ASML Cut to Next-Year Guidance Makes 2026 Outlook Key for Shares

/ / Technology /

ASML Holding’s cut to its expectations for next year on weak order intake means the company’s trajectory from 2025 into 2026 and beyond is now key for its shares, Citi analysts say in a research note. The Dutch company, which supplies semiconductor-manufacturing machinery to chip makers, expects between 30 billion and 35 billion euros in sales next year, below a previous forecast of up to 40 billion euros. The company had reiterated as recently as September that the low end of its 2025 sales guidance was conservative despite negative newsflow over the summer, including cuts to spending plans by key customer Intel, Citi says. “Estimates had been declining for 2025, including our own, but consensus at 36 billion euros is now high,” the analysts say.

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UnitedHealth Cites Multiple Factors Weighing On Earnings

/ / Health Care /

UnitedHealth Group’s 2025 earnings guidance came in below analyst forecasts, weighing on its shares as the healthcare heavyweight deals with a variety of factors that are hurting profitability. The company says recent Medicaid redeterminations have left it with fewer, but sicker, members, while funding from Medicare has declined despite elevated hospital spending, Mizuho analyst Ann Hynes says in a research note. There has also been an increase in the utilization of expensive specialty drugs, the analyst says. UnitedHealth says it expects to continue facing these cost pressures as certain care patterns persist at higher levels than previously expected, the analyst says. Shares fall 7% to $562.48.

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Boeing Equity Issuance Timeline Seen As Positive

/ / Industrials /

The extended timeline that’s part of Boeing’s equity issuance is positive, say analysts at BofA Securities in a research note. The jet maker disclosed in regulatory filings that it could issue up to $25 billion in shares or debt during the next three years while also entering into a new credit agreement with lenders. The disclosure comes as the company is looking to stabilize amid a strike by its largest union that’s exacerbating its financial woes. “We expect Boeing to offer equity first, which should shore up the company’s balance sheet in the near term while maintaining the option to later issue equity debt with a lower risk of a credit downgrade,” say the analysts. Boeing is up 0.3%.

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Microsoft and These Other Stocks Are the Way to Play AI Now, Says Goldman Sachs

/ / Technology /

So-called “platform” stocks, such as Microsoft and Snowflake, are currently the most attractive part of the AI sector as the sector continues to evolve, according to Goldman Sachs. In a recent note, a team of Goldman analysts led by Ryan Hammond revisited its “four phases of AI” investment hypothesis and examined which stocks would offer the best bet in coming months. To recap, Goldman considers Nvidia (NVDA), as the “clearest near-term AI beneficiary,” to encapsulate Phase 1. Phase 2 comprises firms focused on AI infrastructure, including semiconductor firms, cloud providers, data center REITs, hardware and equipment companies, security software stocks and utilities companies, according to Goldman, which gave this cohort the mnemonic GSCBAIP2. Phase 3 includes companies with the potential to monetize AI – primarily via software and IT services (GSCBAIP3). Phase 4 includes companies with the biggest potential earnings boost because of the productivity gains it is hoped AI

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Adobe Inc. (ADBE) Adobe MAX 2024 Investor Q&A with Company Leadership

/ / Technology /

Adobe Inc. (NASDAQ:ADBE) Adobe MAX 2024 Investor Q&A with Company Leadership October 14, 2024 5:00 PM ET Company Participants Jonathan Vaas – VP, IR Shantanu Narayen – Chair & CEO David Wadhwani – President, Digital Media Business Anil Chakravarthy – President, Digital Experience Business Daniel Durn – EVP & CFO Scott Belsky – Chief Strategy Officer & EVP, Design & Emerging Products Steve Day – Head of IR Conference Call Participants Jay Vleeschhouwer – Griffin Securities Michael Turrin – Wells Fargo Saket Kalia – Barclays Karl Keirstead – UBS Mark Murphy – JPMorgan Gregg Moskowitz – Mizuho Securities Jackson Ader – KeyBanc Capital Markets Stefan Slowinski – BNP Paribas Jonathan Vaas Welcome, everyone to Adobe MAX 2024 Investor Update. It’s great to see so many friendly faces here, from the investment community, some of our Board members in the back. Welcome. Thanks for coming. Just curious, show of hands, how

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Delta Says Premium Airline Imitators May Struggle to Catch Up

/ / Consumer Discretionary /

Delta CEO Ed Bastian has a message for competitors who want to start chasing high end travel business: good luck. “It’s really hard to change course,” Bastian says. Rivals are adding more premium seating, bundling products to try to upsell passengers, and investing in free Wi-Fi, but Bastian says they may have trouble catching up to the investments Delta has already made. “We’ve been on this for years,” he says. “We’re not going to change course. If anything, we’re just going to continue to accelerate.”

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IBM Poised for ‘Solid’ Q3 Results Amid Persistent GenAI Consulting Strength, RBC Says

/ / Technology /

International Business Machines (IBM) is expected to post “solid” Q3 results amid continued strength in generative artificial intelligence consulting as well as free cash flow performance, RBC Capital Markets said Thursday. The technology giant is scheduled to report Q3 results Oct. 23. RBC expects adjusted earnings of $2.24 per share on revenue of about $15.08 billion. “Peer results would suggest continued strength in consulting, while software traction likely remains the larger catalyst for sentiment improvement,” RBC analysts, including Matthew Swanson, said in a note to clients. “We continue to look for greater software traction, particularly from Red Hat, which management expects to reaccelerate in the 2H, as 1H strength was largely driven by better-than-expected infrastructure performance late in the refresh cycle as well as GenAI supporting consulting, while ‘discretionary spend’ saw headwinds,” the analysts said. RBC raised its price target on the IBM stock to $250 from $211 while maintaining

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Domino’s Pizza Q3 Profit Beat Offsets Slight Sales Miss

/ / Consumer Discretionary /

Domino’s Pizza Inc. (DPZ) said Thursday it had net income of $146.9 million, or $4.19 a share, for its fiscal third quarter to Sept. 8, up from $175.6 million, or $4.18 a share, in the year-earlier period. Revenue rose to $1.080 billion from $1.027 billion a year ago. The FactSet consensus was for EPS of $3.64 and revenue of $1.099 billion. U.S. same-store sales rose 3%, while international same-store sales were up 0.8%. “Our third quarter results once again demonstrated that our Hungry for MORE strategy is resonating, despite a pressured global marketplace,” CEO Russell Weiner said in prepared remarks. The company is now expecting full-year global retail sales growth of about 6% and full-year income from operations growth of about 8%. For 2025, it expects retail sales growth to be roughly in line with 2024 expectations. The stock was flat premarket but has gained 0.2% in the year to

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Domino’s Pizza Delivered 3Q Sales Miss, Outlook Cut

/ / Consumer Discretionary /

Domino’s Pizza recorded weaker sales growth in the summer quarter than analysts had been expecting and lowered its top line guidance for the year. Total third-quarter revenue was up 5% at $1.08 billion, but analysts had been looking for closer to $1.1 billion, according to FactSet. The growth was driven by higher order volumes and prices, but partially offset by a customer shift toward less profitable products. Domino’s has been leaning on pizza deals and promotions to drive traffic as consumer spending remains pressured. The company said it now expects global retail sales to rise 6% this fiscal year, down from a previous outlook for 7% or higher growth.

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Alphabet Might Get Broken Up. It Could Be Good for the Stock.

/ / Technology /

The Justice Department has suggested a breakup of Alphabet’s Google as a potential way to address its de facto search monopoly. The company is fighting back against the prospect. If it happens, however, investors might not be all that upset. “The government seems to be pursuing a sweeping agenda that will impact numerous industries and products, with significant unintended consequences for consumers, businesses, and American competitiveness,” wrote Lee-Anne Mulholland, Alphabet’s vice president of regulatory affairs in a Tuesday blog post. To call it a big deal would be an understatement. A breakup of a monopoly hasn’t happened since AT&T was split into pieces in the 1980s. The Justice Department has until Nov. 20 to decide on what specific remedy it is seeking. U.S. District Judge Amit Mehta, who ruled in August that Google has a monopoly in search, is expected to rule next year on what action should be taken.

Alphabet Might Get Broken Up. It Could Be Good for the Stock. Read Post »

TSMC Could Sustain Revenue Growth Momentum Over Next Five Years

/ / Technology /

TSMC could continue to post a revenue compound annual growth rate of 15%-20% over the next five years, driven by both AI chip demand and the outsourcing by integrated device manufacturers, Morgan Stanley analysts say in a research note. TSMC’s gross margin could improve slightly to 55.5% in 4Q from 55% in 3Q, driven by strong AI chip demand and a further increase in Apple’s 3-nanometer chip output, they say. The Taiwanese semiconductor maker could maintain its gross margin around 55% in 2025 and beyond after its successful wafer price hike, which is set to take effect next year, they say. Given expectations of at least a 10% price increase for AI chips, 6% for other high-performance computing chips and 3% for smartphone chips, the 2025 price hike could average 4%-5%, lifting its gross margin by 2-3 percentage points, they add.

TSMC Could Sustain Revenue Growth Momentum Over Next Five Years Read Post »

PepsiCo’s Promotional Approach at Core of Debate

/ / Consumer Staples /

The key debate around PepsiCo remains on 2025 and whether its investments on value and promotions can lead to an acceleration in organic sales growth, particularly at Frito, while still driving earnings per share growth on algorithm, Citi analyst Filippo Falorni says in a research note. The beverage giant should see a gradual improvement in organic sales growth to 2.7% in 2025 from 2% in 2024, with slightly below-algo 2025 earnings per share growth on reinvestment, Falorni says. Citi raises its 2024 EPS estimates to $8.14 from $8.10 previously, and its 2025 EPS views to $8.55 from $8.50.

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