General Motors’s Earnings Show 2024 Is the Year of the Hybrid — Barrons.com

/ / Consumer Discretionary /

General Motors blew past Wall Street’s expectations with its forecast for 2024 earnings, laying out new goals for sales of all-electric vehicles. But the biggest surprise was about plug-in hybrid vehicles. Tuesday, GM reported fourth-quarter operating income of $1.8 billion, close to what Wall Street expected. Guidance for 2024, however, was much better than expected. GM believes it will generate about $13 billion in operating profit. Wall Street was looking for $11 billion. Shares jumped 7.8% Tuesday and gained another 1.7% early Wednesday as Wall Street reacted to the news. The S&P 500 and Nasdaq Composite were down about 0.5% and 1.3%, respectively. Management’s financial forecasts were likely responsible for most of the gains, but investors should also have been happy with their guidance about electric vehicles. “We expect our U.S. [EV] portfolio will become variable profit positive in the second half of the year based on our current expectations […]

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AMD Beats on 4Q Earnings, Sales, But 1Q Guidance Is Below Expectations

/ / Technology /

Advanced Micro Devices is one of the most mentioned companies in the U.S. across all news items in the last 12 hours, according to Factiva data. After trading closed Tuesday, the chipmaker posted a fourth-quarter profit of $667 million, or 41 cents a share, beating analysts’ expectations for per-share earnings of 25 cents. Revenue rose 10% to $6.17 billion, higher than the $6.13 billion that analysts were expecting. However, AMD forecast $5.4 billion, plus or minus $300 million, in revenue in the first-quarter of 2024, below analysts’ expectations of $5.73 billion. Dow Jones & Co. owns Factiva.

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AT&T (NYSE:T) Stock Analyst Ratings

/ / Telecommunications /

AT&T (NYSE:T) Stock Analyst Ratings Date Upside/Downside Analyst Firm Price Target Change Rating Change Previous / Current Rating 01/31/2024 12.71% Barclays $17 → $20 Maintains Equal-Weight 01/25/2024 35.25% Deutsche Bank $23 → $24 Maintains Buy 01/19/2024 18.34% Oppenheimer → $21 Upgrades Perform → Outperform 12/13/2023 12.71% Wells Fargo $17 → $20 Maintains Overweight 10/23/2023 1.44% Citigroup $17 → $18 Maintains Buy 10/23/2023 7.07% Morgan Stanley $20 → $19 Maintains Equal-Weight 10/20/2023 4.25% Scotiabank → $18.5 Upgrades Sector Perform → Sector Outperform 10/12/2023 -4.2% JP Morgan $18 → $17 Maintains Neutral 08/29/2023 -4.2% Citigroup → $17 Upgrades Neutral → Buy 08/10/2023 -21.1% RBC Capital $19 → $14 Maintains Sector Perform 08/03/2023 12.71% Morgan Stanley $20 → $20 Reiterates Equal-Weight → Equal-Weight 07/27/2023 12.71% Goldman Sachs $23 → $20 Maintains Buy 07/25/2023 -4.2% Citigroup $16 → $17 Maintains Neutral 07/20/2023 12.71% Wells Fargo $22 → $20 Maintains Overweight 07/17/2023 -9.83% Citigroup $22

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Alphabet’s Efficiency Workstreams Shining Through, But Focus Is on AI Projects, Morgan Stanley Says

/ / Technology /

Alphabet’s (GOOG, GOOGL) Q4 results late Tuesday showed the company’s efficiency workstreams shining through, even amid higher capital expenditures, but the focus is now on the company’s artificial intelligence projects, Morgan Stanley said in a note to clients on Wednesday. “Capex is heading higher, but we see a leading GenAI pipeline and incremental cloud and subscription rev opportunities [to further support ads],” the investment firm said, adding that Alphabet is “one of the best-positioned consumer-facing GenAI companies.” The company’s AI pipeline targeting consumers and advertisers is “flush” and ready to flow, the note said, as Alphabet is launching “multiple emerging GenAI tools for users and advertisers that we see driving more durable multi-year growth.” Morgan Stanley also noted that the benefits of Alphabet “durably re-engineering its cost base continue to show.” Alphabet’s “number of efficiency workstreams/projects continues to grow as product/process prioritization, simplified org structures/removing layers, slower headcount growth, infrastructure

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Starbucks Wants Occasional U.S. Customers To Join Loyalty Program

/ / Consumer Discretionary /

Starbucks wants to make occasional customers into regulars. It saw unexpected headwinds in 1Q, with one factor being occasional U.S. customers who tend to visit stores in the afternoon came in less frequently. Starbucks implemented targeted offers aimed at bringing those customers into its loyalty program, which it says has been shown to create a long-term relationship that increases both ticket and transactions. CEO Laxman Narasimhan says the initiatives have led to more occasional customers beginning to rebound in December. “We feel good about the trajectory over the course of the quarter, but it will take time for our plans to be fully realized,” Narasimhan says.

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Mastercard Expects Robust Consumer Spending to Run Through 2024 After Fourth-Quarter Beat

/ / Industrials /

Mastercard (MA) is casting an eye toward further strength in consumer spending in 2024 after robust activity aided the payments processor in outstripping expectations for its fourth-quarter financial results. “We remain fairly positive about the growth outlook. Consumer spending continues to be supported by a strong labor market and wage growth,” Chief Financial Officer Sachin Mehra said on the company’s conference call Wednesday, according to a transcript from Capital IQ. “Our base case scenario for 2024 reflects healthy consumer spending and recent spending dynamics.” The upbeat remarks about a critical factor for growth came after the company said “healthy consumer spending” was a driver for “strong” earnings and revenue growth last year. It also presented fourth-quarter adjusted earnings and revenue above the Street’s consensus estimates. For 2024, the company forecast net revenue percentage growth at the high end of low double digits. Revenue rose 13% in 2023. Shares of Mastercard

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Boeing CEO Defends 737 Quality Improvements Progress

/ / Industrials /

Boeing CEO David Calhoun says that Alaska Air door-plug blowout doesn’t negate quality improvements the company has made on its 737 MAX jets since a pair of fatal crashes in 2018 and 2019. “Wasn’t the 737 line the most scrutinized product line in the word?” Bank of America analyst Ron Epstein asked Calhoun on a call to review Boeing’s financial results. “What happened to get to where we’ve gotten today?” Calhoun said quality on the 737 line has steadily progressed since the crashes and quality numbers have improved. “I think I understand your underlying context for the question but I take exception to the premise.”

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Microsoft Set for ‘Healthy Expansion’ in 2024 Operating Margins After Fiscal Q2 Beat, Morgan Stanley Says

/ / Technology /

Microsoft (MSFT) is poised for a “healthy expansion” in fiscal 2024 operating margins after Q2 results topped forecasts with a boost from artificial intelligence, strong execution, and cost discipline, Morgan Stanley said Wednesday in a report. “Q2 results well illustrated Microsoft’s leading position in GenAI and unique ability to monetize this technology,” the investment firm said. On Tuesday, Microsoft reported Q2 earnings of $2.93 a share on revenue of $62.02 billion. Analysts polled by Capital IQ expected EPS of $2.77 on revenue of $61.13 billion. Morgan Stanley said Microsoft Azure posted a 28% growth in constant currency in Q2 with AI contributing “a remarkable” 6%. The EPS beat occurred amid hurdles related to accounting and AI investments, and mergers and acquisitions. The company’s Q3 gross and operating margin guidance stood “significantly ahead of expectations,” and Morgan Stanley said Microsoft’s solid execution, expense optimization and position in the GenAI innovation cycle

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CFRA Keeps Buy Opinion On Shares Of Walmart Inc.

/ / Consumer Discretionary /

CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows: WMT announced a 3:1 stock split (effective February 26). While stock splits are purely cosmetic (i.e., no impact to fundamentals), they are perceived as a shareholder-friendly move and a sign of confidence. In separate news releases, WMT announced increases to store manager pay (from $117K/year to $128K/year, with bonuses up to 200% of base salary) and plans to build or convert more than 150 stores over the next five years. WMT will continue to remodel stores (650 store remodels planned over the next year) to its Store of the Future concept (i.e., improved layouts, expanded product selection, and innovative technology). We visited a few remodeled stores and were particularly grabbed by the new displays and features, wider aisles, and brighter lighting. Store remodels should help drive traffic/volume

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AMD’s Q1 Revenue Guidance ‘Slightly Worse’ Than Consensus, BofA Says

/ / Technology /

Advanced Micro Devices’ (AMD) Q1 sales outlook of $5.4 billion, plus or minus $300 million, was “slightly worse” than the consensus of $5.8 billion, BofA Securities said in a note Tuesday. The firm’s forecast is revenue of $5.5 billion. “Weak outlook is primarily in programmable chips, gaming and PC, deeper than expected,” BofA said. The firm also said that the company’s data center segment is “strongly on track” and points to “continued share gains” against Intel (INTC). BofA increased the data center sales forecast for AMD by 5% to 6% to $12 billion in 2024 and to $15.9 billion in 2025. The firm lowered its EPS estimates for the company to $3.62 from $3.83 in 2024 and to $5.07 from $5.20 in 2025. BofA maintained the buy rating and $195 price objective on AMD stock.

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AMD’s Big Gaming Correction Not Worrying UBS Analysts

/ / Technology /

AMD’s projected slump in its gaming business isn’t worrying analysts at UBS. They say in a research note that the gaming segment is seeing a larger-than-expected correction, as the chipmaker forecasts an implied 30% sequential drop in gaming revenue in the next two quarters. Still, the analysts say AMD raised its implied revenue guidance for its data center business, which includes AI chips. That segment is core to their investment thesis, and they see it on track to generate half of revenue in 2024. “If this were AMD’s only business, this would have been a great result & guidance as momentum continues to grow,” they say. Shares fall 2.5% to $167.74.

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Meta Platforms Poised for Q4 Earnings Beat on Reels, AI Momentum, BofA Securities Says

/ / Technology /

Meta Platforms (META) is likely to post Q4 results above consensus as analysts see upside potential on Reels momentum and artificial intelligence benefits, BofA Securities said in a note Wednesday. The social networking and virtual reality company is set to report Q4 financial results following the market close Thursday. Meta’s revenue for the three months ended Dec. 31 is seen rising 22% year-over-year to $39.3 billion, topping Street at $39.0 billion, BofA analysts said, adding “24% growth is possible.” BofA also sees Meta’s per-share Q4 earnings at $5.18, exceeding Street’s $4.89, and is projecting revenue for the current quarter in a range of $32.0 billion to $34.5 billion, bracketing the $33.6 billion Street view. “We remain constructive on Meta and see multiple tailwinds aiding (the) stock” during 2024, including upside potential for the company’s messaging platforms and its new artificial intelligence and machine learning integrations driving increased usage and advertising

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