>>> Target beats by $0.10, reports revs in-line with comps below guidance; guide

Target beats by $0.10, reports revs in-line with comps below guidance; guides Q2 EPS, comps below consensus; FY17 EPS guidance achievable
  • Reports Q1 (Apr) earnings of $1.29 per share, excluding non-recurring items, $0.10 better than the Capital IQ Consensus of $1.19; revenues fell 5.4% year/year to $16.2 bln vs the $16.31 bln Capital IQ Consensus.
  • Comps +1.2% vs. +1.5-2.5% guidance; more than offset by the impact of the sale of the pharmacy and clinic businesses.
    • Comparable digital channel sales grew 23% and contributed 0.6 % points to comparable sales growth.
    • EBIT +4.9% to $1.32 bln.
    • EBITDA and EBIT margin rates were 11.5% and 8.2%, respectively, compared with 10.5% and 7.4%, respectively, in 2015.
    • First quarter gross margin rate was 30.9%, compared with 30.4% in 2015, reflecting the benefit of the sale of the Company's pharmacy and clinic businesses, combined with the benefit of the Company's cost savings initiatives, partially offset by investments in promotions.
  • Co issues downside guidance for Q2, sees EPS of $1.00-1.20, excluding non-recurring items, vs. $1.36 Capital IQ Consensus; comps flat to down 2% vs. ests near +1.9%.
  • Co sees FY17 EPS within $5.20-5.40 prior range achievable, excluding non-recurring items, vs. $5.27 Capital IQ Consensus Estimate.

>>> US Early premarket gappers

Gapping up: ANDE +30.1%, DLNG +20.4%, NETE +16.1%, NLST +11.8%, PETX +7.4%, CBYL +6.5%, CHD +4.5%, SDRL +4.3%, CETX +3.6%, AGIO +3.4%, SPLS +2.7%, TSLA +2.6%, ARMH +2.6%, NOK +2.3%, MT +2.1%, AVID +1.5%, RBS +1.3%, VRX +1%, LOW +1%, CS +0.9%, VRX +0.9%, HRL +0.8%

Gapping down: VIPS -13.2%, ACXM -10.3%, MACK -4.8%, SHLX -4.6%, IAG -3.7%, EGO -3.4%, GFI -2.6%, AUY -2.2%, BBL -2%, RIO -1.9%, FCX -1.8%, BHP -1.7%, VALE -1.6%, SLW -1.5%, GOLD -1.5%, SLV -1.2%, GAIN -1.2%, ABX -1.1%, X -1.1%, HSBC -0.6%

NY Post : S&P downgrades Icahn Enterprises debt rating to junk status

S&P downgrades Icahn Enterprises debt rating to junk status

When it comes to debt, Carl Icahn is junk.

That’s the conclusion of ratings agency Standard & Poor’s, which knocked down his company’s debt to BB+ on Tuesday with a stable outlook, citing the lack of returns and weakening investment prospects.

The $6.3 billion Carl Icahn Enterprises, known as IEP, has ramped up its leverage and decreased its cash holdings — all while its stock price has fallen through the year, S&P said in its note.

“We do not expect IEP to take action to decrease leverage at the current time, and management’s leverage tolerance continues to be unclear,” the ratings agency said.

The downgrade was expected. In February, S&P put Icahn Enterprises on watch with “negative implications” and added that there was a 50/50 chance the company would be downgraded.

The downgrade comes as the billionaire investor’s latest SEC filing shows how pessimistic he has become on stocks.

At the end of last year, IEP was net short 25 percent. In a filing at the end of March, Icahn had increased his net short position to 150 percent.

He also claimed earlier this year that there’s “danger ahead” for the US economy.

The company’s stock fell 22 cents, to $52.53 a share, on Tuesday.

Icahn, 80, owns about 90 percent of Icahn Enterprises, which holds positions in companies like Pep Boys and PayPal.

The downgrade comes just days after Icahn disclosed that he’d liquidated his stakes in Apple and Gannett.

(UBS) Euronext NV - Upgrade to Neutral - Investor Day Message was Positive thoug

Euronext NV - Upgrade to Neutral - Investor Day Message was Positive though Targets
will be a Challenge

We raise our rating for Euronext to Neutral from Sell
We raise our rating to Neutral following the company's Investor day last week where CEO Stephane
Boujnah communicated his 2019 strategic plan to the market. Overall, we think management did a good
job confidently detailing its revenue growth opportunities and incremental cost-cutting expectations.
While we don't expect the firm to fully achieve these targets, we give them credit for some of the
incremental cost cutting opportunities, driving a 5-9% upgrade to our 2016-18E EPS, a 10% increase to
our price target (to €37.50 per share) and our rating from Sell to Neutral. The growth opportunities
leverage Euronext's existing franchise and do not rely on any transformational deals.

€70mn of revenue growth opportunities & €22mn of incremental cost saves
Management highlighted 6 specific opportunities that are budgeted to bring in €70mn of incremental
annual revenues by 2019 (revenues were €519mn in 2015). They expect these initiatives will require
€35mn of annual operating expenses, leading to a target €35mn of incremental EBITDA in 2019 (EBITDA
was €284mn in 2015). Combining organic growth, the growth initiatives and an incremental €22mn of
identified cost saves, management expects EBITDA to grow at an 8% CAGR through 2019.

Friday’s Investor Day removes an overhang on the stock
After months without a clear strategy, we view the strategic plan from Euronext positively. But we think
that achieving the stated revenue, expense & profit targets will be a challenge. And even with the
announced cost-cutting opportunities, we don’t expect to see meaningful change to Euronext's EBITDA
from these initiatives until 2018. In the meantime, Euronext faces a very difficult market environment as
cash equity volumes have slowed sharply in recent months (40% of revenue base).

Valuation: We raise the rating of Euronext to Neutral with a PT of €37.50
We raise our 2016-18 EPS ests by 5-9%, our target price by 10% and our rating to Neutral. Despite the
increases, we remain 5-10% below consensus EPS in 2016-17 and see our price target implies 5%
downside potential to the current share price. While the message conveyed last Friday was positive and
led us to increase our earnings estimates, we expect this to be balanced by near-term operating
headwinds, especially as cash volume growth remains weak (hence the Neutral rating).

(UBS) Jeronimo Martins - Regaining Polish momentum – upgrade to Buy

Upgrade on a stronger outlook despite risks on retail tax
We upgrade Jeronimo Martins today on a) a stronger outlook in Poland driving higher EBIT forecasts and
good cash generation, and b) a positive €450m valuation for the Colombian business, Ara (previously
valued at zero), as we look in more detail at the operations. While the details of the Polish retail tax are
still undecided, we feel the risks are well known and the market may be too cautious on Jeronimo's
long-term ability to pass this through.

Solid LFL growth helps margin expansion and further cash returns could come
The repositioned businesses of Biedronka (evolving from soft discounter towards value supermarket) and
Pingo Doce (from affluent into value supermarket) are once again delivering sound LFL sales growth.
With deflationary pressures slowly easing and a more benign competitive environment, we expect salesdriven
margin expansion to continue. Sound cash-flow generation, lack of debt on balance sheet and the
possible disposal of its manufacturing and services business should boost ROIC and may also result in
another wave of special dividends, as seen in 2015.

Colombia a drag currently but a sizeable future opportunity
While we expect Ara to be in the red until 2019, the business appears to be gaining traction with
customers as sales densities grew c.40% in 2015. However, this is from a low base and the business still
has some way to go before breakeven, we believe. Logistics challenges also remain as infrastructure and
cultural barriers in the country create complexity. The company intends to have 1,000 Ara stores in 2020
(vs. c150 currently) with c€500-600m capex over the five-year period (circa one-fifth of total capex).

Valuation: Demanding but not as expensive as it seems
Jeronimo has traded on an average EV/EBIT of 15.6x over the past 10 years, and if we adjust for the
negative impact of the loss-making Colombian business, then it currently trades on 13x EV/EBIT, on our
2017 forecasts. We value the business on a blended 16.6x EV/EBIT for 2017e, a premium to the sector's
11.8x, reflecting high returns and growth potential. Our price target rises to €16 as a result of: (1) higher
EBIT forecast; (2) lower net debt estimate; and (3) positive €450m valuation of Ara (zero previously).