Trefis Week In Review

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The Week in Review

Below is a summary of the activity on Trefis during the past week that we thought you would find interesting.

Insights from the Week


Technology Media & Telecom

Priceline's strategic acquisition of Agoda in 2007 strengthened its foothold in the South Asian hotel bookings market and unlocked huge growth potential which is reflected in the stock price trajectory …

Dell has a number of tablets planned for launch in 2011 like Gallo, Opus One, Sterling, Silver Oak and Rosemount (Windows 7 based) that focus on the enterprise market …

If Amazon wishes to expand its online streaming service to include these selections and compete with Netflix, it will have to incur higher operating expenses, reducing profit margins for the company …

  • DirecTV Could Unlock Further Stock Upside from Latin America on February 25,  2011

One of the key aspects of DirecTV's expansion in Latin America during the recent quarter was its success in offering products that were targeted to middle-market segments, especially in Brazil …

  • The Impact of Increased Tech Spending on IBM on February 25,  2011

During Q4 2010, IBM's global technology services segment recorded its first increase in revenue from existing accounts since late 2008, as corporate profits grew with improvement in the economic environment …

  • Innovative Products Will Drive Revenue Growth for Monster on February 24,  2011

Monster has introduced quite a few innovative products like Power Resume Search, an innovative product launched in November 2009 that is based on Monster's patented 6Sense technology …

  • Upside and Downside Scenarios for OpenTable on February 24,  2011

The number of diners in North America making reservations through OpenTable has increased from 24.6 million in 2007 to 62.4 million in 2010 …

  • Nvidia PC Processors Expected to Add 11% to Firm's Value on February 24,  2011

The company has used a parallel computing concept in its GPUs and could well use it to its advantage where high performance is required …

  • Oracle's Abundant Cash Balance Provides Room for Acquisitions on February 24,  2011

Oracle is not currently a major player in the cloud computing market and hence Salesforce.com could provide it with ample growth opportunities in applications software …

  • Adobe's Upside and Downside Market Share Scenarios on February 24,  2011

Adobe's share in the creative software market has fluctuated between 40% to 50%, and has historically increased when a new software version has been released …

  • Optimistic Outlook for SAP's On-Demand Market Prospects on February 23,  2011

The company believes that Business ByDesign enterprise software solution features a few advantages over products offered by competitors, as other players typically provide a piecemeal solution while SAP's offering is an integrated solution …

  • Salesforce.com Showing Strong Subscriber Growth Momentum on February 23,  2011

We estimate that the revenue per paying subscriber per month is around $60 and will likely remain at this level through our forecast period …

  • Comcast Could Benefit from Reduced Capital Intensity on February 23,  2011

Comcast has been migrating to a digital network that requires less maintenance and upgrade costs compared to the traditional analog systems …

  • Microsoft's New Products Make Waves in PC and Smartphone OS Markets on February 23,  2011

Smartphone OS success not only enables higher licensing revenues for Microsoft, but also helps the company capture greater market share in the search advertising market …

  • AMD Can Leverage Short-Term Opportunity, but Real Value Comes from Long-Term Positioning on February 22,  2011

AMD executives have acknowledged the window of opportunity created by Intel's faulty chips, but the potential revenue impact is still uncertain …

  • Mobile Traffic Explosion Creates Both Opportunity and Risk for Akamai on February 22,  2011

Given the aggressive pace of mobile traffic growth, mobile networks are likely to face significant congestion and will thus require technological advancements from content delivery networks …

  • Google's Efforts in Social Search Could Enhance Market Share on February 22,  2011

Google's new social search functionality integrates information from Twitter, Flickr and Quora within the traditional search results …

  • Trefis Insights from Last Week - Technology, Media & Telecom on February 21,  2011

The Nokia deal provides Microsoft with an opportunity to gain market share in both the smartphone operating system market and the search advertising market as it leverages Nokia's large global presence across the globe …

  • SanDisk's Opportunity in the Tablet Market on February 21,  2011

While we believe that cloud storage will be the preferred way in the long-term as it enhances the accessibility and usability of the tablet devices, tablets will be the most useful immediately with built-in SSD based storage features …

  • IBM's Watson - From Jeopardy to Middleware Software Upside on February 21,  2011

It is the software advancements achieved during the development of Watson that will be most beneficial to IBM, rather than the addition of new and more  powerful POWER7 processors to its portfolio …

  • Gotta 'Like' Yahoo's Traffic and Stock Upside from Incorporation of Facebook Tools on February 21,  2011

Acceleration in traffic growth is critical for Yahoo to overcome the threat created by Facebook, and leveraging Facebook's user base would be one such way of achieving that …

  • Upping Estimates on CBS on Better Ad Environment on February 21,  2011

CBS has observed higher ratings for many of its shows and is also seeing improvement in content licensing due to growth in international markets …

  • Can Dell Sustain Improved Profit Margins? on February 21,  2011

With reductions in other expenses like SG&A and R&D as well, Dell's EBITDA margin for its notebook & netbook business saw an incremental 1.5% over 2009 levels …

(Trefis Pro Exclusive) Consumer, Retail & Automotive

  • A&F Results Confirm International Focus & Solid Growth Outlook on February 25,  2011

The company's current strategy for 2011 appears to be to aggressively expand its store count on the international front while it will close down domestic stores that are not performing well …

  • Proctor & Gamble's Cash Flow Bests Peers, Justifies 20% Upside on February 24,  2011

We are a little conservative with regards to P&G's revenue growth forecasts at around 4% predominantly on account of the increasing proportion of volumes coming from emerging markets, behind lower priced product variants …

  • Urban Outfitters Can Sustain Margins Despite Pressure from Rising Cotton Prices on February 24,  2011

We believe Urban Outfitters' success during 2010, despite increasing raw material prices and weak consumer trends, was largely a function of its target demographic and the nature of its operations …

  • Best Buy Looking to Lift Profitability on February 24,  2011

When comparing Best Buy's revenues ($50+ billion) to expected cost savings ($60-70 million) , one can understand why the upside benefit to overall company value might be limited …

  • Sam's Club Could Perk up Wal-Mart Sales if it Was More like Costco on February 24,  2011

It may be possible that while revenue per square foot figure for Costco may not see much growth given it is already on higher side, and that Sam's Club could progress towards that standard …

  • Coverage Launch: $57.50 Trefis Price Estimate for Las Vegas Sands on February 23,  2011

An expanding Chinese middle class is expected to spur continued growth in travel to Macau and generate increased demand for gaming, entertainment and resort offerings …

  • Coverage Launch: $65 Trefis Price Estimate for Target on February 23,  2011

As the health of the U.S. economy improves, consumer spending will increase from 2010 levels because of various factors like improving employment, which will lift wages and boost confidence in the future …

  • Pepsi Expands Focus on Healthier Beverages with Russian Dairy & Juice Maker on February 22,  2011

Pepsi will also have a strong foothold in the lucrative Russian dairy market, which increased in size by 22% between 2006 and 2010, and is expected to grow by 12% in the next four years …

  • Avon's Investment in Growth Warrants Upside Despite Margin Pressure on February 22,  2011

While R&D remained flat at around 0.7% of sales over 2005-07, investments in RVP increased dramatically from a negligible (0%) in 2005 to almost 2.5% of sales by 2009 …

  • Trefis Insights from Last Week - Consumer, Retail & Automotive on February 21,  2011

Estee Lauder draws over 40% of its sales from skin care and recorded 15% growth in revenues from this segment during 2010 due in part to improved market share …

  • Walgreens Can Add Fiz to Sales with Private Label Beer Offering on February 21,  2011

With increasing competition in pharmacy services and rising real estate rental rates, drugstores aim to increase sales albeit at lower margins to meet the rising operating expenses …


(Trefis Pro Exclusive) Energy & Financial Services

  • Global Equity Underwriting Outlook Puts JPMorgan in Promising Position on February 25,  2011

After a stagnant equity underwriting market in 2010, we estimate that global equity underwriting volumes will grow 7% annually to reach almost $1371 billion by 2017, from current levels of about $854 billion …

  • Higher Inflation Could Deflate Hartford's Outlook on February 25,  2011

As higher inflation would result in a decline in sales, insurance companies will price their insurance policies more aggressively to retain customers and grab market share …

  • Coverage Launch: $81 Trefis Price Estimate for Newmont Mining on February 25,  2011

Newmont Mining's copper production primarily comes from its Batu Hijau operations in Indonesia and Boddington operations in Australia …

  • After Christchurch, Assessing AIG's Risk to Earthquakes on February 24,  2011

Since AIG has a significant exposure to the property & casualty insurance sector, any major catastrophic event such as an earthquake could adversely effect the company's performance …

  • Assessing Jasmine Revolution's Impact on ExxonMobil Production on February 24,  2011

The process of oil & gas exploration and production is extremely capital intensive and time consuming, and disruptions due to political instabilities only means additional expenses with a delay in the ability of the company to generate returns …

  • Anadarko Stock Price Justified Given Optimistic Cost Control Outlook on February 24,  2011

However, when compared to ConocoPhillips' average production cost of $7.72 per barrel of oil equivalent in 2009, Anadarko's cost seems to be on the higher side …

  • Sales and Trading Key to Turning MS Stock Around on February 23,  2011

The economic recovery and rising interest rates also have the potential to help out Morgan Stanley's trading business, bringing back investors and increasing liquidity and volumes across markets …

  • Coverage Launch: $67 Trefis Price Estimate for Barrick Gold on February 23,  2011

The economic turmoil of 2008 and 2009 shifted the focus of investors to safer investment vehicles like gold, which is perceived to be a good investment during times of economic upheaval …

  • Bank of America New Account Fees Could Add Slight Additional Upside on February 23,  2011

Bank of America is trying to earn more revenues from its existing customer base by requiring them to use more products and services in order to avoid monthly fees …

  • Cliffs Wraps Up 2010; Encouraging Outlook for North American Iron Ore on February 23,  2011

There was a significant impact on the company's net income, which saw a five-fold increase from $205 million in 2009 to more than $1 billion in 2010 …

  • Credit Suisse's FICC Trading Misses in 2010 But Should Recover in 2011 on February 23,  2011

In the investment banking division, total underwriting and advisory fees increased by 28% for the year, but its FICC and equities trading revenues were down by 38% and 21% respectively …

  • Unrest in Libya Could Jeopardize BP Exploration Deal on February 22,  2011

The political turmoil in Libya must be chilling for BP as it could bring into limbo the future of the $900 million exploration and production agreement BP had signed with the Libya'a National Oil Company ( NOC ) in 2007 …

  • Increased Trading Volume and Regaining Market Share Essential for Nasdaq on February 22,  2011

We expect the average daily cash equity trading volume to recover and grow to over 11 billion by the year 2013 as increased automation and more advanced trading platforms allow for heavier trading …

  • ArcelorMittal Results Suggest Slow and Steady Recovery in Steel Industry on February 22,  2011

The company reported total revenues of $78 billion for the year, a 20% increase over the $65 billion recorded in 2009 …

  • Fixed Income Trading the Biggest Driver to Barclays' Stock on February 22,  2011

This represents an annual growth of 10% for debt assets deployed and is fueled by the growing need for companies globally to raise capital to expand their operations after the economic downturn …

  • ConocoPhillips Looks to Make Moves in New Energy Technologies on February 21,  2011

We estimate that the company's revenue from emerging business will see a steady uptick towards $1.1 billion by the end of our forecast period …

Summaries of Trefis Members' Recent Forecasts

  • Declining Sales Trend Puts Wal-Mart on Back Foot on February 25,  2011

Despite these ongoing efforts, Wal-Mart's Q4 2010 results saw comparable store sales, a metric to measure a company's sales growth, decline 1.8% - a continuous decline since past seven quarters …

  • Outlook for Verizon's Mobile Plan Pricing on February 24,  2011

To minimize customer churn and attract new customers, service providers are offering discounts and promotional offers like free minutes, free calls to other subscribers, and roll-over minutes …

  • Yahoo's Search Profit Margin to Expand Offering Additional Upside to Stock on February 24,  2011

While we expect Yahoo's search advertising EBITDA margin will rise to 44% in 2011 and remain at that level over the forecast period, Trefis members predict the search margin will cross 54% …

  • Improving Hotel Occupancy Levels Spell Upside for Priceline's Stock on February 23,  2011

Although not much has changed in the room rates, the occupancy levels are rising - this indicates that hotel bookings and travel have resumed …

  • Higher BNY Mellon's Asset Servicing Fee Could Add to Upside on February 21,  2011

Since the contracts with institutional clients are long term in nature, we expect BNY Mellon to offer highly competitive investment servicing fee to attract assets for custody …

  • Chesapeake's Market Price Justified Given Optimistic Natural Gas Price Outlook on February 21,  2011

Trefis members anticipate that Chesapeake's natural gas price will reach $7.3 per million cubic feet by the end of our forecast period (vs. our $6.2 per million cubic feet projection), representing a potential upside of 26% to our price estimate for CHK stock …

The growth will likely come from users in the 18-34 age group, as Facebook establishes its leadership in the social networking industry amongst competitors like MySpace and LinkedIn …



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.




This article appears in: Investing , Investing Ideas , Stocks , US Markets

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