Consumer Discretionary

General Motors’ Q1 Adjusted Earnings, Revenue Increase

/ / Consumer Discretionary /

General Motors (GM) reported Q1 adjusted earnings Tuesday of $2.62 per diluted share, up from $2.21 a year earlier. Analysts polled by Capital IQ expected $2.12. Revenue for the quarter ended March 31 was $43.01 billion compared with $39.99 billion a year earlier. Analysts polled by Capital IQ expected $41.82 billion. The company raised its full-year adjusted EPS outlook to between $9 and $10, from the previous range of $8.50 to $9.50. Analysts polled by Capital IQ expect $9.02.

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CFRA Maintains Hold Opinion On Shares Of General Motors Company

/ / Consumer Discretionary /

CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows: We raise our 12-month target by $1 to $45, based on a ’25 P/E of 5.0x, a justified discount to historical averages. We increase our adjusted EPS estimates to $9.70 from $8.80 for ’24 and to $9.00 from $8.50 for ’25. GM posts Q1 adjusted EPS of $2.62 vs. $2.21 (+19%), well ahead of the $2.11 consensus. The beat was driven by a stronger-than-expected top line, as revenue rose 7.6% to $43.0B ($1.2B above consensus) on higher prices, partially offset by a 2.5% sales volume decline. GM increased 2024 adjusted EPS guidance to $9.00-$10.00 from $8.50-$9.50 (current consensus = $9.02). While the beat and raised guidance were positives, we remain at a Hold on GM, as we think the company could lose additional market share in the

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CFRA Keeps Hold Opinion On Shares Of Spotify Technology S.a.

/ / Consumer Discretionary /

CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows: We raise our target by $83 to $325 using a forward P/E of 67.0x our ’24 earnings estimate, below the five-year historic average of 78.0x. We increase our 2024 EPS estimate to €4.85 from €2.40 and 2025’s to €6.30 from €3.95. SPOT posted Q1 2024 EPS of €0.97, a €0.32 earnings beat, driven by 20% Y/Y revenue growth (revenue in line with consensus) and significantly wider gross margins (27.6% vs. 25.2%). In Q1, total subscribers were 615M (+19% Y/Y), with premium subs at 239M (+14%) and lower priced ad-supported subs at 388M (+22%). By geography, Europe was 38% of total subscribers, North America (27%), Latin America (22%), and rest of world (13%), with strong growth in family and duo plans. On a sequential basis, SPOT’s Q2 guidance

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Nike Needs a Win, and It’s Giving Caitlin Clark Over $20 Million to Deliver One

/ / Consumer Discretionary /

By Weston Blasi Some Nike athletes’ careers are ‘winding down,’ one expert said, and the company is looking to make a big splash with Clark’s meteoric rise Caitlin Clark is reportedly adding to the $76,535 starting salary she’ll make in the WNBA in a big way: with an eight-figure endorsement deal with Nike Inc. Clark’s endorsement deal with Nike (NKE) will be for eight years and be worth “up to $28 million,” according to the Wall Street Journal. It comes after an iconic run for Clark through the women’s March Madness that saw her star rise to a point where the women’s tournament final had more viewers than the men’s final for the first time. As part of the Nike deal, Clark would be getting a signature shoe, something almost unheard of for a basketball player who has yet to play in a professional game. In the basketball space, Nike

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Spotify Stock Jumps After Earnings Top Expectations — WSJ

/ / Consumer Discretionary /

By Anne Steele Spotify stock surged after the audio-streaming company swung to a first-quarter profit. Shares jumped over 14% to trade at around $312.90, putting the stock on track for its highest close since March 2021. Spotify is turning 18 this quarter and topping it off with showing we’re a consistently profitable company, Chief Executive Daniel Ek said in an interview. After years of rapid subscriber growth and efforts to expand beyond music streaming into broader audio offerings including podcasts and audiobooks, the company has been focused on controlling costs and prioritizing profitability. Spotify reported a quarterly profit of 197 million euros, or 97 euro cents a share, versus a prior-year loss of 225 million. Analysts had expected 62 euro cents a share, according to FactSet. Monthly active users grew 19% to 615 million, 3 million shy of Spotifys guidance, amid moderated marketing activity. Some other key highlights from Spotifys

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Spotify Technology(SPOT) Q1 2024 Earnings Conference

/ / Consumer Discretionary /

The following is a summary of the Spotify Technology S.A. (SPOT) Q1 2024 Earnings Call Transcript: Financial Performance: Spotify’s Q1 revenue increased by 21% year-on-year to EUR3.6 billion on a constant currency basis. Q1 saw a record gross margin of 27.6%, surpassing predictions by 121 basis points. Q1’s operating income reached a new record of EUR168 million, thanks to a strong gross profit and lower operational expenses. Spotify had positive free cash flow, reaching EUR207 million. Revenue for Q2 is anticipated to increase by over 22% year-on-year, potentially reaching the EUR3.8 billion mark. 20% of the revenue growth was contributed by the premium product service, due in part to price increases. Gross margin expanded significantly in this quarter, with music improvements being the significant driver alongside the growth of the marketplace business. Business Progress: Q1 experienced slower user growth due to workforce reduction impact, slower start of the year, and

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General Motors’ Core Business Strength Underpins Electric, Autonomous Vehicles Development, BofA Says

/ / Consumer Discretionary /

General Motors’ (GM) “well-managed” core business continues to underpin its future-proofing strategy of accelerating investments in electric and autonomous vehicles, BofA Securities said in a note Tuesday. “GM’s liquidity levels should be sufficient to manage through volatility in the macro environment, while also proactively investing for the future and returning value to shareholders,” the brokerage said. Following General Motors’ solid Q1 results, the brokerage said the company did not disappoint investors, who were looking for an upside to 2024 guidance. General Motors raised its full-year adjusted EPS outlook to between $9 and $10, from the previous range of $8.50 to $9.50, after reporting forecast-beating Q1 earnings. BofA reiterated its buy rating on the stock and a price target of $75.

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Starbucks’ U.S., China Pressures Drive Estimates Lower

/ / Consumer Discretionary /

Starbucks remains well positioned despite current pressures, UBS analysts say in a research note. The coffee chain has a strong customer brand affinity and attractive growth profile. The U.S. challenges largely reflect a combination of Middle East conflict-related protests and consumer spending pressures, while China macro conditions and competition represent overhangs, the analysts say. These pressures are expected to weigh on Starbucks’ results. UBS lowers its 2Q North America same store sales to flat from an increase of 3%, and its international estimates to a decline of 2% from prior flat expectations. It also cuts its 2Q and FY EPS forecasts to 78 cents and $3.94, previously, noting that sales headwinds likely persisted in the 2Q.

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Spotify Demonstrates Robust Financial Health With Impressive Q1 Revenue, Margin Improvements: Analyst

/ / Consumer Discretionary /

Goldman Sachs analyst Eric Sheridan had a Neutral rating on Spotify Technology SA (NYSE:SPOT) with a price target of $277. Spotify reported fiscal first-quarter 2024 revenue growth of 20% year-on-year to $3.95 billion, beating the consensus of $3.85 billion. EPS of $1.05 beat the consensus of $0.70. The stock price jumped Tuesday after the print. The analyst expects Spotify to have a positive market reaction to its first-quarter 2024 earnings report (including its forward second-quarter 2024 commentary) as the company reported roughly in-line subscriber and revenue performance across its businesses with some headwinds to forward revenue and subscriber momentum in the forward forecast. In addition (and likely the more significant component of the stock reaction to this earnings report), he would focus on the positive operating momentum in both gross margins and operating margins on a mix of improved music and podcast trends with some headwind from audiobook costs operating margins benefiting from lower personnel

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General Motors’ Potential In EV Transformation Weighed By Analysts After Q1 Beat- Was This a ‘Prove Me’ Quarter For CEO Mary Barra?

/ / Consumer Discretionary /

General Motors Company (NYSE:GM) shares are trading higher on Tuesday after raising its outlook for FY24, following a first-quarter beat. General Motors projects adjusted earnings per share of $9.00 – $10.00, higher than the prior view of $8.50 – $9.50. According to Wedbush analyst Daniel Ives, the company is focusing heavily on profitability, with expenses continuing to be a big priority. This was a major “prove me” quarter for General Motors, which shows the long-awaited turnaround for the company’s CEO, Mary Barra. Importantly, honing in on the EV transformation, the company expects to be EV variable margin positive in the second half of the year, with at least a 60-point EBIT margin improvement this year and mid-single digit EBIT EV margin in 2025, including the benefits from the clean energy tax credits. Ives reiterated an Outperform rating on the stock with a price forecast of $45. BofA Securities analyst John Murphy said in a new investor note

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Starbucks Faces Near-Term Pressures, But Long-Term Outlook Remains Positive, UBS Says

/ / Consumer Discretionary /

Starbucks’ (SBUX) 2024 outlook will likely be affected by near-term pressures, but it remains well-positioned in the long term due to “strong customer brand affinity and an attractive growth profile,” UBS said in a note emailed Tuesday. Challenges in the US stem from protests related to Middle East conflict and pressure on consumer spending, while China’s macro conditions and competition are adding to concerns, according to the note. The firm said results from its survey on brand image, customer traffic, and sales trends and growth found Starbucks still has a strong brand reputation and opportunities to improve sales in the future. UBS said it expects Starbucks to reduce its fiscal 2024 same-store sales and revenue growth. Earnings will also decrease as cost-saving measures will not be able to maintain the current earnings target, the firm added. UBS reduced the price target for Starbucks to $95 from $105, while keeping the

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Tesla Q1 Non-GAAP Earnings, Revenue Decline

/ / Consumer Discretionary /

Tesla (TSLA) reported Q1 non-GAAP earnings late Tuesday of $0.45 per diluted share, down from $0.85 a year earlier. Analysts surveyed by Capital IQ expected $0.50. Revenue for the quarter was $21.3 billion, down from $23.33 billion a year earlier. Analysts surveyed by Capital IQ expected $22.26 billion. Shares were up 5.3% in after-hours tradng.

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