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News Breaks
June 25, 2014
15:27 EDTHAR, DLPH, GOOGJoining Open Automotive Alliance positive for Delphi, Harman, says Wells Fargo
Wells Fargo views the addition of Delphi Automotive (DLPH) and Harman (HAR) as new members of the Open Automotive Alliance, which is a coalition to bring Google's (GOOG) Android to cars, as a positive. The firm reiterates its Outperform rating on both stocks.
News For DLPH;HAR;GOOG From The Last 14 Days
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September 25, 2015
10:48 EDTGOOGMorgan Stanley cautious on media, but sees several stocks punished too hard
Morgan Stanley cut its price targets on a number of media companies, citing the impact of cord cutting and skinny bundles. The firm also reduced its outlook for the pay-TV sector due to its belief that the adoption of skinny bundles will accelerate, while the outlook for cable TV ads has deteriorated slightly, given macro pressures. The firm kept a Cautious view on the media sector, but also identified several stocks in the space that it thinks have been punished too harshly by investors recently. WHAT'S NEW: TV networks in general, and cable networks in particular, have the highest margins in media and are encountering increased top and bottom line competitive pressures, Morgan Stanley analyst Benjamin Swinburne believes. On the top line, they are being hit by ratings and ad pressures as well as cord cutting and distribution consolidation, the analyst stated. Meanwhile, their profit is being hurt by the increased need to obtain new content and intensified competition for content from new sources like Netflix (NFLX) and Google's (GOOG) YouTube, Swinburne said. However, the analyst thinks that media stocks are "starting to get" cheap, given the leverage that many of the companies carry. Swinburne cuts his price target on 21st Century Fox (FOXA) to $31 from $37, on AMC Networks (AMCX) to $86 from $88, on CBS (CBS) to $46 from $56, on Time Warner (TWX) to $72 from $87 and on Viacom (VIAB) to $48 from $60. He kept Overweight ratings on Fox, AMC and CBS, an Equal Weight rating on Time Warner and an Underweight rating on Viacom. OVERDONE DECLINES: Swinburne believes that the declines in three media stocks - CBS, 21st Century Fox, and AMC Networks - have been overdone, while the decline in Comcast's (CMCSA) stock has also been excessive. CBS and 21st Century Fox are "best positioned for the skinny bundle" and have the cheapest valuations relative to their growth rates, Swinburne believes. Meanwhile, AMC Networks has "content momentum" and its EPS can exceed expectations, the analyst believes. Comcast is gaining share in the broadband Internet market, could take share in video soon, and has sufficient scale and offerings to benefit from the increased popularity of skinny bundles, according to the analyst, who kept an Overweight rating on the stock. The media sector could benefit from consolidation going forward, added Swinburne, who recommended that investors interested in buying potential takeover targets in the space focus on AMC Networks, MSG Networks (MSG) and Dreamworks Animation (DWA). He kept Overweight ratings on all three of those stocks. OTHERS TO WATCH: Besides Comcast, other pay TV companies include DISH Network (DISH) and Charter Communications (CHTR). PRICE ACTION: In early trading, Fox A shares lost 0.5% to $25.83, AMC fell 0.3% to $73.29, CBS added 0.2% to $41, Time Warner was little changed at $67.66 and Comcast A shares added 0.6% to $57.17.
10:26 EDTGOOGBlackBerry posts quarterly loss, says turnaround continuing
BlackBerry (BBRY) shares are lower in morning trading after the company posted a second quarter loss that was steeper than analysts' expectations. BlackBerry is in the middle of a turnaround for its smartphone business and confirmed today that it plans to launch a new device that uses Google's (GOOG) Android operating system. EARNINGS: Excluding items, BlackBerry reported a loss per share for Q2 of (13c), below analysts' consensus estimates of (9c). Revenue for the quarter was $490M, reflecting a purchase accounting write down of deferred revenue associated with the acquisition of WatchDox. The revenue result may not compare with analysts' estimate of $611M. Looking ahead, BlackBerry said it is targeting "sustainable" non-GAAP profitability in the fourth quarter and sees "modest" sequential growth in total revenue for the rest of fiscal year 2016. The company sees a "slight" uptick in third quarter revenue compared to this quarter, and announced it will change its non-GAAP income statement presentation to be "consistent with the primary practice in the software industry." BlackBerry said it believes this is necessary due to its increased emphasis on software, as well as acquisitions of software companies with material recurring revenue streams. On the company's earnings conference call, John Chen, BlackBerry's chief executive officer, announced that the board approved an increase to the current buyback program by an additional 15M shares, bringing the total available for repurchase to 21M shares. The approval was based on expectations for continued free cash flow. Chen said that he believes the company has made "good progress" moving its software business from perpetual to subscription. Chen said he is "not satisfied" as far as overall revenue and profitability, particularly in its handset business, but said the company is focused on growing device volume profitably, generating recurring revenue from IP licensing and making its software business larger. WHAT'S NOTABLE: To help strengthen its device business, Chen confirmed BlackBerry will launch a new slider device powered by Google's Android operating system later this calendar year, to be called Priv. Chen also confirmed that the company will continue to develop and enhance the BlackBerry 10 operating system and confirmed plans to release platform updates focused on security and privacy enhancements. Chen said the company is working with Google to secure Android and is not using Samsung's (SSNLF) Knox. Chen said the company is not planning another BlackBerry 10 device this year and noted that if the plan of doing the Android type of implementation "works well," it could consider replacing BB10 or merging it into Android. PRICE ACTION: BlackBerry is down 2% to $6.89 in morning trading.
09:17 EDTDLPHAuto suppliers decline on Volkswagen fears overdone, says Wells Fargo
Wells Fargo says that a 10% decline in diesel's market share in Europe would only reduce the annual EPS of Tenneco (TEN0, BorgWarner (BWA) and Delphi (DLPH) by 1%-5%, while the stocks have fallen by a median of 10.2% since September 17. The firm does not expect Volkswagen (VLKAY) sales to drop tremendously. It views fears about BorgWarner and Tenneco as "way overdone," and says that Delphi's weakness is also unjustified.
08:50 EDTGOOGBlackBerry says working with Google on securing Android
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07:04 EDTGOOGBlackBerry launches slider device Priv
BlackBerry (BBRY) is announcing two new additions to its handheld device roadmap. First, the company will launch a flagship slider device, Priv, which will run on the Android (GOOG) operating system, bringing together the best of BlackBerry security and productivity with the expansive mobile application ecosystem available on the Android platform. In combination with BlackBerry's efforts to support Android for Work on the BES12 platform, the new device will offer best in class security for enterprise customers. BlackBerry expects the device to be available late in the calendar year in major markets in-store and online, and will release further details in the coming weeks. While the new device will provide a choice in OS to new and existing customers, the company remains committed to the BlackBerry 10 operating system, which enables industry-leading security and productivity benefits. Second, the company will continue to develop and enhance the BlackBerry 10 operating system and is confirming plans to release platform updates focused on security and privacy enhancements, with version 10.3.3 scheduled to be available in March 2016.
06:59 EDTGOOGGoogle to be investigated by U.S. regulators over Android, Bloomberg reports
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06:21 EDTGOOGFacebook's free internet effort in developing countries 'inadequate,' WSJ says
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06:16 EDTGOOGGoogle October volatility elevated
Google September weekly call option implied volatility is at 23, October is at 37, November is at 30; compared to its 52-week range of 16 to 41, suggesting large October price movement.
05:58 EDTGOOGIndian Prime Minister to meet with Apple, Google CEOs, WSJ reports
Indian Prime Minister Narendra Modi will meet this weekend with Google (GOOG) CEO Sundar Pichai, Facebook (FB) founder Mark Zuckerberg and Apple (AAPL) CEO Tim Cook, among others, The Wall Street Journal reports. According to industry insiders, the tech executives will use the visit to push for better market access in India as well as clearer regulation on investment and startups. Reference Link
September 24, 2015
13:03 EDTGOOGEU investigates internet firms' online practices, Reuters reports
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11:21 EDTGOOGJury says Pendrell patents not infringed on by Samsung, Google products
Pendrell announced earlier, that on September 23, a jury in the United States District Court for the Eastern District of Texas found that certain claims of five digital rights management patents asserted by Pendrell (PCO) subsidiary, ContentGuard Holdings, against Samsung Electronics (SSNLF) and Google (GOOG) are valid, but that Samsung products and Google products accused in the lawsuit do not infringe the asserted patents. ContentGuard is assessing the jury's findings and evaluating its options to challenge the verdict. ContentGuard's claims against Samsung and Google are part of a larger lawsuit filed by ContentGuard against several companies that have not paid for a license to use ContentGuard's patented digital rights management solutions, including Apple (AAPL), DirecTV, HTC, Huawei and Motorola Mobility. The jury verdict does not impact ContentGuard's August 2015 settlement and license agreement with (AMZN); nor does ContentGuard believe the jury verdict will impact or delay ContentGuard's upcoming November trial against Apple. Shares of Pendrell are down 35.34% in morning trading.
11:15 EDTGOOGAnalyst sees $55,000 car from Apple as soon as 2019
Apple (AAPL) could introduce a car by as soon as 2019, but assuming an average selling price of $55,000 and 200,000 shipments, the contribution to the tech giant's earnings in that year is probably not enough to "excite" investors, said the research team at Jefferies this morning. However, a car would give the tech giant some "much needed" diversification away from the iPhone and would be positive for the broader tech space, the firm added. RIPE FOR DISRUPTION: Jefferies analysts Sundeep Bajikar, Mark Lipacis and their team say their analysis indicates the automobile industry is "ripe for disruption" and that Apple is well positioned to introduce a car, potentially as early as 2019. A car could add 32c to Apple's earnings per share in FY19 under a best-case scenario, Bajikar tells investors. He assumes a $55,000 average selling price for an Apple Car and an operating margin of 20%, over 1,000 basis points higher than the Street's 2019 margin estimate for electric carmaker Tesla (TSLA). Investors are likely to find the assumptions "highly aggressive," the analyst cautions. Meanwhile, the potential earnings impact is probably not big enough for Apple investors to get excited and earnings contributions from a vehicle may not become meaningful before iPhone decelerates, the analysts argue. However, the firm said it could get more constructive on Apple shares if diversification in earnings were to drive less iPhone risk. Bajikar and Lipacis keep a Hold rating on the iPhone maker with a $126 price target. TOP CHIP PICKS: Efforts in the car market from tech heavyweights Apple and Google (GOOGL) will lead the industry to design and sell more intelligent vehicles, accelerating the growth of semiconductors for automobiles above current forecasts, contend Jefferies' analysts in a separate note to investors this morning. The analysts lay out their top picks among automotive semiconductor suppliers, saying the pending merger of NXP Semiconductors (NXPI) and Freescale (FSL) will create the world's biggest automotive semi company, adding that growth in microcontroller content and networking applications will benefit that combined giant. NVIDIA's (NVDA) automotive sales have grown the fastest since the end of the 2012 fiscal year among the companies the firm follows, while Maxim Integrated (MXIM) had the second fastest growth in that time frame, the analysts noted in naming those two as their other top picks in the space. Lipacis and Bajikar identified Analog Devices (ADI), Microchip (MCHP) and Linear Technology (LLTC) as other notable beneficiaries from the expected growth of semiconductor content in automobiles. PRICE ACTION: Amid broad weakness in the market, Apple shares are down 1.5% to $112.56. Meanwhile, the Philadelphia Stock Exchange Semiconductor Sector index (SOX) is down 2.4% this morning.
11:12 EDTDLPHAnalyst says Delphi pushed to 'attractive' level by Volkswagen scandal
The shares of auto equipment maker Delphi (DLPH) are falling nearly 4% this morning and have tumbled over 8% week-to-date in the wake of the Volkswagen (VLKAY) emissions scandal. In a note to investors today, RBC Capital recommended that investors buy Delphi shares at current levels, saying that the impact of the Volkswagen news on Delphi "appears limited." WHAT'S NEW: After meeting with Delphi's CEO and treasurer, RBC Capital analyst Joseph Spak says that Delphi parts are not incorporated into any light vehicles with diesel engines in the U.S., while Volkswagen accounts for only about 1% of Delphi's overall powertrain business. Delphi could be hurt if European consumers stop buying diesel powered vehicles, according to Spak, who noted that Delphi generates double the revenue from diesel vehicles than it gets from gasoline vehicles. Such a scenario, however, is unlikely to play out and the company would see higher revenue from gasoline engines if it does occur, according to Spak. Addressing the company's outlook in China, Spak lowered his third quarter and full-year operating income estimates for the auto maker "towards the low end" of its guidance. However, he noted that Delphi "does seem to be confident" that it can meet its earnings per share guidance even if its production in China is flat in the second half of this year, the analyst stated. Moreover, Delphi suggested that its China business appears to be stabilizing, while some automakers are increasing their fourth quarter orders from previous levels, he wrote. Spak cut his price target on the stock to $91 from $93 but kept an Outperform rating on the shares. WHAT'S NOTABLE: Yesterday, Spak wrote that the decline of auto suppliers with exposure to Volkswagen's powertrain could be overdone. In addition to Delphi, he identified Magna (MGA) as having exposure to Volkswagen's powertrains. BorgWarner (BWA) would only lose 7c of EPS if all sales of cars with 1.5M Volkswagen engines disappear, the analyst added. PRICE ACTION: In morning trading, Delphi dropped 3.7% to $71.36, while Magna fell 5.7% to $43.64 and BorgWarner declined 3.7% to $37.54.
08:57 EDTGOOGGoogle price target raised to $781 from $730 at Citi
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08:03 EDTDLPHDelphi should be bought at current levels, says RBC Capital
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07:24 EDTGOOGWPP CEO: Google needs to weed out 'fake' online ad views, FT reports
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06:59 EDTGOOGFacebook and Google more 'Yelp-like' than ever, says Northland
Northland analyst Darren Aftahi says Facebook (FB), Google (GOOG, GOOGL) and (AMZN) have recently added new features that focus on improved local search as well as tools enabling easier business-consumer communication. Facebook and Google are now more "Yelp-like" than ever, Aftahi tells investors in a research note. And while Apple's (AAPL) new "swipe right" feature could drive a near-term surge in Yelp (YELP) app downloads, it may translate into lower engagement on the Yelp app over longer term, the analyst argues. He remains cautious on Yelp's growth prospects and cut his price target for the stock to $17.75 from $21.50. Shares of the local business review site closed yesterday down 25c to $23.10. Aftahi has an Underperform rating on the stock, his firm's equivalent of a sell.
06:08 EDTGOOGSamsung Pay has over $30M in accumulated transaction volume in first month
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September 23, 2015
14:14 EDTDLPHVolkswagen shares jump as CEO Winterkorn departs
Shares of Volkswagen (VLKAY) trading in New York have jumped following the resignation of Chief Executive Officer Martin Winterkorn, with the company's supervisory board subsequently praising the decision and saying it will consider his replacement at a meeting Friday. Prior to the news, several analysts made their own arguments regarding the stock, appearing quite bearish but saying long-term value still remains for Volkswagen even as it grapples with what could be years of fallout from its recent emissions failure. ANALYST OPINION: Several research firms weighed in on Volkswagen's ongoing emissions scandal this morning prior to Winterkorn announcing his resignation as CEO. Credit Suisse analyst Dan Galves commented more broadly that the events surrounding the emissions violations "will likely impact all OEM's that sell vehicles in Europe," explaining that European air pollution tests are "very misleading" and feature notable loopholes. The Volkswagen scandal could accelerate stricter testing standards, resulting in higher compliance costs for automakers as well as weakened appeal for diesel engines, according to Galves. Autoparts suppliers with exposure to diesel vehicles like BorgWarner (BWA) and Delphi (DLPH) may see a "modest drag" if consumer sentiment shifts, though Magna (MGA) could benefit from increased compliance spending, added the analyst. Meanwhile, JPMorgan's Jose Asumendi downgraded Volkswagen to Neutral from Overweight. The analyst noted that the North American engine recall is not his primary worry, but rather the company's European exposure, especially given the potential for additional investigations and the lack of clarity on the company's total liability. Separately, Deutsche Bank analyst Tim Rokossa downgraded the stock to Hold and cut his price target to EUR130 from EUR260. Though the stock's recent slip may look like a buying opportunity, the complete impact of the scandal will likely take "much longer" to unfold, stressed Rokossa. Beyond "very painful" legal fees, the scandal's impact on Volkswagen operations is the more key concern as damage to the Volkswagen and Audi brands pressures pricing, argued Rokossa. Volkswagen was also downgraded to Neutral from Buy at Nataxis this morning. In addition to the downgrades, Fitch Ratings placed Volkswagen's ratings, including its 'A' Long-term Issuer Default Rating, on Rating Watch Negative, reflecting "the reputational damage" on the group's brands the emission test scandal and the expected multi-billion euros financial impact from potential fines, recall costs, lawsuits and legal claims. CEO EXIT: Martin Winterkorn stepped down as CEO of Volkswagen on Wednesday as the company's emissions scandal continued to unfold. The former Chief Executive stated, "I am stunned that misconduct on such a scale was possible in the Volkswagen Group. As CEO I accept responsibility for the irregularities that have been found in diesel engines and have therefore requested the supervisory board to agree on terminating my function as CEO... I am doing this in the interests of the company even though I am not aware of any wrong doing on my part...The process of clarification and transparency must continue. This is the only way to win back trust." Winterkorn's announcement was quickly followed by a statement from the supervisory board itself, saying its executive committee "recognizes not only the economic damage caused, but also the loss of trust among many customers worldwide." The executive committee explained that recommendations for new personnel will be presented at an upcoming board meeting this Friday, but cautioned that it is expecting "further personnel consequences in the next days" as its internal investigations continue "at a high tempo." Importantly, the board also stated that it will voluntarily submit a complaint to the State Prosecutors' office in Brunswick, remarking that "criminal proceedings may be relevant." Possible replacements for Winterkorn include Matthias Mueller, head of the Porsche brand who has the support of the family that controls a majority stake of VW, and Herbert Diess, who recently joined from BMW (BAMXY), said Bloomberg, citing a person familiar with the matter. PRICE ACTION: Shares of Volkswagen trading in New York have advanced 8.3% to $27.55 in afternoon trading following Winterkorn's departure, though the company's American Depository Receipts have crashed nearly 28% since the emissions failure became public. Fellow German automakers BMW and Daimler (DDAIF) have also suffered double digit percentage declines in their New York listed shares since news of the scandal.
08:50 EDTDLPHWeakness in auto suppliers could create opportunities, says RBC Capital
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