telenor Cut to Hold at Handelsbanken
* Telia Cut to Hold at Handelsbanken
* TI Fluid Cut to Hold at Jefferies; PT 195 pence
>>> Initiation
* Atlantic Sapphire ASA Reinstated Hold at Arctic Securities
* D'Ieteren Rated New Outperform at Oddo BHF; PT 205 euros
* flatexDEGIRO Rated New Outperform at Oddo BHF; PT 30 euros
* Impact Healthcare REIT Rated New Buy at Jefferies; PT 134 pence
* IntegraFin Re-Initiated Hold at Liberum; PT 430 pence
* Kainos Rated New Add at Numis; PT 1,560 pence
* Nyxoah Rated New Peerperform at Wolfe; PT 19.24 euros
* Raiffeisen Resumed Underweight at Morgan Stanley; PT 14 euros
* Target Healthcare REIT Rated New Hold at Jefferies; PT 122 pence
* Unity Software Rated New Buy at Citi; PT $125
>>> Call
* Commodities Could Soar 40% as Investors Pivot, JPMorgan Predicts (+)
* GB Group Gets Another Buy as Liberum Sees Long-Term Potential
* Morgan Stanley Strategists Say European Stocks Look ‘Very Cheap’ (+)
* Staffers Estimates Cut at Jefferies, Lowers Pagegroup to Hold
DAX:
- Fresenius SE (FRE TH) -1%
MDAX:
- Gerresheimer (GXI TH) +2.7%
- Gerresheimer 1Q Adjusted Ebitda EU61.5M Vs. EU54.2M Y/y
- Duerr (DUE TH) +0.8%
- Thyssenkrupp (TKA TH) +0.7%
- Siemens Energy (ENR TH) +0.7%
- Telefonica Deutschland (O2D TH) -0.9%
- K+S (SDF TH) -1.2%
SDAX:
- flatexDEGIRO (FTK TH) +2.8%
- flatexDEGIRO Rated New Outperform at Oddo BHF; PT 30 euros
- Traton (8TRA TH) +1.9%
- SMA Solar (S92 TH) +1.4%
- LPKF (LPK TH) +1.4%
- SAF-Holland SE (SFQ TH) +1.3%
- Faurecia SE (FAU TH) +1.6%
- Voestalpine (VAS TH) +1.5%
- Watch European Miners as Iron Ore Declines Over China Outbreak
- Vestas (VWSB TH) +1.2%
- Siemens Gamesa (GTQ1 TH) +1.1%
- Grocer Carrefour Picked as Top Takeover Target in Europe: Survey
- Orsted (D2G TH) +1.1%
- ASML (ASME TH) +1.1%
- Raiffeisen (RAW TH) -1%
- Raiffeisen Resumed Underweight at Morgan Stanley; PT 14 euros
- Centrica (CENB TH) -1.1%
- K+S (SDF TH) -1.2%
- Ukraine War Defers EU Agri-Green Push, Boost Fertilization Firms
- Danone (BSN TH) -1.2%
- Volvo (VOL1 TH) -1.5%
- Equinor (DNQ TH) -1.8%
>>> Up
* Hurricane Energy Raised to Hold at Canaccord; PT 9 pence
* Julius Baer Raised to Buy at SocGen; PT 67.50 Swiss francs
* Swedbank Raised to Add at AlphaValue/Baader
>>> Down
* Addlife Cut to Hold at SEB Equities; PT 275 kronor
* Brewin Dolphin Cut to Market Perform at KBW; PT 515 pence
* Cargotec Cut to Hold at Handelsbanken
* Energean Cut to Hold at Jefferies; PT 1,300 pence
* Ford Cut to Equal-Weight at Barclays; PT $17
* Gjensidige Cut to Sell at SEB Equities; PT 215 kroner
* Granges Cut to Hold at Handelsbanken
* PagSeguro Cut to Neutral at Banco BTG Pactual; PT $23
* Sampo Cut to Hold at HSBC; PT 49 euros
* Selvaag Bolig Cut to Hold at Pareto Securities; PT 53 kroner
* Target Healthcare REIT Cut to Hold at Berenberg; PT 120 pence
* Telenor Cut to Hold at Handelsbanken
* Telia Cut to Hold at Handelsbanken
* TI Fluid Cut to Hold at Jefferies; PT 195 pence
>>> Initiation
* Atlantic Sapphire ASA Reinstated Hold at Arctic Securities
* D'Ieteren Rated New Outperform at Oddo BHF; PT 205 euros
* flatexDEGIRO Rated New Outperform at Oddo BHF; PT 30 euros
* Impact Healthcare REIT Rated New Buy at Jefferies; PT 134 pence
* IntegraFin Re-Initiated Hold at Liberum; PT 430 pence
* Kainos Rated New Add at Numis; PT 1,560 pence
* Nyxoah Rated New Peerperform at Wolfe; PT 19.24 euros
* Raiffeisen Resumed Underweight at Morgan Stanley; PT 14 euros
* Target Healthcare REIT Rated New Hold at Jefferies; PT 122 pence
* Unity Software Rated New Buy at Citi; PT $125
>>> Call
* GB Group Gets Another Buy as Liberum Sees Long-Term Potential
* Staffers Estimates Cut at Jefferies, Lowers Pagegroup to Hold
Stocks fell Thursday after the Federal Reserve outlined plans to pare its balance sheet by more than $1 trillion a year while hiking interest rates, a campaign to curb inflation that could hit economic growth. An Asia-Pacific share gauge fell over 1%, sapped by Japan. Losses were a little smaller in China, where officials have again signaled that they intend to loosen policy amid a Covid outbreak and property-market woes. U.S. and European futures dipped after a tech-led Wall Street retreat Wednesday. Treasuries rose, the yield curve was steeper and the dollar flirted with a three-week high as investors digested the minutes of the Fed’s March meeting. The minutes signaled half-point rate increases are possible, and that the Fed is considering reducing its massive bond holdings at a maximum pace of $95 billion a month to tighten financial conditions. Commodity markets continue to be whipsawed by disruptions sparked by Russia’s war in Ukraine and efforts to curb raw-material costs. Oil rallied, paring a slump that was triggered by the International Energy Agency’s decision to deploy 60 million barrels from emergency stockpiles. The Fed’s plan to prune its near $9 trillion balance sheet, which was swollen by pandemic-era bond purchases, points to more volatility in global markets. Investors are doubtful the Fed can avoid tipping the world’s biggest economy into a recession as it focuses on slowing activity to bring down price pressures. In China, officials will use monetary policy tools at an “appropriate time” and consider other measures to boost consumption, according to the readout from a meeting of the State Council chaired by Premier Li Keqiang on Wednesday. Russia slipped closer to a technical default after foreign banks declined to process about $650 million of dollar payments on its bonds, forcing it to offer rubles instead. The latest corporate developments included the purchase of a stake in HP Inc. valued at more than $4.2 billion by Warren Buffett’s Berkshire Hathaway Inc. HP’s shares jumped in extended trading. US After Hours SOFI -5.3% falls on weak guidance; VAPO -18.8% as it withdraws FY22 rev guidance; LEVI +1% ticks higher on earnings
Nikkei -1.60% Hang Seng -1.13% CSI -1.06% Shanghai -1.18% Shenzen -1.55%
Eur$ 1.0917 CNH 6.3674 CNY 6.3622 JPY 123.68 GBP 1.3083 CHF 0.9326 RUB 81.8411 TRY 14.7424 WTI$ 97.23+ +1.06% Gold 1,923.03 -0.12% BTC 43,270 -1.37% ETH 3,200 -1.91%
S&P -0.30% Nasdaq -0.22% EuroStoxx -0.16% FTSE +0.06% Dax -0.18% SMI +0.08%
Macro :
- ECB’s Knot Expects Higher Inflation in Coming Months
- Fed Officials Weigh Pruning Balance Sheet by $95 Billion a Month
- Oil Selloff Accelerates as IEA Sets Coordinated Global Release
Keep an eye on :
- 888 LN : 888 to Launch Equity-Raise to Fund William Hill Takeover: Sky
- ARL GY : Advent, Centerbridge to Submit Renewed Aareal Takeover Bid
- ACCEL NA : Accell Says Acceptance Period in KKR Deal Runs April 8 to June 3
- ACS SM : ACS Confirms Interest to Bid For Atlantia With GIP, Brookfield
- ACS SM : ACS Looks to Elevate Highways Ambition With Atlantia Bid: React
- AIR FP : Airbus Is Said to Have Delivered About 60 Aircraft in March
- ALV GY : BNP, SocGen Interested in Allianz’s Generation Vie Stake: Echos
- ARR NO : Arribatec Group Offering of 100m Shares Prices at NOK0.5/Share
- ATL IM : Blackstone Is Said to Weigh Potential Bid for Italy’s Atlantia
- ATL IM : Atlantia Shares Jump in Milan After Report Perez Weighing Offer
- ATL IM : Atlantia Outlook to Stable by Moody's
- AVTX NA : Avantium Starts Offering Worth up to EU45m, Terms Show
- BARC LN : Barclays Hires BofA Equity Capital Markets Veteran Warren Fixmer
- BBVA SM : BBVA Plans Early Redemption of Contingent Conv. Securities
- BA US : Boeing 737 Max 10 Faces Costly Delays as Lawmaker Opposes Waiver
- CA FP : Carrefour Seen as Europe’s Top M&A Target in Bloomberg Survey
- CLASB SS : Clas Ohlson March Sales +22% (1)
- CNP FP : CNP Assurances Names Barriere, Thepaut to Executive Committee
- DBK GY : Deutsche Bank Plans to Hire 3,700 in India to Entrench Position
- H20 GY : Enapter AG Plans EU100m Capital Raise in Two-Part Share Issue
- EUZ GY : Eckert & Ziegler Prelim 1Q Net Income About EU6.5M
- SGRE SM : Gamesa Sinks on Turbine Issue; Citi Says Drop May Be Overdone
- G IM : Generali Div. at Risk in Challengers’ Plan, CEO Tells Repubblica
- GXI GY : Gerresheimer 1Q Adjusted Ebitda EU61.5M Vs. EU54.2M Y/y
- HPQ US : Buffett’s Berkshire Hathaway Adds New $4.2 Billion HP Stake
- REMEDY FH : Finland’s Remedy to Remake Max Payne Titles With Rockstar Games
- REP SM : Repsol 1Q Refining Margin Widens, Crude Output Drops
- MSLH LN : Marshalls to Buy Marley For GBP535m Ent. Value; Starts Placing
- SAN FP : Sanofi, Regeneron: EU Commission Approves Dupixent for Children
- SBMO NA : SBM Offshore Has No Significant Business in Ukraine or Russia
- SCTS SS : Scandi Standard Says Fire Broke Out at Danish Facility
- SKAB SS : Skanska Receives Order for Route 146 in U.S. Worth SEK780m
- SOP FP : Sopra Steria Indexes EU1.1B Credit Line to Carbon Target
- SREN SW : Swiss Re Reiterates Target ROE of 14% in 2024
- DG FP : Vinci Highways Acquires 70% of Tollplus It Didn’t Already Own
- WMH LN : 888 to Launch Equity-Raise to Fund William Hill Takeover: Sky
AccuWeather Warns La Nina To Spark Active Hurricane Season
AccuWeather forecasters are predicting the seventh straight above-average Atlantic hurricane season because of La Niña and warmer ocean temperatures.
AccuWeather's senior meteorologist and hurricane expert Dan Kottlowski is once again anticipating an above-normal season of tropical development in the Atlantic basin, along with higher probabilities of major hurricanes making landfall in the U.S.
Kottlowski forecasts 16-20 named storms and six to eight hurricanes. Of those hurricanes, he believes three to five could exceed Category 3 strength.
AccuWeather's forecast of 16-20 named storms is higher than the 30-year average of 14 per year. The projection of six to eight hurricanes is in line with averages.
This year's upcoming season could be identical to how 2020 and 2021 played out. Last season, there were 21 named storms, seven hurricanes, and four major hurricanes. Eight of those storms made direct impacts on the U.S. mainland. About four to six are expected to hit the U.S. this year.
Kottlowski said the climatological phenomenon known as La Niña will play a crucial role in the active hurricane season, which begins on June 1 and ends on Nov. 7. There's also a risk of tropical storms before the season starts.
La Niña has been extremely active in the last two years and has reduced the amount of vertical wind shear in the atmosphere. Greater vertical wind shear can often stymie developing cyclones.
Kottlowski said La Niña and above-normal sea-surface temperatures in the Gulf of Mexico and the Caribbean and off the U.S. East Coast would produce another active hurricane season.
Samsung Forecasts Record First-Quarter Revenues
Profits are also projected to rise over prior year
SEOUL— Samsung Electronics Co. forecast record quarterly revenues and a 50% rise in first-quarter operating profits over the prior year, owing to strength for memory chips and a robust rollout of its latest flagship smartphones.
Samsung’s performance speaks to how the prolonged chip shortage continues to boost business for tech suppliers. But sales of the South Korean tech giant’s memory chips and smartphones could face risks of decline in the months ahead as factors including the Russia-Ukraine war and record inflation could dampen consumer sentiment.
On Thursday, the world’s largest maker of memory chips and smartphones said it forecasts operating profit of 14.1 trillion South Korean won, equivalent to about $11.6 billion, for the quarter ended March 31. That compares with 9.4 trillion won for the year-earlier quarter.
Revenue is expected to reach 77 trillion won, up about 18% from the prior year. It would mark Samsung’s highest ever quarterly revenue, just topping the prior record of 76.6 trillion won set in the prior quarter.
Samsung’s outlook topped market expectations. Analysts polled by S&P Market Intelligence were expecting on average 13.5 trillion won in operating profit and 74.9 trillion won in revenue.
The Suwon, South Korea-based company reports full earnings later this month. Samsung is considered a bellwether for the tech world as it is both a major electronics maker and a supplier to consumer-electronics rivals including Apple Inc. and Sony Group Corp.
Samsung generates most of its operating profit from semiconductors and has a dominant position in memory chips that give devices their multitasking ability and data storage.
Prices of the two major types of memory chips—both DRAM and NAND flash—in the first quarter remained higher than the same point last year. But production hold ups due to shortages of other types of semiconductors have led to some pullbacks in memory demand from the prior quarter, said Sanjeev Rana, a Seoul-based senior analyst at brokerage CLSA. But memory prices held up better than expected, propping up profits, he said.
DRAM prices could decline by up to 5% in the second quarter, from the prior three-month period, due in part to weaker consumer demand for tech gadgets because of inflation and unknown economic fallout from the continuing Russia-Ukraine war, according to TrendForce, a Taiwan-based tech-market researcher.
But NAND flash prices are expected to rise by 5% to 10% in the second quarter as supply became tighter following a raw-material contamination that disrupted production at Japan’s Kioxia Holdings Corp. and Western Digital Corp. in early February, TrendForce projects.
Samsung is also expected to have gotten a boost from its latest lineup of Galaxy S22 flagship smartphones, which made its debut in February. The South Korean firm kept prices the same as last year’s models. But the premium devices, which bring in the highest margins, are the main drivers of the company’s smartphone profits.
Global demand is 20% higher for the Galaxy S22 than its predecessor, based on the first six weeks of sales, Samsung recently said.
Samsung is the largest smartphone vendor in Russia with a 30% market share as of the fourth quarter of 2021, according to Counterpoint Research. Last month, the company said it had suspended shipments of all of its products to the country because of geopolitical developments and was monitoring the situation.