Apple’s Fear Factor Is a Draw — WSJ

/ / Technology /

By Dan Gallagher Apples largest business is struggling, while the company is also losing ground in China and seems to have completely missed Big Techs AI party. That might make now a good time to buy the stock. Apples share price jumped more than 3% Monday morning after Bernstein analyst Toni Sacconaghi upgraded the stock to a buy rating. A Heard on the Street column also published Monday morning noted that the stock has been a weak performer this yearespecially relative to other big tech shares that have been lifted by the markets enthusiasm for generative artificial intelligence. Worries about the latest iPhone cycle, China, regulatory pressure in the U.S. and Europe and the companys unclear plans for its own AI play have all combined to push Apples multiple to around 25 times forward earningsin line with its five-year average, according to FactSet data. Buy the fear, was Sacconaghis advice […]

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AI Data Centers Drive Electricity Demand: Goldman Sachs Picks 16 Stocks To Play The Trend

/ / Technology /

Escalating electricity needs from running AI data centers will create downstream investment benefits in the utilities, renewable energy generation, and industrial sectors, according to Goldman Sachs. In a recently published study, equity analyst Carly Davenport has listed a basket of stocks positioned to benefit from the potential massive surge in U.S. power demand. The investment bank forecasts that data center power demand will grow at 15% compound annual growth rate from 2023-2030. This growth trajectory is expected to elevate data centers’ share of total US power demand to 8% by 2030, up from the current level of approximately 3%. The “U.S. power demand (is) likely to experience growth not seen in a generation. Not since the start of the century has US electricity demand grown 2.4% over an eight-year period, with US annual power generation over the last 20 years averaging less than 0.5% growth,” Goldman Sachs highlights. Analysts estimate

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Domino’s Pizza(DPZ.US) Q1 2024 Earnings Conference

/ / Consumer Discretionary /

The following is a summary of the Domino’s Pizza, Inc. (DPZ) Q1 2024 Earnings Call Transcript: Financial Performance: Domino’s reported a global retail sales growth of 7.3%, excluding foreign currency impact. There was a 7.8% increase in U.S. retail sales, and a 6.8% growth in international retail sales, excluding foreign currency. The company’s same-store sales saw a significant increase in the U.S. by 5.6% and abroad by 0.9%, excluding foreign currency impact. New store additions included 20 in the U.S. and 144 internationally. An increase of 19.4% in operating income was noted in Q1, considering the exclusion of foreign currency’s negative impact. Business Progress: Domino’s introduced their New York Style pizza in Q1 2024 and rolled out a series of product training sprints across 6,800 plus U.S. stores. Initiatives like ‘Emergency Pizza’, Carryout Special Boost Week, and a new loyalty program, Domino’s Rewards, significantly contributed to increasing U.S. same-store sales.

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Amazon Says It Made Record Number of Same-Day, Next-Day Deliveries in Opening Months of 2024

/ / Consumer Discretionary /

Amazon.com (AMZN) said Monday that it made a record number of same-day or next-day deliveries to Prime members during the first three months of 2024. The company said it fulfilled over two billion orders the same or next day to subscribers of its $139 per year service around the globe. “In March, nearly 60% of Prime member orders arrived the same or next day across the top 60 largest US metro areas, and we delivered three out of four items the same or next day in London, Tokyo, and Toronto,” Doug Herrington, CEO of Worldwide Amazon Stores, said in a statement Monday.

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Lululemon Stock Could Trip Because Leggings Are Out — Barrons.com

/ / Consumer Discretionary /

Here’s the latest fashion newsflash: younger Americans are swapping out skinny jeans for oversize, baggy pants. That could hurt companies such as Lululemon Athletica while giving a sales boost to denim-based retailers, Barclays says, as shoppers spend less on form-fitting leggings. Analyst Adrienne Yih noted that this preference is part of a broader shift in consumer silhouettes, which, unlike a short-lived fad, will dictate trend cycles for years to come. “A silhouette shift is a virtuous cycle in that it can drive not only wardrobe refresh but also multiyear new-dollar spend as the consumer adopts the entire look over several years,” she wrote in a note to clients Monday. Apparel retailers with a strong denim business, such as American Eagle Outfitters, Gap, and Urban Outfitters could be the biggest beneficiaries of the trend, Yih noted. With consumers laser-focused on buying newer, baggier styles, these retailers may start to see higher

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Uber Q1 Revenue Expected to Slightly Exceed Consensus, BofA Says

/ / Consumer Discretionary /

Uber Technologies’ (UBER) Q1 revenue is expected to be slightly higher than the consensus of $10.088 billion, BofA Securities said in a Monday note. The firm said it forecasts a revenue of $10.093 billion for the ride-hailing company, which is set to release Q1 results on May 8. BofA said that the “bright spot” for the quarter is expected to be Uber’s mobility business, for which the firm anticipates “modestly accelerating” year-over-year growth on a foreign exchange-neutral basis to 29%. The firm said that based on data on mobility and the company’s historical guidance, it expects a Q2 bookings guidance range of $39.5 billion to $40.5 billion, the midpoint of which is inline with the consensus of $40 billion. BofA maintained its buy rating and $91 price objective on Uber.

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Domino’s Pizza Has Displayed A Strong Start To 2024, Says Analyst

/ / Consumer Discretionary /

TD Cowen analyst Andrew Charles reiterated a Buy rating on the shares of Domino’s Pizza Inc (NYSE:DPZ) with a price target of $550. The company reported first-quarter FY24 sales growth of 6% year-on-year to $1.085 billion, beating the analyst consensus estimate of $1.079 billion. EPS of $3.58 beat the consensus estimate of $3.42. The analyst attributes the EPS beat primarily to 110 basis points of better supply chain margin vs the Cowen model ($0.20), lower interest expense ($0.05), and lower income tax ($0.16). DPC Dash (Domino’s China) investment losses from fair value adjustments weighed on the first-quarter EPS by $0.53 relative to the analyst’s $0.50 estimate. U.S. same store sales of 5.6% exceeded the analyst’s expectations, aided by positive order counts for both delivery & carry-out orders, said the analyst. Order count growth was observed across all income cohorts in a challenged restaurant spending atmosphere for lower income consumers. DPZ ended first-quarter with

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Uber Poised For First-Quarter Earnings, Bookings Beat, BofA Says

/ / Consumer Discretionary /

Uber Technologies (UBER) is expected to report better-than-projected first-quarter earnings and bookings, with the company’s mobility business likely to be the “bright spot,” BofA Securities said Monday. The ride hailing company is scheduled to report first-quarter results May 8. BofA projects earnings at $0.26 per share and gross bookings at $38.27 billion, topping Wall Street’s views for $0.22 and $37.96 billion, respectively. The brokerage expects revenue of $10.09 billion, which is said would match the Street’s estimates. BofA sees mobility bookings at $19.18 billion versus the Street’s $19.14 billion view. The firm said its outlook assumes 28% growth. “We remain constructive on Uber as our top travel/transportation stock given bookings and (earnings before interest, taxes, depreciation, and amortization) growth well above peers,” BofA analysts Justin Post and Michael McGovern said in a note. “Data points for (first-quarter) mobility spend suggest accelerating trends, while restaurant may have decelerated, though Uber’s other

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Drop in U.S. Cosmetic Imports To China Seen As Key To Estee Lauder’s Results

/ / Consumer Discretionary /

The downtrend of cosmetics imports to China didn’t show any signs of improvement in the 1Q, Citigroup analyst Filippo Falorni says in a research note. China saw a 21% year-over-year decline in imports, and a 15% U.S. drop. “The continued decline of imports from the U.S. would suggest trends for Estee Lauder in Mainland China could remain sluggish for this quarter,” Falorni says. “However, we continue to believe the cycling of large inventory reductions in Korea/China travel retail could support a return to sales growth.” L’Oreal, on the other hand, can mitigate the impact of subdued China market growth and buy time until a recovery on easy comparatives in this region, Falorni adds. Citigroup’s top pick is the Chinese beauty company Proya for its strong earnings outlook at 25%-30% growth.

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Boeing Scores $10 Billion Bond Financing in ‘Much-needed’ Liquidity Boost

/ / Industrials /

By Joy Wiltermuth Fresh off reporting a more than $300 million quarterly loss, Boeing Co. saw robust demand on Monday for its $10 billion corporate-bond deal. Order books peaked at $77 billion, allowing pricing to narrow from initial levels, according to Informa Global Markets. A scarcity factor for the three- to 40-year bonds helped, with it being slightly more than three years since Boeing last borrowed in the U.S. corporate-debt market. The aircraft manufacturer’s new funds represent a “much-needed” liquidity boost that “should keep cash at healthy levels this year and into early 2025,” according to Matt Woodruff and Arda Tirnakli, aerospace and defense analysts at CreditSights. The duo estimated the financing will increase Boeing’s (BA) interest burden by about $660 million, with that burden “now total[ing] about $2.8 trillion on a proforma basis.” With safety concerns weighing on Boeing, investors have been getting a chance to own the company’s

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S&P 500 Companies’ Latest Quarterly Results Mixed so Far, Oppenheimer Says

/ / Financials /

S&P 500 companies’ quarterly financial results have been mixed so far in the current reporting cycle, with signs of both “strength and softness,” Oppenheimer Asset Management said Monday. The brokerage said that 228 companies in the benchmark equity index have already reported results in the ongoing season, with earnings up 3.4% year over year overall on the back of a 3.9% increase in revenue. Eight of the 11 sectors have showed positive earnings growth, led by a 41% surge in communication services. Healthcare is leading the decliners, down 36%, followed by energy and materials posting double-digit declines, the firm said in a note. In terms of sales growth, 141 companies have reported positive results, while 75 have logged negative results. Technology and communication services sales are up more than 8% each on an annual basis, while utilities, energy and materials are down, according to the note. Microsoft (MSFT), Facebook parent

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Franklin Resources(BEN) Q1 2024 Earnings Conference

/ / Financials /

The following is a summary of the Franklin Resources, Inc. (BEN) Q1 2024 Earnings Call Transcript: Financial Performance: Franklin ended the quarter with assets under management (AUM) of $1.64 trillion, a significant increase from both the previous quarter and same quarter last year. Investment performance remained strong across all measurement periods. Franklin reported long-term net flows of $6.9 billion in the quarter, with a large portion being from reinvested distributions. Adjusted operating income was $419.6 million, which is a slight increase from the prior quarter but a decrease from the prior year quarter. Increasing expenses and a slightly raised expense guidance were reported due to performance fee increases and compensation calendar resets. The company’s Effective Fee Rate was at 38.5 basis points for the quarter. Business Progress: Franklin saw positive net flows in non-US regions and high demand in private markets and alternative assets. The acquisition of Putnam contributed positively

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