>>> Dr Pepper Snapple beats by $0.08, beats on revs; guides FY16 EPS in-line, ra

Dr Pepper Snapple beats by $0.08, beats on revs; guides FY16 EPS in-line, raises rev guidance
  • Reports Q1 (Mar) earnings of $0.94 per share, $0.08 better than the Capital IQ Consensus of $0.86; revenues rose 2.5% year/year to $1.49 bln vs the $1.47 bln Capital IQ Consensus.
  • Co issues guidance for FY16, sees EPS at the high end of the previously communicated range of $4.20-4.30, vs. $4.32 Capital IQ Consensus Estimate. Now expects full year reported net sales to be up approximately 2%, up from prior guidance for 1% growth. Consensus represents +1.7% sales growth.
    • Collectively, foreign currency translation and transaction are now expected to negatively impact net sales by approximately 1% and core EPS growth by about 2.5%.
  • "We're off to a good start this year. Our teams stayed focused on our strategy of unlocking growth across our priority brands through integrated communication and execution. We gained dollar share in both CSDs and sparkling waters in Nielsen measured markets and delivered both product and package innovation to meet consumers' evolving needs. Rapid Continuous Improvement (RCI) continues to enhance growth and productivity across the business."

>>> Mondelez Int'l beats by $0.09, reports revs in-line; reaffirms guidance

Mondelez Int'l beats by $0.09, reports revs in-line; reaffirms guidance
  • Reports Q1 (Mar) earnings of $0.48 per share, excluding non-recurring items, $0.09 better than the Capital IQ Consensus of $0.39; revenues fell 16.8% year/year to $6.46 bln vs the $6.42 bln Capital IQ Consensus. Operating Income margin was 11.2%, up 80 basis points; Adjusted operating income margin expanded 240 basis points to 15.1%.
    • Organic Net Revenue grew 2.1%, as the company increased volume/mix in developed markets and raised prices to recover currency-driven input cost inflation in inflationary markets. Power Brands2 grew 3.8 percent. Organic Net Revenue from emerging markets3 was up 3.6 percent and developed markets4 increased 1.3 percent.
  • Mark Clouse, Chief Commercial Officer, to leave company to become CEO of a North American publicly traded food company
  • Reaffirms guidance: Organic Net Revenue Growth at least 2% (reduces FX headwind to 300 bps from 600 bps); Adjusted Operating Income Margin 15% to 16%; Adjusted EPS Double-digit growth on a constant currency basis (FX headwind to $0.05 from $0.13); Free Cash Flow excluding items at least $1.4 billion.

>>> Apple: Color on Quarter

Apple: Color on Quarter
  • AAPL down 8% near $96 premarket... the stock found support near $95 in February and Aug '15 corrections... AAPL now has a $532 bln market cap and trades at 11.6x FY16 EPS Capital IQ Consensus... Semi ETF SMH indicated 1.5% lower premarket.
  • RBC cuts tgt to $120 from $130. The June-qtr guide was exceptionally disappointing but they think valuation provides support in mid 90's near-term but for AAPL to sustain multiple expansion investors need to get comfort regarding iPhone 7 being a game changer and enabler of rev acceleration. From a stock perspective, as they lap the tough iPhone 6 compares and head into iPhone 7 launch, they should see return of growth in Dec-qtr that along with a modest uptick in gross-margins should enable AAPL to drive EPS growth (buybacks should also help).
  • Mizuho notes Apple reported F2Q revenues below expectations and toward the low-end of guidance. EPS came in below consensus with revenue downside driving margins lower. While risk to F3Q16 was anticipated, guidance implies significant deceleration and margin pressure. However, they look beyond the current cycle and remain grounded in their analysis of customer LTV supporting a fundamental value of the stock meaningfully higher than current levels. Reiterating Buy rating and $120 on attractive risk-reward.
  • Cowen cuts tgt to $125 from $135. While optically hard to defend and maybe range-bound near-term, their call here is unchanged. They areaggressive buyers <$100 and feel the market will look back on this as the last estimate cut ahead of a little better than expected iPhone 7 cycle providing a bridge to a new "cycle of innovation" with OLED in '17. They see risk/reward >2:1 to upside at <$100. They note inventories have been vleared; fundamental price/demand elasticity for iPhone that remains very strong (SE unit demand is well ahead of supply) and this is likely the last estimate cut.
  • Stifel is reducing their F2016-F2018 rev and non-GAAP EPS estimates by an average of 4% and 7%, respectively, following Apple's weak F2Q16 results and F3Q16 outlook (channel inventory burn considered). Based on a belief investors could consider a current trough non-GAAP EPS (including stock-comp) in the range of $8/sh. and their updated (6% reduced) estimate of $9.42/sh. for C2017, while they see downside into the $90/sh. range (~7.5x ex-cash P/E vs. ~9x median), they maintain their $120/sh. price target (10x ex-cash P/E on C2017 est; ~7x EV/EBITDA). Given their analysis/views on Apple's iPhone installed base expansion (>625M), they remain positive on the set-up into late-2016 / 2017.
  • Maxim lowers tgt to $157 from $162. iPhone Mar Q units miss their estimate by 2% on a sell-out basis. June quarter guidance implies iPhone sell-out likely down 15% to 17% y/y, 6% weaker than their prior estimate. While they are not lowering their FY17 revenue estimate ($239B, up 12% y/y, up 2% over FY15), they are shifting revenue slightly from iPhone (less inventory build) to services which is impacting gross profit estimate by 1%. Combined with lower projected net interest income, they are slightly lowering their FY17 EPS estimate by 3% from $9.90 to $9.68 (consensus was $9.95).
  • Needham expects AAPL to trade down today because it missed FY2Q16 consensus income statement metrics and lowered guidance for FY3Q16. What they liked about the quarter was: 1) accelerating services growth (to 20% y/y up from 15% last quarter); 2) capital return program increased by $50B, including a dividend increase of 10% (to $0.57/share); 3) Operating Free Cash Flow of $11.6B implying an annualized FCF yield of 8-10%; 4) iPhone units sales were 51.2 mm (better than their est of 50mm, and well above bear estimates). They view the tough y/y iPhone comps, strong currency headwinds, and $2B inventory drawdown as temporary issues, suggesting upside in FY2H16. They are buyers on weakness.
  • Oppenheimer downgrades to Perform.
  • Goldman cuts tgt to $136 from $155; removed from Conviction Buy; reiterate Buy rating
  • Piper Jaffray cuts tgt to $153 from $172
  • BMO cuts tgt to $117 from $130
  • Macquarie lowers tgt to $112 from $117

>>> Kinnevik Paints a Different Picture of Rocket Internet: Gadfly

"The usefulness of Kinnevik's methodology was highlighted further on Wednesday. As it reported first-quarter results, there was also news of a 300 million euro funding round for Global Fashion Group, an online retailer owned 26 percent by Kinnevik and 22.5 percent by Rocket. Kinnevik will kick in 200 million, Rocket 100 million and the funding values the company at about 1 billion euros. That’s way below the 3 billion euros in Rocket's last portfolio value; lower even than Kinnevik's 1.71 billion euros as of Tuesday night.

And there are recent signs of Kinnevik distancing itself from Rocket. Lorenzo Grabau, Kinnevik CEO and former Goldman Sachs banker, stepped down as Rocket chairman late last year, though he remains on the board. Kinnevik didn't take part in a $420 million co-investment fund that Rocket unveiled in January, and has been making its own bets on fintech and healthcare start-ups.

In any case, Kinnevik and Rocket both suffer from a similar difficulty: holding a bunch of different stakes in companies means their shares trade at a discount to net asset value. Rocket shares are at a 38 percent discount to its own last portfolio value. Kinnevik, which owns more listed assets so is easier to value, has a discount of about 17 percent."

>>> RKET -7.39% : *DJ Rocket Internet, Kinnevik are Key Shareholders of Global F

RKET -7.39% : *DJ Rocket Internet, Kinnevik are Key Shareholders of Global Fashion Group, Valuation of Global Fashion Group Drops Sharply
BERLIN--Rocket Internet SE said it would inject additional cash in online retailer Global Fashion Group at a sharply reduced valuation, highlighting uncertainty about the value of tech startups in recent months.
Global Fashion Group will be worth 1.0 billion euros ($1.13 billion) after a EUR300 million capital increase, Rocket Internet said. In August last year, Global Fashion Group had been valued at EUR3.04 billion.
Rocket Internet has agreed to underwrite up to EUR100 million of the financing. Investment AB Kinnevik said separately it has committed to invest up to EUR200 million.

>>> RKET -7.39% : *DJ Rocket Internet, Kinnevik are Key Shareholders of Global F

RKET -7.39% : *DJ Rocket Internet, Kinnevik are Key Shareholders of Global Fashion Group, Valuation of Global Fashion Group Drops Sharply
BERLIN--Rocket Internet SE said it would inject additional cash in online retailer Global Fashion Group at a sharply reduced valuation, highlighting uncertainty about the value of tech startups in recent months.
Global Fashion Group will be worth 1.0 billion euros ($1.13 billion) after a EUR300 million capital increase, Rocket Internet said. In August last year, Global Fashion Group had been valued at EUR3.04 billion.

(BarCap) Auto Sector - Volkswagen, Porsche Upgraded - see full note atatched

Porsche : A different way into VW
Porsche is winning the battles, but the war is not over yet: We are upgrade Porsche

to Overweight and raise our price target to €78 to reflect changes to our valuation of

VW now that we have incremental visibility on the cost of the emissions crisis. Although

we accept the potential high associate risks and that we remain a long way from a

conclusion to Porsche’s own litigation issues, we think recent legal developments

continue to suggest momentum is in Porsche’s favour. However, were legal cases in

Hanover to arrive at results contrary to those seen thus far in Stuttgart and

Braunschweig, and Porsche were required to pay out on all outstanding claims, we

would see c.19% downside to our PT at €42 (our downside case). Similarly, if Porsche

were to prevail in all the outstanding cases, we would see the shares being worth €88

(our upside case), a 79% premium to today’s share price.

A “cleaner” VW? Upgrading to OW on anticipation of corporate change

What has changed? As usual with a huge conglomerate company like VW, particularly

given its wide-sweeping emissions crisis, visibility is less than perfect. "We don't know

what we don't know", was the refrain in reply to what exactly the €16.2bn provision

(announced with Friday's FY15 results) incorporates. Clearly it is not possible to provide

under IFRS for unknown risks but it is evident that VW management have tried to

account for as much of the bad news as possible in one block, including criminal

liabilities. What else is new? This is where our knowledge grows even hazier; but it feels

to us that 2016E guidance and the new management compensation profile were

structured to highlight corporate change, in particular for VW's unwieldy cost structure.

So while the risks aren't past, and we believe the stock will remain uninvestable to

many, we think the balance of risk has moved in VW's favour and we upgrade to OW,

with a new PT of €160 for the Preference shares and €184 for the Ords (a 15%

premium for voting power).