In today’s briefing:
- Shockwave Medical Inc (SWAV US): Initial Thought on Takeover Talk and Probable Pricing
- Coinbase Targets Offshore Amid Falling Volumes
- Don’t Get Fooled by the Tight Inventory Narrative – Economic Situation Continues to Worsen
- Kroger Co: A ‘Fresh’ & Friendly Strategy For Growth – Key Drivers
- Marvell Technologies Inc: 5G & ASICs Saving The Day – Key Growth Drivers
- Mettler-Toledo International Inc.: Continued Lab Growth
- Morgan Stanley: Initiation Of Coverage – A Series Of Synergistic Acquisitions & Other Drivers
- Sabre Corp: Leveraging The Global Travel Recovery? – Key Drivers
- Box Inc: Benefitting From The Hybrid Work Era With Phenomenal Retention – Key Drivers
- Visa: Don’t Follow Narratives And Focus On What Matters In Upcoming Earnings
Shockwave Medical Inc (SWAV US): Initial Thought on Takeover Talk and Probable Pricing
- Shockwave Medical Inc (SWAV US) is reportedly drawing takeover interest from Boston Scientific. Shockwave can potentially be one of Boston Scientific’s largest ever acquisitions. Probable pricing still offers upside potential.
- Shockwave has an addressable market opportunity of $8.5 billion. The company has guided for 2023 revenue of $660–680 million, which represents 35–39% YoY growth.
- Addition of Shockwave will bolster Boston Scientific’s cardiovascular portfolio. No official announcement has been made by any of the companies. There is no certainty they will lead to a deal.
Coinbase Targets Offshore Amid Falling Volumes
- Last week, Coinbase received approval to operate an offshore derivatives exchange, based in Bermuda.
- This move makes a lot of sense, particularly when looking at Coinbase’s share of total spot volumes.
- Since the start of 2022, Coinbase’s share of volumes has almost halved, falling from 10% to 5% while Binance gained as much as 30% market share over the same time period, before losing some in the last couple of weeks with their reintroduction of fees.
Don’t Get Fooled by the Tight Inventory Narrative – Economic Situation Continues to Worsen
- Don’t get fooled by the tight inventory narrative While many copper bulls continue to write about the low copper inventories I would like to inform you once again that there is simply no correlation between copper inventories and the price of the industrial metal.
- If you want to be precise – you could even make the case that excessive lows in the LME copper inventory data actually mark cyclical highs in the price of the brownish metal.
- US Leading Economic Index’s recession signal deepens in March, Conference Board reports: “The US LEI fell to its lowest level since November of 2020, consistent with worsening economic conditions ahead,” says CB’s senior manager for business cycle indicators.
Kroger Co: A ‘Fresh’ & Friendly Strategy For Growth – Key Drivers
- Kroger had a mixed Q4 and failed to meet the revenue expectations of Wall Street given the shifting customer preferences due to inflation and macroeconomic uncertainty.
- The company observed total household growth and improved customer loyalty, with higher-income households growing by 1.1 million.
- The company’s end-to-end fresh initiative led to noticeable growth in both fresh and total store sales, and Kroger will continue innovating to enhance the fresh experience and drive customer satisfaction.
Marvell Technologies Inc: 5G & ASICs Saving The Day – Key Growth Drivers
- Marvell Technologies had a challenging Q4 but it did manage to surpass the revenue expectations of Wall Street.
- However, the company expects strong growth in revenue from 5G and custom ASICs in Q1, although with gross margins lower than Marvell’s average.
- In terms of the end markets, data center revenue declined 13% YoY and 21% sequentially, while the rest of the end markets held up relatively well.
Mettler-Toledo International Inc.: Continued Lab Growth
- Mettler-Toledo experienced robust growth in most product lines and regions during Q3, particularly in the Lab business, resulting in a successful quarter which happened to be an all-around beat.
- While Product Inspection witnessed a 13% increase in sales during the quarter, Food Retail sales decreased by 19%.
- To capture growth and market share in its Lab business, Mettler has accelerated their digital transformation in sales and marketing and sharpened their focus on the most attractive market segments.
Morgan Stanley: Initiation Of Coverage – A Series Of Synergistic Acquisitions & Other Drivers
- Despite a more difficult environment, Morgan Stanley had a strong quarter and managed an all-around beat.
- The merging of Eaton Vance and E-Trade increased the company’s potential to gain new clients, increase assets, and support its stability.
- We initiate coverage on Morgan Stanley with a ‘Hold’ rating with a revised target price.
Sabre Corp: Leveraging The Global Travel Recovery? – Key Drivers
- Sabre had a challenging Q3 and failed to meet the revenue expectations of Wall Street while delivering wider-than-expected losses.
- Sabre generated total revenue of $441 million in the quarter, a substantial improvement compared to $278 million in Q3 2020.
- The distribution revenue of Sabre increased by $140 million year-on-year, and the IT Solutions revenue increased to $145 million in Q3.
Box Inc: Benefitting From The Hybrid Work Era With Phenomenal Retention – Key Drivers
- Box had a successful third quarter and delivered an all-around beat with accelerating revenue growth, an operating margin of 21%, and RPO growth of 25%.
- Box’s net retention rate was 109%, with 97 deals over $100,000 and a 63% attach rate of Suites over $100,000 in the quarter.
- Box is seeing early success in customer adoption and use of Box Sign, with leading organizations replacing their incumbent signature solutions with Box Sign.
Visa: Don’t Follow Narratives And Focus On What Matters In Upcoming Earnings
- Visa has become one of the best-performing stocks within its peer group.
- The risk of a recession is still casting a shadow over Visa, but implications from the inflationary environment should not be ignored.
- The business continues to perform better than expected, and investors should keep a close eye on the upcoming earnings report.
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