Credit: Shutterstock photoThe 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
- Apple Earnings Preview: Can it Beat its Own Forecasts? on July 15, 2011
Apple generated revenues of $24.7 billion and gross margins above 41% in Q2, and the outlook given by the company for Q3 was $23 billion in revenues and 38% in gross margins …
- VeriSign Heads to $38 Charging More for Domain Names on July 15, 2011
As of January 15, 2012, the registry fee for .com domain names will be increased by 7% from $7.34 to $7.85 while the registry fee for .net domain names will be increased by 10% from $4.65 to $5.11 …
- Google Shares Jump on Earnings, Fully Valued at $600 on July 15, 2011
For the quarter, total advertising revenues surged by about 33% over Q2 2010 values driven by increased paid clicks as well as higher cost-per-click rates over the same quarter last year …
- Nokia Earnings Preview: What We're Watching on July 15, 2011
A number of events have occurred recently from its Microsoft partnership agreement it announced in the lastearnings callto its lower guidance for sales and profit margins due to competitive pressures …
- Internet Sales Tax Could Hamper OTAs Like Priceline & Expedia on July 15, 2011
This could offer states struggling with burgeoning fiscal deficits a way to boost revenues without raising taxes and create a more level playing field between the traditional brick-and-mortar retailers and their online counterparts …
- Qualcomm Earnings Preview: What We're Watching on July 15, 2011
Qualcomm holds patents in CDMA, WCDMA, OFDMA technology and is the leader in the baseband chipset market based on this technology with a market share of around 65% as of 2010 …
- What Justifies Our $43 RIM Estimate on July 15, 2011
This view is predicated on the assumption that RIM will turnaround its BlackBerry fortunes and regain some market share from competitors Apple, Nokia and Motorola Mobility.
- Adding More China to iPhone Sales Gets Apple to $430 on July 14, 2011
China Telecom could begin offering Apple's iPhone by the end of this year in a deal that could represent a $9 billion opportunity for the tech giant according to recent reports …
- eBay Q2 Earnings Preview: What We're Watching on July 14, 2011
Given that PayPal significantly grew in Total Payments Volume (TPV) by about 28% in Q1 2011 over last year, we expect increased acquisition activity to drive the number of PayPal accounts upwards for Q2 2011 …
- Priceline Partners with Cathay Pacific Airways on July 14, 2011
Priceline will now provide bookings at thousands of hotel properties in over 114 cities globally where Cathay Pacific Airways has coverage …
- CBS Gains as TV Ad Dollars Rise on July 14, 2011
According to a recent report in WSJ citing ad-buying firm Intergroup, TV advertisement spending will increase by 3.3% in 2011. This is higher growth compared to overall expected growth in advertising spend, which is likely to be about 1.6% in 2011 …
- 3 Reasons Netflix's Stock Needs a Breather on July 14, 2011
Our valuation is based on long-term expectations for growth, and this leads us to question how much Netflix can grow its user base overall …
- Facebook Apps BranchOut and BeKnown Take on LinkedIn on July 13, 2011
Given the size of Facebook's platform and user familiarity, users may opt for Facebook apps like BranchOut and BeKnown in the future as long as privacy settings satisfy their needs …
- Monster Launches Jobs Networking App BeKnown on Facebook on July 13, 2011
BranchOut launched in August 2010 and has grown rapidly to over 817,000 users as of June 2011. BeKnown hopes to replicate this growth while offering clear ways to ring fence professional and social networks …
- Why LinkedIn's Fundamentals Don't Support the Market Price on July 13, 2011
LinkedIn had more than 100 million registered members by March 2011 compared with more than 750 million registered users for Facebook …
- Netflix Bets on Customer Loyalty as Higher Costs Force Price Hike on July 13, 2011
The real motive behind the company's decision to raise prices is unclear though rising content acquisition costs has certainly been a big concern …
- How to Justify Salesforce.com's Stock at $150 on July 13, 2011
Salesforce is 15% ahead of its Dec-end price of $132 to around $150 today based on optimism surrounding the launch of new products like Database.com and the continuing growth of Force.com and Chatter …
- Nickelodeon Tops Ratings, Supporting Viacom's $60 Value on July 12, 2011
The company also states that this was 65th consecutive quarter when Nickelodeon's stood as basic cable's top total day network with kids in the range of 2-11 years as well as among total viewers …
- Apple Eyes $430 as Component Prices Improve on July 12, 2011
This is positive news for Apple as the company should benefit from higher gross margins in the short to medium-term, especially for its flagship product the iPhone …
- Yahoo Q2 Earnings Preview: What We're Watching on July 12, 2011
We would focus our attention this quarter to developments in Yahoo's search advertising business as well as the Yahoo-Alibaba dispute and the potential effect it can have on Yahoo's stock …
- Google Earnings Preview: What We're Watching on July 12, 2011
We will keep a close eye on Google's search ad revenue growth, as well as the company's operating expenses, which surged in Q1 2011 from the same quarter last year …
- Upside & Downside Scenarios to Intel's $27.50 Valuation on July 12, 2011
Intel's main product lines include notebook microprocessors, server microprocessors and desktop microprocessors which contribute about 35%, 28% and 11% to Intel's stock respectively …
- Paramount Announces New Animation Unit Though Small Impact to Viacom on July 11, 2011
As the box office sales, DVDs and movie licensing segment accounts for around 14% of Viacom's value and since the company initially plans only 1 animation movie per year at first, we do not see this as a catalyst for the shares in the near-term …
- ADP Grows Beyond Payrolls Lifting Stock Value to $62.50 on July 11, 2011
We earlier discussed that ADP is bringing its popular payroll management platform for small businesses to the Android smartphone operating platform through a suite of mobile apps …
(Trefis Pro Exclusive) Consumer, Retail, & Automotive
- Unilever Sets up VC Fund to Tap Indian Growth on July 15, 2011
In India's context, we expect Unilever to fund technologies that help it reach out to more consumers in remote and inaccessible parts of the country …
- Jones Group Upside/Downside Explanation for $17 Valuation on July 15, 2011
In its 1Q11 earnings, Jones reported revenue growth of about 8% to about $961 million beating the analysts' average estimate of about $939 million …
- Wal-Mart Rides to $73 on International Growth on July 14, 2011
Wal-Mart's international segment has witnessed a substantial increase in its store count from 2,733 in 2007 to 4,557 in 2011. That roughly means an addition of 360 stores a year …
- Despite Price Hikes Starbucks Looks Expensive on July 14, 2011
Starbucks has increased the price of packaged coffee to combat the steep increase in Arabica coffee prices. It announced a 17% hike in the price of its packaged coffee …
- Heinz Will Catch Up to $62 as Emerging Markets Get Sauced on July 13, 2011
Emerging markets currently generate 15% of the company's total sales and Heinz's goal is to have them generate 25% of earnings by 2016 and 40% in the long-term …
- Costco Fuels its Sales by Getting Members to the Gas Pump on July 12, 2011
Costco will soon start selling gasoline at its Lincoln Park warehouse store in Chicago as construction for pumps has already started …
- Highlighting the Large Upside Potential for Aeropostale on July 12, 2011
Aeropostale's revenue per square foot has increased significantly during the recessionary period, even while the revenue per square foot of some competitors declined …
- Express Scripts' Split Could Weigh on Walgreen Shares on July 12, 2011
Walgreen expects to fill around 90 million prescriptions processed by Express Scripts in 2011 making up over $5 billion - or over 7% of Walgreen's sales so clearly this move impacts Walgreen's business …
(Trefis Pro Exclusive) Financial Services
- Barclays Sees 20% Upside as Consumer & Corporate Banking Recovers on July 14, 2011
Barclays expects retail and business banking to rake in $3.2 billion of additional revenues and the corporate and wealth management divisions to contribute an additional $1.6 billion in revenues each …
- JPMorgan Earnings Preview: What We're Watching on July 14, 2011
JPMorgan's sales & trading division contributes to around 16% of our $45.62 value for the company's stock, and has been a major contributor to the company's top-line in previous quarters …
- Margin Recovery Can Help Barclays Reach $18 on July 13, 2011
We expect the operating margins to improve going forward due to re-organization efforts started by Barclays in 2008 as well an improving banking environment …
- Barclays Sheds PE Assets as Stock Eyes $18 on July 12, 2011
Barclays is clearly in a hurry to ensure compliance with the stringent capital requirement rules expected to bring all financial firms in Europe under scrutiny …
- Is the Market Too Negative on Bank of America? on July 12, 2011
Bank of America's stock saw a high of $15.25 during the second week of January this year and has since shed nearly a third of its value to around $10.30 recently …
- Schwab Winding Down Troubled YieldPlus Fund on July 11, 2011
The YieldPlus fund took a beating during the global economic crisis of 2008 when a substantial part of its investments in mortgage-backed securities turned worthless, wiping out a substantial part of the fund's value …
- Citigroup Earnings Preview: What We're Watching on July 11, 2011
Two items that merit attention are the profit margins on its sales and trading business and the net interest margins of the consumer banking assets of the company …
- Analysts Lower Estimates on Higher Reserves & Growth Concerns on July 11, 2011
Analysts at Morgan Stanley expect JPMorgan, Citigroup and Bank of America to face a 2.5% capital surcharge that would force them to hold higher reserves than the industry norms to be followed under Basel III …
(Trefis Pro Exclusive) Energy & Natural Resources
- Big Oil Makes Small Strides in Renewables on July 15, 2011
While green technologies currently contribute to a fraction of these multi-billion dollar upstream and downstream oil & gas businesses, they are expected to be a major source of growth over the future …
- Suntech's High Performance Panels Help Beam Shares to $10.65 on July 13, 2011
Its latest offering, HiPerforma 245W, makes use of Suntech's Pluto technology to boost efficiency by almost 10% over traditional screen printed solar cell …
- Anadarko Needs Higher Nat Gas Prices for Another Leg Up on July 12, 2011
If the current level of prices were to sustain for the rest of the year and steadily grow to about $6 per 1,000 cubic feet of gas by 2017, our price estimate of Anadarko would increase by almost 5% …
- Exxon Avoids Major Fallout from Yellowstone so Far on July 12, 2011
The area was also experiencing flooding at the time of the spill which may have contributed to a pipe's rupture and is still being investigated …
- Duke Energy & AEP Form JV to Expand Commercial Business on July 11, 2011
Duke Energy and its competitor AEP will spend $275 million in the development of a 55-mile long high-voltage transmission project with Tennessee Valley Authority (TVA) in Indiana and Kentucky …
- LDK Solar's Upside & Downside Scenarios to $12 Valuation on July 11, 2011
LDK Solar derives most of its value from its solar modules & systems and China wafers businesses that account for 40% and 23%, respectively of our $12 Trefis price estimate …
(Trefis Pro Exclusive) Basic Materials
- Rio Tinto Q2 Review: Recovery Supports $97 Value on July 14, 2011
CEO Tom Albanese said that the operations have largely recovered from the severe weather impacts earlier this year, although some port and rail constraints remain …
- Aluminum Demand, New Products Lift Alcoa's Earnings as Stock Eyes $19.50 on July 14, 2011
While the company grew its top-line by more than 11% over the figure in Q1 2011 to reach $6.6 billion, the net income also grew over the period by about 6% to settle at $326 million. …
- Alcoa Aims for $19.75 as JV in Saudi Arabia Gets Funding on July 13, 2011
Alcoa owns a 25% stake in the JV named Ma'aden Bauxite and Alumina Company which is expected to commence operations in 2013-2014 …
- ArcelorMittal & Peabody Bid 40% Premium for Macarthur Coal on July 11, 2011
Macarthur was brought under the ambit of the Australian carbon emissions tax - which will result in additional costs going forward for Macarthur and other Australian coal mining companies in the years to come …
(Trefis Pro Exclusive) Industrials & Transportation
- Upside & Downside Scenarios to Boeing's $87 Value on July 14, 2011
We currently forecast Boeing's share of global commercial aircraft to increase in future years, primarily due to the expected commercial launch of the Boeing 787 Dreamliner in the latter half of 2011 …
- Halliburton Earnings Preview: What We're Watching on July 13, 2011
Weakness in natural gas has forced drillers such as Chesapeake, Devon and Petrohawk to shift their attention to oil and liquid rich shale deposits …
- UPS Coverage Launch: $80 Trefis Price Estimate on July 12, 2011
UPS It operates a ground fleet of approximately 99,800 vehicles, which reaches all business and residential zip codes in the contiguous U.S. …
- KMP Could Build First Major Canadian Pipeline to Serve Asian Markets on July 11, 2011
The company is currently weighing the commercial aspects of the expansion, which will essentially provide the first significant network for the Canadian oil exports to Asia and other continents …
- Transocean Eyes $85 on Deepwater Drilling Demand in Brazil & Africa on July 11, 2011
E&P estimated that 38% of the capital expenditure on deepwater projects will be concentrated in Brazil and that Petrobras, the state-owned oil firm, will dwarf competitors such as Statoil, BP, Exxon Mobil and Chevron in deepwater production …
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.
