Morgan Stanley Benefited From ‘Solid’ Wealth Management Results in Q3, Oppenheimer Says

/ / Financials /

Morgan Stanley’s (MS) Q3 earnings-per-share beat was driven by “solid” wealth management results together with “sizable uplift” from beats across results in investment banking and trading, Oppenheimer said in a note Thursday. Oppenheimer also said total revenue exceeded expectations, driven by investment banking and trading. “Overall, we see Q3 as continued evidence of MS executing well, which we view as largely priced into the current valuation,” Oppenheimer said. Oppenheimer said that for 2025, it is boosting its EPS forecast for Morgan Stanley by about 2.4% mainly because of the flow-through effect of a higher base of trading expected in 2024 as well as wealth management assets under management and revenue. Oppenheimer has a perform rating on Morgan Stanley.

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Microsoft Poised for Growth Despite Short-Term Pressures, AI Challenges, Morgan Stanley Says

/ / Technology /

Microsoft (MSFT) faces negative investor sentiment due to concerns about gross margins, capital expenditures, artificial intelligence monetization, and its OpenAI relationship, Morgan Stanley said in an earnings preview on Thursday. But despite short-term supply constraints in AI infrastructure, Microsoft’s ability to deliver steady core Azure consumption puts it in a positive setup for outperformance in the upcoming quarters, the analysts said. “We expect to see modest upside in F1Q outperformance, but see the larger lever for stock outperformance being greater investor confidence in the F2H Azure acceleration,” Morgan Stanley said. The firm said investors have reduced their expectations for Microsoft 365 Copilot due to limited financial visibility and competitive pressures. However, it is showing positive signs of adoption and is viewed as a potential multi-year driver for average revenue per user expansion. Morgan Stanley expects the company’s capital expenditures to remain high as they are aligned with future growth in

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ASML Lacks Positive Catalyst for Rest of 2024

/ / Technology /

ASML Holding faces a few months without a positive share price catalyst as newsflow in the near term is unlikely to improve for the Dutch semiconductor-equipment maker, Stifel’s Juergen Wagner writes in a research note. ASML shed more than $60 billion in market value this week after the company warned the recovery for some areas of the industry could extend well into the next year.Wagner says near-term visibility is more limited at the moment, likely prompting a change in investor sentiment more toward shorter-term newsflow. ASML shares trade 0.6% lower at 630.00 euros.

ASML Lacks Positive Catalyst for Rest of 2024 Read Post »

Alcoa Beats Q3 EPS Expectations, Rides Alumina Price Surge Despite Production Hiccups

/ / Basic Materials /

Alcoa Corporation (NYSE:AA) shares are trading higher on premarket Thursday. On Wednesday, the company reported third quarter sales of $2.904 billion, missing the consensus of $2.967 billion. Alumina production dropped 4% sequentially to 2.44 million metric tons, mainly due to the full curtailment of the Kwinana refinery in June 2024. Meanwhile, aluminum production rose 3% sequentially to 559,000 metric tons, driven by progress on the Alumar smelter restart. In the Alumina segment, third-party shipments dropped 9% sequentially, mainly due to reduced trading activity. In the Aluminum segment, total shipments fell 6% on a sequential basis, owing to lower trading and shipment timing. Adjusted EBITDA, excluding special items, rose to $455 million from $325 million in the second quarter thanks to higher alumina prices and lower raw material costs. Adjusted EPS of $0.57 exceeded the consensus of $0.28. The company ended the third quarter of 2024 with a cash balance of

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UnitedHealth Seeing Steep Medical Cost Headwinds, RBC Says

/ / Health Care /

UnitedHealth Group (UNH) is seeing a steeper-than-expected medical cost trend amid elevated Medicare coding intensity and temporary Medicaid acuity headwinds, RBC Capital Markets said in a note Wednesday. RBC said it is raising its 2025 Medical Care Ratio estimate by 70 basis points to 84.7% and lowering its adjusted earnings per share estimate to $29.75 from $30.84 previously. “Our estimate reflects elevated Medicare coding intensity, which has persisted beyond resumption prior authorization, as well as Medicaid acuity headwinds, which should be transitory,” RBC analysts said in the note. UnitedHealth’s management cited three headwinds, including an about 20% rise in Medicare coding intensity, elevated Medicaid acuity from timing mismatches, and increased specialty drug prescribing, RBC said, adding that these specialty headwinds should not affect the medical cost ratio beyond Q4 as the company has priced for Inflation Reduction Act drug provisions in its 2025 bids. RBC reiterated its outperform rating on

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Alcoa Corporation (AA) Q3 2024 Earnings Call Transcript Summary

/ / Basic Materials /

The following is a summary of the Alcoa Corporation (AA) Q3 2024 Earnings Call Transcript: Financial Performance: Alcoa Corporation reported a flat revenue of $2.9 billion in Q3 2024. Net income improved significantly to $90 million from $20 million in the prior quarter, with an earnings per share increase from $0.11 to $0.38. Adjusted EBITDA increased by $130 million to $455 million, driven primarily by higher average realized third-party prices for alumina and improved cost management in both raw materials and production. The Alumina segment saw a substantial increase in adjusted EBITDA, contributing $181 million, due to elevated alumina prices. The Aluminum segment, however, faced a decrease by $53 million, largely due to higher raw material costs and a drop in metal prices. Business Progress: Alcoa achieved its fourth consecutive quarterly production record at the Mosjoen smelter in Norway, while improving operations at the Alumar smelter in Brazil, now at

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ASML Cut to Next-Year Guidance Makes 2026 Outlook Key for Shares

/ / Technology /

ASML Holding’s cut to its expectations for next year on weak order intake means the company’s trajectory from 2025 into 2026 and beyond is now key for its shares, Citi analysts say in a research note. The Dutch company, which supplies semiconductor-manufacturing machinery to chip makers, expects between 30 billion and 35 billion euros in sales next year, below a previous forecast of up to 40 billion euros. The company had reiterated as recently as September that the low end of its 2025 sales guidance was conservative despite negative newsflow over the summer, including cuts to spending plans by key customer Intel, Citi says. “Estimates had been declining for 2025, including our own, but consensus at 36 billion euros is now high,” the analysts say.

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UnitedHealth Cites Multiple Factors Weighing On Earnings

/ / Health Care /

UnitedHealth Group’s 2025 earnings guidance came in below analyst forecasts, weighing on its shares as the healthcare heavyweight deals with a variety of factors that are hurting profitability. The company says recent Medicaid redeterminations have left it with fewer, but sicker, members, while funding from Medicare has declined despite elevated hospital spending, Mizuho analyst Ann Hynes says in a research note. There has also been an increase in the utilization of expensive specialty drugs, the analyst says. UnitedHealth says it expects to continue facing these cost pressures as certain care patterns persist at higher levels than previously expected, the analyst says. Shares fall 7% to $562.48.

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Boeing Equity Issuance Timeline Seen As Positive

/ / Industrials /

The extended timeline that’s part of Boeing’s equity issuance is positive, say analysts at BofA Securities in a research note. The jet maker disclosed in regulatory filings that it could issue up to $25 billion in shares or debt during the next three years while also entering into a new credit agreement with lenders. The disclosure comes as the company is looking to stabilize amid a strike by its largest union that’s exacerbating its financial woes. “We expect Boeing to offer equity first, which should shore up the company’s balance sheet in the near term while maintaining the option to later issue equity debt with a lower risk of a credit downgrade,” say the analysts. Boeing is up 0.3%.

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Microsoft and These Other Stocks Are the Way to Play AI Now, Says Goldman Sachs

/ / Technology /

So-called “platform” stocks, such as Microsoft and Snowflake, are currently the most attractive part of the AI sector as the sector continues to evolve, according to Goldman Sachs. In a recent note, a team of Goldman analysts led by Ryan Hammond revisited its “four phases of AI” investment hypothesis and examined which stocks would offer the best bet in coming months. To recap, Goldman considers Nvidia (NVDA), as the “clearest near-term AI beneficiary,” to encapsulate Phase 1. Phase 2 comprises firms focused on AI infrastructure, including semiconductor firms, cloud providers, data center REITs, hardware and equipment companies, security software stocks and utilities companies, according to Goldman, which gave this cohort the mnemonic GSCBAIP2. Phase 3 includes companies with the potential to monetize AI – primarily via software and IT services (GSCBAIP3). Phase 4 includes companies with the biggest potential earnings boost because of the productivity gains it is hoped AI

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Adobe Inc. (ADBE) Adobe MAX 2024 Investor Q&A with Company Leadership

/ / Technology /

Adobe Inc. (NASDAQ:ADBE) Adobe MAX 2024 Investor Q&A with Company Leadership October 14, 2024 5:00 PM ET Company Participants Jonathan Vaas – VP, IR Shantanu Narayen – Chair & CEO David Wadhwani – President, Digital Media Business Anil Chakravarthy – President, Digital Experience Business Daniel Durn – EVP & CFO Scott Belsky – Chief Strategy Officer & EVP, Design & Emerging Products Steve Day – Head of IR Conference Call Participants Jay Vleeschhouwer – Griffin Securities Michael Turrin – Wells Fargo Saket Kalia – Barclays Karl Keirstead – UBS Mark Murphy – JPMorgan Gregg Moskowitz – Mizuho Securities Jackson Ader – KeyBanc Capital Markets Stefan Slowinski – BNP Paribas Jonathan Vaas Welcome, everyone to Adobe MAX 2024 Investor Update. It’s great to see so many friendly faces here, from the investment community, some of our Board members in the back. Welcome. Thanks for coming. Just curious, show of hands, how

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Delta Says Premium Airline Imitators May Struggle to Catch Up

/ / Consumer Discretionary /

Delta CEO Ed Bastian has a message for competitors who want to start chasing high end travel business: good luck. “It’s really hard to change course,” Bastian says. Rivals are adding more premium seating, bundling products to try to upsell passengers, and investing in free Wi-Fi, but Bastian says they may have trouble catching up to the investments Delta has already made. “We’ve been on this for years,” he says. “We’re not going to change course. If anything, we’re just going to continue to accelerate.”

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