The growth of late first quarter brokered deposits at mid-cap US banks is likely to weigh on second quarter earnings and betas, being the measure of volatility facing an individual asset when compared to the market as a whole, analysts at UBS believe.
“Beneath the hood of deposit run-off/mix-shift for our coverage in 1Q was a resurgence of brokered deposit utilization, which increased to 10% of deposits on average for our coverage list from 7% in 4Q22,” they pointed out in a note to clients.
GSK PLC (LSE:GSK, NYSE:GSK) making an out-of-court settlement for a case in California alleging its Zantac heartburn medication caused cancer, is "not a full stop" for the saga, say analysts.
Paying an undisclosed amount to settle the lawsuit, which was filed in California by James Goetz and was scheduled for trial in July, "doesn’t have any direct impact on other state level cases", said analyst Dr Sean Conroy at Shore Capita.
Futura Medical PLC (AIM:FUM, OTC:FAMDF) earlier this week caught the market a little off guard as it shared revenue guidance for the first time as sales of its breakthrough erectile dysfunction gel start to build.
According to research conducted by UK brokerage firm Liberum Capital, Futura has stated that it was "highly encouraged" by Eroxon's early progress, with initial orders and market demand matching expectations.
The operational risk facing American Express Company (NYSE:AXP) from the forthcoming Basel 3 endgame/Basel 4 proposal (B3/B4), being efforts by regulators to amend certain aspects of large banks’ capital rules, has been overstated according to analysts at UBS.
“Calculation of operational risk-weighted assets (RWAs) under the Basel proposal is especially punitive for firms with greater size and fee income streams,” the analysts explained in a note to clients.
Analysts at UBS say they are still pining for Intel to separate its product and manufacturing operations into two businesses after the company detailed its IDM 2.0 strategy for its foundry business, its chip manufacturing arm.
On Wednesday, Intel provided investors with a number of updates on its turnaround plans, including its intention to become a chip manufacturing company in competition with Taiwan Semiconductor Manufacturing Company.
Equinix Inc (NASDAQ:EQIX)’s portfolio of assets is well-positioned in areas where infrastructure demands are becoming more distributed, cloud-connected and on-demand, wrote UBS analysts in a note to clients.
They boosted their 12-month target price on Equinix, which specializes in internet connection and data centers, to $900 per share, from $765 previously, based on 23 times earnings before interest, taxes, depreciation and amortization (EBITDA) and 25 times adjusted funds from operations (AFFO).
Anheuser-Busch InBev (NYSE:BUD)'s recent underperformance implies a permanent reduction in its US business, according to analysts at Deutsche Bank.
Still, their proprietary survey data suggests these headwinds are likely to fade even if they do not expect the US business ever to fully recover from its current challenges, the analysts wrote in a client note.
UBS analysts updated their estimates on Lumen Technologies Inc, the third-largest phone company in the US, following Lumen’s investor day, where management laid out their strategy for returning to growth in 2025 and beyond.
“While we believe Lumen has room to take share and long-term guidance is ahead of UBS and Street estimates, we await evidence of execution given challenges to the wider enterprise market,” they wrote.
Analysts at UBS have repeated their ‘Neutral’ rating for Hewlett Packard Enterprise (HPE) after the company announced its entrance to the public AI cloud market through a new partnership with German start-up Aleph Alpha.
They also repeated their 12-month price target of $15, which is below the stock’s current price of $16.88.
FedEx (NYSE:FDX) has lowered its fiscal 2024 earnings guidance due to the strong international headwinds it faces, with an expected $800 million hit to its operating income.
Still, while lowering its FY2024 earnings per share estimates for the global delivery firm to $18.17 from $19.53, analysts at UBS have maintained their ‘Buy’ rating and raised their 12-month price target to $272 from $260.
Eli Lilly and Co (NYSE:LLY)’s $2.4 billion acquisition of DICE Therapeutics “makes strategic sense,” bolstering the global pharmaceutical company’s presence in immunology, analysts at UBS said in a note on Wednesday.
UBS, which has a ‘Buy’ rating and a 12-month price target of $498 for Eli Lilly, noted that the acquisition provides two oral IL-17 inhibitors DC-806 and DC-853, as well as additional pipeline opportunities to the company’s profile.
Uber Technologies Inc (NYSE:UBER) shares are up over 70% so far for 2023 and analysts at Oppenheimer think the transportation app has further to go.
They’ve maintained their ‘Outperform’ rating on the company while increasing their 12-18 month price target to $65 from $55, citing higher peer valuations and increased confidence in the consumer tailwinds that are driving the stock.
Analysts at Barclays sent mixed messages on Tesla Inc (NASDAQ:TSLA) in a note Wednesday, downgrading the electric carmaker after a rally it called “too sharp” but raising its price target nonetheless.
The firm lowered its rating to Equal Weight from Overweight but upped its price target to $260 from $220. Tesla shares traded nearly 3% lower Wednesday morning at $266.45.
Advanced Micro Devices, Inc. (NASDAQ:AMD) expects to get meaningful revenue from artificial intelligence (AI) starting from the fourth quarter of 2023 as it steps up its game, encouraging analysts at Baird to maintain their ‘Outperform’ rating on the company’s stock, while raising its price target to $170 from $100.
The company introduced Mi300x, a new version of its AI supercomputing hybrid processor designed to support generative AI models, at its recent Data Center and AI Technology event. And it’s expected to be a game changer for AMD.
Analysts at Baird say they still like the long-term outlook for biotechnology company Arcellx Inc (NASDAQ:ACLX) after a clinical trial for its investigational new drug CART-ddBCMA for relapsed or refractory multiple myeloma was put on hold by the US Food and Drug Administration (FDA) following a patient’s death.
The analysts said they expected the negative regulatory update from Arcellx on Monday night to weigh on the stock, which closed down 7.2% at US$33.23 on Tuesday.
Nike Inc (NYSE:NKE) is a long-term outperformer according to analysts at UBS, who believe the athletic footwear, apparel, and equipment company’s upcoming quarterly earnings will be a negative catalyst.
The analysts projected that Nike’s 2024 financial year guidance is likely to fall short of expectations, pressuring the stock.