AI Will Drive Big Demand for Copper, J.P. Morgan Says. 3 Stocks to Watch. — Barrons.com

/ / Financials /

By Tae Kim Surging demand for artificial intelligence might exacerbate a copper shortage later this decade, J.P. Morgan warns. Copper is an essential component for power infrastructure upgrades based upon its electrical conductivity, use in wires, and relative low cost. Data centers will need to revamp their power and cooling systems as AI servers draw more power per square foot. Incremental demand from AI is “stressing an already large looking annual copper supply shortfall later this decade,” J.P. Morgan analyst Dominic O’Kane wrote Thursday. “The implications for future copper demand are significant.” Using the International Energy Agency’s base case scenario of 15% annual power growth for data centers, O’Kane estimates AI will lead to 2.6 million tonnes of additional aggregate copper demand by 2030. Even without the advent of AI power demand, J.P. Morgan had forecast 4 million tonnes cumulative supply shortage through 2030. “Our analysis suggests that data center […]

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Tesla Is Navigating Free FSD Trials, Gigafactory Challenges, and Governance Hurdles: Analyst

/ / Consumer Discretionary /

RBC Capital Markets analyst Tom Narayan maintained an Outperform rating on Tesla Inc (NASDAQ:TSLA) with a price target of $298. The fourth quarter of fiscal 2023 saw a demand-pull forward from the IRA expiry of particular Model 3s, and that likely negatively impacted the first quarter of 2024, as per the analyst. The analyst flagged the Red Sea disruption in January and the arson attack in February, hampering the Berlin gigafactory operations. Narayan expects the company’s decision to give one month of free trials of FSD in the U.S. will help drive higher volumes in the second quarter. Higher FSD attach rates are also central to his investment thesis on the stock. Narayan projects Tesla deliveries of 446,000 in the first quarter of 2024, down 10.7% vs. his prior estimate of 500k and 3.3% below consensus, based on registration data and app downloads. He expects Tesla to report deliveries during the first week of April.

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Estée Lauder Shares Climb 6.2% After Bank of America’s Upgrade on Turnaround Efforts

/ / Consumer Discretionary /

Shares of Estée Lauder on Thursday climbed after Bank of America upgraded its recommendation on the stock to buy from neutral as the beauty giant implements a profit-recovery plan. The owner of cosmetics brands such as Clinique, La Mer and Bobbi Brown should benefit from a reacceleration of sales and profit growth as Estee Lauder exits the fiscal year ending in June 30 with better visibility into end-market demand, Bank of America analysts say in a research note. The New York company lost focus on product upgrades and innovation in recent years. However, its current innovation push to respond faster to trends and repair brands portfolios should come with improvements across the prestige category. Bank of America expects to see innovation specifically aimed at reversing recent market-share softness in makeup from MAC and Tom Ford. Estée Lauder’s success is dependent on achieving more consistent growth across developed markets and emerging

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United Parcel Service’s (UPS) 2026 Revenue Outlook Above BofA Securities’ Forecast

/ / Industrials /

United Parcel Service’s (UPS) 2026 revenue outlook of $108 billion to $114 billion and operating margin above 13% is higher than BofA Securities’ forecast of $105 billion and 12%, the firm said in a note Wednesday. The investment firm said it anticipates its outlook to be subject to risk given that United Parcel missed its multi-year targets at its most recent analyst meetings. The company expects mid-single-digit revenue growth and revenue per package growth of 2.5%, BofA Securities added. “This appears to be an aggressive return-to-growth outlook, despite sustained weakness in the small package market,” BofA said. BofA maintained its neutral rating on the company’s stock and cut the price objective to $158 from $164.

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Disney Likely Has Several Sources of Potential Earnings Upside, UBS Says

/ / Consumer Discretionary /

Walt Disney’s (DIS) business model has multiple sources of potential upside that could drive earnings higher over the next several quarters, UBS Securities said in a note e-mailed Wednesday. The firm increased its per-share earnings outlooks for Disney by 3% to 6% from 2024 through 2026, with results likely driven by a better performance from the company’s parks business, with additional help from the direct-to-consumer and content segments, UBS analysts, including John Hodulik, said. UBS raised its price target on Disney stock to $140 from $120, with a buy rating.

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Estée Lauder Launches Clinique Amazon Store in Distribution Shift

/ / Consumer Discretionary /

Estée Lauder’s latest move amid its profit recovery plan is aimed at gaining consumers by taking control of the U.S. ecommerce giant, following similar steps from competitors such as L’Oréal, Coty and Shiseido. It directly partners with Amazon for the first time by launching a U.S. Amazon Premium Beauty store for Clinique. Other Estée Lauder brands will have their own Amazon stores over the coming months, CEO Fabrizio Freda says. Amazon, which started selling cosmetics in 2004, is leading growth across all retailers in beauty growth, with prestige outpacing mass growth, according to NIQ data from December. Shares rise 2% to $142.15.

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United Parcel Service’s (UPS) Cost Cuts Seen as ‘Significant,’ UBS Says

/ / Industrials /

United Parcel Service (UPS) outlined “significant” cost cuts that are expected to support a “multiyear margin improvement story,” UBS Securities said Wednesday in a report. The company provided a framework for productivity drivers and network rationalization at its Tuesday analyst meeting that are expected to result in $3 billion of cost savings through 2028, UBS said. “We believe the pullback in UPS stock provides an attractive opportunity,” the report said. UBS maintained its buy rating on the stock with a $175 price target.

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Walt Disney Likely Has Multiple Avenues of Potential Earnings Upside, UBS Says

/ / Consumer Discretionary /

Walt Disney’s (DIS) business model likely has several sources of potential earnings upside in the coming quarters, led by better results at its parks business, with additional help from the direct-to-consumers and content segments, according to UBS Securities. These sources are expected to drive the media and entertainment giant’s earnings estimates higher over the next several quarters, yielding a 25% three-year compound annual growth rate, UBS analysts John Hodulik, Batya Levi, and Christopher Schoell said in a note Wednesday. The brokerage expects the parks segment’s earnings before interest and taxes to grow by double-digit percentage annually in both the fiscal second quarter and full year amid strong US attendance. The company’s spending plan is likely to drive high-single-digit or better EBIT growth in the business for “several years,” the analysts said. “Despite the tougher comparisons, we expect the experiences segment to remain a high-growth and cash generative business for Disney,”

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