>>> Up
>>> Down
>>> Reiteration
>>> Initiation
Gapping up
In reaction to strong earnings/guidance: REN +25%, XNCR +14.5%, AMID+13.8%, URBN +8.8%, EGLT +7.4%, BNED +6.7%, PLX +6.5%, OMER +5.2%,THO +3.9%, ATRS +3.7%, SOL +3.4%, NEFF +3.3%, TEDU +3.2%, NEWT+1.9%, PLOW +1.8%, PCTI +0.9%, NX +0.6%, .
M&A news: SUNE +33.2% (Vivint Solar terminates merger agreement with SunEdison (SUNE)), VSLR +1%, TERP +15.3% (Vivint Solar terminates merger agreement with SunEdison (SUNE)), EYEG +7.9% (to acquire Jade Therapeutics; EYEG will pay Jade's liabilities and issued 765,728 shares of EYEG shares),
Other news: LEU +19.7% (announces it has signed new sales contracts in the last nine months; contracts have an aggregate value of ~$165 mln w/ deliveries through 2022+), SA +4% (updates independent mineral resource estimate for the Deep Kerr Deposit at its 100%-owned KSM Project in northwestern British Columbia), SCTY +3.8% (to work with Whole Foods Market (WFM) to install solar power systems on locations across the United States), RACE +3.1% (still checking), IMMU +1.1% (announces new patent concerning methods of use of the Company's proprietary anti-histone antibody), MTDR +0.9% (upsizes and prices 7.5 mln shares of common stock at for proceeds of ~$142.4 mln (upsized from 5 mln shares prior))
Analyst comments: PNRA +0.9% (upgraded to Overweight from Equal-Weight at Morgan Stanley)
In reaction to strong earnings/guidance: REN +25%, XNCR +14.5%, AMID+13.8%, URBN +8.8%, EGLT +7.4%, BNED +6.7%, PLX +6.5%, OMER +5.2%,THO +3.9%, ATRS +3.7%, SOL +3.4%, NEFF +3.3%, TEDU +3.2%, NEWT+1.9%, PLOW +1.8%, PCTI +0.9%, NX +0.6%, .
M&A news: SUNE +33.2% (Vivint Solar terminates merger agreement with SunEdison (SUNE)), VSLR +1%, TERP +15.3% (Vivint Solar terminates merger agreement with SunEdison (SUNE)), EYEG +7.9% (to acquire Jade Therapeutics; EYEG will pay Jade's liabilities and issued 765,728 shares of EYEG shares),
Other news: LEU +19.7% (announces it has signed new sales contracts in the last nine months; contracts have an aggregate value of ~$165 mln w/ deliveries through 2022+), SA +4% (updates independent mineral resource estimate for the Deep Kerr Deposit at its 100%-owned KSM Project in northwestern British Columbia), SCTY +3.8% (to work with Whole Foods Market (WFM) to install solar power systems on locations across the United States), RACE +3.1% (still checking), IMMU +1.1% (announces new patent concerning methods of use of the Company's proprietary anti-histone antibody), MTDR +0.9% (upsizes and prices 7.5 mln shares of common stock at for proceeds of ~$142.4 mln (upsized from 5 mln shares prior))
Analyst comments: PNRA +0.9% (upgraded to Overweight from Equal-Weight at Morgan Stanley)
Gapping down
In reaction to disappointing earnings/guidance: TNGO -32.4%, PSG -32.2%,PERY -16.3%, JGW -10%, SHAK -9.1%, ACRX -8.3%, DKS -4.7%, FLY -4.3%,MVIS -3.5%, ICFI -3.4%, CASY -1.9%, JCAP -1.7%, SSW -1.7%, LUV -1.5%,FEYE -1.5%
Select metals/mining stocks trading lower: BHP -5.9%, RIO -5.9%, BBL-5.1%, VALE -4.9%, FCX -3.7%, X -3.5%, CNHI -3.1%, AA -2.8%, AGCO -2%,JOY -1.9%, CAT -1.1%, CLF -0.9%
Other news: BAS -9.5% (reported selected operating data for the month of Feb 2016; co's well servicing rig count remained unchanged at 421), JBLU-5.9% (discloses that preliminary revenue per available seat mile for February is estimated to have decreased between 10-10.5% year-over-year on capacity growth of about 19.6%), RVNC -1.5% (filed $300 mln mixed securities shelf offering, entered into an ATM Sales Agreement with Cowen to offer and sell shares of its common stock having aggregate gross proceeds of up to $75 mln), AAL -1.4% (Feb Traffic results), AAPL -0.7% (key supplier Dialog Semi reported weaker than expected earnings overnight)
Analyst comments: AN -3.5% (downgraded to Sell from Neutral at Goldman), BCEI -2% (downgraded to Neutral from Outperform at Credit Suisse)
In reaction to disappointing earnings/guidance: TNGO -32.4%, PSG -32.2%,PERY -16.3%, JGW -10%, SHAK -9.1%, ACRX -8.3%, DKS -4.7%, FLY -4.3%,MVIS -3.5%, ICFI -3.4%, CASY -1.9%, JCAP -1.7%, SSW -1.7%, LUV -1.5%,FEYE -1.5%
Select metals/mining stocks trading lower: BHP -5.9%, RIO -5.9%, BBL-5.1%, VALE -4.9%, FCX -3.7%, X -3.5%, CNHI -3.1%, AA -2.8%, AGCO -2%,JOY -1.9%, CAT -1.1%, CLF -0.9%
Other news: BAS -9.5% (reported selected operating data for the month of Feb 2016; co's well servicing rig count remained unchanged at 421), JBLU-5.9% (discloses that preliminary revenue per available seat mile for February is estimated to have decreased between 10-10.5% year-over-year on capacity growth of about 19.6%), RVNC -1.5% (filed $300 mln mixed securities shelf offering, entered into an ATM Sales Agreement with Cowen to offer and sell shares of its common stock having aggregate gross proceeds of up to $75 mln), AAL -1.4% (Feb Traffic results), AAPL -0.7% (key supplier Dialog Semi reported weaker than expected earnings overnight)
Analyst comments: AN -3.5% (downgraded to Sell from Neutral at Goldman), BCEI -2% (downgraded to Neutral from Outperform at Credit Suisse)
A bank might be interested in American Express to grow their card-issuing business and push further into high growth/return payments sector, Citi analyst Donald Fandetti writes in note.
- AXP hypothetical takeout value of $81/shr would be 37% premium to last close $59
- AXP generates ~25% ROE vs banks’ ~9%-12%; banks with traditional retail deposits have much lower cost of funding, which would drive synergies
- AXP shares (buy, PT $70) “clearly cheap” at 10x Citi’s 2017 earnings est., stock is at steep discount to S&P 500 vs historical 1.02x relative multiple
Early premarket gappers
Gapping up: XNCR +19.4%, AMID +17.5%, SUNE +17.4%, URBN +10.4%, SA +8.4%, EYEG +7.9%, EYEG +7.9%, REN+6.3%, BBEP +6%, DRD +4.4%, THO +3.9%, NEFF +3.3%, TEDU +3.2%, RACE +3%, OMER +2.5%, AG +2.4%, ABX+2.3%, CHK +2.1%, NEWT +1.9%, PLOW +1.8%, SLW +1.3%, AUY +1.2%, GSK +0.9%, PCTI +0.9%, TTM +0.8%, NX+0.6%
Gapping down: SHAK -9.3%, BAS -9.2%, SDRL -9.2%, ACRX -8.3%, VSLR -6.9%, BHP -6.1%, RIO -5.5%, BBL -4.8%,VALE -4.3%, FCX -3.9%, CLF -3.8%, ICFI -3.4%, CNHI -3.1%, X -2.9%, AA -2.2%, INFY -2.2%, WLL -2%, MTDR -1.9%,MTDR -1.9%, BP -1.9%, RDY -1.7%, ILMN -1.6%, RVNC -1.5%, KMI -1.4%, YHOO -1.3%, MRO -1.2%, AAPL -0.9%, CASY-0.9%, PDCE -0.8%
Expect continued strong EPS growth and cash generation. Reiterate as top pick in media sector
media sector. Following strong Q4 15 organic growth momentum (+4.9%)
and solid FY15 results we continue to expect good EPS momentum with 15-
17E EPS CAGR of c10% (ex impact from likely bolt-on M&A in ‘17). We
also expect continued strong EqFCF generation and shareholder returns with
2016E/17E div. yield of 3.4%/3.7% & 3% buyback in 2016E. Despite these
attractive characteristic WPP trades in line with the market on 2016E/17E P/E
of 14.7x/13.5x and an EqFCF yield (pre-bolt-on M&A) of 7.8%/8.1%. We
increase our 2016E/17E Net Income estimates by 1.3%/2.0% (Table 1) and
bring our WACC estimate inline with the rest of our large cap coverage (8.5%
vs 9.0%). However, we take a more cautious view on 2016E net debt and
share count. Net-net we increase our multiples and DCF derived Dec-16 price
target by 4% to 1,835p, implying 19% upside.
Positive 2016 growth outlook. Management sees 2016 organic net sales
growth of over 3% (JPMe 3.4% y/y) with January net sales tracking just
behind this at 2.3% y /y due to strong 2015 comp and expected phasing
during 2016 (with Euros / Olympics / US presidential election). Group M
forecasts 2016 ad-spend growth of +4.5% y/y, 110bps ahead of 2015’s rate.
Margin expansion on track with management targeting +30bps margin
expansion in 2016 vs +40bps achieved in 2015 (at cons FX). The main
drivers are costs savings from operational effectiveness and efficiency
programmes in 2016/17 (expected to deliver savings of c.£30m/£51m).
WPP acknowledged pricing pressure from the recent account reviews but
maintain its long-term margin target of 19.7% (JPMe max margin of 18.7%
in 2022E) given the significant cost saving potential still within the group.
Many different levers provide robust EPS outlook: Management
reiterated its long-term guidance of achieving 10-15% EPS growth through
four levers in 1) organic growth; 2) margin expansion; 3) buybacks; and, 4)
M&A. We note WPP achieved a 14% EPS CAGR between 1993 & 2015.
Use of cash. We expect c£400m of small to mid size acquisitions in 2016E.
We also expect WPP to achieve its 50% payout target in 2016 (3.4% div
yield) on top of a 3% buyback.
CASINO :
New Information on Casino Casts Additional Doubt on France Recovery; Governance Problems in Brazil Appear Larger than Admitted
- Based on new information, we are revising downward our estimate of 2014 adjusted France retail EBITDA by 9.1%.
- Our investigators uncovered strong evidence that indicates in H2 2015 Casino has stretched payables to its suppliers in France to levels beyond what was typical of Casino, and generally accepted in France.
- Casino’s announced sale of its crown jewel stake in BigC Thailand validates our thesis that the company is hollowing itself out in order to sustain the debt load largely held at the parent level and at Rallye.
- Our investigators found evidence that the accounting and governance problems with Casino’s consolidated subsidiaries Cnova and GPA in Brazil are likely much greater than have been disclosed, and that these problems are likely attributable to Casino’s decision to force out GPA Chairman Albio Diniz, son of the company’s founder, in 2013. The information our investigators collected certainly calls into question Casino’s ability to operate its far-flung retail empire, and its willingness to be forthright with investors.
- We found a strikingly similar analog to Casino’s situation in that of Israeli supermarket chain Mega, where many mistakes by management led to the collapse of a once promising company. Like Casino, Mega was highly-levered, paid out unsustainable dividends, and has a questionable relationship with an affiliated property company.
- Casino’s management shows strong indications of deception toward investors on numerous key business issues. We engaged a behavioral analyst who worked for the U.S. Central Intelligence Agency to analyze Casino’s call transcripts and its responses to our prior analyses.