United States

RTY long is falling short of our 1,850 PT. SPX met the 3,820/40 tactical top target outlined last week (rally from SPX 3,700). A C-wave decline is expected to 3,650.
DXY near support while yield remains elevated is at odds. DXY rally due from 110/109.50 and if yield push higher will see equities buckle.
NDX is the U/P short to add back to below 11,300. SPX long support zone rests at 3,650/20 with 3,600 the critical pivot to spur a fresh rise.

EQD | SPX Vs NDX : Could CPI Spark a Reversal of Tech Performance Versus the Broader Market?

By Simon Harris

All eyes are on inflation data this week with CPI due out on Thursday
Shorts in tech have been working but could be looking to take profits after big gains last week
Use options for a cheap play on NDX outperformance over SPX

First Solar Inc: Major Drivers

First Solar’s bull run was halted by a below par result in the last quarter as the company failed to meet Wall Street expectations with respect to revenues as well as earnings.
The company’s manufacturing plants produced 2.4 gigawatts of modules in the third quarter and sold 2.8 gigawatts.
Besides, their current fleet’s manufacturing performance metrics remain consistent, and plans for the third manufacturing plant in Ohio are still on track.

Eli Lilly & Co: The Akouos Acquisition & Other Drivers

Eli Lilly’s stock has been on a roll off-late in a relatively challenging market environment and the company supported it with a solid result surpassing Wall Street expectations on all counts.
They have continued to invest in expanding their manufacturing base to fulfill the rising demand for their products and prepare for upcoming launches.
In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

Exxon Mobil Corp: Major Drivers

Like most other oil majors, Exxon Mobil too is trading close to its 52-week high.
The company an delivered outstanding quarterly results driven by higher natural gas realizations, stronger refinery throughput, solid refining margins, and strict cost control.
In the Permian Basin, Exxon increased output to almost 560,000 oil equivalent barrels per day, continuing their rapid expansion from the previous year.

AbbVie Inc: The DJS Antibodies Acquisition & Other Drivers

AbbVie’s results for the past quarter were mixed and the company failed to meet Wall Street expectations with respect to its revenues but managed an earnings beat.
The management also observed a persistently strong double-digit operational sales growth from several other significant products, including Botox Cosmetic, Vraylar, Venclexta, and Botox Therapeutic.
This market growth is anticipated to primarily affect Juvederm and AbbVie’s body contouring portfolio products, which have higher consumer price points.

Sporting Crypto – Nov 7th: Visa Celebrate World Cup 2022 with Masters of Movement

By Sporting Crypto

If you’re bored of reading FIFA-related stories – I’m sorry. The World Cup is on the horizon, after all!
This project by the team over at Visa is probably the most interesting Web3 x World Cup project I’ve seen so far, however.
Visa have created a generative art project where the art represents five iconic moments in World Cup history.

Pfizer Inc (PFE.US) – What if Pfizer Loses the China Market in the Future?

By Xinyao (Criss) Wang

If excluding the contribution from COVID-19 related products, Pfizer’s performance growth could have been quite pessimistic. In terms of BD, Pfizer is “a big buyer” but the return is questionable.
We haven’t seen any blockbuster new products in Pfizer’s pipeline that can make up for the losses caused by VBP/NRDL negotiation in China. Price reduction seems the only way out.
We cannot rule out that Pfizer may lose the China market in the event of further deterioration of Sino-US relations. This is a problem investors need to consider in advance.

Pinterest Inc: New Marketing Campaign & Other Developments

Pinterest’s performance as a stock has been fairly decent in what can be termed as a tumultuous environment for the technology industry.
The company’s global MAUs of 445 million were higher than in Q3 2021 because it largely overcame the pandemic’s difficulties and increased user engagement.
During the quarter, they collaborated with Merlin, BMG, Warner Music Group, and Warner Chappell Music to enhance the music experience on Pinterest.

Shockwave Medical Inc (SWAV US): Continued Triple-Digit Sales Growth in Q3; 2022 Guidance Raised

By Tina Banerjee

Shockwave Medical Inc (SWAV US) reported strong 3Q22 result, with revenue growing 102% y/y to 131.3 million, beating consensus by $7.5 million. EPS stood at $0.92, beating consensus by 35%.
Revenue growth was driven by the launch of Shockwave C2, in the U.S. in February 2021, continued recovery from the pandemic impact, and increased adoption of Shockwave products.
Shockwave now expects 2022 revenue of $483–488 million, representing 104–106% y/y growth. This compares to previous revenue guidance of $465–475 million and current consensus of $478.9 million.

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Nov 08

Daily Brief United States: GrafTech International Ltd, FTX Token, Copper, GMX, Ubiquiti Inc., Apple, Ethereum, Mastercard, Sap Se Sponsored Adr, T Mobile Us Inc and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

Graftech: Operational Issues Plague Thesis
FTT/FTX- Another Inflection Point in the Crypto Market Waiting to Happen?
Copper Long Needs USD to Break Lower
GMX – A DeFi Real Yield Protocol
UI: On Pace for Record Revenue
Apple Inc.: Latest Updates
FTT Liquidity Faces Key Test
Mastercard Inc.: The Crypto Source Program & Other Drivers
SAP SE ADR: Initiation of Coverage – Financial Forecasts
T-Mobile: Industry Specific Smart Solutions & Other Drivers

Graftech: Operational Issues Plague Thesis

By Sameer Taneja

GrafTech International Ltd (EAF US) thesis has taken a turn for the worse with the suspension of the operations in Mexico (impact 50% of production in Q4 2022/H1 2023).
The negotiations of LTA pricing ( based on spot pricing ) in the near term also prove to be a headwind, with spot prices 40% below the contract.
At 7.3x PE FY23 (earnings down 60% YoY), the stock price reflects these challenges. The recovery for the company to normalized cash flow levels will take much longer.

FTT/FTX- Another Inflection Point in the Crypto Market Waiting to Happen?

By Rose Choy

On Nov 3, it was leaked that Alameda seemed to have a weaker than expected balance sheet with $7.6 bn of loans and a relatively illiquid portfolio of assets.
Alameda, a large proprietary crypto trading firm, did not officially comment but its CEO Caroline stated on Twitter that most of the loans were repaid.
The potential linkages between Alameda and FTX, a large crytpo exchange, both controlled by Sam Bankman-Fried, are of utmost concern and has riled the crytpo market.

Copper Long Needs USD to Break Lower

Copper’s bull wedge b -wave breakout stands out (high conviction set up) but needs a weaker USD for follow through. China is the wildcard but seems a bit early still.
Gold trendline and price pivot at 1,700 the key level to clear or will retest the 1,620 triple lows.
DXY to rally off of 110 support within the triangle range and will see metals pullback. Bigger picture needs a break below 109.50 (bearish) to overlay with metals.

GMX – A DeFi Real Yield Protocol

By Edward Wu

GMX is a decentralized spot and perpetual exchange on the Ethereum Layer 2 scaling solution Arbitrum.
This protocol is absolutely a shining star in today’s market. Token price, TVL, and transaction volume are all in an upward trend.
It is also labeled as one of the best “Real Yield” opportunities for Liquidity Providers.

UI: On Pace for Record Revenue

UI continued to report growth in its enterprise segment with total revenue rising to a new record.
Ubiquiti has been operating through a difficult supply chain environment where particular chipsets have been nearly impossible to purchase beyond allocation from the producer.
Ubiquiti has expanded its enterprise product portfolio to include more options where Ubiquiti is generating recurring revenue

Apple Inc.: Latest Updates

Apple has been correcting along with broader markets and the company’s performance has also been hit by the Covid-19 outbreak in the Foxconn unit in China that produces iPhones.
The company’s results were fairly good and it surpassed Wall Street expectations in terms of revenues as well as earnings with a good performance from iPhone, accessories, home, and wearables.
Apple continues to grow its platform quite well in emerging markets with quite strong growth in Latin America, Southeast Asia, and India.

FTT Liquidity Faces Key Test

By Kaiko

Price Movements: For the first time since April, Lido staked ether (stETH) now trades at parity with ETH.
Market Liquidity: Coinbase reported lower than expected earnings due to a continued rout in trade volume.
Derivatives: ETH perpetual futures volume is now higher than BTC volumes as traders pounce at renewed volatility.

Mastercard Inc.: The Crypto Source Program & Other Drivers

With the backdrop of cross-border travel continuing to improve and consumer expenditure remaining resilient, Mastercard delivered strong earnings and revenue growth in its latest result.
Mastercard has expanded with gaming payouts, thus launching its Gaming Fast payout program.
For addressing domestic, cross-border, and account-to-account payments, it has signed an agreement with leading worldwide B2B solutions and networks, Pagero.

SAP SE ADR: Initiation of Coverage – Financial Forecasts

This is our first report on SAP, the global ERP, market leader.
SAP’s performance in the North American and Latin American markets is particularly robust.
The ERP transfer to the cloud is being led by SAP, which created the technology decades ago.

T-Mobile: Industry Specific Smart Solutions & Other Drivers

T-Mobile delivered a mixed set of results this quarter with revenues falling short of Wall Street expectations.
However, it did deliver an earnings beat as the management continued to capitalize on its network leadership position.
With the launch of Network pass and Easy Switch, T-Mobile is making it risk-free and simple to experience its network, also switch to T-Mobile.

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Nov 07

Daily Brief United States: Datadog Inc, DraftKings Inc and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

Grounding Myself in this Market Cycle
King No More

Grounding Myself in this Market Cycle

By BluSuit

At the moment of writing this, it’s 2:30 pm on a Sunday and I am in a ground blind. Every year at about this time of the year I take a few days off of work to unplug, have a few drinks with other family members and run off to the middle of the woods.
I get some of my best thinking done out here while I wait for a White Tail Buck to come by. It’s blissful.
Regardless of where I am or what I am doing, I am and always have been committed to maintaining my transparency, my thoughts and my investing story/process to all of you.

King No More

By subSPAC

Fantasy Sportbook Operator DraftKings saw its shares drop by 28% at the close on Friday, recording the worst in its trading history even as its management and CEO remained upbeat about the company’s future.
What was surprising about the steep decline was the fact that the company beat analyst expectations both on the revenue and EPS front in its most recent quarter while also raising its full-year guidance.
The market remains skeptical about the company’s business model and its decision to prioritize growth over profitability, a stark comparison to its peers who have cut costs in recent months.

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Nov 06

Daily Brief United States: DoorDash Inc and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

Doordash 3Q22: Is DASH the COVID Winner?

Doordash 3Q22: Is DASH the COVID Winner?

By Aaron Gabin

Strong growth continues….GOV grew 30%, 2% ahead of consensus..no macro headwinds.
New “disclosures” imply the core business is more profitable then presumed, rationalizing management’s investments in new businesses.
Beat and Raise…one of the few online platforms to do this in the current environment…in a business (food delivery) that most didn’t think was habitual LT.

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Nov 05

Daily Brief United States: Meta Platforms (Facebook), Moderna Inc, Texas Pacific Land Trust, Laser Photonics, American Rebel Holdings, Howard Hughes Corp, Hawkins Inc, Ecovyst and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

META: Connecting People
Moderna (MRNA US): Q3 Result Misses Expectations; Guidance Slashed As COVID Vax Shipment Deferred
TPL: Rising Production, Raising PT
Laser Photonics Corporation: An Emerging Star In The Laser Cleaning Industry
American Rebel Holdings Inc.: Interesting Set Of Updates With Respect To The Champion Acquisition & Diversification
HHC: Q3 Results Affirm MPC Strengths
HWKN: Moving to Sidelines on Rise of Headwinds
ECVT: Regenerating Free Cash Flow

META: Connecting People

By Value Investing

A few weeks ago, Altimeter Capital CEO Brad Gerstner and longtime shareholder of Meta wrote an open letter to you and the rest of the team at Meta – humbly requesting that you guys pay more attention to the company’s deteriorating share price, and the gradually hostile investor sentiment towards your company.
Basically he was telling you to shape up or ship out – with the main vex of his letter being your company’s large cash burn in their Reality Labs segment (i.e. Metaverse).
As a complete nobody with a net worth of less than $1B, I thought that I should weigh in as well.

Moderna (MRNA US): Q3 Result Misses Expectations; Guidance Slashed As COVID Vax Shipment Deferred

By Tina Banerjee

Moderna Inc (MRNA US) reported Q3 revenue of $3.36 billion, below expectation, representing y/y decline of 35% and q/q decrease of 31%, due to lower sales volume of COVID-19 vaccine.
Management now expects 2022 vaccine revenue of $18–19 billion, down earlier expectation of $21 billion, following delay of certain deliveries into 2023 due to short-term supply constraints.
With the continued higher medical burden of COVID relative to flu, Moderna expects the endemic COVID vaccine market could be as large or larger than flu market volumes over time.

TPL: Rising Production, Raising PT

TPL reported better than expected third quarter results on the heels of production rebounding to a new high compared to the last four quarters
The availability of fracking sand has been the biggest impediment for energy producers in the Permian Basin. TPL contracting for two mobile sand miners should stabilize production over multiple quarters
We are raising our price target to $2,750 to better reflect the earnings power TPL’s business has looking ahead to 2023 and 2024 with higher production levels

Laser Photonics Corporation: An Emerging Star In The Laser Cleaning Industry

This is our first research note on Laser Photonics and we look to provide an overview of the company operations before diving deeper into its valuation with a full-fledged valuation report which will be released soon.
The automotive, building and metalworking industries’ strong need for these technologies and the growing interest in robotic cleaning technologies all support the market’s growth.
Laser Photonics is one of the very few American players in the laser blasting space and offers a cutting-edge solution to the significant rust issue that plagues various industries.

American Rebel Holdings Inc.: Interesting Set Of Updates With Respect To The Champion Acquisition & Diversification

American Rebel is a manufacturer a high-tech safes and vaults provider for the modern American consumer.
The American Rebel brand has been known for its distinctly American flavor and a strong level of patriotism associated with its practices.
Over the past months, the management has been extremely active in terms of executing its inorganic growth strategy and also diversifying its offerings.

HHC: Q3 Results Affirm MPC Strengths

HHC reported third quarter 2022 results validating the real Sim City label we gave the Company upon initiation in 2014.
HHC reported second quarter revenue of $639.5 million primarily because of condo deliveries. HHC reported condo sales of $418 million as it records condo sales upon delivery of units
HHC’s operating assets showed resiliency with a new multi-family property coming online in the third quarter resulting in higher NOI

HWKN: Moving to Sidelines on Rise of Headwinds

HWKN reported better than expected fiscal second quarter (September) results with the caveat it would experience higher costs due to a supplier being offline in the December quarter
Downgrading from Buy to Neutral as this is the perfect time to move to the sidelines as some of the tailwinds of the last two years could become headwinds.
The weakness in industrial could become multi-quarter event with demand pressure due to higher prices and increased imports

ECVT: Regenerating Free Cash Flow

ECVT is benefiting from the continued need for sulfuric acid in multiple industries and catalysts for specialty chemicals
Gasoline demand is now above 2019 levels with greater need for premium gasoline leading to more alkylate production
The catalyst business should realize benefits from refineries taking maintenance shutdowns in the first quarter of 2023 due to the current high utilization rates

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Nov 04

Daily Brief United States: News Corp, Russell 2000 Index, Meta Platforms (Facebook), Bristol Myers Squibb Co, Microsoft Corp, Johnson & Johnson, Match Group Inc, Novavax Inc, A10 Networks, Vf Corp and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

News Corp (NWS AU)’s Proposed Merger With Fox Corp. Again.
SPX Pullback near Target with RTY Buy In
Meta Platforms: Is The Hyper Growth Story Over? (11/22)
Bristol-Myers Squibb: The Turning Point Acquisition & Oncology Expansion
Microsoft Inc: The Designer Visual Design App & Other Developments
Johnson & Johnson: R&D Expansion & Other Drivers
Match Group 3Q22: Turnaround Brewing?
Breaking Estimate Short Candidates: Novavax, Micron, Generac, FormFactor
ATEN: Steady Growth, PT to $24
VF Corporation: Major Drivers

News Corp (NWS AU)’s Proposed Merger With Fox Corp. Again.

By David Blennerhassett

Back on the 17 October, News Corp (NWS AU) announced it had begun exploring a potential combination with Fox Corporation (FOXA US).
A merger of two parts of Rupert Murdoch’s media empire would combine Fox News and TMZ assets with NWS’ newspaper and online news operations.
Murdoch split his empire in 2013, placing the print business in a newly created NWS, and the TV and entertainment under Fox,

SPX Pullback near Target with RTY Buy In

SPX dual top at 3,928 rolled just under the 3,950 top target. Break of wedge support was the touted trigger to add to our short group. 10yr 4.20% PT met.
SPX 3,700/650 is our pullback target add to risk but we must get past the NFP report first. RTY is our top long pick in the US at trendline.
Asia shorts (HSI and Taiwan) and Asia longs to layer into (NKY and ASX). Levels to coordinate with SPX 3,660 support.

Meta Platforms: Is The Hyper Growth Story Over? (11/22)

Meta Platforms delivered a highly disappointing set of results with a huge earnings miss.
The company’s ballooning costs to fund its virtual reality vision have resulted in a drop in profitability.
We provide the stock of Meta Platforms with a ‘Hold’ rating and a revision in the target price.

Bristol-Myers Squibb: The Turning Point Acquisition & Oncology Expansion

Bristol-Myers delivered another all-around beat as the management continued to make an effort to expand its new product range and inline franchise.
In this quarter, the inline and new product portfolio grew by 13%, and the company managed to deliver non-GAAP EPS growth of 3%.
Revenues in the third quarter were approximately $11.2 billion and the inline and new product portfolio grew strongly up to 13%.

Microsoft Inc: The Designer Visual Design App & Other Developments

Microsoft delivered a good result in the last quarter surpassing Wall Street expectations on all counts.
Microsoft Cloud revenue surpassed $25 billion, increasing by 24% and 31% in constant currency.
Microsoft is getting more customers that want to grow and innovate with its existing infrastructure.

Johnson & Johnson: R&D Expansion & Other Drivers

Johnson & Johnson has shown some recovery in its stock price which was backed by a solid result across its business segments.
Pharmaceutical growth was determined by robust commercial execution and access that enabled Johnson & Johnson to continue to deliver growth in operational growth.
We provide the stock of Johnson & Johnson with a ‘Hold’ rating and a revised target price.

Match Group 3Q22: Turnaround Brewing?

By Aaron Gabin

After a massive guidedown last quarter, Match is beginning to show stability in the business, and offered a cautiously optimistic return to growth guide for 2023.
Tinder rebuild underway, 16% FX-Neutral growth was 2% ahead of consensus and drove the quarter’s beat.
5-Pronged plan by new CEO Kim seems well thought out for what ails Match.

Breaking Estimate Short Candidates: Novavax, Micron, Generac, FormFactor

By Eric Fernandez, CFA

This model finds companies facing recent sharp cuts in estimates. These shorts can have very disparate characteristics.
The key judgement involves whether the negative revisions are temporary or if they are indications of ongoing weakness in the business.
Breaking Estimates stocks often continue to decline after the cuts. This week we flag: Novavax, Micron, Generac, FormFactor

ATEN: Steady Growth, PT to $24

ATEN continues to demonstrate its growth ability by focusing on its security first approach. ATEN reported third quarter revenue slightly more than we were projecting
The steady growth ATEN has experienced this year has come through the diversification of its customer base
ATEN’s management asserted demand has been consistent and dependent on performance. ATEN has added more customers throughout the year, which should serve as a baseline for incremental revenue in 2023

VF Corporation: Major Drivers

VF Corporation is operating in a challenging macro-economic backdrop and delivered a disappointing quarterly result.
The company barely managed to meet revenue expectations given a weak performance in China and also missed out on earnings expectations.
Apart from China, VF Corporation has witnessed an improvement across the rest of Asia, led by Japan and Korea.

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Nov 03

Daily Brief United States: Pfizer Inc, Save Foods Inc, Polygon and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

Pfizer Inc (PFE US): Stellar Q3 Performance; Despite Unfavorable Fx Impact, Raises 2022 Guidance
Save Foods Inc.: A Uniquely Positioned Small-Cap In Food Safety
Reddit Creates an Adoption Tsunami

Pfizer Inc (PFE US): Stellar Q3 Performance; Despite Unfavorable Fx Impact, Raises 2022 Guidance

By Tina Banerjee

Pfizer Inc (PFE US) reported beat-and-raise Q3 results. Revenue declined 2% operationally to $22.6 billion, beating consensus by $1.5 billion. Adjusted EPS of $1.78 was ahead of consensus of $1.40.
Pfizer raised its 2022 financial guidance, on an operational basis, for revenue and adjusted EPS by approximately $1.7 billion and $0.19, respectively.
The company aims to launch 19 new products or indications, of which more than two thirds have the potential to be blockbusters, in the market over the next 18 months.

Save Foods Inc.: A Uniquely Positioned Small-Cap In Food Safety

This is our first research note on Save Foods Inc.
The company is a distinguished player within the field of developing green solutions for the food industry in order to improve food safety and increase shelf life.
With a rising number of quality inspections faced by food companies, increased awareness of foodborne illnesses, and the necessity to avoid food contamination, Save Foods’ offerings are in high demand.

Reddit Creates an Adoption Tsunami

By Carbono Insights

Reddit creates and adoption tsunami Bear times are build times.
You’re probably tired of hearing this already. But if you’re still with us during these bear times, and you’re still following the news, you’re probably aware that engineers are hard at work building what will be the rails of the next great wave of adoption.
As soon as liquidity enters back the room, crypto will be ready to onboard the first billion customers, be sure of that.

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Nov 02

Daily Brief United States: Tesla Motors, ARK Innovation ETF, Financial Select Sector SPDR Fund, Ethereum and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

Tesla Motors Buy Level for Drive to 255
EQD | ARK Innovation (ARKK US): Is It Time to Get Back into Growth?
Bear Market Rally Continues; Financials/XLF Reversing YTD Downtrend; Small-Caps at 11-Month RS Highs
DeFi Options Protocols Series (#3): Where Can the Next Phase of Growth Come From?

Tesla Motors Buy Level for Drive to 255

TSLA (US) shows near term upside that is expected to fade and set up a better entry level below 200 with stiff resistance near the 255 target.
Macro descending wedge is the dominant driver into 2023 with lower wedge support at 180/160 and upper pattern resistance at 330 currently and will shift lower with time translation.
Buy volumes on this bounce have tapered off, suggesting this rise is corrective in nature and why our buy target revolves around a new low.

EQD | ARK Innovation (ARKK US): Is It Time to Get Back into Growth?

By Simon Harris

Growth Stocks have been hammered in the rising rate environment
Inflation may have peaked and central banks could be reaching the end of the hiking cycle
We look at derivative strategies on ARKK US to gain a broad exposure to the growth and tech

Bear Market Rally Continues; Financials/XLF Reversing YTD Downtrend; Small-Caps at 11-Month RS Highs

By Joe Jasper

The market remains in bear market rally mode, and our price target remains the 200-day MAs on the SPX and Russell 2000, as discussed in last week’s Compass (Oct. 25).
Longer-Term, this is still a bear market until the S&P 500 and IWM can break above their respective YTD downtrends/200-day MAs, and markets could easily test their lows again.
With that said, there are signs that suggest breakouts above YTD downtrends/200-day MAs could be coming. Catalysts include the FOMC announcement on Wednesday, followed by midterm elections on Nov. 8.

DeFi Options Protocols Series (#3): Where Can the Next Phase of Growth Come From?

By Alec Tseung

DeFi options protocols’ TVL did not change much in the past three months despite the bear market we are now in.
Many (TradFi) institutions and institutional investors we spoke to believed the next bull market/major innovations in DeFi might be coming from protocols that offer yields from real-world assets.
To drive the next phase of growth, options protocols should leverage their composability to tap into it by offering those protocols additional use cases related to options.

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Nov 01

Daily Brief United States: PNM Resources, Coca Cola Co, Crude Oil, Netgear Inc, AXT Inc, Visa, 3 M Co, Kraft Heinz Co, MSCI Inc, Otis Worldwide Corp and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

Iberdrola/PNM Resources: One to Watch
The Coca-Cola Co: Major Drivers
The Commodity Report #75
NTGR: Retail Headwinds Is Not the Story
AXTI: Inventory Balloon Pop
Visa Inc: Collaboration With FTX & Other Drivers
3M Co: Acquisition of Treo Solutions & Other Drivers
Kraft Heinz Inc: New Plant-Based Offerings & Other Drivers
ISSB Affirms Scope 3 Emissions Reporting Requirements and Investor-Centric Focus
Otis Worldwide Corp: New Contracts For Gen 2 & Other Drivers

Iberdrola/PNM Resources: One to Watch

By Jesus Rodriguez Aguilar

Iberdrola SA has not abandoned its strategic plan in the United States, which includes the acquisition of PNM Resources through its American subsidiary Avangrid Inc.
Iberdrola is convinced that the transaction will be unblocked in the coming weeks, either because the appeal prospers or because of changes in the regulator.
I retain my TP of $50.3 cash takeout price (consideration offered by Avangrid/Iberdrola) vs. my $49.8/share median implied valuation. My TP represents 8.5% upside plus a 2.9% dividend yield.

The Coca-Cola Co: Major Drivers

Despite a macroeconomic environment that remained difficult in the third quarter, Coca-Cola managed to deliver yet another all-around beat.
Utilizing their customer-centric marketing strategy, they are rapidly connecting consumption occasions with passion points through digital engagement.
Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

The Commodity Report #75

By The Commodity Report

With the beginning of this week’s newsletter, I probably won’t make any new friends in my home country.
What makes me sad is that literally nobody is speaking about the untapped natural gas reserves we have underground in Germany that are indeed accessible.
A short calculation: In 2021 Russia delivered 55 billion cubic meters to Germany or 55% of the total German gas consumption.

NTGR: Retail Headwinds Is Not the Story

NTGR reported third quarter results showcasing continued growth in its SMB and service provider product lines while the retail channel remained challenged.
NTGR has been transitioning away from the lower end of the Wi-Fi router market, but a contracting market has extended out the timeframe of depleting channel inventory
NTGR’s growth driver are primarily its Pro AV switches and 5G hotspots, which continue to outperform our expectations

AXTI: Inventory Balloon Pop

AXTI slightly beat its downward adjusted third quarter guidance but issued fourth quarter forecast showing further deterioration in the business
During the third quarter AXTI experienced a significant delay in orders from customers causing revenue to decline by approximately 11 percent sequentially
The spill over of weakness into the fourth quarter should not be a surprise given the pace of decline in revenue in the third quarter

Visa Inc: Collaboration With FTX & Other Drivers

Despite the uncertainty brought on by the pandemic, the timing of the cross-border travel rebound, inflation, the Ukraine crisis, and potential recession, Visa’s performance in 2022 has been quite solid.
The company delivered yet another all-around beat as it established over 400 business collaborations with fintechs worldwide this year, ranging from start-ups to established businesses.
Cross-border volumes in Q4 increased by 7 points from Q3 and were up 49% year over year and 130% compared to three years earlier, excluding intra-Europe.

3M Co: Acquisition of Treo Solutions & Other Drivers

3M delivered a mixed set of results for the last quarter as it failed to meet revenue expectations of Wall Street but managed an earnings beat.
Every business segment produced margins higher than 21%, with noteworthy margin growth in the safety, industrial, transportation, and electronics sectors.
This is what helped them deliver an earnings beat.

Kraft Heinz Inc: New Plant-Based Offerings & Other Drivers

Kraft Heinz has had another strong quarter and the company delivered yet another all-around beat.
Despite the challenges of the supply chain, the company managed to have a strong customer demand that resulted in a greater-than-expected profitability and cash flow in this quarter.
Kraft Heinz has not only succeeded in meeting the market demand but also gained market share in many key categories during the third quarter.

ISSB Affirms Scope 3 Emissions Reporting Requirements and Investor-Centric Focus

By Kyle Rudden

The International Sustainability Standards Board (ISSB) recently confirmed important aspects of its proposed sustainability reporting standards. One step closer to a unified standard.
Particularly noteworthy is confirmation that disclosures of Scope 3 emissions will be required. Scope 3 emissions are largely unreported, but account for the majority of total emissions.
Scope 3 disclosure could have repercussions for ESG ratings, ESG indices based on ESG ratings, and potentially (though too soon to tell) reconstutions of exchange-traded funds.

Otis Worldwide Corp: New Contracts For Gen 2 & Other Drivers

Otis delivered a mixed set of results for the last quarter.
The company saw a good growth in organic sales but failed to meet the revenue expectations of Wall Street.
Its expansion in margins did result in the company delivering an earnings beat.

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Oct 31

Daily Brief United States: Arch Capital, S&P 500, Nitro Software Ltd, Chipotle Mexican Grill, Moody’s Corp, Servicenow Inc, Texas Instruments, Ford Motor Co, Valero Energy, Biogen Inc and more

By Smartkarma Daily Briefs | Daily Briefs, United States

In today’s briefing:

Ad Hoc S&P500 Change on Twitter Deletion
SPX 3,500 Transitioning Higher
Nitro Software Rejects Potentia, Again, And Engages With KKR
Chipotle Mexican Grill: Major Drivers
Moody’s Corporation: ESG Insurance Underwriting Solutions & Other Drivers
ServiceNow Inc: Acquisition of Era Software
Texas Instruments: Production At New Facility & Other Drivers
Ford Motors: Major Drivers
Valero Energy: Major Drivers
Biogen Inc: Push For Byooviz & Other Drivers

Ad Hoc S&P500 Change on Twitter Deletion

By Travis Lundy

S&P DJI announced late 27 October 2022 that Twitter Inc (TWTR US) would be deleted from the S&P500, replaced by Arch Capital (ACGL US).
RXO would be added to the MidCap400 while Bread Financial Holdings (BFH) would move from MidCap400 to SmallCap600 and Unifi Inc (UFI US) would get deleted from the 600.
This insight presents the issues and the flows, which are not to be separated.

SPX 3,500 Transitioning Higher

Our bullish risk call at SPX 3,500 has panned out nicely while using our short group to sell squeeze rallies. Increasing evidence sides with a more bullish November for risk.
USD and the US 10yr yield face pivot support with a tactical bounce bias. Conviction is to sell the USD and Yield into strength.
RTY long from 1,650 has been the star performer while shorting the NDX on squeeze spiked has worked fairly well. Update SPX, RTY and NDX buy and sell level outlined.

Nitro Software Rejects Potentia, Again, And Engages With KKR

By David Blennerhassett

On the 28 October, Potentia announced an improved (and final) off-market Offer of A$1.80/share for Nitro (NTO AU), a 13.9% improvement over its initial proposal on the 30 August.
Nitro has now concluded the Potentia Takeover Bid undervalues Nitro. The Offer, however, is still proceeding, and will open in two weeks.
Separately, KKR’s Alludo has pitched a non-binding – subject to due diligence – Offer by way of a Scheme (or off-market takeover) at A$2.00/share. Nitro is supportive of this Offer.

Chipotle Mexican Grill: Major Drivers

Chipotle Mexican Grill delivered a mixed set of results.
In the quarter, Chipotle continues to view broadening trends by the income levels with the consumers with lower income reducing frequency.
We provide the stock of Chipotle Mexican Grill with a ‘Hold’ rating and a revision in the target price.

Moody’s Corporation: ESG Insurance Underwriting Solutions & Other Drivers

Moody’s Corporation delivered a disappointing result, failing to meet Wall Street expectations with respect to both, revenues as well as earnings.
The Moody’s Analytics business continued to perform quite well with strong revenue growth and an increase in the annualized recurring revenue.
We provide the stock of Moody’s with a ‘Hold’ rating with a revision in the target price.

ServiceNow Inc: Acquisition of Era Software

Service Now had a solid third quarter and the company delivered another all-around beat.
Considering the solid organic growth and market demand of the company, it is expected that there will be 750 million new applications built by 2025.
The company focused on improving customer service experience and expanding its market by acquiring other software companies which is why it closed the acquisition of Era Software.

Texas Instruments: Production At New Facility & Other Drivers

Texas Instruments had a good third quarter, with revenue increasing by 13% year over year to $5.2 billion, surpassing Wall Street expectations.
After two years of construction, the company’s new semiconductor chip facility has begun producing chips.
The management anticipates Texas Instruments’ fourth-quarter revenue to be in the $4.4 billion to $4.8 billion range.

Ford Motors: Major Drivers

Ford’s stock has seen some recovery off-late despite a mixed result for the third quarter.
The company surpassed the revenue expectations of Wall Street but missed out on earnings and ended up with nearly $50 billion in liquidity.
The only silver lining in the quarter was Ford Credit which delivered another healthy quarter with an EBT of $600 million.

Valero Energy: Major Drivers

Valero Energy had a mixed performance in its recent financial results for the quarter as its revenues were significantly above Wall Street expectations.
The company has a good refining margin supported by continued energy cost advantages, low product inventories, and strong product demand for the U.S. refineries in comparison to the global competitors.
The refining fundamentals stay strong, with global product supply staying constrained because of the high natural gas prices and capital reductions.

Biogen Inc: Push For Byooviz & Other Drivers