FedEx: Color on Quarter

FedEx: Color on Quarter
  • Cowen says FedEx remains on track for another record holiday shipping season, which should drive underlying earnings improvement as service levels remain high. Of note, increased demand for larger packages coupled with e-commerce growth are helping produce these record results. While peak season is not finished, the surcharge on oversized residential packages should continue to improve the yield environment for F2H18. Overall, they expect few issues for FedEx during the peak shipping season as long as the weather remains manageable for the remainder of the week.
  • OpCo says its $265 target is based on 17x our FY19E adjusted EPS of $15.50 (+19% y/y) vs. FedEx's four-year historical range of 11-18x the FTM consensus expectation. Underlying the firm's view is FedEx's Express segment margin expansion opportunity/anticipated Ground operating income growth/overall adjusted longterm EPS growth profile in the teens.
FDX shares are higher by 2% following

(Needham) Lululemon athletica: Growth algorithm supports higher sales and margin

Growth algorithm supports higher sales and margins
Needham notes LULU is their top pick for 2018 based on strong momentum and firm's expectation for higher sales and margins during the next year and beyond. While its brand is well-proven in the N. America women's markets, firm believes it has a long runway for growth in under-penetrated areas, including int'l and men's. Strong product acceptance and double-digit square footage growth will provide an avenue for growth in these segments. With respect to margins, firm believes LULU should be able to drive GM expansion and SG&A leverage in 4Q and throughout 2018, enabling its already high margins to improve further. LULU's highly profitable e-commerce segment is posting out-sized growth and they think it is well positioned for the sector's structural shifts to digital channels. All in, they foresee double-digit EPS growth during the next few years; Buy, $79 tgt.

>>> Micron: Color on QTr- Analysts raising price targets across the board follow

Micron: Color on QTr- Analysts raising price targets across the board following strong quarter/guidance
  • Mizuho Securities raises tgt to $50 from $45. MU reported a solid NovQ and guided its FebQ to $7B/$2.58, up 3% q/q and well above consensus at down 5% q/q. A ~55% GM was 300bps above consensus. DRAM and NAND remain strong, with DRAM Enterprise and Cloud shipments up 50% y/y and SSDs up 50% q/q. With strong fundamentals, continued cost reductions and stable ASP / margins, EPS is now running at an annual rate of ~$10/shr. With GMs at an all-time high at ~56% and a stable 1H18 outlook, firm is reiterating Buy and raising PT to $50. DRAM (~67% of revenue) and NAND (~27% of revenue) outlook was strong with 1x/1y transition and 64L/Gen3 NAND ramp.
  • Cowen & Co raise tgt to $53 from $50. Firm and many investors expected a beat and opportunity for a raise, but nobody expected MU to be annualizing $10 EPS off this call. The question is now whether the multiples, which appear unreasonably low (MU ~8x FTM FCF), expand any as improvements in MU's technology roadmaps should drive sustainable cash flows through CY20. The focus remains on DRAM and opportunity for server momentum in C2018 w/ FebQ guidance implying DRAM segment gross margin flat to up from the newly minted 62% for FQ2. These are levels that are over ~2,000bps higher than anything MU has posted in DRAM for 15+ years (see charts). This is great, and Cowen still believes a combination of structural technology limitations and declining demand elasticity should keep DRAM supply very much at bay.
  • Stifel Research raises tgt to $75 from $65.
  • J.P. Morgan raises tgt to $60 from $55.
  • Deutsche Bank raises tgt to $60 from $55.
  • Rosenblatt raises tgt to $85 from $75.
  • Citigroup raises tgt to $55 from $51.
  • WSJ Article on Results

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance:
  • SFIX -11.1%, RHT -2.0%, IBKC -1.8%.
Notable Crypto Plays:
  • CCIH -21.3%, MGTI -2.1%
Other news:
  • ROKA -46.3% (To delist from NASDAQ Global Markets),
  • TXMD -8.8% (announces FDA acceptance of New Drug Application and PDUFA target action date of May 29, 2018 for TX-004HR),
  • CBIO -2.6% (proposes public offering of common stock),
  • STM -1.4% (Still Checking).
Analyst comments:
  • IBKC -1.8% (Downgraded to Outperform from Strong Buy at Raymond James),
  • JACK -1.8% (Downgraded to Hold from Buy at Jefferies),
  • CENX -1.7% (Downgraded to Hold from Buy at Deutsche Bank),
  • SEP -1.1% (Downgraded to Equal Weight from Overweight at Barclays),
  • HCA -1% (Downgraded to Underweight from Equal-Weight at Morgan Stanley),
  • THC -0.9% (Downgraded to Underweight from Equal-Weight at Morgan Stanley),
  • GILD -0.9% (Downgraded to Neutral from Outperform at Credit Suisse),
  • GDS -0.9% (Downgraded to Neutral from Outperform at Credit Suisse).

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance:
  • BLIN +17.5%, BB +7.3%, MU +7.1%, FDX +2%, GIS +0.2%.
In Reaction to Strong MU earnings report:
  • AMAT +2.2%, LRCX +2%, INTC +1%, NVDA +1%, WDC +0.9%,AMD +0.9%, STX +0.8%.
Notable Crypto Plays:
  • SSC +55.8%, LFIN +18.7%, FTFT +13.6%, XNET +8.0%, OTIV+7.5%, DPW +6.1%, GROW +4.3%, SRAX +3.8%, MARA +2.9%, RIOT +2.3%.
Other news:
  • SKLN +21.1% (to purchase an equity stake in Helomics Corporation),
  • GSUM +13.9% (Launches AI-driven, Software as a Service, Intelligent CRM Solution for the China market),
  • EXEL +5.3% (continued strength after FDA approval of CABOMETYX tablets for previously untreated advanced renal cell carcinoma),
  • TIG +1.9% (Announces plans to focus its resources and capabilities on its eASC platform technology and its product candidates Cx601 and Cx611),
  • BIIB +1.6% (Ionis Pharma and Biogen enter collaboration agreement to identify new antisense oligonucleotide drug candidates for the treatment of spinal muscular atrophy),
  • AL +1.4% (slightly higher in after hours following upgrade to Buy at Buckingham ),
  • UPS +0.8% (following FDX results).
Analyst comments:
  • QHC +5.4% (Upgraded to Equal-Weight from Underweight at Morgan Stanley),
  • AKS +2.5% (Upgraded to Buy from Neutral at Longbow),
  • X +2.1% (Upgraded to Buy from Neutral at Longbow),
  • WEN +1.8% (Upgraded to Outperform from Neutral at Wedbush),
  • WTW +1.6% (Initiated with a Buy at B. Riley FBR, Inc.; tgt $65),
  • BIIB +1.6% (Upgraded to Outperform from Neutral at Credit Suisse),
  • UAL +1.3% (Upgraded to Buy from Neutral at Buckingham Research),
  • AA +1.1% (Upgraded to Outperform from Neutral at Credit Suisse),
  • TS +1.1% (Initiated with a Overweight at Barclays; tgt $39),
  • NUE +0.9% (Upgraded to Buy from Neutral at Longbow).

>>> US Early premarket gappers

Early premarket gappers
Gapping up:
  • SKLN +21.1%, BLIN +17.5%, GSUM +13.9%, BB +7.3%, MU+7.1%, EXEL +5.3%, AMAT +2.2%, LRCX +2%, FDX +2%, TIG+1.9%, BIIB +1.6%, UAL +1.4%, INTC +1%, NVDA +1%, WDC+0.9%, AMD +0.9%, STX +0.8%, UPS +0.8%, ACN +0.7%.
Gapping down:
  • SFIX -11.1%, TXMD -8.8%, CBIO -2.6%, RHT -2%, IBKC -1.8%,WGO -0.5%

>>> Borsalino put into administration after court refuses bankruptcy protection


Borsalino put into administration after court refuses bankruptcy protection request
20 DEC 2017

Borsalino, an Italian millinery company, has been put into administration, The Daily Telegraph reported. The newspaper cited court proceedings in Alessandria for the information. Borsalino was declared insolvent following the court’s refusal to allow protection from Borsalino’s creditors.

The hat maker owes its creditors about EUR 18m (GBP 15.9m), the item said.

Private equity fund Haeres Equita had managed Borsalino since 2015, according to the newspaper. Haeres Equita had invested EUR 10m in Borsalino, the item said.

A report in the Italian-language newspaper Il Messaggero on 1 September said Haeres Equita was ready to take over Borsalino. The report did not cite a source for the information.

Haeres Equita was planning to formalise a bid after 18 September, when Borsalino shareholders were expected to approve a EUR 7.5m capital raise, according to the report.