Nasdaq Stocks

Fintel reports that on May 13, 2024, Redburn Atlantic upgraded their outlook for MSCI (NYSE:MSCI) from Sell to Neutral.

Fintel reports that on May 13, 2024, TD Cowen initiated coverage of Biodesix (NasdaqGM:BDSX) with a Buy recommendation.

Disney stock ( NYSE:DIS ) appears to have weak prospects following a rather soft Q2 earnings report. While the entertainment giant did demonstrate some positive progress in its strategic evolution during the quarter, with retained momentum in its parks and profitability improvements across the board, challenges persist. Notably, its legacy TV channels are struggling, and its Direct-to-Consumer division faces stiff competition, hindering its potential. Thus, my stance on the stock remains neutral. Entertainment Segment: Legacy TV on Decline, DTC Faces Stiff Competition Disney’s Entertainment segment, which makes up about 44% of the company’s revenue mix, had an underwhelming period in Q2. Segment revenues declined by 5% to $9.8 billion for the quarter, as declines in its Linear Networks division and content sales/licensing couldn’t be offset by some growth driven in the DTC business. See below. Source: Q1 Earnings Report, Author More specifically, Linear Networks posted revenues of $2.77 billion, down 8% from last year, due to both domestic and international challenges. On the domestic front, Linear Networks faced hardships due to declining subscribers, which, in turn, was due to the non-renewal of carriage of certain networks. A drop in ad revenue following lower impressions due to softer average viewership also negatively impacted this segment. Clearly, Disney Channel, National Geographic, and ESPN, among other channels, keep losing appeal. The bullish perspective might argue that Disney effectively addresses the inevitable decline of traditional television by strengthening its DTC arm within the Entertainment segment through the expansion of Disney+. Nevertheless, it’s essential to highlight two key considerations in this context. The first consideration here is that even though DTC revenues grew by 14% in Q2, this was mainly due to higher pricing, as Disney+ actually lost subscribers compared to last year. Worldwide subscribers fell to 153.6 million, down from 157.8 million last year. Disney is clearly struggling against stiff competition in this field. Evidently, Netflix ( NASDAQ:NFLX ) revved its subscriber growth to 16% year-over-year during the same period, to 269.6 million members. This is despite having already captured a much larger chunk of the market. The second consideration is that DTC revenue falls significantly short of the profitability seen in Linear Networks. Consequently, while Disney may manage to substitute Linear Networks’ revenue with DTC earnings, replicating the same profit margins would prove challenging. Although the DTC sector has shown improvement, transitioning from a $587 million operating loss to a $47 million operating profit in Q2 of this year, it’s evident that the business is still hovering around the breakeven point. Parks Take on the Heavy Lifting, Driving Up Profitability Shifting gears to the brighter side of Disney’s Q2, we see its remarkable performance in the Parks & Experiences division. Revenues from Parks & Experiences grew by 10% year-over-year to $8.4 billion, as you can see below. This was due to better Walt Disney World Resort and Disney Cruise Line results. In turn, these businesses benefited from higher guest spending due to higher average ticket prices. The fact that Disney keeps increasing its ticket prices while still attracting massive crowds is absolutely phenomenal. Source: Q1 Earnings Report, Author Therefore, Disney was able to achieve a higher operating income from parks, which increased by 12% to $2.29 billion. Combined with DTC cutting down its operating losses, as I mentioned previously, and overall efforts to improve profitability, you can see how Disney’s total operating income grew by 17% to $3.85 billion. Unconvincing Bull Case Not Inspiring Confidence at Current Valuation Despite seeing some improvements in Disney’s bottom line in its Q2 report, the overall investment case fails to inspire confidence given its current valuation. The outlook for the Entertainment segment appears grim as traditional channels lose traction and Disney’s DTC fails to rise above the competition. Further, the stagnant state of the Sports segment merits little attention. Lastly, the Experiences segment appears solid. Yet, a question remains: how long can Disney keep raising prices before facing demand constraints? Given this picture, I don’t see the stock having further upside from its current levels. At about 22.3 times this year’s expected adjusted EPS, I would argue Disney is fairly valued at best, if not modestly overvalued. Given that interest rates remain high and Disney fails to produce a decent earnings yield and/or dividend yield, this risk is worth considering. Is DIS Stock a Buy, According to Wall Street? Peeking at Wall Street’s outlook on the stock, Walt Disney features a Strong Buy consensus rating based on 22 Buys and two Holds assigned in the past three months. Despite my more cautious view, at $133.55, the average  Disney stock price projection implies 26.2% upside potential. The Takeaway In my view, Disney’s Q2 results were a mixed bag. While the Experiences segment shined through strong performance in Parks, the Entertainment segment faces worrisome challenges, particularly when it comes to the decline of legacy TV and stiff competition in the DTC space. Considering these factors alongside Disney’s current valuation, my outlook on the stock remains neutral, as uncertainties linger over its future. Disclosure

Fintel reports that on May 13, 2024, HSBC initiated coverage of Southwest Airlines (NYSE:LUV) with a Hold recommendation.

Airline stocks, including Southwest Airlines ( NYSE:LUV ), have trailed the broader markets since the onset of the COVID-19 pandemic. Today, Southwest Airlines stock trades 58% below all-time highs, valuing the company at a market cap of $16 billion. However, I don’t believe Southwest Airlines stock is a good buy at its current valuation. I am bearish on Southwest Airlines due to its exposure to Boeing ( NYSE:BA ), narrowing earnings, and high balance sheet debt. In early 2020, governments all around the world were forced to shut their borders to limit the spread of the dreaded virus. To remain operational, airline companies increased balance sheet debt while revenue and cash flows fell significantly. While global travel resumed by late 2021, central banks hiked interest rates to offset inflation, both of which touched multi-year highs in 2022. The triple whammy of high debt, interest rates, and inflation has impacted the profitability of Southwest Airlines and its peers, even though travel demand staged a remarkable comeback in a post-pandemic world. An Overview of Southwest Airlines Southwest Airlines is among the largest airline companies in the world. It operates and manages a fleet of passenger aircraft. Moreover, it offers ancillary services such as early bird check-in, upgraded boarding, and transportation of pets and unaccompanied minors. The ongoing pullback has meant that LUV stock has returned just 19% to shareholders in the past decade (see below), trailing the S&P 500 Index ( SPX ), which has more than tripled investor returns after adjusting for dividends. Southwest Airlines Has Massive Exposure to Boeing Southwest operates an all-Boeing fleet and relies heavily on the aircraft manufacturers’ line of 737 planes. However, the 737 aircraft have wrestled with a range of issues in the last five years. For instance, several countries grounded 737 Max 8 jets in 2019 and 2020 after two fatal crashes were reported in a span of six months, raising concerns over the safety of these jets. Earlier this year, Boeing came under fire again after an Alaska Airlines flight (a Boeing 737 Max 9) landed 10 minutes after takeoff because a window panel blew out. In fact, over a dozen equipment problems involving Boeing have been reported since 2012 as it continues to lose market share to Airbus. Now, Boeing is wrestling with production delays and pressure from regulators, which is hurting companies such as Southwest Airlines. Southwest Misses Estimates in Q1 of 2024 Last month, Southwest Airlines announced its Q1 results for 2024, reporting a wider-than-expected loss, and warned that airplane delays from Boeing would hamper near-term growth. Southwest Airlines reported revenue of $6.33 billion and a loss of $0.36 per share. Comparatively, analysts forecast Q1 revenue at $6.42 billion and a loss of $0.34 per share. The airline expects to grow its capacity by 4% in 2024, lower than its previous guidance of 6%. It also estimates revenue to decline by 3.5% year-over-year in Q2 of 2024. Southwest Airlines emphasized that it now expects to receive 20 737 Max 8 planes from Boeing, much lower than its previous forecast of 46 planes. So, Southwest will have to delay retiring older jets as it also looks to reduce costs amid a challenging operating environment. Additionally, Southwest Airlines announced it would shut down operations at airports such as Houston’s George Bush International and New York’s Syracuse. The airline carrier is also scaling back operations in Atlanta and Chicago. In its earnings release, Southwest CEO Bob Jordan explained, “The recent news from Boeing regarding further aircraft delivery delays presents significant challenges for both 2024 and 2025. We are reacting and replanning quickly to mitigate the operational and financial impacts while maintaining dependable flight schedules for our customers.” Southwest Airlines stated that it has re-planned its capacity for the next two years due to Boeing’s delivery delays. However, it warned investors and explained that there is no assurance that Boeing will meet its most recent delivery schedule. Southwest Stock Has High Debt Southwest Airlines ended Q1 with $8 billion in total outstanding debt and $11.5 billion in liquidity. Southwest must generate enough cash flow to service its debt and make regular interest payments. However, the company reported a free cash outflow of almost $700 million in Q1, making investors nervous. A negative free cash flow figure limits Southwest Airlines’ ability to reinvest in growth or lower balance sheet debt. If Southwest Airlines continues to report negative free cash flow, it would reduce total liquidity levels and drive its valuation lower. What Is the Target Price for LUV Stock? Out of the 14 analyst ratings given to LUV stock, five are Buys, nine are Holds, and one is a Sell, indicating a Moderate Buy consensus rating. The average LUV stock price target is $30.59, indicating upside potential of 9.3% from current levels. Nonetheless, LUV stock is forecast to end 2024 with adjusted earnings of $1.16 per share, indicating a forward earnings multiple of 23.7x, higher than the sector median of 19x. The Takeaway Prior to the pandemic, Southwest was one of the best growth stocks in the airline sector. While it remains a well-run business, its exposure to Boeing and other macro headwinds makes it a high-risk investment right now. Investors looking to gain exposure might want to consider other companies instead of buying LUV stock on the dip. Disclosure

Discover why Eli Lilly is considered a 'strong buy' as it capitalizes on the growing demand for diabetes and obesity treatments, backed by its robust financial performance and promising future prospects.

Fintel reports that on May 13, 2024, Piper Sandler initiated coverage of Mastercard (NYSE:MA) with a Overweight recommendation.

Lean hogs were down 5 cents to $1.40 across most contracts. USDA’s National Average Base Hog negotiated price was up $1.37 on Monday afternoon at $89.78. The CME Lean Hog Index was up just 4 cents on May 9 at $91.32. USDA’s National Pork Carcass Cutout Value was up another...

The wheat complex shot out of a rocket at the day session open. Chicago contracts were 19 ½ to 26 cents across most nearby contracts. Kansas City futures were 24 to 26 ¾ cents higher on Monday. MPLS spring wheat futures were 13 ¾ to 21 ½ cents in the...

The cotton market posted Monday gains of 8 to 50 points. The outside market factors were helpful, with gains of 94 cents in oil and the dollar index down 7 points. Crop Progress data from Monday afternoon indicated that 33% of the US cotton crop was planted as of Sunday...

Live cattle closed the Monday session with contracts mostly 5 to 72 cents lower, as a couple spring 2025 contracts were slightly higher. Cash was mixed around last week, with the South seeing action anywhere from $183-185, and the North at $186-187. Feeders were higher on the day, as contracts...

Soybean futures closed the Monday session with contracts bear spreading, as the front months were just fractionally higher. Other contracts were up 3 to 8 ¼ cents. Soymeal futures pupped back to start the fresh week, as contracts were down $1.50 to $5.40/ton. Soy Oil was up 71 to 87...

Corn futures closed out the Monday session with contracts mixed. Front months were up fractionally to 2 ¾ cents on the day, with deferred contracts fractionally to 2 ¼ cents lower. Monday afternoon’s Crop Progress report indicated 49% of the US corn crop was planted as of May 12, a...

Monday, May 13th, 2024The Dow finally broke its 8-day winning streak today. In truth, this run didn’t seem so much like a breakaway to a higher orbit and more of a re-establishing levels given up during a dip mid-April. The blue-c

Dorian LPG (LPG) ended the recent trading session at $43.29, demonstrating a +0.28% swing from the preceding day's closing price. This change outpaced the S&P 500's 0.02% loss on the day. On the other hand, the Dow registered

Deckers (DECK) closed the latest trading day at $850.67, indicating a -1.31% change from the previous session's end. The stock's change was less than the S&P 500's daily loss of 0.02%. On the other hand, the Dow registered a l

The S&P 500 Index ($SPX ) (SPY ) Monday closed down -0.02%, the Dow Jones Industrials Index ($DOWI ) (DIA ) closed down -0.21%, and the Nasdaq 100 Index ($IUXX ) (QQQ ) closed up +0.21%. US stocks on Monday settled mixed. Higher inflation expectations weighed on stocks Monday after...

StoneCo Ltd. (STNE) came out with quarterly earnings of $0.29 per share, beating the Zacks Consensus Estimate of $0.28 per share. This compares to earnings of $0.14 per share a year ago. These figures are adjusted for non-recurrin

Orchestra BioMed Holdings, Inc. (OBIO) came out with a quarterly loss of $0.38 per share versus the Zacks Consensus Estimate of a loss of $0.40. This compares to loss of $0.40 per share a year ago. These figures are adjusted for n

Lowe's (LOW) closed at $232.98 in the latest trading session, marking a -0.87% move from the prior day. The stock's change was less than the S&P 500's daily loss of 0.02%. Elsewhere, the Dow saw a downswing of 0.21%, while the