Tesla Accelerates Rollout of More-Affordable EVs as Profit Drops Sharply — WSJ

/ / Consumer Discretionary /

By Rebecca Elliott Tesla Chief Executive Elon Musk sought to assuage Wall Street’s concerns about the company’s strategic direction by underscoring the automaker’s commitment to making less-expensive electric cars. On the company’s Tuesday earnings call, Musk said Tesla was accelerating the launch of new models, including vehicles that sell at more-affordable prices. His comments cap a dismal start to the year for the world’s most-valuable automaker, which saw its first-quarter profit plunge to its lowest level since 2021. Tesla’s operating margin narrowed significantly, dropping to 5.5% in the first three months, from 11.4% a year earlier. Musk also emphasized the importance of Tesla’s achieving its longstanding — and thus far elusive — goal of developing an autonomous car. He shared new details about the company’s plans for a dedicated robotaxi model and ride-hailing network, saying Tesla would operate its own fleet and allow customers to deploy their vehicles for the […]

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Don’t Overweight the Megacap Tech Giants Like Nvidia and Apple, Says UBS

/ / Technology / ,

UBS downgrades what it calls the Big Six to neutral UBS cut its rating on what it calls the Big Six – that’s the Magnificent Seven minus struggling Tesla – to neutral from overweight. Strategists led by Jonathan Golub noted the grouping of Alphabet (GOOGL), Amazon (AMZN), Apple (AAPL), Meta Platforms (META), Microsoft (MSFT) and Nvidia (NVDA) has already dropped 8% from its April peak, having soared 117% from its Jan. 2023 lows. Nvidia on Friday skidded 10% as AI stocks retreated. What’s of note is that the UBS call is not about animal spirits or AI. It’s just that earnings per share growth for this group is expected to slow to 16% from 42% The COVID-19 pandemic set off what it calls an asynchronous earnings cycle. Other tech stocks didn’t benefit from the COVID-driven boom to the same extent. “Deceleration in large cap tech and acceleration in mid cap

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Verizon Begins 2024 With Strong Wireless Service Revenue Growth, Solid Cash Flow and Continued Momentum in Broadband

/ / Telecommunications /

Verizon begins 2024 with strong wireless service revenue growth, solid cash flow and continued momentum in broadband First quarter performance positions Verizon for growth and profitability throughout 2024 1Q 2024 Highlights Consolidated: — Earnings per share of $1.09, compared with earnings per share of $1.17 in first-quarter 2023; adjusted EPS1, excluding special items, of $1.15, compared with $1.20 in first-quarter 2023. — Total operating revenue of $33.0 billion, up 0.2 percent from first-quarter 2023. — Consolidated net income for the first quarter of $4.7 billion, compared to consolidated net income of $5.0 billion in first-quarter 2023, and consolidated adjusted EBITDA1 of $12.1 billion, up from $11.9 billion in first-quarter 2023. Total Wireless: — Total wireless service revenue2 of $19.5 billion, a 3.3 percent increase year over year. — Retail postpaid phone net losses of 68,000, and retail postpaid net additions of 253,000. — Retail postpaid phone churn of 0.89 percent,

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Verizon’s Q1 Adjusted Earnings Fall, Revenue Rises

/ / Telecommunications /

Verizon Communications (VZ) reported Q1 adjusted earnings Monday of $1.15 per share, down from $1.20 a year earlier. Analysts polled by Capital IQ expected $1.12. Revenue for the quarter ended March 31 was $32.98 billion, up from $32.91 billion a year earlier. Analysts surveyed by Capital IQ expected $33.23 billion. For full-year 2024, the wireless communications and mobile network company said it continues to expect adjusted earnings of $4.50 to $4.70 per share. Analysts polled by Capital IQ expect $4.57.

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CFRA Maintains Strong Buy Opinion On Shares Of Salesforce, Inc.

/ / Technology /

CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows: According to an unconfirmed WSJ report, talks between CRM and Informatica (INFA 35 NR) about an acquisition have faded as the two sides are unable to agree to terms. We believe pricing was likely the ultimate issue, as INFA’s stock price in recent weeks had surged above the level that CRM was willing to pay. We view the lack of a deal as a positive, as investors embraced CRM’s shift away from dealmaking and instead focused on maximizing FCF/returning cash back to shareholders. We think the recent pressure on shares represents an enhanced buying opportunity, as CRM was down more than 7% on the day of speculation around a deal. The company now trades at a valuation below 25x our CY 25 EPS estimate, towards the low

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Spotify Likely to Deliver In-Line Q1 Results, Profitability Will Be ‘Key Focus,’ Macquarie Says

/ / Consumer Discretionary /

Spotify (SPOT) is seen delivering in-line Q1 results on Tuesday, while profitability will be a “key focus” for investors after the recent job cuts and as podcasts are near an inflection point to profitability, Macquarie Equity Research said in a note emailed Friday. Macquarie expects the company to report Q1 revenue of 3.6 billion euros ($3.82 billion) “driven by a 10% price hike in the US (28% of premium sub base) and improving ad market trends that should support growth in ad supported revenues.” “Podcast margins were near breakeven in 4Q23, and [management] commentary signaled that margins are likely to positively inflect and drive profitability through 2024,” said Macquarie analysts Tim Nollen and Ross Compton. “Podcasting has an inherent fixed cost base that implies operating leverage across the content slate. This is in contrast to music where each and every stream warrants a variable cost to the label,” they said.

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Verizon’s 1Q Profit Surpasses Street Views

/ / Telecommunications /

Verizon Communications is one of the most mentioned companies in the U.S. across all news items in the past 12 hours, according to Factiva data. Verizon posted first-quarter adjusted earnings that topped Wall Street’s expectations amid a slightly better performance in its consumer business after years of erosion. Dow Jones & Co. owns Factiva

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CFRA Keeps Hold Opinion On Shares Of Truist Financial Corporation

/ / 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 raise our 12-month target price by $1 to $38, 10.1x our 2025 EPS estimate, below TFC’s five-year forward P/E average of 10.8x, given modest growth expectations. We lower our 2024 EPS estimate by $0.08 to $3.49 and reduce 2025’s by $0.16 to $3.76. TFC posted adjusted Q1 EPS of $0.90 vs. $1.05 a year ago, $0.10 above consensus. It was a busy quarter for TFC as it agreed to sell the remaining 80% of its insurance business for $12.6 billion. Encouragingly, this should dramatically improve the banks CET1 ratio (10.1% in Q1) by 230 bps and thus allow the bank to play offense once again as the transaction should reduce the strain on TFC’s securities portfolio. Additionally, TFC saw a resurgence in investment banking and trading

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Apple Likely to ‘Slightly Beat’ Q2 Earnings, Revenue Estimates, Morgan Stanley Says

/ / Technology /

Apple (AAPL) is expected to “slightly beat” Q2 earnings and revenue estimates, driven by “better than expected product shipments and App Store outperformance,” Morgan Stanley said in a note to clients Monday. The brokerage expects Apple to post Q2 earnings of $1.51 per share and revenue of $91 billion, compared with consensus estimates of $1.50 and $90 billion, respectively. Morgan Stanley said investors will pay close attention to Apple’s performance in China, its updated capital return framework, and capital expenditures when the tech giant reports Q2 results after market close May 2. The firm anticipates Apple’s Q3 revenue at around $80 billion, down from the consensus estimate of $83.4 billion. The brokerage expects Apple’s Q3 earnings per share to be $1.22. Morgan Stanley cut its price target on Apple’s stock to $210 from $220, but reiterated its overweight rating.

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Tesla Slashes Marketing Team Amid Broad Layoffs

/ / Consumer Discretionary /

Tesla (TSLA) has cut its newly established marketing team as part of broader company layoffs, Bloomberg reported Monday, citing people familiar with the matter. The “growth content” team in the US, led by senior manager Alex Ingram and comprising about 40 employees, was dissolved as part of job cuts, the people told Bloomberg. The company has a smaller marketing team in Europe, the report said, citing one person. There were also significant job reductions in Tesla’s design studio and Hawthorne, California staff, according to the report.

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Truist Financial(TFC) Q1 2024 Earnings Conference

/ / Financials /

The following is a summary of the Truist Financial Corporation (TFC) Q1 2024 Earnings Call Transcript: Financial Performance: Truist Financial Corporation reported an adjusted net income of $1.2 billion, equivalent to $0.90 per share in Q1 2024. Despite an increase in investment banking and trading revenue, loan demand remained muted. Adjusted expenses saw a marginal increase compared to the last quarter but showed a 4% year-on-year decline. The company plans to sell its remaining stake in Truist Insurance Holdings to strengthen its capital position. A 4.2% decrease in net interest income was reported compared to the last quarter due to reasons including higher rates paid on deposits. Business Progress: Truist added nearly 8,600 small business accounts and secured $700 million in deposits in Q1 2024. Over $252 million was committed to support community initiatives like affordable housing and new job creation. Significant progress was made on the digital front with

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Visa, Mastercard Benefiting From Strong International Travel Trends, Morgan Stanley Says

/ / Industrials / ,

Visa (V) and Mastercard (MA) are expected to continue benefiting from a positive outlook on international travel, with international departures from the US climbing above pre-pandemic levels, analysts at Morgan Stanley wrote in a note Monday. Citing data from the US International Trade Administration and Department of Homeland Security as well as anecdotal information from airlines, Morgan Stanley analysts said international travel likely will stay healthy through 2024 while supporting “higher-yielding cross-border volume growth at Visa and Mastercard.” Total card spending, as recently reported by the larger banks, similarly continued to edge higher during the first three months of 2024 compared with the prior quarter, they said. The analysts also expect the credit card companies to drive increased revenue over time through a variety of value-added services for merchants and financial institutions, including new customer identification, cybersecurity and open banking applications. Overall, Visa and Mastercard should produce “consistent” double-digit growth

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