Citigroup’s First Quarter Profit Falls 27%, But Beats Expectations — WSJ

/ / Financials /

By Justin Baer Citigroup reported a 27% drop in its first-quarter profit as expenses, including from the banks restructuring plans, offset revenue gains by some of its biggest businesses. The third-biggest U.S. banks shares rose 1% in early trading after the results were announced. Here are the numbers you need to know: — Citi reported net income of $3.37 billion, or $1.58 a share, compared with net income of $4.61 billion, or $2.19 a share, a year earlier. Analysts expected $1.18 per share, according to FactSet. — Revenue fell 2% to $21.1 billion from $21.45 billion. Wall Street was looking for $20.46 billion, according to FactSet. Citis revenue tally a year ago included a $1 billion gain on the sale of its consumer-banking arm in India. — Citis Services business, which provides a range of banking and treasury services for companies and investment managers, posted revenue of $4.8 billion, up […]

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Wedbush’s Dan Ives Says Apple Has ‘Best Installed Base In The World’ For Its AI Future: WWDC A ‘Key Moment’ For Cupertino

/ / Technology /

Wedbush’s Dan Ives believes that Apple Inc.’s (NASDAQ:AAPL) installed user base of over 2 billion is the “best” in the world as far as its AI opportunity is concerned. What Happened: Ives thinks Apple’s upcoming Worldwide Developers Conference (WWDC) in June will be a “key moment” for Cupertino. Ives thinks Apple will unveil a “key part” of its AI strategy at WWDC. “I believe [it] ultimately goes to an AI App Store… which is going to be… developers, they’re going to build apps,” Ives said in an interview with Hankyung Global Market, adding that the services category is going to be a “huge opportunity” for Apple. Although Apple has been slow to adopt AI in its portfolio of devices and services, unlike its rivals Alphabet Inc.’s Google and Microsoft Corp., Ives believes Cupertino will take that leap with the iPhone 16 that is all set to launch in September this year. “They will not be on the

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CFRA Reiterates Buy Opinion On Shares Of Amazon.com, 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: We lift our 12-month target from $198 to $221, calculated using an EV/EBITDA multiple of 17x (was 16x) against our 2024 adj-EBITDA of $141.8B (up from $137.0B) vs. the 12x-30x historical range. We lift our 2024 adj-EPS estimate to $6.85 from $6.45 and 2025’s to $8.53 from $7.18. Our upwardly revised estimates reflect margin expansion opportunities in 2024, driven by continued retail efficiencies (e.g., supply chain regionalization benefits), AWS growth reacceleration (e.g., GenAI investments), and robust advertising growth (e.g., Prime Video ads introduced in January). We see GAAP operating margins rising from 6.4% in 2023 to 9.4% in 2024, above the current 8.5% consensus, with free cash flow likely exceeding $70B (up from $37B in 2023). Risks include a slower consumer spending environment and lumpy AWS growth,

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Qualcomm Stock Should Get an AI Boost. But Beware of Earnings and Guidance. — Barrons.com

/ / Technology /

J.P. Morgan analyst Samik Chatterjee on Thursday placed Qualcomm shares on the firm’s “Negative Catalyst” watch list, although he maintains his Overweight rating on the stock with a $170 target price. The analyst suggests that the recent optimism about a pickup in phone sales may be a little misplaced. “We are yet to see any significant change in the fundamentals of the smartphone market with the recovery expected to remain muted in 2024.” he writes in a research note. And Chatterjee adds that recent data on the China smartphone market raise concerns about the strength of the expected recovery. Chatterjee says March quarter revenue appears to be tracking to $9.5 billion, above the midpoint of Qualcomm’s guidance range and Street consensus as tracked by FactSet, both at $9.3 billion. But he thinks June quarter guidance will be about in line with the Street at $9.1 billion, which he doesn’t think

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Microsoft Can Double Its EPS by 2029 Based on Position in Cloud, Gen AI, Morgan Stanley Says

/ / Technology /

Microsoft’s (MSFT) “strong secular positioning” in tech, cloud and generative artificial intelligence should help the company double its earnings per share to $24 by fiscal 2029, Morgan Stanley said in a note Thursday. Given the company’s leading position, the business should be able to achieve a compound annual growth rate of 14% in revenue and 16% in earnings per share over the next five-year period, the firm said. Growth in the company’s earnings and revenue will be driven by its cloud business, while its first mover advantage in generative AI should further compound the gains. Morgan Stanley estimates the company’s revenue from its largest three generative AI initiatives could jump from around $5 billion in 2024 to almost $67 billion in 2029, and as much as $120 billion in a bullish scenario. The firm raised its price target to $520 from $465 on the company’s stock and maintained its overweight

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CFRA Maintains Strong Buy Opinion On Shares Of Marvell Technology, 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: MRVL hosted its Accelerated Infrastructure for the AI Era event where it highlighted an objective to double its market share by 2028 (10% in 2023), led by share gain in the custom compute and switching markets, which we think has the potential to grow MRVL’s revenue by at least 3x-4x in five years. MRVL estimates that its TAM will rise at a 29% CAGR through CY 28 to $75B (estimated $21B in 2023), with accelerated custom compute at a 45%+ CAGR and switching at 15%+. On the connectivity side, AI workloads are demanding a doubling of interconnect speed every two years, or half the time to pre-ChatGPT (2x every four years). On the compute side, we see design wins from existing/new hyperscale customers and greater momentum for

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Delta Air Lines On Line To Gain Demand Growth, Says BofA Analyst

/ / Consumer Discretionary /

BofA Securities analyst Andrew G. Didora reiterated a Buy rating on the shares of Delta Air Lines Inc (NYSE:DAL) and raised the price target from $53 to $55. Yesterday, Delta reported a first-quarter 2024 operating revenue growth of 8% year-over-year to $13.748 billion, and the adjusted EPS was $0.45, above the consensus of $0.36. Both the unit revenue and unit cost outlooks were about 100 basis points better than the analyst modeled, which drove the EPS upside. The analyst thinks there were more pros than cons in DAL’s outlook, giving the confidence to raise 2024E EPS to $6.81 from $6.57. DAL’s demand commentary was better than feared, as transatlantic and premium products remain robust, each a revenue tailwind offsetting pressure from Latin America, noted the analyst. The analyst estimates 2Q24 capacity growth of +6.9%, the high end of DAL’s +6%-7% range, and unit revenue growth of -90 basis points, in line with DAL’s

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Nike Poised to Meet Estimates on ‘Bold’ Management Moves, BofA Securities Says in Upgrade

/ / Consumer Discretionary /

Nike’s (NKE) annual earnings estimates “finally look achievable” on management’s “bold steps to transform” following a stock slump, BofA Securities said Thursday in a report. Calling Nike’s valuation “compelling,” BofA upgraded the stock to buy from neutral and raised the price objective to $113 from $110. The EPS consensus of $3.99 in fiscal 2025 and $4.49 in fiscal 2026 EPS appear achievable as the company’s management takes steps to transform the business and benefits from marketing around the Paris Olympics this year. “Management has acknowledged a need for big changes, and continued shakeup in the team and processes from the recently announced cost savings plan could also spur faster sales stabilization,” BofA said. Shares of Nike rose 3.4% in recent trading Thursday.

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Delta Air Lines’ Better Q1 Metrics Drive Q2 EPS Guidance Beat, BofA Says

/ / Consumer Discretionary /

Delta Air Lines’ (DAL) slightly better metrics in Q1 have driven better-than-expected Q2 earnings-per-share guidance, BofA Securities said in an emailed note to clients Thursday. Delta on Wednesday reported higher Q1 adjusted EPS and revenue that beat analysts’ estimates and initiated Q2 EPS guidance of $2.20 to $2.50, exceeding BofA’s estimate of $2.12. The company’s outlook prompted BofA to raise its 2024 EPS estimate to $6.81 from $6.57, according to the note. The company’s “better unit costs [for Q2] are encouraging and reflect solid operations and an increasing focus on efficiency,” BofA said. The investment firm raised the airline’s price objective to $55 from $53 and reiterated its buy rating.

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The Bar Is Finally Low Enough for Nike, Analyst Says. These Big Events Could Help the Stock This Year

/ / Consumer Discretionary /

By Bill Peters ‘Nike has historically benefited from the newness and marketing around the Olympics, and we see this year as no different,’ BofA analysts say Over the past two years, Nike Inc. has dealt with slowing demand and a lack of new sneakers and other gear to revive it. But for analysts at BofA, acknowledging the problem has been part of the solution. And as Wall Street tempers its profit expectations, they say the bar for the athletic-gear maker might finally be low enough to actually clear. BofA analysts Lorraine Hutchinson and Christopher Nardone upgraded shares of Nike (NKE) to buy from neutral on Thursday. While they said a bigger turnaround could still take time, efforts to lure back customers by shaking up its product assortment, along with a potential boost from events like the Summer Olympics, would benefit the company. The analysts also nudged their price target higher,

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