Markets

The 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

Even if AMD reached to 80% share in the discrete notebook GPU market by end of our forecast period, further upside to our price estimate would only be about 3% …

Supporting the operating system is critical for Nokia in order to avoid further deterioration to its market share, which has taken a beating over the last few years …

Google does not disclose its exact algorithm changes. Still, we know that the recent update aims to reduce the search ranking of "low-quality" sites …

  • 3 Negative Factors Slowing Nokia's Near-Term Outlook on April 28, 2011

The main factors that the company cited for the weak outlook are after-effects from the Japan tragedy, a lack of dual-sim devices and fewer new handset introductions expected in the next quarter …

  • Is Dell a Consumer PC Company? Not Really, Says Mr. Dell on April 28, 2011

Dell has lately diversified away from its core business by acquiring high-end technologies, such as storage and security systems, as well as extending its services portfolio …

  • Out-Of-Home Advertising Outlook For CBS on April 28, 2011

For CBS, revenues from outdoor advertising suffered a significant drop in 2009, falling from about $2.2 billion in 2008 to $1.7 billion in 2009 ….

  • Netflix Dismisses Cord Cutting Argument on April 28, 2011

Netflix's statement essentially coincides with our earlier argument that Netflix is not the prime reason behind cord cutting, and consequently its benefit from the trend is limited or should …

  • Discouraging Motorola Xoom Sales Could be a Drag on Stock on April 27, 2011

Although Xoom sales were never expected to match the early success of the Apple's original iPad, the magnitude of the difference is worth noting …

  • iPhone Users Hanging Onto AT&T on April 27, 2011

AT&T has pulled this off by improving its network and keeping a large amount of its postpaid subscribers (including iPhone) on family plans …

  • NYT Confident in its New Paywall on April 27, 2011

The service is still within its promotional period and might see a few cancellations as subscribers breach their 4-week discounted window. Overall, we estimate that NYT will attract around 500,000 paid subscribers in 2011 …

  • SAP Enhances Customer-Focused Strategy with Innovation on April 27, 2011

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 …

  • Coverage Launch on Constant Contact - $30.66 Stock Price Estimate on April 27, 2011

Constant Contact's average customer base has grown from 128,000 in 2007 to 393,000 in 2010, and we expect its customer base to grow at nearly 15% pace over the next few years …

  • Strong Hardware Revenue Growth Does Not Mean Much for IBM's Stock on April 26, 2011

While we currently forecast that server EBTDA margin will hover around 13% going forward, the potential upside from this segment is limited given its relatively small contribution to the company's value …

  • Signs of Mobile Saturation & Increasing Competition for AT&T on April 26, 2011

It might be getting a bit more difficult for AT&T to add regular subscribers given general mobile market saturation and heightened competitions from Verizon and Sprint …

  • Strong Demand for Intel's Sandy Bridge, but Atom's Progress is Slow on April 26, 2011

Q1 2011 revenues for Atom stood at $370 million, representing growth of about 4% compared to Q1 2010 and a sequential decline of 5% compared to Q4 2010 …

  • Apple Avoids Hiccups in Supply Chain, Raising Estimates on iPhone Outlook on April 26, 2011

Additionally, the recent Japanese earthquake caused headaches for Apple in terms of supply chain constraints as most of the suppliers for Apple were Japanese companies …

  • Coverage Launch on Pandora - $984 Million Valuation on April 26, 2011

Pandora has over 50% market share in internet radio listening time among the top 20 stations and networks in the United States …

  • Nokia's Take on the Microsoft Deal on April 25, 2011

During the conference call, management indicated that the partnership with Microsoft is intended to reduce Nokia's devices and services expenses by 1 billion Euros by 2013 from 5.65 billion Euros in 2010 …

  • Sprint's Earnings Preview: What We're Watching on April 25, 2011

One of the key issues that Sprint has faced over the last few years is continued losses in its postpaid subscriber base. This loss has been more severe in its iDEN base which uses phones based on push-to-talk technology …

  • Revising Qualcomm Forecasts Based on Better Royalty Rates on April 25, 2011

The company also provided a positive outlook for handset average selling prices (ASPs) for 2011, stemming from continued growth of smartphone and tablet sales …

  • Yahoo-Bing Search Alliance Not Yet Meeting Expectations on April 25, 2011

RPS improvements may not happen in the near-term as Yahoo had hoped initially. However, if this improvement happens in the long-term, Yahoo could benefit …

  • Significance of Non-Core Product Losses for Intel on April 25, 2011

If we assume that Intel incurs zero losses (at par with no profit and no loss) from these non-core businesses from 2012 onwards, it could add about 17% to our price estimate …

  • Will Netflix Move to Personalized Streaming? on April 25, 2011

For this strategy to be successful, multiple people in a single household should find Netflix essential enough that they would like to stream their personal choices at same time …

  • Earnings Watch - Netflix and Kimberly-Clark on April 24, 2011

Netflix introduced a streaming-only plan at a lower price towards the end of 2010 that has led to subscriber acceleration. Apart from this, expansion in Canada has been helpful …

  • Sprint Could be Tipping its Hand with Clearwire Deal on April 24, 2011

By not investing a larger portion perhaps for a stake of Clearwire, Sprint appears to be hedging its bets for the moment by not making a commitment beyond the next two years …

(Trefis Pro Exclusive) Consumer, Retail, Airlines & Automotive

  • Estee Lauder Earnings Preview - What We're Watching on April 29, 2011

With an impressive first half of its current fiscal year, Estee Lauder closed 2010 with an 11.6% growth in sales along with a 174 basis point improvement in operating margins …

  • Ford's Earnings Highlight Positive Trends on April 29, 2011

Contribution of cars to Ford's total vehicle sales increased from 33.6% in 2010 to 35% in 2011 Q1. This displays customer confidence in Ford's fuel efficient product such as Fiesta, Fusion, Edge, Escape, etc. that continued to fuel demand …

  • Kraft Marketing & New Markets a Key to Growth on April 29, 2011

The company is looking at channels like TV advertising for its larger brands and use digital media and customer relationship management for its smaller brands …

  • Honda Earnings Point to Further Downside on Quake, Currency on April 29, 2011

In Asia, Honda's cost of sales, SG&A and R&D expenses increasing by almost 10% in this quarter from a year ago, which contributed to the drop in operating income …

  • Coverage Launch American Airlines: $7.20 Trefis Price Estimate on April 29, 2011

American Airlines over the year has lost U.S. market share to low-cost airlines such as Southwest Airlines and JetBlue, and we expect this to decline further in the near future …

  • Abercrombie Investor Day Adds Some Zip to Stock on April 28, 2011

The company plans to open 40 Hollister stores and and 10 Abercrombie & Fitch stores abroad this year, with similar growth rates to be maintained in the coming years …

  • Key Trends Impacting Wal-Mart on April 28, 2011

Recent reports indicate that, during the last quarter of 2010, retailers like Wal-Mart and Amazon gained consumer electronics market share while Best Buy lost some …

  • Toyota's Production Sinks, Downside to Loan & Lease Business on April 27, 2011

Global production dropped around 29% as a result and Toyota predicts that its 2011 global production would register around 7.7 million vs. 8.4 million last year, though many analysts think this number will be revised lower over time …

  • Avon's Operational Improvements Support its Outlook on April 27, 2011

Sourcing initiatives helped Avon shift purchasing towards a globally-coordinated programs with larger volumes (at better prices and trade terms with suppliers) and help it benefit from economies of scale …

  • Inflation Squeezes Margins At Kimberly-Clark on April 27, 2011

While Kimberly-Clark benefited from sales growth and dedicated cost savings of $60 million, these were far outpaced by inflation in key input costs of about $195 million over 2010 levels …

  • Home Depot Benefits from Storms & Improving Home Improvement Outlook on April 27, 2011

Given that home improvement activity across the U.S. is picking up with the recovery in macroeconomic conditions in addition to needs arising from unusually harsh weather, Home Depot should report continued improvements …

  • Unilever Earnings Preview, What We're Watching on April 26, 2011

Unilever in 2010 focused on growing market share by reducing prices amid low employment and depressed disposable income levels, which led many consumers to substitute premium brands with lower-prices brands and private labels …

  • Kraft's Sticky Situation in India on April 25, 2011

If this investigation leads to an unfavorable outcome that might hinder Kraft's growth in India or similar issues were to rise in other countries relating to Cadbury or Kraft, there could be downside to our forecasts …

  • Revlon Earnings Preview - What We're Watching on April 25, 2011

We were pleasantly surprised with Revlon's 2010 performance, with sales rising 2%, a moderate turnaround from the 4% year-on-year drop in sales over 2007-09 …

  • GM's 5-Year Plan to Double Sales in China Adds Upside to Our Bullish Forecast on April 25, 2011

GM plans to capitalize on the potential demand for electric vehicles in China and will work with joint-venture partner SAIC to develop next generation electric vehicle architecture …

  • Price Hikes Won't Help Kimberly-Clark's Stock on April 25, 2011

Since Kimberly-Clark has only issued a tentative timeline for its price increases, we expect to see how competition responds before making gross margin assumptions …

  • P&G Earnings Preview, What We're Watching on April 24, 2011

To cater these high-growth but low-income level consumer market, P&G has had to launch low-priced and smaller-sized variants of its products, expand its distribution network to reach out to the consumers in the remote parts of country …

(Trefis Pro Exclusive) Financial Services & Energy and Natural Resources

  • UBS First Quarter Results Supported by Wealth Management on April 29, 2011

Inside wealth management, we estimate that international clients (non-U.S. and not Swiss) are the most valuable for UBS, contributing around 22% to its stock price …

  • Quick Look at Keys for CME's Stock on April 29, 2011

We currently estimate that average daily trade volume of energy contracts for CME would increase from 1.67 million in 2010 to 3.7 million in 2017 …

  • Sustained Higher Crude Prices Could Lift ConocoPhillips on April 29, 2011

The average realized price of crude oil and natural gas liquids for ConocoPhillips increased to $80.5 per barrel in Q1 2011 from $64.8 per barrel in 2010 …

  • The Cleaner Side of BP on April 29, 2011

Alternative Energy was formed in 2005 with BP pledging funds worth $8 billion by 2015. At the end of 2010, BP had already pumped more than $5 billion into the business …

  • Upside / Downside Case for Discover Financial Services on April 28, 2011

Discover's provisions as a percent of average credit card loan outstanding declined from 10% in 2009 to 6.4% 2010 due to a reduction in the loan loss reserve rate and a decline in the level of net charge-offs …

  • UK Banking Rules Could Take Toll on Barclays on April 28, 2011

The potential reforms recommended by the ICB would force the retail and investment banking divisions of the major banks in UK to have different capital structures termed as "subsidiarisation" …

  • RBS Will Sell Off Insurance Arm in Second Half of 2011 on April 28, 2011

The RBS Group has been working on reducing its non-core assets since it was nationalized by the UK government during the economic crisis in 2008 …

  • High Gas Prices to Fill MasterCard's Tank on April 28, 2011

MasterCard charges gas stations when they accept payments for fuel using MasterCard-branded cards and higher gasoline prices will result in higher fees charged by MasterCard …

  • Tar Sands Financing Could Become a Sticky Issue for RBS on April 27, 2011

Although the company's UK Business Banking division has nearly $159 billion in loans outstanding, the doubt raised over this $9.2 billion financing can potentially hit RBS hard …

  • Key Drivers to Discover Credit Cards' Stock on April 27, 2011

To fund operations, the company has a variety of sources of funds including short and tong term corporate debt, customer deposits and borrowings from the Federal Reserve …

  • AIG's Life Insurance Unit Fitch Upgrade Helps Regain Market Share on April 27, 2011

From AIG's perspective, an improvement in financial strength ratings will boost consumer confidence in the company and will help SunAmerica to gain momentum in new business generation …

  • Key Drivers for JPMorgan's Credit Card Services on April 26, 2011

Net interest yield increased from 8.2% in 2008 to 10.9% in 2009 primarily due to wider loan spreads as borrowing costs decreased and the acquisition of Washington Mutual …

  • An Upside and Downside Case for Wells Fargo on April 26, 2011

We currently forecast that the credit losses on Wells Fargo's outstanding home mortgage loans as a percentage of the loans will fall sharply going forward and then stabilize at around 0.4% …

  • Deutsche Bank Expands Global Transaction Banking Services on April 26, 2011

The bank has identified Saudi Arabia in particular as a strategic part of its global business and hopes to leverage its proven market leadership in administering internationally issued Islamic products …

  • U.S. Steel Prospects Shine with Steel Recovery on April 26, 2011

The steel industry should continue to grow at around 10% in the next few years as other developing Asian countries like India and Thailand show healthy economic development …

  • Goldman's Trading Help Results, Concerns Linger on April 26, 2011

This 'melting up' for financial market seems to have slowed, and going forward, concerns regarding the profitability of FICC trading remain …

  • SunPower Among First to Gain from Budget Decision on April 25, 2011

If the government had cut the funding to the DoE, it would have directly affected the $41 billion in loan guarantees for renewable energy projects, a move that companies in the renewables sector said could "kill all clean energy projects" …

  • Wells Fargo Reports Declining Mortgage Loans, Increase in New Accounts on April 25, 2011

Wells Fargo reported a decline in new mortgage loans origination which fell sharply to $84 billion from $128 billion the previous quarter as interest rates rose …

  • Bullish on BNY Mellon on April 25, 2011

While we believe that asset servicing fees as a percentage of AuC will remain constant at current levels of 0.11% going forward, these fees will get a lift from our projected increase in BNY Mellon's AuC to over $43 trillion by the end of our forecast period …

  • NYSE Again Rejects Nasdaq-ICE Bid on April 24, 2011

The revised offer included a $350 million breakup fees that NYSE Euronext will receive if Nasdaq-ICE deal didn't go through because of the anti-trust issues and also a reimbursement for about $364 million …

  • Suntech Power Could Win Big on Lower Polysilicon Prices on April 24, 2011

With Chinese demand for polysilicon growing exponentially, the country has had to import significantly higher quantities of polysilicon this year …

Summaries of Trefis Members' Recent Forecasts

  • Limited Impact to Honda Stock from Shifts in Japan Vehicle Sales on April 29, 2011

Since Honda vehicles sold in Japan represent less than 3% of Honda's stock value by our estimates, the member estimates imply only a small upside to our stock price estimate …

  • Ralph Lauren Shifting to Customers Channel from Specialty Stores on April 29, 2011

With aggressive expansion plans in international markets, we believe the firm will be spending more and more of its resources on the direct channel in the future …

  • EMC & VMware Show Strong Q1 Results on April 28, 2011

VMware reported license revenues of $419 million for the first quarter of 2011, an increase of 34% year on year (YoY). The company saw growth across all geographies - a good sign …

  • Pepsi Reports Solid Growth but Flags Inflation Concerns on April 28, 2011

The company reported 5% increase in net revenues year over year and reiterated its earnings growth target to 7%-8% for 2011 owing to rising commodity costs and slower-than-expected economic recovery …

  • Mobile Processors Lift AMD's Outlook on April 27, 2011

With the high-end tablet market being dominated by Intel, AMD hopes to leverage the tablet and netbook market with its lower power consuming processors …

  • Stiff Competition Will Keep Pressure on iPhone Pricing on April 27, 2011

The average price of an iPhone has declined from an estimated $868 in 2007 to $610 in 2010, an attempt by Apple to keep itself competitive in the smartphone race and maintain its market share …

  • Outlook for Suntech's PV Systems Revenues on April 26, 2011

With geographically diversified operations and a good number of contract wins, we expect Suntech's PV systems revenues will continue to rise steeply in the coming years …

The firm's Asia-Pacific iron-ore revenues have increased from $42 per ton in 2005 to $121 in 2010 aided by rising Chinese demand for iron-ore and overall global demand for steel …

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.

Latest Markets Videos

    Trefis

    Trefis is an interactive financial community structured around trends, forecasts and insights related to some of the most popular stocks in the US. Whereas most finance sites simply give you the facts about where a stock has been and what a company has done in the past, Trefis focuses entirely on the future.

    Learn More