IBM Seen to Maintain 2024 Guidance If Signings Momentum Continues, BofA Says

/ / Technology /

International Business Machines (IBM) would likely maintain its guidance for 2024 if the strength of the signings momentum continues for the company, BofA Securities said in a note Monday. The firm also expects IBM to guide revenue relatively in-line for Q2. “Heading into earnings we remain most concerned about continuing softness in consulting,” BofA said. The bottomline of IBM, which is set to release Q1 results after market close Wednesday, can be helped by gain on the sale of Weather assets, “offset somewhat by restructuring charges,” BofA said. For 2024, the firm said that it continues to expect free cash flow of about $12 billion for IBM “on higher profitability, lower cash requirement given changes to retirement plans, offset by higher [capital expenditures] and cash taxes.” BofA maintained IBM’s buy rating and $220 price objective.

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General Motors’ Core Business Strength Underpins Electric, Autonomous Vehicles Development, BofA Says

/ / Consumer Discretionary /

General Motors’ (GM) “well-managed” core business continues to underpin its future-proofing strategy of accelerating investments in electric and autonomous vehicles, BofA Securities said in a note Tuesday. “GM’s liquidity levels should be sufficient to manage through volatility in the macro environment, while also proactively investing for the future and returning value to shareholders,” the brokerage said. Following General Motors’ solid Q1 results, the brokerage said the company did not disappoint investors, who were looking for an upside to 2024 guidance. General Motors raised its full-year adjusted EPS outlook to between $9 and $10, from the previous range of $8.50 to $9.50, after reporting forecast-beating Q1 earnings. BofA reiterated its buy rating on the stock and a price target of $75.

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Fiserv(FI) Q1 2024 Earnings Conference

/ / Industrials /

The following is a summary of the Fiserv, Inc. (FI) Q1 2024 Earnings Call Transcript: Financial Performance: Fiserv reported Q1 adjusted earnings per share of $1.88, up 19%, reflecting ongoing revenue growth and operating margin expansion. Adjusted revenue growth was 7% and adjusted operating margin was 35.8%, an increase of 180 basis points. Organic revenue growth stood at 20%, leading to a raised outlook on adjusted earnings per share to a range of $8.60 to $8.75, a projected growth of 14% to 16%. The company revised their adjusted operating margin expansion forecast for the year to at least 125 basis points, up from a previous outlook of 100 basis points. Business Progress: Fiserv has restructured into two segments: Merchant Solution and Financial Solution, providing a clearer view of client engagement with their solutions. New Clover products are slated for launch within the year under Merchant Solutions, with strong demand anticipated

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CFRA Keeps Hold Opinion On Shares Of Msci Inc.

/ / Financials /

CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows: We decrease our target price by $165 to $465, 27.4x our 2025 EPS estimate, a discount to MSCI’s 10-year forward P/E average of 36.4x given reduced growth prospects and slowing sales. We lower our 2024 EPS view by $0.22 to $14.93 and cut 2025’s by $0.20 to $17.00. MSCI posted Q1 adjusted EPS of $3.52 vs. $3.14, a $0.05 consensus beat. All eyes were on MSCI’s retention rate as it fell 240 bps to an uncharacteristically low level of 92.8%. Although disappointing, we expect improvement in upcoming quarters as a large portion of the decline was out of MSCI’s control and related to the large Swiss bank merger. MSCI’s Index segment (55% of run-rate) continued to perform well as 12% growth was driven by market appreciation, while

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CFRA Upholds Buy Rating On Shares Of Fiserv, Inc.

/ / Industrials /

CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows: FI’s Q1 earnings were strong and are being well received today, driven by 1) better-than-expected bottom line results (adj-EPS of $1.88 surpassed consensus by $0.09); 2) sustained Clover revenue uptick, up 30% Y/Y with VAS penetration of 20%; and 3) raised 2024 guidance for adj-EPS of $8.60-$8.75 and adj-operating margin expansion of at least 125 bps. Q1 adj-revenues came in at $4.54B (+7%, +20% organically), led by Merchant Solutions (+13%, +36% organically). Financial Solutions were a little softer (+2%, +5% organically), but we note key client wins should support demand for digital payment solutions. Our 12-month target price of $180 (unchanged), 18.1x our 2025 EPS estimate, is a slight premium to FI’s three-year average of 17.0x. We up our 2024 EPS view by $0.10 to $8.75 and

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Starbucks’ U.S., China Pressures Drive Estimates Lower

/ / Consumer Discretionary /

Starbucks remains well positioned despite current pressures, UBS analysts say in a research note. The coffee chain has a strong customer brand affinity and attractive growth profile. The U.S. challenges largely reflect a combination of Middle East conflict-related protests and consumer spending pressures, while China macro conditions and competition represent overhangs, the analysts say. These pressures are expected to weigh on Starbucks’ results. UBS lowers its 2Q North America same store sales to flat from an increase of 3%, and its international estimates to a decline of 2% from prior flat expectations. It also cuts its 2Q and FY EPS forecasts to 78 cents and $3.94, previously, noting that sales headwinds likely persisted in the 2Q.

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General Electric(GE) Q1 2024 Earnings Conference

/ / Industrials /

The following is a summary of the GE Electric Company (GE) Q1 2024 Earnings Call Transcript: Financial Performance: GE reported a Q1 increase in profits with a revenue increase of 10% across all segments. An operating profit of $1.5 billion was reported, which was a rise of over $600 million, attributing to 300 basis points of organic margin expansion mainly due to pricing and volume. The massive year-over-year increase in Adjusted EPS was notable at $0.82, more than thrice the previous amount. GE reported its Q1 free cash flow at $850 million, a significant rise of over 5x primarily due to higher earnings and reduction in working capital. GE Aerospace made a significant contribution with double-digit growth in revenue and profit, and free cash flow doubled over the year. Business Progress: The completion of GE Vernova’s spin-off and a successful $100 billion debt reduction since 2018 marked valuable progress. GE

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United Parcel Service(UPS) Q1 2024 Earnings Conference

/ / Industrials /

The following is a summary of the United Parcel Service, Inc. (UPS) Q1 2024 Earnings Call Transcript: Financial Performance: United Parcel Service’s announced Q1 2024 revenue at $21.7 billion, marking a 5.3% decline due to a decrease in average daily volume. A significant drop of 31.5% was observed in the Operating profit, amounting to $1.7 billion, mainly due to higher labor costs from the first year of the Teamsters’ contract. In terms of volume, both US domestic and international segments have seen a decrease of 3.2% and 5.8% respectively, affected by the retail and manufacturing sectors. $1.3 billion has been issued to shareholders as dividends in Q1. Despite the performance, UPS retains its projected 2024 consolidated financial targets. Business Progress: UPS is reimagining its network by introducing changes like ‘Network of the Future’, becoming the primary air cargo provider for USPS. The company’s expansion plans include increasing UPS store locations

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RTX Corp(RTX) Q1 2024 Earnings Conference

/ / Industrials /

The following is a summary of the RTX Corporation (RTX) Q1 2024 Earnings Call Transcript: Financial Performance: RTX Corporation reported Q1 sales of $19.3 billion, marking a 12% increase in organic sales since last year. The company backlog now stands at $202 billion, up 12% from the prior year. The company experienced a 10% growth in the segment operating profit that was partially offset by lower pension income and higher interest expenses. Adjusted earnings per share were up 10% year-over-year to $1.34. The free cash flow outflow was $125 million, which aligned with expectations and indicated a $1.3 billion year-over-year improvement. Business Progress: The departure of CEO Greg Hayes was announced with Chris Calio slated to be his successor. The business saw a 33% increase in commercial OE sales and Defense sales saw 7% growth year-over-year with a backlog of $77 billion. The fiscal year 2024 will see significant defense

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Spotify Demonstrates Robust Financial Health With Impressive Q1 Revenue, Margin Improvements: Analyst

/ / Consumer Discretionary /

Goldman Sachs analyst Eric Sheridan had a Neutral rating on Spotify Technology SA (NYSE:SPOT) with a price target of $277. Spotify reported fiscal first-quarter 2024 revenue growth of 20% year-on-year to $3.95 billion, beating the consensus of $3.85 billion. EPS of $1.05 beat the consensus of $0.70. The stock price jumped Tuesday after the print. The analyst expects Spotify to have a positive market reaction to its first-quarter 2024 earnings report (including its forward second-quarter 2024 commentary) as the company reported roughly in-line subscriber and revenue performance across its businesses with some headwinds to forward revenue and subscriber momentum in the forward forecast. In addition (and likely the more significant component of the stock reaction to this earnings report), he would focus on the positive operating momentum in both gross margins and operating margins on a mix of improved music and podcast trends with some headwind from audiobook costs operating margins benefiting from lower personnel

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General Motors’ Potential In EV Transformation Weighed By Analysts After Q1 Beat- Was This a ‘Prove Me’ Quarter For CEO Mary Barra?

/ / Consumer Discretionary /

General Motors Company (NYSE:GM) shares are trading higher on Tuesday after raising its outlook for FY24, following a first-quarter beat. General Motors projects adjusted earnings per share of $9.00 – $10.00, higher than the prior view of $8.50 – $9.50. According to Wedbush analyst Daniel Ives, the company is focusing heavily on profitability, with expenses continuing to be a big priority. This was a major “prove me” quarter for General Motors, which shows the long-awaited turnaround for the company’s CEO, Mary Barra. Importantly, honing in on the EV transformation, the company expects to be EV variable margin positive in the second half of the year, with at least a 60-point EBIT margin improvement this year and mid-single digit EBIT EV margin in 2025, including the benefits from the clean energy tax credits. Ives reiterated an Outperform rating on the stock with a price forecast of $45. BofA Securities analyst John Murphy said in a new investor note

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CFRA Keeps Hold Opinion On Shares Of General Electric Company

/ / Industrials /

CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows: Our 12-month target price of $167, raised $20, reflects a 29x multiple of our projected 2025 EPS. The applied multiple is above that of our aerospace universe average, but merited, in our view, by improving aftermarket services results. We cut our 2024 EPS estimate by $0.36 to $4.00 and lift 2025’s by $0.30 to $5.75. Q1 EPS of $0.82 vs. $0.27, beat the consensus view by $0.12. GE Aerospace orders rose 34% Y/Y, with roughly similar growth rates in both CES (commercial aerospace) and DPT (defense) segments. We see CES as benefiting from demand for commercial aircraft, both for new planes as well as for servicing older aircrafts. Q1 revenues in CES rose 16%, benefiting from pricing traction and volume growth. GE is also working with key

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