Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our  website policy prior to making financial decisions.

In a volatile trading session, three major stocks are capturing investors’ attention with significant price movements and key announcements. Walgreens Boots Alliance (NASDAQ: WBA) faced a steep decline following its earnings report, while Micron Technology (NASDAQ: MU) saw a pullback despite beating expectations. Meanwhile, Palo Alto Networks (NASDAQ: PANW) gained on positive analyst sentiment. Here’s a closer look at these stocks making waves in today’s market.

Walgreens Boots Alliance (WBA) Stock Plunges on Third-Quarter Earnings Report

Shares of Walgreens Boots Alliance plummeted 24.77% to $11.78 as of 11:30 AM EDT, following the release of its fiscal third-quarter earnings report. Despite beating revenue expectations with $36.4 billion against an anticipated $35.94 billion, the company’s adjusted earnings per share of $0.63 fell short of the expected $0.68. The pharmaceutical retailer slashed its full-year adjusted profit outlook to $2.80-$2.95 per share from the previous $3.20-$3.35, citing a “challenging” environment for pharmacies and U.S. consumers.

Walgreens announced plans to close underperforming U.S. stores over multiple years as part of a cost-cutting strategy. Despite challenges in its retail segment, which saw a 4% decline in sales, the company’s U.S. healthcare segment grew 7.6% year-over-year to $2.13 billion. The stock’s year-to-date return stands at -53.64%, significantly underperforming the S&P 500‘s 14.69% gain.

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Micron Technology (MU) Dips Despite Better than Expected Results, Fails to Impress AI-Driven Expectations

Micron Technology shares dropped 6.76% to $132.73 by late morning trading, despite reporting better-than-expected quarterly results. The memory chip manufacturer posted earnings per share of $0.62, surpassing the projected $0.51, and revenue of $6.81 billion, exceeding the estimated $6.67 billion. However, forward guidance that merely met analyst expectations appeared to disappoint investors, especially considering the stock’s strong performance leading up to earnings, having rallied over 65% year-to-date.

With a market capitalization of $157.70 billion, Micron remains a key player in the AI-driven semiconductor rally. However, some analysts suggest the stock may be overvalued in the short term, with an estimated fair value of $97.84, significantly below its current trading price. Despite the pullback, the average analyst price target stands at $153.08, indicating potential upside.

Palo Alto Networks (PANW) Stock Gains on Analyst Optimism

Bucking the downward trend, Palo Alto Networks saw its stock rise 5.28% to $342.42 by late morning. The cybersecurity firm continues to benefit from bullish analyst sentiment, with both Robert W. Baird and Cantor Fitzgerald analysts maintaining Buy ratings. Analysts cite steady demand, improved visibility for the year’s second half, and successful platformization strategies, particularly in Secure Access Service Edge (SASE) and Extended Security Information and Event Management (XSIEM).

Palo Alto Networks boasts impressive growth metrics, with a year-to-date return of 16.12% and a one-year return of 40.45%, outpacing the broader market. The company’s focus on high-quality, sustainable customer relationships and positive response to new AI features have contributed to its strong performance in the rapidly growing cybersecurity sector.

Disclaimer: The author does not hold or have a position in any securities discussed in the article.

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Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our  website policy prior to making financial decisions.

Acuity Brands, Inc. (NYSE: AYI), a market-leading industrial technology company, reported its third-quarter fiscal 2024 results, revealing a mixed performance. The company announced net sales of $968.1 million for the quarter ended May 31, 2024. This figure represents a 3% decline compared to the same period last year, indicating a slight contraction in their top-line revenue. Despite the dip in sales, Acuity Brands managed to grow its operating profit to $145 million, marking a 1% increase over the prior year. When adjusted, the operating profit rose to $167 million, up by 3% year-over-year.

Further highlighting the company’s efficiency, Acuity Brands reported a diluted EPS of $3.62, which is a 10% increase from the previous year’s third quarter. On an adjusted basis, the diluted EPS was $4.15, reflecting an 11% growth over the prior year. Acuity Brands also generated $445 million in year-to-date cash flow from operations, showcasing strong operational cash flow management.

Acuity Brands Beats EPS Expectations in Fiscal Q3, Misses on Revenue

When comparing the company’s performance to market expectations, Acuity Brands’ results present a nuanced picture. The consensus among analysts was an expected EPS of $4.13 and revenue of $1.01 billion for the quarter. Acuity Brands surpassed the EPS expectation, delivering an adjusted EPS of $4.15, which is slightly above the anticipated figure. This overachievement in EPS highlights the company’s effective cost management and operational efficiencies.

However, the company fell short on the revenue front, reporting $968.1 million against the expected $1.01 billion. This shortfall in revenue, amounting to approximately $42 million, indicates that while the company managed to control costs and improve profitability, it faced challenges in driving sales growth. The 3% decline in net sales compared to the prior year suggests that market conditions or competitive pressures might have impacted their ability to meet the revenue expectations.

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Acuity Brands Cautiously Optimistic on Guidance

Looking forward, Acuity Brands has provided guidance that reflects cautious optimism. The company has not specified exact figures but has indicated a focus on maintaining profitability and operational efficiency. The strong year-to-date cash flow from operations of $445 million positions the company well to invest in strategic initiatives and navigate potential market uncertainties.

Acuity Brands’ management has emphasized their commitment to delivering shareholder value through disciplined execution and strategic investments. The growth in adjusted operating profit and EPS despite revenue challenges signals a robust underlying business model. Investors and stakeholders can expect the company to continue prioritizing profitable growth and cash flow generation as key pillars of their strategy moving forward.

Disclaimer: The author does not hold or have a position in any securities discussed in the article.

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Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our  website policy prior to making financial decisions.

The Simply Good Foods Company (NASDAQ: SMPL) recently announced its financial results for the third quarter of fiscal year 2024, showcasing a period of solid performance and strategic growth. Despite the exclusion of the newly acquired Only What You Need, Inc. (OWYN) from these results, the company demonstrated robust financial health. Net sales for the quarter reached $334.8 million, reflecting an increase from $324.8 million in the same period last year.

Net income for Simply Good Foods also saw a notable rise, climbing to $41.3 million from $35.4 million in the previous year’s third quarter. This increase in net income highlights the company’s operational efficiency and successful cost management strategies.

SMPL Slightly Misses Revenue Expectations in Fiscal Q3, Beats EPS

When comparing the company’s actual performance against market expectations, Simply Good Foods delivered mixed results. Analysts had anticipated an earnings per share (EPS) of $0.47, while the company’s actual EPS ($0.5) came in slightly above this forecast. The company’s revenue performance was nearly on target with expectations. The anticipated revenue was $336.75 million, and the actual revenue reported was $334.8 million, which is a marginal difference, indicating that the company is closely aligned with market predictions.

The close alignment of actual revenue with expectations suggests that the company’s sales strategies and market penetration efforts are effective. Investors and stakeholders might view this as a temporary variance, with the potential for future quarters to align more closely with or exceed expectations.

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Simply Good Foods Updates Guidance for Full Year 2024

Looking ahead, Simply Good Foods has updated its guidance for the full fiscal year 2024, reflecting confidence in its strategic direction and market positioning. The company anticipates continued growth in net sales and profitability, driven by its core business operations and the recent acquisition of OWYN. The integration of OWYN is expected to enhance the company’s product portfolio and open new market opportunities, contributing positively to future financial results.

Disclaimer: The author does not hold or have a position in any securities discussed in the article.

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McCormick & Company, Incorporated (NYSE: MKC), a global leader in flavor, reported its financial results for the second quarter ended May 31, 2024. The company experienced a slight decline in sales, down 1% from the same period last year. This decline was consistent in both reported and constant currency terms. The decrease in sales was primarily driven by a 1% volume decline in the Flavor Solutions segment, which more than offset the volume growth in the Consumer segment.

Operating income for the quarter was $234 million, up from $222 million in the previous year. Operating income was $236 million when adjusted for special charges, compared to $235 million last year. Earnings per share (EPS) notably increased, reaching $0.68 compared to $0.56 in the year-ago period. Adjusted EPS was $0.69, up from $0.60, reflecting a positive impact from discrete tax benefits and improved performance from joint ventures, particularly McCormick de Mexico.

McCormick & Company Surpasses EPS, Revenue Expectations in Fiscal Q2

Compared to market expectations, McCormick’s second quarter of 2024 performance exceeded analyst predictions. The expected EPS for the quarter was $0.59, but the company outperformed with an actual EPS of $0.68. This significant beat can be attributed to higher operating income and favorable tax benefits. The adjusted EPS of $0.69 surpassed the anticipated figure, underscoring the strength of McCormick’s operational efficiency and strategic investments.

Revenue expectations for the quarter were set at $1.63 billion, and McCormick reported actual revenue of $1.643 billion. Although the sales declined by 1% year-over-year, the company met the revenue expectations, indicating a resilient performance amidst challenging market conditions. The slight decline in sales was attributed to strategic divestitures and lower demand in certain segments, which were anticipated by the market.

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McCormick & Company Reaffirms Fiscal 2024 Outlook, Expects EPS in the Range of $2.76 to $2.81

McCormick reaffirmed its fiscal 2024 outlook, projecting a continued focus on strengthening volume trends and prioritizing investments to drive profitable growth. The company expects sales to range between a 2% decline and flat growth compared to 2023 or between a 1% decline and a 1% increase on a constant currency basis. This guidance reflects the anticipated impact of prior pricing actions and strategic decisions made in 2023, including discontinuing low-margin businesses and divestitures.

Operating income for 2024 is expected to grow by 8% to 10%, driven by gross margin expansion and significant investments in brand marketing. The company anticipates adjusted operating income to increase by 3% to 5%, or 4% to 6% on a constant currency basis. McCormick projects its 2024 EPS to be in the range of $2.76 to $2.81, with adjusted EPS expected to be between $2.80 and $2.85, representing an increase of 4% to 6%, or 5% to 7% on a constant currency basis.

Disclaimer: The author does not hold or have a position in any securities discussed in the article.

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After Rivian Automotive (NASDAQ: RIVN) announced a strategic partnership with Volkswagen Group worth up to $5 billion, RIVN stock rapidly rose to its February levels. Now at $15.67, RIVN shares nearly doubled its value from the 52-week bottom of $8.26 per share. 

Legacy German carmaker Volkswagen Group will join forces in developing new-gen software for its cars and lowering the cost of Rivian’s vehicles. Volkswagen has a proven track record in scaling global manufacturing, and the company will leverage Rivian’s innovative zonal architecture design.

Departing from the common domain architecture, which disperses electronic control units (ECU) according to function regardless of location, Rivian’s zonal architecture distributes ECUs by location. By relying on data bridges, this type of design significantly cuts costs on the vehicle’s weight and expensive wiring and processing.

In Rivian’s case, this means offsetting the costly battery package. And as all surveys show, EV affordability remains the primary hurdle for EV adoption. Does that mean that Rivian’s bottom line is now more attractive?

What to Expect From Rivian in the Coming Years

From the Volkswagen Group investment announcement, it is clear that the fruits of the equally controlled joint venture will materialize in the latter half of the decade, beyond 2025. Volkswagen will specifically transition to pure zonal architecture with its next-gen software-defined vehicles (SDVs), now boosted by Rivian’s expertise.

“Through our cooperation, we will bring the best solutions to our vehicles faster and at lower cost.”

Oliver Blume, Volkswagen Group CEO

In 2025, Rivian plans to roll out the improved versions of its flagship electric SUVs, Rivian R1S and R1T. Now competing with cheaper Kia EV9, R1S will remain a premium offering with dual, tri or quad motor all-wheel drive with up to 850 horsepower and numerous luxury features. The base R1S Dual Standard model is set with a $75,900 price tag up to $108,650 for Tri-Max.

R1T is the affordable option, also with improved performance and range, starting from $69,900 up to $103,400 for Tri-Max. However, Rivian’s five-seater R2, with a $45,000 price tag, will really push mass adoption.

Initially planned to launch from the $5 billion Georgia plant, the plan shifted to the existing facility in Normal, Illinois, for the first half of 2026. Purportedly, this will save over $2.25 billion in costs. 

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Rivian’s Market Segment Demand and Profitability

Like Elon Musk started Tesla with proof-of-concept luxury EVs to break the tradition of awkward-looking cars, Rivian rides the SUV train. Due to their inherent larger size and higher seating position for greater visibility, SUVs have become popular as they make crashes significantly more survivable. 

However, due to their size, SUVs are also fuel-guzzlers. Federal policies on fuel economy standards have inadvertently incentivized SUV manufacturing via the ‘light truck loophole.’ Rivian’s EV version cuts short that concern. 

SUVs’ market share in the passenger vehicle market has consistently grown. Together with pick-up trucks, they made 72.9% of total sales in Q1 2022, according to JATO Dynamics, making them a uniquely American phenomenon. Toyota RAV4 has been the dominant seller, with a starting price point of $33,770 at the time.

Between January and May, Toyota sold 206,559 units in the US. For comparison, Rivian plans to deliver 57,000 units for 2024, having delivered 13,588 SUVs in Q1. Interestingly, the fuel price spike hasn’t toned down the demand for SUVs, indicating a higher income bracket of customers.

According to a YouGov Survey, nearly half of Americans drive an SUV/truck, mainly among consumers “who are older, white, wealthy and who have children.” This bodes well for Rivian’s cheaper R2 lineup as a higher-tier equivalent to regular SUVs like Toyota RAV4. 

Up to this point, Rivian R1S has been the best-selling EV, above $70k in Q1, and has become especially popular in California. With a 5.1% market share in US EVs, the company plans to achieve the first positive gross profit in Q4 2024, per the Q1 shareholder letter. 

Is Tesla Rivian’s Competitor?

Having recalled all 3,878 Cybertrucks due to accelerator pedal issues, followed by recalls related to detachable bed trim while driving and defective windshield wipers, Tesla has fantastically sullied its reputation in the SUV segment.

At the same time, Rivian also had numerous recalls, including for the accelerator pedals. However, as Tesla holds the dominant EV position in the US, the company receives greater public scrutiny. In the branding department, Rivian caters to off-road, adventurous customers, while Tesla is oriented toward the urban tech-savvy crowd.

Rivian is likely to gain from the flops of Cybertruck, but it is also compatible with Tesla’s Supercharger network. Rivian will likely hold and expand its early mover advantage in the electric SUV segment. In the meantime, RIVN stock is heading for a price correction after the buy-in from the Volkswagen news event. 

The average RIVN price target is $14.25, according to Nasdaq’s forecasting data, with the ceiling at $21 and the bottom at $8 per share. For both Tesla and Rivian, the next two years in scaling operations will fortify or break their fundamentals.

Do you think EV resale value serves as another mass adoption hurdle? Let us know in the comments below.

Disclaimer: The author does not hold or have a position in any securities discussed in the article.

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Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our  website policy prior to making financial decisions.

In a volatile day of trading, three major players in the automotive and biotech sectors are making headlines. Tesla (NASDAQ: TSLA), Rivian (NASDAQ: RIVN), and Moderna (NYSE: MRNA) are each experiencing significant stock movements driven by analyst updates, strategic partnerships, and vaccine efficacy data. Here’s a closer look at the latest developments for these closely watched stocks.

Tesla (TSLA) Stock Gains as Stifel Nicolaus Initiates Coverage with “Buy” Rating, Price Target of $265

Tesla’s stock is rising, gaining 4.26% to reach $195.34 per share as of 11:58 AM EDT. The surge comes as Stifel Nicolaus initiated coverage on the electric vehicle maker with a “buy” rating and a price target of $265.00, well above the current trading price. This positive outlook contrasts with the overall analyst consensus, which maintains a “Hold” rating and a more conservative price target of $187.30.

Despite the day’s gains, Tesla’s year-to-date performance remains negative, down 21.46% and underperforming the S&P 500. The company recently reported quarterly earnings of $0.35 per share, meeting estimates, though revenue of $21.30 billion fell short of expectations. With a market capitalization of $622.404 billion and a P/E ratio of 47.94, Tesla remains dominant in the EV market despite increasing competition.

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Rivian (RIVN) Gets a $5 Billion Lifeline from Volkswagen, Stock Surges

Rivian’s stock is experiencing a dramatic surge, up 26.80% to $15.16 per share, following news of a potential $5 billion investment from Volkswagen. The proposed deal would involve forming an equally controlled joint venture to share EV architecture and software, potentially transforming Rivian’s market position and financial outlook.

Analysts are hailing the partnership as a “core game changer” for Rivian. The funding is expected to bolster the company’s cash reserves and support the development of new models, including the R2 SUVs and R3 crossovers. However, some analysts caution that the funding could dilute Rivian’s share price. The news has propelled Rivian’s market capitalization to $15.094 billion, though the company still reports negative earnings, with an EPS of -$5.77.

Moderna (MRNA) Stock Faces Downward Pressure After Release of Efficacy Data for Newly Approved RSV Vaccine

Moderna’s stock is facing downward pressure, declining 5.40% to $130.17 per share, following the release of efficacy data for its newly approved RSV vaccine, mRESVIA. The latest data shows 50% vaccine efficacy against two or more lower respiratory tract disease symptoms, which some analysts consider to be on the lower end of expectations.

The FDA approved the vaccine last month for adults 60 and older and is now under review by the CDC’s Advisory Committee on Immunization Practices (ACIP). The committee’s opinion will determine the vaccine’s market rollout. Moderna faces stiff competition from GSK and Pfizer, who already have approved RSV vaccines. Despite the day’s losses, Moderna’s year-to-date return remains positive at 30.89%, outperforming the S&P 500.

Disclaimer: The author does not hold or have a position in any securities discussed in the article.

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Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our  website policy prior to making financial decisions.

UniFirst Corporation (NYSE: UNF) has reported robust financial results for the third quarter of fiscal 2024, showcasing significant growth compared to the same period in the previous fiscal year. The company experienced a notable increase in consolidated revenues, which rose by 4.6% to reach $603.3 million. This growth underscores UniFirst’s ability to enhance its market presence and operational efficiency amidst a competitive landscape. The revenue boost is a testament to the company’s strategic initiatives and customer-centric approach. Operating income for the quarter also saw a substantial rise, climbing by 45.1% to $48.5 million. This increase highlights the company’s effective cost management and operational improvements.

Furthermore, UniFirst’s quarterly tax rate decreased to 22.9%, down from 27.2% in the prior year, contributing to the overall positive financial performance. The reduction in the tax rate reflects the company’s strategic financial planning and tax optimization efforts. Income for the third quarter surged by 56.8% to $38.1 million, compared to $24.3 million in the previous year.

This impressive net income growth indicates UniFirst’s strong operational execution and ability to capitalize on market opportunities. Additionally, diluted earnings per share (EPS) increased significantly to $2.03 from $1.29 in the prior year, marking a 57.4% rise. The EPS growth underscores the company’s commitment to delivering value to its shareholders through consistent financial performance.

UniFirst Surpasses EPS and Revenue Expectations in Fiscal Q3

When comparing UniFirst’s current quarter performance against market expectations, the company has exceeded analyst predictions. The expectations for the quarter were set at an EPS of $1.86 and revenue of $601.17 million. UniFirst not only met but surpassed these expectations, reporting an EPS of $2.03 and revenue of $603.3 million. This outperformance reflects the company’s strong operational capabilities and effective execution of its strategic initiatives. The revenue for the quarter exceeded the anticipated $601.17 million by approximately $2.13 million. This marginal yet significant increase demonstrates UniFirst’s ability to drive top-line growth through its diversified service offerings and customer base.

The company’s focus on expanding its market reach and enhancing service quality has paid off, contributing to the better-than-expected revenue figures. Similarly, the EPS of $2.03 surpassed the expected $1.86 by $0.17, highlighting UniFirst’s efficient cost management and improved profitability.

The higher-than-expected EPS indicates that the company has successfully navigated operational challenges and optimized its financial performance. This achievement boosts investor confidence and positions UniFirst favorably for sustained growth in the coming quarters.

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Guidance for Future Performance

Looking ahead, UniFirst has provided optimistic guidance for the future, building on the strong performance of the third quarter. The company aims to continue its growth trajectory by focusing on strategic investments in technology, customer service, and operational efficiency. UniFirst’s leadership has emphasized the importance of innovation and adaptability in maintaining competitive advantage and driving long-term value creation. The company plans to leverage its strong financial position to explore new market opportunities and expand its service offerings.

This includes potential acquisitions and partnerships that align with UniFirst’s core business objectives. By diversifying its portfolio and enhancing its service capabilities, UniFirst aims to capture a larger market share and drive sustainable revenue growth. Moreover, UniFirst is committed to focusing on cost management and operational excellence. The company plans to implement advanced technologies and process improvements to enhance productivity and reduce operational costs. This strategic approach is expected to support UniFirst’s goal of delivering consistent financial performance and maximizing shareholder value.

Disclaimer: The author does not hold or have a position in any securities discussed in the article.

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Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our  website policy prior to making financial decisions.

Paychex Inc. (PAYX), a leading provider of human capital management (HCM) solutions, reported robust financial results for the fourth quarter of fiscal year 2024. Total revenue for the quarter reached $1.295 billion, marking a 5% increase from the same period last year. This growth was driven by a combination of higher client numbers, enhanced product penetration, and increased PEO insurance revenues. Adjusted operating income also saw significant improvement, rising by 15% to $521 million in Q4 FY24 compared to $453 million in Q4 FY23.

The company’s adjusted diluted earnings per share (EPS) came in at $1.12, a 15% increase from the $0.97 reported in the previous year’s fourth quarter. This strong performance reflects the company’s successful cost optimization initiatives and solid execution across key operational metrics. Additionally, Paychex maintained a strong liquidity position with net cash and equivalents amounting to $737 million.Significant strides were also made in the PEO segment, which saw a 9% revenue growth, supported by an increase in the number of average PEO worksite employees and higher PEO insurance revenues. The company’s efforts in cost optimization, including reductions in geographic footprint and reprioritization of technology investments, resulted in $39 million in one-time costs but are expected to yield long-term benefits.

Paychex Beats Revenue and EPS Expectations in Fiscal Q4

When compared to market expectations, Paychex’s performance in the fourth quarter of fiscal 2024 exceeded both EPS and revenue forecasts. Analysts had anticipated an EPS of $1.10 and revenue of $1.29 billion. The actual EPS of $1.12 surpassed the forecast by $0.02, while the reported revenue of $1.295 billion slightly exceeded the expected $1.29 billion.

This outperformance was attributed to several key factors. The company’s revenue growth was bolstered by a higher number of clients and increased product penetration, particularly in HR Solutions and Retirement Services. Additionally, the PEO and Insurance Solutions segment showed robust growth, contributing significantly to the overall revenue increase.

Furthermore, Paychex’s effective cost management strategies played a crucial role in enhancing profitability. The company implemented various cost optimization initiatives, which included reducing its geographic footprint and optimizing headcount. These measures not only improved operating margins but also positioned the company for sustainable growth in the future.

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Paychex Expects Fiscal Year 2025 Revenue to Grow Between 4.0% to 5.5%

Looking ahead to fiscal year 2025, Paychex has provided optimistic guidance, forecasting total revenue growth between 4.0% and 5.5%. The company also expects adjusted diluted EPS to grow by 5% to 7%. Management Solutions revenue is projected to increase by 3% to 4%, while PEO and Insurance Solutions revenue is anticipated to grow by 7% to 9%.

The company is also forecasting interest on funds held for clients to be between $150 million and $160 million, with an operating income margin expected to range from 42% to 43%. Other income, net, is projected to be between $35 million and $40 million, and the effective income tax rate is anticipated to be between 24% and 25%.

Paychex is committed to investing in its business to drive sustainable, profitable growth. The company plans to make targeted investments in AI, digital, product, and technology to enhance efficiency and customer experience. These investments are expected to leverage the company’s vast data assets and accelerate AI initiatives, providing clients with valuable insights to help them succeed.

Disclaimer: The author does not hold or have a position in any securities discussed in the article.

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General Mills, Inc. (NYSE: GIS) revealed its financial results for the fourth quarter of fiscal 2024, showcasing a mixed performance amidst a challenging market environment. Net sales for the quarter stood at $4.7 billion, marking a 6% decrease from the previous year. This decline was attributed to unfavorable net price realization and mix and lower pound volume. The company’s operating profit also saw a downturn, falling by 5% to $779 million. Adjusted operating profit, which excludes certain items, was down 10% in constant currency, amounting to $800 million.

Despite these setbacks, General Mills achieved a gross margin of 35.8%, an increase of 140 basis points from the previous year. This improvement was driven by cost savings from its Holistic Margin Management (HMM) initiative, favorable mark-to-market effects, and reduced supply chain costs.However, input cost inflation and unfavorable net price realization partially offset these gains. The company’s diluted earnings per share (EPS) for the quarter were $0.98, a decline of 5%, while adjusted diluted EPS fell by 10% in constant currency to $1.01.

General Mills Falls Short of Expectations in Q4

When comparing the actual results to market expectations, General Mills fell short in both earnings and revenue for the quarter. Analysts had anticipated an EPS of $1.00, but the actual EPS came in slightly lower at $0.98. Similarly, the revenue expectation was set at $4.86 billion, yet the company reported $4.7 billion, missing the mark by approximately $160 million. This shortfall can be attributed to several factors, including a reduction in retailer inventory and a headwind in the International segment’s results.

The company’s performance in the North America Retail segment was particularly concerning, with net sales down 7% to $2.85 billion and segment operating profit dropping by 14%. The Pet segment also faced challenges, with net sales declining by 8% to $602 million. However, there were some bright spots, such as the North America Foodservice segment, which saw a 4% increase in net sales to $589 million, driven by strong growth in breads, cereal, and frozen biscuits.

Despite these mixed results, General Mills’ management remains optimistic. CEO Jeff Harmening emphasized the company’s ability to pivot its plans and enhance efficiency in response to the challenging environment. He highlighted the improved volume performance in the second half of the year and industry-leading levels of HMM cost savings as key achievements.

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GIS Expects Net Sales Growth to Range Between Flat and Up 1%

Looking ahead to fiscal 2025, General Mills provided a cautious yet optimistic outlook. The company expects organic net sales growth to range between flat and up 1%, reflecting a gradual improvement in volume trends across its categories. Adjusted operating profit is projected to be between down 2% and flat in constant currency from the base of $3.6 billion reported in fiscal 2024. This forecast includes a 2-point headwind from resetting incentive compensation after a below-average payout in the prior year.

Adjusted diluted EPS for fiscal 2025 is expected to range from down 1% to up 1% in constant currency from the base of $4.52 earned in fiscal 2024. General Mills also aims for free cash flow conversion to be at least 95% of adjusted after-tax earnings. The company plans to generate HMM cost savings of roughly 4 to 5% of the cost of goods sold, which is anticipated to exceed the expected input cost inflation of 3 to 4%.

Disclaimer: The author does not hold or have a position in any securities discussed in the article.

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FedEx Corporation (NYSE: FDX) shares soared in pre-market trading Wednesday following the release of its fourth-quarter and full-year fiscal 2024 results.

The shipping giant reported better-than-expected earnings, driven by aggressive cost-cutting measures and improved operational efficiency. As of 6:26 AM EDT, FedEx stock was up 14.05% to $292.40, marking a significant jump from its previous close of $256.38.

FedEx’s Fourth Quarter and Full-Year Performance

FedEx reported a modest increase in fourth-quarter revenue, rising to $22.1 billion from $21.9 billion a year earlier. Operating income for the quarter climbed to $1.56 billion, up from $1.50 billion in the same period last year. The company’s adjusted operating margin improved to 8.5%, compared to 8.1% in the previous year’s quarter.

For the full fiscal year 2024, FedEx saw a slight decline in revenue to $87.7 billion, down from $90.2 billion in fiscal 2023. However, the company’s cost-cutting initiatives paid off, with full-year operating income increasing to $5.56 billion from $4.91 billion the previous year.

The adjusted operating margin for the year improved to 7.1%, up from 6.0% in fiscal 2023. Full-year diluted earnings per share (EPS) rose to $17.21, with adjusted EPS reaching $17.80, both showing significant improvements over the previous year’s figures.

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FedEx’s Cost-Cutting Measures Drive Profitability in Q4

FedEx’s impressive results can be largely attributed to its aggressive cost-cutting strategy. The company’s DRIVE program, aimed at reducing costs by $4 billion by the end of fiscal 2025, has already yielded $1.8 billion in structural cost reductions in fiscal 2024.

The shipping giant is consolidating its air and ground services into a unified FedEx Corporation, expecting an additional $2 billion in savings from this consolidation.

Other cost-saving measures include the permanent retirement of 22 Boeing 757-200 aircraft and seven related engines, as well as plans to close seven FedEx Freight facilities to optimize operations. Capital spending was reduced to $5.2 billion in fiscal 2024, down 16% from the previous year.

Looking ahead, FedEx forecasts $2.2 billion in cost savings from the DRIVE program in fiscal 2025, as it continues to focus on reducing structural costs and lowering the capital intensity of its business.

Disclaimer: The author does not hold or have a position in any securities discussed in the article.

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Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our  website policy prior to making financial decisions.

Having co-founded ARK Investment Management in 2014, Catherine Wood rose to public prominence in 2021 when her ARK ETFs widely outperformed the market benchmark S&P 500. Her investing thesis revolves around disruptive innovation, as exposure to high-growth markets such as AI, blockchain, robotics, energy storage, DNA sequencing, and autonomous mobility.

This idea was less than well received at her former workplace, AllianceBernstein, prompting Cathie Wood to venture out independently.

However, just as the Federal Reserve’s liquidity injections strongly correlate with Bitcoin performance, so have Wood’s exchange-traded funds. Once the Fed placed a capital flows dampener with the rate hiking cycle in early 2022, her flagship ARK Innovation ETF (ARKK) crashed, severely underperforming the wider market.

In an open letter to the Fed, Wood expressed dismay at the rapid hiking cycle, warning that the Fed’s aggressive rate hikes could lead to a deflationary bust.

“Could it be that the unprecedented 13-fold increase in interest rates during the last six months––likely 16-fold come November 2––has shocked not just the US but the world and raised the risks of a deflationary bust?”

As it became apparent that the central bank dictates the ebbs and flows of the stock market, Wood’s projected 30-40% compound annual returns over five years failed to materialize. Out of 36 holdings in actively managed ARRK ETF, Tesla, Coinbase, Roku, Square, and Roblox make the top five picks, with a combined portfolio weight of 40%, or $2.4 billion market value.

Although ARKK delivered a negative annualized performance of 24.96% in the last three years, what can investors expect from Cathie Wood’s three biggest holdings?

Tesla (NASDAQ: TSLA)

From a luxury electric vehicle (EV) company, Tesla has grown as an exposure to robotics and autonomous driving. The latter two are yet to fully materialize. Tesla CEO Elon Musk noted that the company’s humanoid robot Optimus could end with a price tag half as much as a car, at around $25,000 – $30,000 range.

The hard technical challenge of autonomous mobility is shared between Optimus and Tesla EVs. Still in beta, the company’s Full Self-Driving (FSD) is yet to transition from level 2 (partial automation) to level 5 (full automation). However, as Musk missed his optimistic timeframe, much is expected from his robotaxi announcement scheduled for August 8th.

Akin to training large language models (LLMs), such capacity will rely on successfully integrating data from millions of Tesla drivers. However, given the company’s dominant EV market share in the Western markets, Tesla has an edge over legacy car makers.

Tesla is also hoping to overcome the main hurdle of EV adoption – affordability. The compact crossover model known as “Redwood” or “Model 2” is rumored to have a $25k price tag. Following aggressive price cuts push from Chinese automakers, TSLA shareholders expect this to be a turning point as EV demand plateaus in the upper-price segment.

Zoomed out, Tesla continues to excite investors as all the puzzle pieces come together. They are all leading (ideally) to a seamless binding of multiple platforms – humanoid robot, self-driving car, neuralink interface and xAI.

From that vantage point, Tesla’s YTD underperformance of 25.26% could be seen as an opportunity, relying heavily on solving engineering challenges and scaling. The average 52-week TSLA price is holding at $217.19, above the present price of $182.58 per share.

If 2-3 rate cuts materialize as fed fund futures suggest this year, Tesla could be ending 2025 with an above-$1 trillion market value.

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Coinbase (NASDAQ: COIN)

This well-regulated crypto exchange became the main facilitator of most Bitcoin ETFs. Of the big players, only Fidelity custodies its own FBTC fund while VanEck (HODL) picked Gemini. This reveals Coinbase’s dominant market position in the digital asset arena and how institutions and retail traders perceive it.

Globally, Binance is still the undisputed king of crypto exchanges at 49.7% market share, while Coinbase occupies the 5th rank at 6.8% share. Moving with the swings of the crypto market, the company’s Q1 revenue went up 72% Q/Q to $1.6 billion. 

Compared to a net loss of $79 million in the year-ago quarter, Coinbase’s net income massively increased to $1.17 billion, although most of it is from $737 million unrealized mark-to-market gains. In the meantime, the exchange’s Base L2 scaling solution for Ethereum saw 2x transaction volumes and 8x developer activity for new finance apps.

If Ethereum ETFs receive approvals, Coinbase will not receive another wave of capital inflows. COIN stock is up 41% year-to-date, significantly outperforming the broad stock market. At the current price of $221.35 per share, COIN shares are still well below their 52-week ceiling of $283.48 per share.

Roku (NASDAQ: ROKU)

Roku exemplifies Cathie Wood’s innovative disruption with its ecosystem of streaming devices and smart TV operating systems. The company has a multi-stream revenue from hardware sales, ads, licensing of its operating system to TV manufacturers, Roku Pay transaction fees, and content distribution/subscription fees.

The hardware part has taken a back seat to its much higher-margin streaming platform, accounting for 85.6% of revenue in the latest Q1 earnings report. For the quarter, Roku reported $50.8 million net loss, a significant improvement over the net loss of $193.6 million in the year-ago quarter.

However, despite shifting from devices to platforms, the latter is only accessible from 18 countries, constraining its market reach. In other words, Roku has not made a profitable quarter since the end of 2021. This trend is likely to continue given the great network effect of Roku’s competitors Amazon (NASDAQ: AMZN), Apple (NASDAQ: AAPL), Google (NASDAQ: GOOG), and Netflix (NASDAQ: NFLX), all of which offer greater advertising reach.

So far, Roku’s accumulated deficit is $1.3 billion, with $2 billion in cash and cash equivalents against $1.8 billion worth of liabilities. Year-to-date, ROKU stock is down 38%. At the present price of $54.45 per share, ROKU is significantly below its 52-week average of $74.50 and just above its 52-week bottom of $51.51 per share. 

Do you think Cathie Wood jumped the shark with her investing thesis? Let us know in the comments below.

Disclaimer: The author does not hold or have a position in any securities discussed in the article.

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Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our  website policy prior to making financial decisions.

As the market remains active, three notable stocks are making headlines due to significant corporate developments and price movements. Carnival Corporation (NYSE: CCL), Eli Lilly and Company (NYSE: LLY), and Dollar Tree, Inc. (NASDAQ: DLTR) are each experiencing distinct shifts in their market positions, driven by earnings reports, strategic partnerships, and regulatory challenges.

Carnival Corporation (CCL) Surges After Second-Quarter Earnings Report Exceeding Expectations

Carnival Corporation’s stock is surging, up 7.69% to $17.65 as of 11:21 AM EDT, following the release of its impressive second-quarter earnings report. The cruise line operator reported record Q2 revenue of $5.78 billion, exceeding analyst expectations by $100 million. Adjusted earnings per share came in at $0.11, beating the forecasted -$0.02.

The company’s strong performance is reflected in its nearly fivefold increase in operating income to $560 million compared to Q2 2023. Carnival has raised its full-year 2024 net yield guidance to approximately 10.25% and projects adjusted net income for 2024 at about $1.55 billion, $275 million above its March guidance. CEO Josh Weinstein expressed confidence in achieving the company’s 2026 SEA Change targets, citing strong bookings momentum for the remainder of 2024 and full year 2025.

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Eli Lilly and Company (LLY) Partners with OpenAI

Eli Lilly’s stock is up 2.10% to $908.78, pushing its market capitalization to $863.709 billion. The pharmaceutical giant announced a groundbreaking collaboration with OpenAI to discover novel antimicrobials using generative AI technology. This partnership aims to combat drug-resistant pathogens and aligns with Lilly’s commitment to fighting antimicrobial resistance (AMR).

The collaboration builds on Lilly’s previous $100 million commitment to the AMR Action Fund in 2020, which aims to provide 2-4 new antibiotics by 2030. Lilly’s chief information and digital officer hailed the partnership as a “groundbreaking step forward,” while OpenAI’s COO expressed excitement about AI’s potential in pharmaceutical breakthroughs. This news comes as Lilly continues to see success with its weight loss drug Tirzepatide, although it faces potential competition from Novo Nordisk in the rapidly growing weight loss market.

Dollar Tree, Inc. (DLTR) Stock Slides Amid Regulatory Challenges

Dollar Tree’s stock is down 1.74% to $105.48 amid ongoing regulatory challenges. The discount retailer is facing scrutiny from the FDA for continuing to sell lead-tainted children’s applesauce products almost two months after their recall. The FDA has issued a warning letter to Dollar Tree, revealing that some stores were unaware of the recall even a month after it was issued.

The FDA has confirmed 90 cases of adverse events tied to the contaminated product and has given Dollar Tree 15 days to outline how it will prevent similar issues in the future. This latest setback adds to the company’s struggles, including previous issues such as a rat infestation at a Family Dollar warehouse. Dollar Tree is currently reviewing options for its struggling Family Dollar business, including a potential sale or spinoff. The FDA has warned of potential legal action, including product seizures if the company fails to address these concerns promptly.

Disclaimer: The author does not hold or have a position in any securities discussed in the article.

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Apple Inc. (NASDAQ: AAPL) stock saw gains on Tuesday, rising 0.98% to $210.19 when writing, as investors responded positively to a bullish analyst report on the company’s artificial intelligence (AI) prospects.

Evercore ISI analyst Amit Daryanani raised the price target for Apple stock from $220 to $250, citing the potential for AI features to drive a longer and stronger iPhone upgrade cycle. This optimism comes as Apple continues to outperform the S&P 500 in long-term returns, with the stock up 60.79% over three years and an impressive 340.19% over five years.

AI Features Likely to Drive iPhone Sales

Daryanani’s analysis focuses on the upcoming iPhone 16 cycle and the gradual rollout of AI features. According to the analyst, Apple plans to introduce “Apple Intelligence” features exclusively to higher-end iPhone 15 Pro and upcoming iPhone 16 models.

The initial AI rollout, expected to function only in American English, will include limited features such as alert recaps, content summaries, and image generation. However, Evercore ISI believes that the full range of AI capabilities won’t be available until calendar year 2025.

The staggered introduction of AI features is expected to create a prolonged upgrade cycle, with word-of-mouth spreading steadily and convincing owners of older iPhones to upgrade over time. Evercore estimates that even a one-month reduction in the typical upgrade cycle could result in an additional $14 billion in iPhone sales.

This potential has led the firm to raise its fiscal year 2025 iPhone revenue growth estimate from 4% to 7%, with the possibility of reaching double-digit growth.

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Apple’s Stock Still Has Room for Growth

The company’s financial metrics remain robust as Apple prepares to leverage AI in its product lineup. With a market capitalization of $3.234 trillion, Apple remains one of the world’s most valuable companies. The tech giant boasts a strong profit margin of 26.31% and an impressive return on equity of 147.25%.

For the trailing twelve months, Apple reported total revenue of $381.62 billion and net income available to common shareholders of $100.39 billion.Despite trading near its average analyst target price of $208.80, Apple’s stock still has room for growth, according to some analysts. Price targets range from a low of $164.00 to a high of $275.00, reflecting varied opinions on the company’s future performance.

Do you see AI features as a major growth driver for the iPhone? Let us know in the comments below.

Disclaimer: The author does not hold or have a position in any securities discussed in the article.

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Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our  website policy prior to making financial decisions.

TD SYNNEX (NYSE: SNX), a leading global distributor and solutions aggregator for the IT ecosystem, posted revenue of $13.9 billion for the quarter ended May 31, 2024, representing a slight decrease of 0.8% compared to the same period last year. However, the company’s non-GAAP gross billings, which include costs incurred and netted against revenue related to sales of third-party supplier service contracts and certain fulfillment contracts, grew by 3.1% to $19.3 billion.

The company’s gross margin improved by 13 basis points year-over-year to 6.98%, while non-GAAP gross margin increased by 9 basis points to 6.98%.

Net income for the quarter rose to $144 million, up 7.9% from $133 million in the prior year’s quarter. Diluted earnings per share (EPS) increased by 17.7% to $1.66, while non-GAAP diluted EPS grew by 12.4% to $2.73.

TD SYNNEX’s CEO, Rich Hume, noted, “We continued to see an improving IT spending environment, with a return to year-over-year gross billings growth driven by strength in our core business across both Endpoint and Advanced Solutions and mid-teens growth in Strategic Technologies.”

The company’s financial position remained strong, with $1.17 billion in cash and cash equivalents as of May 31, 2024. TD SYNNEX also demonstrated its commitment to shareholder returns by repurchasing $254 million worth of shares and paying $34 million in dividends during the quarter, representing a 210% increase in total shareholder returns compared to the prior year’s second quarter.

TD SYNNEX Reports Fiscal Q2, in line with Expectations

TD SYNNEX’s fiscal second quarter of 2024 performance largely met or exceeded expectations. The company’s revenue of $13.9 billion fell within its previously provided outlook range of $13.3 billion to $14.9 billion. Non-GAAP gross billings of $19.3 billion came in at the upper end of the company’s guidance of $18.4 billion to $19.6 billion, indicating strong business momentum.

The company’s profitability metrics also aligned with expectations. Both net income of $144 million and non-GAAP net income of $237 million were within the anticipated range. Similarly, diluted EPS of $1.66 and non-GAAP diluted EPS of $2.73 met the company’s outlook.

TD SYNNEX’s performance across its geographic segments was mixed. The Americas segment, which accounted for the largest revenue share, saw a 1.6% year-over-year decline to $8.6 billion. However, non-GAAP gross billings for the region grew by 3.5% to $12.2 billion. The Europe segment experienced a slight revenue decline of 0.8% to $4.4 billion, while the Asia-Pacific and Japan segment showed strong growth with revenue increasing by 6.9% to $964 million.

The company’s focus on strategic technologies and ability to navigate the changing IT landscape contributed to its solid performance. CEO Rich Hume highlighted the mid-teens growth in Strategic Technologies, which underscores TD SYNNEX’s success in capitalizing on emerging market trends and technologies.

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SNX Expects Fiscal Q3 Revenue Between $13.3 Billion and $14.9 Billion

Looking ahead, TD SYNNEX guided for its fiscal 2024 third quarter, projecting revenue in the range of $13.3 billion to $14.9 billion. The company expects non-GAAP gross billings to be between $18.9 billion and $20.1 billion for the upcoming quarter.

TD SYNNEX anticipates net income for the third quarter to be in the range of $152 million to $194 million, with non-GAAP net income expected between $219 million and $261 million. Diluted EPS is forecast to be between $1.77 and $2.27, while non-GAAP diluted EPS is expected to range from $2.55 to $3.05.

The company’s guidance reflects cautious optimism about the ongoing recovery in IT spending and its ability to capitalize on growth opportunities in strategic technologies. TD SYNNEX’s focus on maintaining operational efficiency and investing in high-growth areas is expected to drive continued performance improvements.

Additionally, TD SYNNEX announced a quarterly cash dividend of $0.40 per common share, representing a 14% increase from the prior fiscal second quarter. This dividend increase underscores the company’s confidence in its financial position and commitment to delivering value to shareholders.

Disclaimer: The author does not hold or have a position in any securities discussed in the article.

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Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our  website policy prior to making financial decisions.

Although renewable energy sources are known to be material and area-intensive, it is difficult to beat their self-sufficiency. From biomass boilers to solar and wind, they offer a path to clean reduction of reliance on the power grid. Moreover, regulatory zero net initiatives across the board increase renewable energy companies’ access to capital. 

These factors alone make renewable energy stocks have staying power at scale. However, compared to the broader market, they have taken the opposite turn owing to their cyclical nature and sensitivity to the higher interest rate regime.

While the S&P 500 is up 15.5% YTD, First Trust NASDAQ Clean Edge Energy Index Fund (QCLN) is down 16%.

Yet profits are made in these downturn moments. Given that fed fund futures price in three rate cuts by the end of 2024, these renewable stocks could bring long-term gains. 

Clearway Energy, Inc. (NASDAQ: CWEN)

Clearway Energy diversified across the US into energy storage, wind and solar, accounting for around 6,200 MW of power. This is bolstered by 2,500 MW coming from natural gas operations. In the renewable energy arena, the company ranks 5th by market share.

In May 2022, the EU-led consortium consisting of TotalEnergies, TotalEnergies, ArcelorMittal, Axens and IFP Energies Nouvelles acquired 50% of Clearway Energy Group (CEG). In Q1 earnings delivered in May, Clearway had a net loss of $46 million, of which renewables’ loss of $44 million was offset by conventional generation with a net income of $16 million. 

However, compared to the year-ago quarter, the company only slightly drained cash holdings, at $963 million vs $1 billion respectively. Against total liabilities worth $9.8 billion, Clearway has $5 billion worth of equities. With a debt-to-equity ratio of 1.5, the company confirmed its full-year $395 million CAFD guidance for 2024 and increased dividend payouts by 1.7%.

That’s because Clearway made multiple long-term investments. The $65 million worth of investments on Dan’s Mountain and Rosamond South alone are projected to yield 10% CAFD (Cash Available for Distributions Per Share). The company increased the future CAFD outlook from $415 million to $420 million. 

At present dividend yield of 6.34% at $1.6408 annual dividend payout per share, CWEN stock is now $25.95. This is close to its 52-week average of $24.43. Nasdaq’s average CWEN price target is $31, with the bottom target aligned with the current price at $26 per share.

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Brookfield Renewable Partners L.P. (NASDAQ: BEP)

BEP has an even easier time accessing capital under its parent company, Brookfield Asset Management. As of May, the company holds nearly 200,000 MW of renewable energy assets in hydro, wind, solar, and distributed storage.

By 2028, Brookfield expects 10% annual growth of funds from operations (FFO). In addition to acquiring assets as a strategic model, the credence for this forecast comes from 12% FFO per unit CAGR between 2016 and 2024. More importantly, around 70% of Brookfield’s revenues are indexed to inflation with an average 13-year contract.

Brookfield increased revenue from $1.3 billion to $1.5 billion compared to the year-ago quarter. The company has a 5.79% dividend yield at $1.42 annual dividend payout. At the present price of $25, BEP stock is aligned with its 52-week average but still down from its 52-week ceiling of $30.32 per share.

That level is Nasdaq’s average price target, at $30.4. At the same time, the low estimate of $27 is still higher than the present BEP price level.

Eversource Energy (NASDAQ: ES)

Operating in Massachusetts, Connecticut, and New Hampshire, this utility holding company aims to become carbon neutral by 2030. By the end of 2024, Eversource is on track to complete its offshore projects, Revolution Wind, Sunrise Wind, and South Fork Wind, with the latter already generating power.

The company’s FFO growth target is within the 14 – 15% range for 2025, following 6% earnings per share (EPS) 10-year growth rate since 2014. Eversource Energy offers a 5% dividend yield at an annual dividend payout of $2.86 per share. 

At the present price of $57.18, ES stock is still under the 52-week average of $60.52 per share. Nasdaq’s average ES price target is $65.9 with the low estimate also aligning with the current stock price at $57 per share. 

Do you think renewables will take a back seat to nuclear power or become complementary? Let us know in the comments below.

Disclaimer: The author does not hold or have a position in any securities discussed in the article.

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Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our  website policy prior to making financial decisions.

In a volatile trading session, three major tech and manufacturing stocks are drawing investor attention due to significant price movements and noteworthy developments. International Business Machines (NYSE: IBM), NVIDIA Corporation (NASDAQ: NVDA), and Packaging Corporation of America (NYSE: PKG) are all experiencing notable shifts in their stock prices and analyst outlooks. This article examines these closely watched companies’ latest updates and market reactions.

IBM Gains on AI Optimism

Shares of IBM are up 2.24% to $176.33 as of 10:51 AM EDT, following Goldman Sachs’ initiation of coverage with a Buy rating and a $200 price target. The investment bank highlighted IBM’s strategic shift towards long-term growth, emphasizing the company’s focus on infrastructure software assets, particularly in open-source and artificial intelligence.

Goldman Sachs noted strong synergy between IBM’s evolving software portfolio and consulting business, expecting the stock to re-rate higher due to improving software business mix. IBM’s revenue is projected to grow from $60.53 billion in 2024 to $65.52 billion in 2025, with earnings per share expected to increase from $9.13 to $10.34 over the same period.

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NVIDIA Slides Amid Insider Selling

NVIDIA stock is down 5.83% to $119.19, despite recently becoming the world’s most valuable company before slipping back to second place. The decline comes amid significant insider selling activity, with CEO Jensen Huang selling 240,000 shares for approximately $31.6 million on June 20, and other executives and directors also offloading substantial holdings.

Despite the selling pressure, NVIDIA’s year-to-date stock return remains impressive at 155.62%, significantly outpacing the S&P 500’s 14.57% gain. Analyst consensus on NVIDIA remains a Strong Buy, with price targets ranging from $47.84 to $200.00 per share.

Packaging Corp. of America Rises on Positive Outlook

Packaging Corporation of America stock is up 3.33% to $189.43, buoyed by Bank of America’s increased price target from $197.00 to $200.00. The new target implies a potential upside of 8.08% from the previous close, with BofA maintaining a “buy” rating on the stock.

PKG reported strong Q1 earnings of $1.72 per share, beating estimates by $0.09, with revenue slightly above expectations at $1.98 billion. The positive sentiment in the packaging industry is further reinforced by recent insider buying, with Director Karen E. Gowland purchasing 300 shares at $182.06 per share.

Disclaimer: The author does not hold or have a position in any securities discussed in the article.

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Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our  website policy prior to making financial decisions.

Apple (NASDAQ: AAPL) and Meta (NASDAQ: META) are reportedly discussing integrating Meta’s generative AI model into Apple’s newly announced iPhone AI system. This potential collaboration comes as both companies ramp up their efforts in artificial intelligence, with Apple recently unveiling its “Apple Intelligence” technology and Meta expanding its AI chatbot offerings.

While not yet finalized, the talks signal a growing trend of partnerships in the rapidly evolving AI landscape. Meta’s stock saw slight gains on the news at the market opening today.

Meta Stock Gains After News of Apple AI Partnership

Meta Platforms Inc.’s stock price climbed on Monday following reports of potential AI collaboration with Apple. As of 9:59 AM EDT, Meta’s stock was trading at $505.30, up $10.52 or 2.13% from the previous close. The company’s market capitalization stood at $1.28 trillion, and trading volume reached 6,655,608 shares, below its average daily volume of 13,326,916.

The stock’s performance has been robust, with Meta outpacing the S&P 500 across various timeframes. Meta shares have surged 42.87% year-to-date, compared to the S&P 500’s 14.85% gain. The company’s one-year return of 75.15% and a five-year return of 164.57% have also significantly outperformed the broader market. Analysts maintain a positive outlook on Meta, with price targets ranging from $260.00 to $593.00.

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Meta’s Generative AI Model in the iPhone AI System?

The potential partnership between Apple and Meta could involve the integration of Meta’s generative AI model into Apple’s iPhone AI system. While Apple is not offering direct payment for these collaborations, it would provide valuable distribution channels for AI partners. The deal structure may allow AI companies to sell premium subscriptions through Apple Intelligence. This strategy aligns with Apple’s broader initiative to incorporate AI technology from various companies into its devices, potentially reducing reliance on any single AI partner.

Apple has been making significant strides in AI development, recently announcing plans to integrate “Apple Intelligence” across its suite of apps and partnering with OpenAI to enhance Siri with ChatGPT capabilities.

The company is focusing on practical AI features, such as writing suggestions and custom emojis, while emphasizing user privacy. Apple plans to roll out these AI enhancements in its newest operating systems later this year, although it’s holding back certain features in the European Union due to regulatory concerns.

Disclaimer: The author does not hold or have a position in any securities discussed in the article.

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Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our  website policy prior to making financial decisions.

Nvidia Corporation (NASDAQ: NVDA), the powerhouse behind AI chip technology, has been making headlines with its meteoric rise in valuation and recent insider selling activity. The company briefly surpassed Microsoft (NASDAQ: MSFT) as the world’s most valuable before returning to second place. Meanwhile, Nvidia’s stock has shown remarkable growth, outperforming the S&P 500 across various timeframes despite recent downward pressure.

Nvidia Insiders Are Selling

In recent weeks, Nvidia has seen a flurry of insider selling activity. CEO Jen-Hsun Huang sold 240,000 shares on June 20, 2024, netting approximately $31.6 million, while CFO Colette Kress offloaded 100,000 shares the following day for about $12.7 million. Other notable sales include Director Mark A. Stevens’ disposal of 470,000 shares for roughly $58.3 million on June 11, and Director Tench Coxe’s sale of 100,000 shares for approximately $119.5 million on June 7.

Over the past few months, this consistent selling pattern among executives and directors has raised eyebrows among investors. While some sales appear to be part of pre-planned trading schedules, others may be opportunistic, given the stock’s significant price appreciation. However, it’s worth noting that despite these large sales, many insiders still retain substantial holdings in the company.

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Is NVDA Stock Due for a Correction?

The selling of insiders coincides with Nvidia’s brief reign as the world’s most valuable company. The chip maker’s valuation peaked at $3.34 trillion before a 3.5% drop in share price on an unspecified Thursday caused its market value to fall to around $3.22 trillion. This allowed Microsoft to reclaim the top spot with a steady valuation exceeding $3.3 trillion. This fluctuation underscores the intense competition among tech giants, with Nvidia, Microsoft, and Apple (NASDAQ: AAPL) boasting over $3 trillion valuations.

As of the latest trading session, Nvidia’s stock closed at $126.57, with a market capitalization of $3.113 trillion. The company’s P/E ratio stands at 74.06, while its forward P/E is 48.78. Nvidia has demonstrated impressive financial performance, with trailing twelve-month revenue of $79.77 billion and net income available to common shareholders of $42.6 billion. The stock’s year-to-date return of 155.62% significantly outpaces the S&P 500’s 14.57% gain. Despite recent selling pressure, analyst consensus remains a Strong Buy, with price targets ranging from $47.84 to $200.00 per share.

Do you think buying Nvidia stock in the current market conditions makes sense, or is waiting for a pullback a better idea? Let us know in the comments below.

Disclaimer: The author does not hold or have a position in any securities discussed in the article.

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Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our  website policy prior to making financial decisions.

Intel Corporation (NASDAQ: INTC) has made significant strides in its semiconductor manufacturing capabilities, announcing major progress with its Intel 3 process technology.This development led to the company’s stock showing positive movement in today’s trading session. Intel stock has seen slight gains at the time of writing, up 1.89% over the day. However, year-to-date, Intel’s stock is down 34.8%.

Intel 3 Process Reaches High-Volume Production

Intel’s latest manufacturing technology, the Intel 3 process, has achieved a crucial milestone by reaching high-volume production at the company’s facilities in Oregon and Leixlip, Ireland.This new process node offers substantial improvements over its predecessor, Intel 4. It delivers up to 18% better performance at the same power consumption and up to 10% greater density. The Intel 3 process is a key component of the company’s ambitious plan to launch five new process nodes in just four years.

The Intel 3 process is particularly significant as it marks the first leading-edge node that will be utilized by external foundry customers. Intel plans to maintain the Intel 3 process for an extended period, offering multiple variants to cater to diverse customer needs.The company’s Xeon 6 server CPUs, including the Sierra Forest and Granite Rapids models, will be among the first products to leverage this new technology. Intel has already secured approximately $15 billion worth of external business for its foundry services, underscoring the potential impact of this advancement on the company’s future growth.

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Intel Stock Sees Slight Gains on Foundry Development

As of 1:42 PM EDT on the current trading day, Intel’s stock price stands at $31.20, reflecting a gain of $0.58 or 1.89%. This positive movement comes amidst a challenging period for the semiconductor industry, suggesting investor optimism about Intel’s recent technological progress and future prospects.

The company’s market capitalization currently sits at $132.878 billion, positioning Intel as a major player in the tech sector. Intel’s price-to-earnings (P/E) ratio, based on trailing twelve months (TTM) earnings, is 31.57, while its earnings per share (EPS) for the same period is $0.97. 

Disclaimer: The author does not hold or have a position in any securities discussed in the article.

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In Thursday’s note to investors, JPMorgan strategists identified suppressed short selling and short covering as one of the main drivers of a “steady flow of support” for stock performance. 

Short interest is now at its lowest level in six years across S&P 500 ETF Trust (SPY) and Invesco QQQ Trust Series 1 (QQQ), the biggest equity ETFs that track the S&P 500 and Nasdaq-100, respectively.

JPMorgan strategists identified greater retail activity, greater regulatory scrutiny and the rising difficulty in maintaining short position against the buoyed market as the main suppressors of short sellers. 

In turn, insider buying becomes more indicative of the stocks’ potential rally. Case in point, Metrick and Zeckhauser found in a 2003 study that insider purchases act as market outliers, outperforming the market by 11.2% annually. After all, fund managers, executives, and high stakeholders signal higher confidence in companies’ futures as they buy the shares under the belief they are undervalued.

These three stocks have shown such insider activity in recent weeks.

Priority Technology Holdings (NASDAQ: PRTH)

Priority Technology Holdings is a fintech company that facilitates payment processing and point-of-sale systems for mainly small and medium-sized enterprises (SMEs). Additionally, Priority Technology offers data analytics, e-commerce payment solutions, and inventory management tools to brick-and-mortar retailers of all sizes. 

On June 14th, John Priore, as a Director at the company, bought 598,187 common stock PRTH shares, worth around $2.13 million, at an average price of $3.56 per share. In Q1 earnings, the company reported $5.2 million net income vs $0.5 million net loss in the year-ago quarter. This performance, minus dividends paid to redeemable senior preferred stockholders, beat the estimated earnings per share (EPS) of -$0.12 vs reported -$0.1. 

At the present price of $4.79, PRTH stock is nearly double its 52-week low of $2.62 and close to its 52-week ceiling of $5.07 per share. According to Nasdaq forecasting, PRTH average price target is $5.75 with the upper ceiling of $7. Interestingly, the bottom forecast is not too far from the current price, at $4.5 per share. 

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Disc Medicine, Inc. (NASDAQ: IRON)

Previously known as Gemini Therapeutics following a merger, Disc Medicine is a clinical-stage biotech firm primarily focused on treating hematological (blood) disorders. This makes it a high-risk, high-reward stock typical of the biotech sector. 

Disc Medicine has three main projects in its pipeline. Bitopertin to treat Diamond-Blackfan anemia (DBA) as a congenital disorder with a 40-year life expectancy of 75% afflicted. After the positive AURORA study and European Hematology Association (EHA) updates, Bitopertin is looking as a prospective drug heading into Phase 3 trials.

The biotech firm’s other two candidates are DISC-00974 for anemia of Myelofibrosis (MF) and DISC-3405 for polycythemia vera and iron overload disorders. Both drug hopefuls are still in early Phase 1 trials. 

Co-founder and board member of Disc Medicine, Kevin Bitterman, while also serving on the boards of Akero Therapeutics (NASDAQ: AKRO) and Kinaset Therapeutics, purchased ~$8 million worth of IRON shares on June 17th. Likewise, Orbimed Advisors LLC and Ashiya Mona (Orbimed Advisors board member) purchased $3 million worth of IRON shares each. 

All three instances of insider buys were at $36 per share. At the present price of $41.25, IRON stock is still far from its 52-week high of $77.60. The current Nasdaq forecasting consensus is $62.11 as the average price target, with an upper ceiling of $85 per share. This makes Disc Medicine one of top potential gainers.

Citi Trends, Inc. (NASDAQ: CTRN)

Largely serving urban black and Latino communities, as 84% of the customer base, Citi Trends offers value-priced fashion apparel. Typically located in local communities adjacent to grocery and other value stores, Citi Trends buys upfront from manufacturers according to its designs.

In May and early June, Pleasant Lake Partners and Fund 1 Investments insiders bought CTRN shares worth $2.67 million, with purchase prices ranging from $22.4271 to $25.55 per share.

The company reported 3.7% year-over-year sales growth in Q1 earnings to $186.3 million. However, given the value-oriented pricing, Citi Trends came out with an operating $5.6 million loss (adjusted), although lower than the $7.9 million in the year-ago quarter. On the upside, the company holds zero debt and ended the quarter with $58.2 million in cash. 

At the present price of $21.67, CTRN stock is significantly under its 52-week ceiling of $32.90 per share. Nasdaq’s forecasting puts the average CTRN stock price at $31, while even the low ballpark of $25 is above the current price level.

What are your favorite stock-buying signals? Let us know in the comments below.

Disclaimer: The author does not hold or have a position in any securities discussed in the article.

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