AMZN in focus | Morning News

April 24, 2015

Despite European market strength and  GOOG and AMZN taking the nasdaq to new record highs at this 7AM  hour, the Dow and S&P futures are hovering along the flat line as investors digest the week of heavy earnings and await important durable goods data later this morning. Finding a new two-week high against a soft dollar, the euro is heading higher following weakening fears, and Germany’s business climate index rose to its highest level since June 2014. Key monetary policies are scheduled in the US (Wed) and Japan (Thurs) next week which could give the top-heavy dollar some direction.

NEWS:

  • DNKN:will replace Riverbed Technology  in the S&P MidCap 400 after Monday’s close
  • DDD warns: Q1 EPS of $0.02-0.04, v. consensus $0.17 and revenue of $158-160M, v. consensus $182.78M (earnings 5/6)
  • WD: will replace Entropic Communications in the S&P SmallCap 600 after the April 30 close
  • TWC: CMCSA: Comcast plans to drop Time Warner Cable merger, reports reuters
  • CELG: AZN: Celgene Corporation enters into strategic immuno-oncology collaboration with AstraZeneca. reports business wire
  • NLSN: spot secondary price $45.45
  • MRK: GILD: ABBV:its experimental hepatitis C drug combination cured 95 percent of previously untreated patients in a late-stage study, reports bloomberg (GILD and ABBV has rival hep c drugs)
  • LOOK: announces a merger with privately held Pyxis Tankers’ Maritime Technologies Corp
  • AAPL: launch of iWatch in Toyko is quiet, reports reuters

ON THE ECONOMIC CALENDAR:

  • 8:30AM: Durable Goods: expectation +.9%:ACTUAL: good news, bad news: durable goods +4% BUT core orders (ex military and aircraft) fell .5%: shipment of core goods also fell, by .4%

EARNINGS:

  • TYC: FQ2 EPS of $0.55 beats by $0.06.Revenue of $2.43B in-line: guidance misses expectation ,Q3 EPS $.55-.57 v. $.65 consensus: conference call 8AM EST
  • COG: Q1 EPS of $0.12 beats by $0.09.Revenue of $464.77M (-8.8% Y/Y) beats by $47.52M: earnings call 9:30AM EST
  • AAL: Q1 EPS of $1.73 beats by $0.02.Revenue of $9.83B (-1.7% Y/Y) in-line: fuel costs has positive impact: strong US dollar negatively impacted: conference call 8:30AM EST
  • XRX: Q1 EPS of $0.21 in-line.Revenue of $4.47B (-6.3% Y/Y) misses by $90M: guidance lowers FY15 adj. EPS outlook to 95 cents-$1.01 from $1-$1.06
  • BIIB: Q1 EPS of $3.82 misses by $0.09.Revenue of $2.55B  misses by $110M: conference call 8AM EST
  • INFY: FQ4 EPS of $0.44 in-line.Revenue of $2.16B misses by $80M: CEO sees Q4 “challenging quarter”

SOME NOTABLE EARNINGS RECAPS FROM LAST NIGHT:

  • AMZN:Q1 EPS of -$0.12 beats by $0.01.Revenue of $22.72B  beats by $330M: guidance,Q2 revenue of $20.6B-$22.8B v.  $22.1B consensus: free cash flow for the trailing 12 months rose to $3.16B from $1.94B at the end of Q4 and $1.49B a year earlier: In its first quarter of breaking out its cloud computing business, Q1 revenue was $1.57B (+49% Y/Y) and an op. profit of $265M
  • GOOG:Q1 EPS of $6.57 misses by $0.03.Revenue of $17.26B misses by $240M:Q1 sales were hurt by a strong dollar – Y/Y growth was 12% in actual dollars, and 17% in constant currency: partly offset forex pressure by recording $311M in hedging gains
  • SBUX: FQ2 EPS of $0.33 in-line.Revenue of $4.56B (+17.8% Y/Y) beats by $30M: guidance beats expectations,FY15 EPS of $1.77-$1.79 expected vs. $1.57 consensus:My Starbucks Rewards member adds +1.3M members to 10.3M members total: global sss beats expectations,+ 7% in FQ2 v. + 5.1% expected: mobile payment app users total 16M, up 60% Y/Y
  • AWAY:Q1 EPS of $0.11 misses by $0.02.Revenue of $119.03M misses by $0.49M:  missed expectations, Q2 revenue of $122M-$124M v. $129.6M consensus) and FY15 revenue of $493M-$500M v. $513.2M consensus
  • GIMO:Q1 EPS of $0.13 beats by $0.09.Revenue of $46.85M (+47.5% Y/Y) beats by $4.7M: guidance strongQ2 revenue of $48M-$51M and EPS of $0.11-$0.15, beating consensus of $45.1M and $0.06
  • ALTR: Q1 EPS of $0.31 misses by $0.01.Revenue of $435.5M misses by $35.5M: guidance misses Q2 revenue $400.6M-$418M v. $492.1M consensus ( the stock is now 26% below INTC’s rumored $54/share offer price.)
  • ALGN: Q1 EPS of $0.44 beats by $0.12.Revenue of $198.1M (+9.7% Y/Y) beats by $7.27M: guidance Q2 2015 revenue of $206.6-210.4M  v.  $207.27M consensus
  • MSFT: FQ3 EPS of $0.61 beats by $0.10.Revenue of $21.73B (+6.5% Y/Y) beats by $670M: sales of corporate software, revenue increased 4.6% from a year ago, beating expectations: guidance conservative

ANALYSTS’ RATINGS CHANGES:

UPGRADES:

  • MAT: upgrade: neutral to buy: Goldman: pt raised from $26 to $37
  • TGT: upgrade: neutral to buy: BofA/Merrill: pt raised from $86 to $92
  • GIMO: upgrade: neutral to buy: DA Davidson: pt raised from $22 to $32
  • T: upgrade: neutral to outperform: Macquarie: $37
  • AMZN: upgrade: neutral to overweight: JP Morgan: $535
  • AMZN: upgrade: market perform to outperform: Raymond James $485
  • MSFT: upgrade: neutral to buy: Nomura: $50
  • CSCO: upgrade: buy to Conviction Buy: Goldman: $34

DOWNGRADES:

  • BKU: downgrade: outperform to market perform: Keefe Bruyette: $33
  • HBAN: downgrade: outperform to market perform: Keefe Bruyette: $11.50
  • GM: downgrade: buy to neutral: Buckingham: pt cut from $42 to $37
  • ALTR: downgrade: outperform to neutral: Baird
  • BBY: downgrade: overweight to neutral: JP Morgan: $40
  • NKE: downgrade: buy to hold: HSBC: $104

INITIATIONS:

  • QURE: initiated: buy: Chardon: $40

PRICE TARGET CHANGES:

  • AAPL: pt raised from $135 to $142: Bernstein
  • PTEN: pt raised from $23 to $26: Cowen
  • MSFT: pt raised from $47 to $50: UBS
  • MSFT: pt raised from 448 to $50: Pacific Crest
  • CBI: pt raised from $51 to $61: Deutsche Bank
  • SBUX: pt raised from $48 to $57: UBS
  • REGN: pt raised from $445 to $527: Leerink
  • AMZN: pt raised from $430 to $460: Citigroup
  • AMZN: pt raised from $385 to $460: Cantor
  • AMZN: pt raised from $400 to $500: RBC Capital
  • AMZN: pt raised from $410 to $500: Deutsche Bank
  • AMZN: pt raised from $434 to $460: Axiom
  • AMZN: pt raised from $425 to $465: Baird
  • AMZN: pt raised from $425 to $450: Benchmark
  • GOOG:  pt raised from $600 to $650: JP Morgan
  • GOOG: pt raised from $625 to $670: Deutsche Bank
  • GOOG: pt raised from $632 to $672: FBR Capital
  • GOOG: pt cut from $635 to $625: Cantor
  • P: pt cut from $38 to $26: Canaccord

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