In today’s briefing:
- Intel Results #1 Take-Away: Major Readthrough for PC Upgrade Cycle and Edge AI
- Kenvue (KVUE US): Q2 Result Beats Estimates; Initiated 2023 Guidance; J&J Launches Exchange Offer
- Cadence Design Systems Inc.: Shaping the Future of AI with its Unique Products? – Key Drivers
- Will A Credit Event Derail the Equity Bull?
- Archer-Daniels-Midland Company: Catering To The Rising Demand For Health Products! – Key Drivers
- Corning Incorporated: Redefining Resilience & Emerging More Assertive Amid the Global Economic Recovery! – Key Drivers
- Dow Inc.: New Partnership with New Energy Blue to Pioneer Sustainable Bio-Based Plastics & Other Developments
- General Electric Company: A Successful Turnaround?- Key Drivers
- Kimberly-Clark Corporation: Winning the Race in Key Markets Worldwide? – Major Drivers
- Meta Platforms Inc.: Interesting Progress On The VR Front! – Key Drivers
Intel Results #1 Take-Away: Major Readthrough for PC Upgrade Cycle and Edge AI
- Intel’s latest results imply a potential bottoming of its business & nascent turn-around; however the greater take-away is that the PC industry is heading into a major AI-driven up-cycle.
- PC industry inventories are now “healthy” and Intel’s Client Computing segment (PCs) showed the strongest QoQ revenue growth. Management is guiding for continued improvement next quarter.
- Edge AI will drive a major upgrade cycle for PCs worldwide and Intel’s new Meteor Lake chip could be a catalyst. Invest ahead of AI PCs having their “ChatGPT Moment”.
Kenvue (KVUE US): Q2 Result Beats Estimates; Initiated 2023 Guidance; J&J Launches Exchange Offer
- Kenvue (KVUE US) reported 5% YoY revenue growth to $4B in 2Q23, driven by continued demand of self-care portfolio, mainly consisting of cough, cold, and allergy, and pain care products.
- The company has guided for 4.5–5.5% revenue growth and EPS of $1.26–1.31 for 2023. Kenvue has declared a cash dividend of $0.20 for 3Q23.
- J&J is offering its shareholders the option to exchange shares for Kenvue’s at a 7% discount. The exchange offer is scheduled to close on August 18, 2023.
Cadence Design Systems Inc.: Shaping the Future of AI with its Unique Products? – Key Drivers
- Cadence exceeded the revenue and earnings expectations of Wall Street for the second quarter of 2023, resulting in year-over-year 14% revenue growth and 19% non-GAAP EPS growth.
- In terms of Generative AI, the customers of Cadence are adopting its chip, Generative AI portfolio, system, board, and package as they are achieving exceptional productivity benefits and quality results with these solutions.
- We give Cadence Design Systems a ‘Hold’ rating with a revised target price.
Will A Credit Event Derail the Equity Bull?
- We believe equity bulls run the risk of a credit event which could spark a bear market.
- Market-Based indicators used by technicians have failed to anticipate and discount well-telegraphed events such as the GFC and the start of the Russo-Ukraine War.
- If you want to be bullish, we wouldn’t argue with you. Just be careful.
Archer-Daniels-Midland Company: Catering To The Rising Demand For Health Products! – Key Drivers
- Archer-Daniels-Midland delivered a mixed result in the recent quarter, with revenues below market expectations, but it surpassed the analyst consensus in earnings.
- The company reported second-quarter adjusted earnings per share of $1.89 and an adjusted segment operating profit of $1.6 billion.
- ADM’s team expects continued strength in Brazil’s origination, solid biofuel demand, and resilient food demand, leading them to raise their earnings expectations for 2023.
Corning Incorporated: Redefining Resilience & Emerging More Assertive Amid the Global Economic Recovery! – Key Drivers
- Corning delivered mixed results in its most recent quarter, with revenues above analysts’ expectations but below-par earnings.
- During the last quarter, Corning made significant progress in improving profitability and cash flow in response to the challenging post-pandemic economic conditions.
- As a result, the gross margin improved, and the free cash flow increased.
Dow Inc.: New Partnership with New Energy Blue to Pioneer Sustainable Bio-Based Plastics & Other Developments
- Dow delivered a positive result and managed an all-around beat in the last quarter.
- The last quarter was challenging for Dow, with lower year-over-year sales and earnings due to the slow global economic growth.
- Despite these headwinds, the company demonstrated resilience by executing its financial and operational strategies, resulting in sequential earnings improvement.
General Electric Company: A Successful Turnaround?- Key Drivers
- General Electric managed to exceed Wall Street expectations in terms of revenue and earnings.
- GE Vernova is also increasing spin with significant orders, improved profitability in Renewable Energy, and continuing margin expansion in Power.
- We give General Electric a ‘Hold’ rating with a revised target price.
Kimberly-Clark Corporation: Winning the Race in Key Markets Worldwide? – Major Drivers
- Kimberly-Clark delivered mixed results for the previous quarter, with revenues below analyst expectations but managed an earnings beat.
- The company delivered strong organic growth across all segments.
- Significant progress was made on margin recovery, leading to increased adjusted gross margin, operating profit, and earnings per share.
Meta Platforms Inc.: Interesting Progress On The VR Front! – Key Drivers
- Meta Platforms managed to exceed analyst expectations in terms of revenue as well as earnings.
- On Facebook, engagement trends have been stronger than the company’s management anticipated.
- We give Meta Platforms a ‘Hold’ rating with a revised target price.
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