Markets

Trefis Week in Review

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

Management mentioned that the CBS Network (and broadcast networks in general) is continuing to draw viewership as a result of big event programming …

There could be however be a 5% downside to our $185 price estimate for IBM stock if middleware license revenues increase at the historical rate (which is lower than the growth rate we forecast) reaching close to $8.5 billion by the end of our forecast period …

Partnership with Microsoft also benefits RIM - by leveraging Bing, RIM doesn't need to devote resources to search efforts, and can use those resource in improving its own smartphone operating system …

  • Netsuite Win Enhances Oracle's Exadata Presence on May 13, 2011

The NetSuite win is another feather in Oracle's cap, as the company is already a dominant player in the database software market with a market share of around 50% …

  • Nvidia Paid a Fair Price for Icera on May 13, 2011

However, to justify the acquisition price of $367 million, Nvidia will need to lift these revenues to at least $1.3 billion instead of $1 billion …

  • Google Launches Direct Attack on Microsoft with Chromebook on May 13, 2011

Although consumers and businesses are accustomed to Microsoft's products over the years, and more advanced programs will need the support of a full operating, this could serve as another shot across the bow from Google in its intentions to move toward a web based environment …

  • Dell Earnings Preview, What We're Watching on May 13, 2011

Around 78% of Dell's revenue is enterprise focused, and the enterprise refresh cycle is helping support PC growth but only at modest levels …

  • Microsoft Missing Out On Growth From 2 Billion Internet Users on May 12, 2011

The additional growth doesn't move the needle on Microsoft stock much given Bing's low penetration in search and since the much of this rapid growth is due to cellular subscriptions and migration to 3G …

  • DirecTV Upside if LatAm Market Share Reaches US Levels on May 12, 2011

We now expect total subscribers in 2011 to increase by approximately 22%. The growth is being driven by high growth in markets like Brazil as a result of popularity of products that appeal to middle class …

  • Nvidia Acquires Icera as Baseband Chipset Market Heats Up on May 12, 2011

Icera is a perfect fit that will enhance its position in the baseband processor market. Baseband processors represent one of the fastest growing segments in the technology industry, at an estimated annual market size of about $15 billion …

  • Should Netflix Worry About YouTube? on May 12, 2011

Netflix's content offering trumps YouTube currently as it entered the market earlier and so offers better content both in terms of quantity and a wider mix of titles …

  • RIM Continues to Lose Ground in Smartphones on May 11, 2011

According to a recent report from Comscore, Research in Motion's share in the U.S smartphone subscriber market declined from around 32% in December 2010 to 27% in March 2011

  • SAP Spending More to Drive Long-Term Growth on May 11, 2011

Some of the innovations that the company has brought in the recent past are the introduction of products like HANA (High Performance Analytic Appliance) and Business ByDesign …

  • Will DirecTV's U.S. Subscriber Growth Momentum Continue? on May 11, 2011

While Dish has not aggressively pursued new subscribers, competition from telcos like AT&T and Verizon remains intense and cable operators are also starting to improve …

  • Expedia Partners With AirAsia on May 11, 2011

Expedia stands to benefit from AirAsia's distribution network both online and offline (retail outlets) along with its expertise in the local markets, something it could not have managed itself …

  • Netflix Riding a Positive Feedback Loop on May 11, 2011

If Netflix gets full support of the content owners, it might not be outrageous to think that Netflix might penetrate a majority of U.S. households one day - this scenario would make our current projections appear quite conservative …

  • With Microsoft, Can Skype Accelerate the Shift to VoIP? on May 11, 2011

Microsoft's move could influence consumers to gradually shift to Skype subscriptions from their landline connections in a more effective way now and compete with VoIP offerings provided by AT&T and others …

  • Microsoft's Skype Deal to Link its Products to Consumers via the Web on May 10, 2011

Skype has about 663 million registered users, and Microsoft could leverage such a large user base to promote its search advertising business through Bing …

  • Amazon Grows Top-Line, but at What Cost? on May 10, 2011

Offers like free shipping have the ability to pump up unit sales. However, the downside effect is an increase in shipping costs to Amazon, which can drag operating margins over the near-term …

  • DirecTV Sees High Quality Subscriber Additions on May 10, 2011

We expect the penetration to rise to 66% by the end of our forecast period as the new subscribers continue to opt for these advanced services and existing subscribers upgrade …

  • Key Trends for PayPal Emerging from eBay's Q1 Earnings on May 10, 2011

Total payments made through PayPal has been increasing significantly. The bulk of this increase is driven by 38% year-on-year growth in payments made for merchant services …

  • Netflix May Go to Latin America Next, Our Take on May 9, 2011

As the broadband wave starts to take off in Latin America, it's in Netflix's interest to win the hearts of consumers early. DirecTV's success in Latin America draws similar parallels …

  • Microsoft Leaning on Business PC Market Growth on May 9, 2011

The PC market is a critical driver for Microsoft, and we expect notebook and netbooks growth to be in double-digits for the next few years, although the desktop market is unlikely to see much upside going forward …

  • Smartphone Delays a Slight Setback for Motorola Mobility on May 9, 2011

During its recent earnings announcement, Motorola Mobility mentioned that some of its products scheduled for Q2 2011 will now be rolled out over the summer, including its Droid Bionic smartphone and Xoom LTE version of the tablet …

(Trefis Pro Exclusive) Consumer & Retail, & Automotive

  • Starbucks Eyes China for Long-Term Growth on May 12, 2011

In April this year, Starbucks introduced its instant-coffee packets in China and expanded beyond coffee stores to sell consumer packaged goods in the region …

  • Rising Inflation in China a Concern for Coach on May 12, 2011

Inflation in China hit a 32-month high of 5.4% in March and will likely continue its rise in the months ahead. On top of that, China's economy, accustomed to double-digit growth, is only expected to grow 8-9% this year …

  • "Wynn-ing" in Macau on May 11, 2011

Wynn is poised to benefit from the growth in the Macau gaming industry that saw gaming revenues continue its surge, increasing 45% in April from a year earlier …

  • McDonald's Spending $1 Billion on Makeover on May 11, 2011

The remodeled store would be more like a mature version of the present stores, with wooden tables and faux leather chairs instead of fiberglass tables and steel chairs …

  • Macau Growth Bolsters LVS' Top-Line on May 11, 2011

Adjusted property EBITDA margin expanded across the Sands China property portfolio to reach a market-leading 33.4%. Overall firm revenues increased from $1.3 billion in Q1 2010 to $2.1 billion in Q1 2011, representing an increase of approximately 60% …

  • What P&G Could Look Like in 5 Years on May 11, 2011

P&G embarked on its ambitious goal to acquire a billion additional consumers by 2014/15, which naturally draws its focus to the two most populous nations in the world - China and India …

  • Unilever's Results Show Challenges to Growth on May 10, 2011

While sales grew by 4.3% Q1 2011 compared to the same period last year, the underlying volumes grew by only 2.5% with price increases contributing the remaining 1.8% …

  • Las Vegas Sands Gains an Edge from Geographic Diversification on May 10, 2011

While the recent economic recession hit LVS' Las Vegas operations, its effect was mitigated by the substantial growth of the Macau gaming industry …

  • Why P&G is a Great Stock for Retirement on May 10, 2011

Its history of creating new products to meet consumers' needs, the near 50% dividend payout and strong cash flow make it a compelling choice for those looking to buy and hold quality stocks …

  • MGM's Risk from Geographically Concentrated Operations on May 10, 2011

The huge debt burden of $12 billion has curtailed MGM's future expansion plans by imposing covenants which limit annual capital expenditures …

  • Bath & Body Works Grows to 25% of Limited's Stock Value on May 10, 2011

Our price estimate for Limited Brands' stock stands at $33.36, which is about 18% below the market price though if sales and profit margins improve beyond our forecast, there could be upside to these forecasts …

  • Volumes Drive Upside for P&G on May 9, 2011

As we had expected, the company broadly delivered volume-driven growth, with volumes rising 5% over January-March 2011 compared to the same period last year …

  • Limited Investors Loving Victoria's Secret on May 9, 2011

For the quarter ending in April, the increase in comparable sales was a healthy 15% as Limited Brands' sales crossed $2.2 billion in sales …

(Trefis Pro Exclusive) Financial Services

  • Electronic Exchanges Will Support NYSE Euronext's Market Share on May 13, 2011

The popularity of floor trading in NYSE is being steadily pushed aside in favor of electronic trading. NYSE has managed to mitigate the impact of the decline by drawing more business to its all-electronic Arca market …

  • The 2 Businesses that Drive MasterCard's Stock on May 13, 2011

Transaction fees is one the major revenue source for MasterCard and includes authorization, settlement and switch charges as well as connectivity charges …

  • Key Trends Impacting E-Trade on May 13, 2011

Because most of the revenue per trade is made up of commissions from equity trading, E-Trade's average revenue per trade is expect to decline in the next few years before steadying in the long run …

  • The 3 Most Important Business Divisions for Wells Fargo on May 12, 2011

Wells Fargo's mortgage business earns interest in the form of monthly payments on home loans, servicing fees on mortgage serviced for clients, interest on mortgages held for sale and gains upon their sale …

  • AIG's 2 Most Important Divisions on May 12, 2011

AIG collected $32.5 billion in premiums for property and casualty insurance in 2010 and held 7.4% market share in the highly fragmented property and casualty insurance market …

  • The 3 Key Businesses That Make Visa Worth $86 on May 12, 2011

Association with the Visa brand helps a customer (bank and other financial institution) to attract consumers by providing them with a large network of Visa merchants and ATMs …

  • Barclays' Poised to Grow Retail Loan Volume by 5% Annually on May 11, 2011

While loans have remained at nearly the same value in GBP terms since then, negative exchange rate movement caused their value to drop to $417 billion by 2010 …

  • RBS Likely to Take a Hit in PPI Battle on May 10, 2011

RBS may have to set aside as much as £1 billion ($1.6 billion) to compensate customers who were mis-sold Payment Protection Insurance (PPI) policies over the years …

  • The 4 Business Segments Driving Barclays' Stock Value on May 10, 2011

Barclays Capital services a wide variety of client needs, covering strategic advisory and M&A, equity and fixed income capital raising, corporate lending and risk management …

  • 2 Factors Driving Payments Volume for Visa on May 10, 2011

Visa's total payments volume increased by 13% in Q2 2011 compared to same period last year. Payment volumes in Q1 rose around 15%, and in the U.S., payment volumes grew 12% in Q2 2011 and 15% in the rest of the world …

  • Visa's Transaction Volume Poised for Growth on May 9, 2011

Visa recently reported its fiscal Q2 2011 earnings and posted net operating revenue of $2.2 billion, an increase of 14% from $1.9 billion in the same period last year …

  • Wells Fargo Non-Interest Expenses Take a Bite Out of Earnings on May 9, 2011

While rising rates could be one factor at play in the mortgage business, non-interest expenses ballooned to $12.7 billion in Q1'11, up $616 million from a year ago. This includes items like salaries, incentives, benefits, insurance, advertising and promotion and outside professional services …

  • MetLife's Annuity Business is Humming, Providing Upside to Shares on May 9, 2011

Fixed annuities sales soared during 2008-09 economic crisis when consumers had low risk appetite but the growing pace of market recovery has led to a decline in sales of fixed annuities …

  • Glencore Deal Lifts Morgan Stanley's Equity Underwriting Fees on May 9, 2011

The total underwriting fee from this deal is expected to reach up to $275 million, with the bulk of it being shared by the lead underwriters Citigroup, Credit Suisse and Morgan Stanley …

  • Strong MetLife Q1 Led by International Growth on May 8, 2011

MetLife's operating revenues from international insurance jumped to $4.6 billion in Q1 2011 from $1.5 billion in the same quarter last year because of the acquisition of ALICO from AIG last year …

(Trefis Pro Exclusive) Energy & Natural Resources

  • BP Finally Cleared to Operate in Deepwater Brazil on May 13, 2011

BP had declared its decision to buy the assets from Devon in March 2010, and had been waiting for the regulatory approvals from ANP since then …

  • Chevron Worth $104 on Oil & Gas Production on May 13, 2011

Although natural gas production and crude oil and NGL production have similar margins, the production volume (when measured on a comparable basis) and pricing is higher for crude oil …

  • Company Specific Trends Impacting Chevron on May 12, 2011

Even though Chevron's business is dependent on non-renewable energy sources like crude oil and natural gas, the company is also focused on embracing alternative energy solutions …

  • 3 Drivers to First Solar's Stock Value on May 12, 2011

In the recent past, First Solar has taken its business to China, India, Australia, and the Middle East which are likely to become major markets for solar components in the years to come …

  • Is Total's Generous Offer for SunPower Stake Justifiable? on May 12, 2011

SunPwer saw its shares shoot up from just around $16 to its current levels of above $21 with the announcement that Total intends to acquire 60% of the solar company's equity at $23.25 a share …

  • First Solar Finds its European Stronghold on Shaky Ground on May 11, 2011

The changes proposed to the FiT structure in these countries would result in lower demand in European region. This would in-turn lead to a significant inventory build-up and a reduction in prices in what is First Solar's core market …

  • Downside to Duke Energy From Increasing Environmental Regulations on May 10, 2011

Utility revenues have been slow to recover as power prices have remained low with people and businesses using less electricity, a continuation of tends seen during the recent downturn …

  • Duke Reports Higher Industrial Energy Demand on May 9, 2011

The company expects costs to increase due to increasing environmental regulations and expected safety upgrades of nuclear plants, which would be required in the aftermath of the tsunami related nuclear power crisis in Japan …

  • Freeport Will Explore New Opportunities in British Columbia on May 9, 2011

In order to establish the joint venture, Freeport is required to spend $5 million in exploring the Choo and Tchentlo properties over the next 4 years …

  • BP's Alaskan Oil Spill Settlement and its Repercussions on May 9, 2011

The company reached an agreement with the U.S. Department of Justice to pay a civil penalty of $25 million, which brings the total expenses for the company relating to the oil spill to $85 million …

(Trefis Pro Exclusive) Industrials & Transportation

  • Coverage Launch: $45 Trefis Price Estimate for Dow Chemicals on May 13, 2011

We recently launched coverage on Dow Chemicals with a $45 price estimate for the company's stock, which is roughly 10-15% premium over its current market price …

  • The 4 Most Important Product Divisions for DuPont on May 12, 2011

Automotive and industrial coatings supplies high-performance liquid and powder coatings to motor vehicle original equipment manufacturers (OEM) and the motor vehicle after-market …

  • 3 Key Value Drivers for DuPont on May 11, 2011

With the market worth about $445 billion in 2010, we expect global specialty chemicals market to reach close to $570 billion by the end of the Trefis forecast period, primarily driven by high industrial growth in emerging economies …

  • Coverage Launch: $58.10 Trefis Price Estimate for DuPont on May 9, 2011

We recently launched coverage on DuPont with a $58.10 price estimate for the company's stock, which is around a 6% premium over its current market price …

05/13/11 Trefis Top 5 - May 13 Insights (DOW, MSFT, RIMM, GOOG, CVX)

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


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

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