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General Motors (GM) announced that it has collaborated with Goldman Sachs and Mastercard to roll out a co-branded reward-based credit card.

The automaker said Goldman Sachs will be the issuing bank for the credit card, which is planned to be launched in September. Meanwhile, Mastercard (MA) will remain the network provider of the cards.

Chuck Thomson, GM's general manager of retail sales and marketing support said, “We chose to partner with Goldman Sachs (GS) because of their proven ability to innovate.”

Last week, GM announced that it will roll out EV delivery vehicles under its new business unit named BrightDrop. Its first product, an electric pallet called EP1, will hit the Street in early 2021. (See GM stock analysis on TipRanks)

Following the announcement, Argus analyst Bill Selesky upgraded GM stock to Buy from Hold with a target price of $56 (12.1% upside potential). Selesky expects GM to benefit from its expansion into the electric and autonomous vehicle market.

Overall, the consensus among analysts is a Strong Buy based on 13 Buys and 1 Hold. The average analyst price target of $53.50 implies upside potential of about 7.1% to current levels. GM stock has gained about 44% in one year.

From TipRanks’ Smart Score system, the stock scores a “Perfect 10”, indicating that the stock has a strong chance of beating market expectations.

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FedEx will levy a new surcharge on shipments for residential delivery by its large customers. Shares of the delivery giant closed 1.5% lower last Friday.

FedEx (FDX) said that starting Feb. 15, it will be adding a $0.30 fee per package for shippers whose weekly average volume crosses over 30,000 packages between Jan. 4 and Jan. 31. The move could help FedEx offset rising operating costs amid a surge in volumes due to the coronavirus pandemic.

FedEx said that the fees will be levied on FedEx Ground and FedEx Express domestic residential packages. It will not apply on FedEx One Rate and FedEx SmartPost packages. (See FDX stock analysis on TipRanks).

On Dec. 30, 2020, Argus Research analyst John Eade raised the stock’s price target to $305 (20.8% upside potential) from $270 and reiterated a Buy rating. In a note to investors, Eade said that the company’s balance sheet is healthy and looks good on technical basis. The analyst also believes that the Covid-19 impact on FedEx’s Express and Freight businesses has reversed and it is benefiting from continued growth in e-commerce market.

From the rest of the Street, the stock scores a cautiously optimistic outlook, with the analyst consensus of a Moderate Buy based on 15 Buys, 4 Holds and 1 Sell. The average analyst price target of $332.71 implies upside potential of about 31.7% to current levels. Shares have gained 58.7% over the past year.

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Capital One Fined $390M For Violating Bank Secrecy Act

Software company Citrix Systems is in advanced talks to buy California-based collaborative work management platform provider Wrike from Vista Equity Partners for over $2 billion, Bloomberg has learnt.

According to the report, Citrix (CTXS) could announce a deal with Vista as early as this week, which would be the company’s largest acquisition to date. Furthermore, if the deal goes through, it would help Citrix to expand its collaboration software business.

Meanwhile, the deal price suggests that Vista is likely to gain significantly on its investment. Notably, Vista had acquired a majority stake in Wrike in 2018. (See CTXS stock analysis on TipRanks)

On Jan. 15, Citigroup analyst Walter Pritchard maintained a Buy rating and a price target of $205 (55.3% upside potential) on CTXS, as he expects the company to deliver strong 4Q results. However, he remains concerned about the company's 1Q guidance. Citrix is set to report its 4Q results on Jan. 21. In a note to investors, the analyst said that he expects “positive FY21 CTXS-specific dynamics.”

From the rest of the Street, the stock scores a cautiously optimistic outlook with the analyst consensus of a Moderate Buy based on 4 Buys and 3 Holds. The average analyst price target of $169 implies upside potential of about 28% to current levels. Shares have gained 16.1% in one year.

Meanwhile, the TipRanks’ stock investor sentiment tool shows that investors currently have a Negative stance on CTXS.

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SkyWest Airlines will receive $233 million from the U.S. Treasury Department to help it pay for the wages and other benefits of thousands of SkyWest Airlines employees.

SkyWest Airlines, a subsidiary of SkyWest, Inc. (SKYW), has already received half of the funds and will receive the second half next month.

$40 million will be in the form of a ten-year, low interest unsecured bond, and SkyWest will issue warrants to the U.S. Treasury Department to buy approximately 98,815 SkyWest shares at a strike price of $40.41.

Certain conditional restrictions have been placed on SkyWest, including limitations on involuntary terminations, restrictions on the payment of dividends and the repurchase of shares, as well as certain limitations on executive compensation. (See SKYW stock analysis on TipRanks)

Deutsche Bank analyst Michael Linenberg downgraded SkyWest from Buy to Hold last month but raised his price target from $39 to $45. This implies upside potential of around 8% from current levels.

Linenberg is positive about the long-term prospects of the airlines sector, despite airline stocks being around fair value valuations for 2022. Investor sentiment has been given a boost recently with positive developments around COVID-19 vaccines.

Consensus among analysts is a Moderate Buy based on 2 Buys and 1 Hold. The average price target of $51.33 suggests upside potential of around 23% over the next 12 months.

SKYW scores a 7 out of 10 on Tipranks’ Smart Score rating, indicating that it is likely to perform relatively in line with market averages.

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Capital One has received a $390 million penalty from the Financial Crimes Enforcement Network (FinCEN) for engaging in both “willful and negligent violations of the Bank Secrecy Act (BSA) and its implementing regulations.”

Capital One (COF) admitted that it had deliberately failed to implement and maintain an effective Anti-Money Laundering program, with it also not reporting thousands of suspicious currency transactions.

The violations are believed to have occurred from at least 2008 through 2014, and relate to Capital One’s Check Cashing Group.

Capital One also acknowledged that it failed to report suspicious transactions by convicted money launderer, Domenick Pucillo, an associate of the Genovese organized crime family.

Despite being informed about Pucillo’s association with criminal activity in 2013, Capital One continued to process over 20,000 transactions valued at approximately $160 million.

FinCEN’s Director, Kenneth Blanco, called the violations “egregious,” adding that Capital One’s behavior “puts our nation and our people at risk” by depriving law enforcement of this information. (See COF stock analysis on TipRanks)

RBC Capital analyst Jon Arfstrom reiterated his Hold rating on COF three days ago and set a price target of $120. (7% upside potential).

Capital One will report earnings on January 26 and Arfstrom expects first quarter earnings per share (EPS) to come in at around $5.07.

Consensus among analysts is a Strong Buy based on 12 Buys and 2 Holds. The average price target of $115.31 suggests that COF shares are almost fully priced, with minimal upside potential of around 2% over the next 12 months.

COF scores a 9 out of 10 on Tipranks’ Smart Score rating, indicating that it has a strong chance of beating market expectations.

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BlackBerry Limited (BB) is somewhat of an enigma in the investment world, full of great promise but at the same time, it has let shareholders down time and again. The company is armed with a huge patent portfolio, and offers several cutting-edge products in cybersecurity, Internet-of-Things (IoT), and automotive technology.

What’s more, shares have surged 32% in the last two sessions after BlackBerry announced that it has sold 90 smartphone technology patents to Huawei, as part of its shift away from the mobile phone space.

But while BlackBerry gushes with potential, it also disappoints quarter after quarter. In the most recent quarter, BlackBerry missed on revenue and GAAP EPS. Most concerning were the drop in revenue, down 20% year-over-year, and the sizeable increase in GAAP operating loss of $127 million, up from the $29 million loss one year ago.

To be fair, some of the performance issues were pandemic-related, particularly with regards to the auto sector where plant shutdowns have translated to fewer automobile deliveries, and hence, lower QNX licensing fees. However, the company’s revenue has been shrinking for several years before the pandemic. The five-year growth rate for example is -20.8%.

Company Transformation

The story is not all bad. Glimmers of hope are emerging in what may yet shape up to be a multi-year turnaround story that started in 2013, the year that John Chen took the reigns of BlackBerry as CEO. At that time, BlackBerry was a $6 billion Titanic, immersed in red ink after hitting an iceberg called the Apple iPhone. After taking charge, John Chen proceeded to monetize the company’s patent portfolio, and transform the mobile phone manufacturer into a much more modest $1 billion software company.

The transformation has taken place over several years, with half a dozen acquisitions along the way, including Cylance, Good, and AtHoc. These companies have been assimilated and worked into BlackBerry's product streams, but also have resulted in a significant write down of goodwill, including $500 million earlier in 2020.

BlackBerry has at least stabilized its financial situation, and now has positive free cash flow and adjusted EBITDA. That said, the turmoil surrounding the company has affected its stock price and resulted in an attractive valuation. BlackBerry also boasts some promising technologies that could lead to strong revenue growth down the road.

This may be a great time to invest in BlackBerry.

Valuation Metrics

BlackBerry’s low valuation should come as no surprise given its past troubles. The company has superior metrics versus the software industry on a number of fronts, summarized in the table below.

Metrics such as price/sales and price/book ratio suggest that BlackBerry is quite undervalued, with a strong likelihood that the stock will outperform once the company’s future potential is recognized by the market. It is not at all unreasonable to expect a 2x - 3x stock price increase from its current level.

BlackBerry IVY

BlackBerry’s recent announcement regarding its strategic alliance with Amazon Web Services (AWS) may be enough to kick-start the company’s stock price. The exclusive partnership provides instant credibility along with a ‘Big Data’ mindset to vehicle data, resulting in unlimited potential for third-party applications in areas such as car insurance, maintenance, EV charging, and connected vehicles.

The AWS platform gives BlackBerry IVY cloud-connectivity, scalability, and a global reach. This initiative will provide BlackBerry with a new source of recurring revenue in the automotive market, where it already has software installed in over 175 million cars.

Spark Suite

Apart from BlackBerry IVY, there are several other promising technologies emerging from BlackBerry, including Spark Suite, which combines Endpoint Management with Endpoint Security, a logical step in the evolution of mobile devices. Spark Suite provides Zero Trust, an emerging concept in cybersecurity that is becoming a necessity for enterprises as mobile devices such as wearables become the norm within the workplace.

In addition to IVY and Spark Suite, BlackBerry has several other more mature product offerings including QNX, BlackBerry AtHoc, and BlackBerry SecuSUITE. While not as exciting as BlackBerry's recent initiatives, they provide a steady and increasing revenue stream.

Wall Street’s Take

From Wall Street analysts, BlackBerry earns a Hold analyst consensus based on 3 Hold ratings. Additionally, the average price target of $8 puts the downside potential at 18.7%. (See BlackBerry stock analysis on TipRanks)

Summary and Conclusions

BlackBerry has had a turbulent past, downsizing from a $6 billion hardware company into a $1 billion software company over the last seven years. Revenue was down 20% year-over-year in the latest quarter, but much of the poor performance can be attributed to the soft auto sector resulting from the pandemic. QNX licensing fees and royalties will pick up as the global economy improves.

Despite several years of disappointing results, the company has stabilized its financial situation and appears to be positioned to capitalize on several leading-edge technology ventures, including its exclusive partnership with AWS and enterprise mobility management and security. Given the very low valuation, this could be an ideal time to invest in BlackBerry.

Disclaimer: The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities.

General Motors announced on Friday that it has reached an agreement with labor union Unifor and will invest almost $800 million to transform its CAMI manufacturing plant in Ontario into Canada’s first large-scale electric vehicles manufacturing plant.

Last week, General Motors (GM) launched its BrightDrop business, which will offer customers an ecosystem of connected and electrified products and services designed to improve the delivery of goods and services.

BrightDrop will develop the EV600, an electric light commercial vehicle, which GM hopes will be ready for delivery by late 2021.

The CAMI investment is the latest in a long line of recent ventures by GM into Canada. The CAMI plant will shift over the next two years from current production of the Chevrolet Equinox to BrightDrop EV600 production. (See GM stock analysis on TipRanks)

Argus Research analyst Bill Selesky upgraded his rating on GM from Hold to Buy three days ago and set a price target of $56. This implies upside potential of around 12% from current levels.

Selesky said that GM continues to expand into electric and autonomous vehicles and it benefits from “high margins” in North America as well as “solid cash flow and a strong balance sheet.”

Consensus among analysts is a Strong Buy based on 13 Buys and 1 Hold. The average price target of $53.50 suggests upside potential of around 7% over the next 12 months.

GM scores a perfect 10 from Tipranks’ Smart Score tool, indicating that it has a strong chance of beating market expectations.

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PNC Financial Services Group reported better-than-expected 4Q results on Friday, driven by higher deposits and loans. However, lower revenues and a decline in net interest margin led to a 3.5% drop in its stock.

PNC Financial’s (PNC) 4Q earnings of $3.26 per share grew 34.2% year-over-year and came in ahead of analysts’ estimates of $2.54. Its 4Q revenue of $4.21 billion declined 2.6% from the year-ago period but exceeded the Street's $4.13 billion call.

Average deposits grew 25% year-over-year, and the net interest margin stood at 2.32% as of Dec. 31, 2020, versus 2.78% as of Dec. 31, 2019. The decrease reflects lower loan yields. Provision recapture was $254 million in the fourth quarter of 2020, compared to a provision for credit losses of $221 million in the year-ago quarter. (See PNC stock analysis on TipRanks)

Meanwhile, on Nov. 16, PNC agreed to acquire BBVA USA Bancshares, Inc. from Spanish financial group BBVA S.A. for about $11.6 billion in cash. PNC Financial has sold its equity stake in BlackRock to finance the transaction. The deal, which is expected to close in mid-2021, will increase PNC's total assets by about $102 billion, making it the fifth-largest bank by assets. It will also expand the bank’s presence in 29 of the 30 largest US markets.

Following the 4Q results, Raymond James analyst Michael Rose maintained a Hold rating on the stock. In a note to investors, the analyst said, “Looking ahead, its outlook calls for flat revenue (+fee revenues, -NII) and noninterest expenses in 2021 on a standalone basis inclusive of $300 million of savings from its continuous improvement program (CIP). However, the potential for deposit growth and further steepening of the yield curve could drive PTPPI [pre-tax, pre-provision income] growth/positive operating leverage.”

From the rest of the Street, the stock scores a cautiously optimistic outlook, with the analyst consensus of a Moderate Buy based on 4 Buys and 11 Holds. The average analyst price target of $154.46 implies that shares are fully priced at current levels. Shares have gained 1.6% in the last year.

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Shares of Wells Fargo fell 7.8% on Friday after the banking giant reported revenues of $17.93 billion that fell short of analysts’ expectations of $18.13 billion. Moreover, the figure compared unfavorably to the year-ago period's revenues of $19.86 billion.

Wells Fargo's (WFC) lower revenues reflect declines across all of its business segments.

Meanwhile, the company’s earnings per share of $0.64 topped the Street's estimate of $0.60. The bottom-line result also marked a 6.7% improvement from the year-ago quarter’s earnings of $0.60 per share, reflecting lower noninterest expenses. (See WFC stock analysis on TipRanks).

In response, Oppenheimer analyst Chris Kotowski reiterated a Hold rating on the stock. Kotowski wrote, “We think it was a solid quarter, in particular the "core" expense control showed signs of discipline. Asset quality trends were also stable. While NPAs (Non-Performing Assets) ticked up slightly from 0.89% in 3Q20 to 1.00%, NCOs (Net Charge Offs) trended down from 0.29% to 0.26% QoQ—a solid outcome in this environment.”

Overall, the consensus among analysts is a Moderate Buy based on 9 Buys and 6 Holds. The average analyst price target of $34.17 implies upside potential of about 6.7% to current levels. Shares have plunged 33.7% in one year.

However, TipRanks’ Hedge Fund Trading Activity tool shows that confidence in WFC is currently Very Negative as 34 hedge funds decreased their cumulative holdings in WFC by 40.8 million shares in the last quarter.

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JPMorgan Chase reported stronger-than-expected 4Q results on Friday, reflecting strong growth in its deposit base, improvement in loans, and higher investment banking fees.

JPMorgan’s (JPM) 4Q net revenues increased 3.2% to $29.2 billion year-on-year and topped Street estimates of $28.65 billion. Further, its adjusted earnings of $3.07 per share came in ahead of the consensus forecast of $2.62.

The bank's average loans were up 1%, while its deposits surged 35% during the quarter. Moreover, revenues from the Corporate & Investment Bank segment grew 17% year-on-year, reflecting 37% growth in investment banking revenues and an 18% increase in Markets & Securities Services sales. (See JPM stock analysis on TipRanks).

Following the earnings release, RBC Capital analyst Gerard Cassidy raised the stock’s price target to $150 (8.2% upside potential) from $130 and reiterated a Buy rating.

In a note to investors, Cassidy said that JPMorgan’s impressive performance was "led by better-than-anticipated revenues and a significant loan loss provision benefit (negative loan loss provision)." He added, "Assuming the economy continues to expand throughout 2021, JPM should steadily rebuild its earnings power along with the strengthening in the economy."

Overall, the rest of the Street is cautiously optimistic on the stock, with the Moderate Buy analyst consensus based on 10 Buys, 4 Holds, and 2 Sells. The average analyst price target of $145.86 implies upside potential of about 5.2% to current levels. Shares have gained about 1.4% over the past year.

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