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

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

Three notable technology companies saw significant developments that impacted their stock prices in a day of mixed market performance. Analysts gave Palo Alto Networks (NASDAQ: PANW) a new price target, FactSet (NYSE: FDS) reported strong earnings and raised guidance, and Texas Instruments (NASDAQ: TXN) announced a strategic collaboration in the electric vehicle sector.

Palo Alto Networks Gains on New Coverage

Shares of Palo Alto Networks (NASDAQ: PANW) rose 2.84% to $319.88 after DA Davidson initiated coverage with a Buy rating and a price target of $380.The cybersecurity firm was added to DA Davidson’s Best-of-Breed Bison initiative, highlighting its significant potential in the expanding cybersecurity market. Analysts noted Palo Alto Networks’ three platforms offer unmatched vendor consolidation, with the company currently holding approximately 7% of the total addressable market, which is nearing $200 billion.The stock has shown impressive growth, with a year-to-date return of 8.47% and a three-year return of 158.16%.

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FactSet Surges on Earnings Beat and Raised Outlook

FactSet Research Systems (NYSE: FDS) saw its stock climb 3.64% to $423.20 following strong fiscal 2024 third-quarter results. The financial data and analytics company reported adjusted earnings per share of $4.37, surpassing analysts’ estimates of $3.90. Revenue rose 4.3% year-over-year to $552.7 million, with organic revenue up 4.5%.FactSet raised its full-year adjusted EPS outlook to $16.00-$16.40 from $15.60-$16.00, although it slightly lowered its revenue guidance. The company’s performance reflects its robust position in the financial services sector, with a three-year return of 33.52% and a five-year return of 47.11%.

Texas Instruments Partners for EV Innovation

Texas Instruments (NASDAQ: TXN) shares increased 2.00% to $196.61 following the announcement of a long-term collaboration with Delta Electronics to advance electric vehicle onboard charging and power solutions.The partnership will establish a joint innovation laboratory in Pingzhen, Taiwan, aiming to optimize power density, performance, and size for EVs. The collaboration leverages Texas Instruments’ semiconductor expertise and Delta’s power management experience, with a goal to reduce charger size by 30% while achieving up to 95% power conversion efficiency.This strategic move aligns with the growing demand for electric vehicle technologies, reflected in the stock’s year-to-date return of 16.25% and five-year return of 99.11%.

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 market increasingly driven by artificial intelligence (AI) developments, three tech stocks are capturing investor attention today: Accenture (NYSE: ACN), Advanced Micro Devices (NASDAQ: AMD), and Super Micro Computer (NASDAQ: SMCI). Each company has reported significant AI-related progress, driving stock price movements and analyst interest.

Accenture (ACN) Surges on AI-Fueled Hype

Despite missing analyst expectations for its fiscal third-quarter results, Accenture’s stock surged in pre-market trading. The company reported revenue of $16.5 billion, a 1% decrease in U.S. dollars but a 1.4% increase in local currency. While GAAP EPS of $3.04 fell short of the expected $3.17, investors focused on Accenture’s strong AI performance. The company booked over $900 million in new generative AI business in Q3, contributing to a total of $2 billion in AI-related bookings for the fiscal year to date. Accenture raised its full-year fiscal 2024 revenue growth guidance to 1.5%-2.5% in local currency, further boosting investor confidence.

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Advanced Micro Devices (AMD) Selected as “Tp Pick” by Piper Sandler

AMD shares gained momentum after Piper Sandler analyst Harsh Kumar elevated the stock to “top pick” status. Despite being down 14% over the past three months, AMD’s outlook in the AI space appears promising. The company’s AI accelerator lineup, particularly the MI series, is expected to perform well as supply constraints ease in the year’s second half. AMD reported having over 100 customers in the AI accelerator space, with its MI300 product expected to generate more than $4 billion in revenue this year. The company’s recent announcement of an AI-based smart parking solution for Sun Singapore further highlights its growing presence in the AI market.

Super Micro Computer (SMCI) Gains After xAI News

SMCI shares jumped after Elon Musk revealed the company as a supplier for his AI startup xAI’s supercomputer project. The news underscores SMCI’s growing role in providing hardware for cutting-edge AI applications. Musk’s xAI is developing a $500 million “Dojo” supercomputer in Buffalo, New York, and plans another “super dense, water-cooled supercomputer cluster” in Austin, Texas. These projects aim to advance computer vision and large language models for robots and autonomous vehicles. SMCI’s stock has significantly outperformed the S&P 500 year-to-date, reflecting strong investor confidence in the company’s position in the rapidly expanding AI hardware market.

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 Kroger Co. (NYSE: KR) reported its first-quarter 2024 results, showcasing a mixed performance. Total company sales for the quarter reached $45.3 billion, a slight increase from $45.2 billion in the same period last year. Identical sales, excluding fuel, rose by 0.5%, illustrating modest growth in core business areas. The company also reported an operating profit of $1,294 million, down from $1,470 million in the first quarter of 2023. Earnings per share (EPS) stood at $1.29, slightly lower than the $1.32 reported in the previous year.

Kroger’s digital sales grew by more than 8%, with delivery and pickup services combining for double-digit growth. The company also noted an increase in total households, loyal households, and customer visits, indicating a solid customer base. However, the FIFO gross margin rate decreased by 7 basis points, primarily due to lower pharmacy margins and increased price investments, partially offset by a favorable product mix reflecting Our Brands’ margin performance.

The company’s LIFO charge for the quarter was $41 million, a decrease from $99 million in the same period last year. This reduction was attributed to lower inflation expectations for the current year. Despite these challenges, Kroger’s commitment to providing exceptional customer value and investing in associates has helped maintain a stable performance.

Kroger’s $1.43 Adjusted EPS Beats Wall Street Estimates

Kroger’s first-quarter performance fell short of Wall Street expectations. Analysts had anticipated an EPS of $1.34, but the company reported an EPS of $1.29. Despite this, Kroger’s adjusted EPS, which excludes certain items, was $1.43, surpassing the expected $1.34. This adjusted figure indicates that the company’s core operations performed better than the headline numbers suggest.

Revenue expectations for the quarter were set at $44.93 billion, and Kroger managed to exceed this with actual revenues of $45.3 billion. This slight outperformance in revenue indicates that, despite various headwinds, the company’s sales strategies are effective. The increase in digital sales and customer visits further supports this positive trend.

However, the operating profit declined, with the first quarter of 2024 reporting $1,294 million compared to $1,470 million in the first quarter of 2023. This drop in operating profit is a concern, reflecting increased operating expenses and investments in associate wages and incentive plans. The OG&A rate increased by 22 basis points, highlighting the cost pressures the company is facing.

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Kroger Reaffirms Full-Year 2024 Guidance, Expects Net Earnings per Diluted Share Between $4.30 and $4.50

Kroger reaffirmed its full-year 2024 guidance, projecting identical sales growth, excluding fuel, between 0.25% and 1.75%. The company expects adjusted FIFO operating profit to range between $4.6 billion and $4.8 billion. Adjusted net earnings per diluted share are forecasted to be between $4.30 and $4.50. These projections indicate cautious optimism, with the company expecting steady growth despite economic uncertainties.

The company also anticipates generating adjusted free cash flow of $2.5 billion to $2.7 billion and capital expenditures of $3.4 billion to $3.6 billion. These figures suggest a strong commitment to reinvesting in the business to drive long-term growth. The adjusted effective tax rate is expected to be around 23%, reflecting typical tax adjustments.

Kroger’s capital allocation strategy focuses on generating strong free cash flow and maintaining its investment-grade debt rating. The company has paused its share repurchase program to prioritize de-leveraging following the proposed merger with Albertsons.

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

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Accenture (NYSE: ACN) reported mixed results for its fiscal third quarter, falling short of analyst expectations on both revenue and earnings per share. However, the company’s stock surged in pre-market trading as investors focused on Accenture’s raised guidance driven by strong demand for its artificial intelligence (AI) services.

Accenture Misses Q3 Expectations

For the quarter ended May 31, 2024, Accenture posted revenues of $16.5 billion, representing a 1% decrease in U.S. dollars but a 1.4% increase in local currency compared to the same period last year. The company’s consulting revenues stood at $8.5 billion, while managed services revenues reached $8.0 billion. Despite the slight revenue miss, Accenture’s GAAP operating margin improved to 16.0% from 14.2% in the prior year.

On the earnings front, Accenture reported GAAP earnings per share (EPS) of $3.04, a 3% decrease from $3.15 in the previous year. Adjusted EPS also declined 2% to $3.13 from $3.19. The company’s actual EPS of $3.04 fell short of analyst expectations of $3.17 by $0.13. While revenue of $16.5 billion slightly missed the expected $16.6 billion, it remained within Accenture’s adjusted guidance range. The company’s new bookings were a bright spot, reaching $21.1 billion, a 22% increase in U.S. dollars and a 26% increase in local currency.

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Accenture Ups Guidance Based on AI Business

Looking ahead, Accenture raised its full-year fiscal 2024 revenue growth guidance to 1.5%-2.5% in local currency, narrowing the previous range of 1-3%. For the fourth quarter, the company anticipates revenues between $16.05 billion and $16.65 billion, translating to a 2-6% growth in local currency.

The upbeat guidance is largely attributed to Accenture’s strong performance in its AI-related business. The company reported over $900 million in new bookings tied to generative AI in the third quarter alone, contributing to a total of $2 billion in AI-related bookings for the fiscal year-to-date. Accenture’s significant investments in AI are paying off, as the growing adoption of these technologies helps offset slower enterprise IT spending. Generative AI solutions enable Accenture’s clients to enhance productivity and reduce costs.

ACN Stock Gains in Premarket Trading Session on AI-Fueled Guidance

As of the June 18, 2024 close, Accenture’s stock price stood at $285.35, down $0.18 or 0.06%. However, the stock surged in pre-market trading, reaching $304.02, a gain of $18.67 or 6.54%, as investors reacted positively to the company’s AI-driven outlook. Accenture’s market capitalization currently stands at $179.408 billion, with a beta of 0.92 and a trailing twelve-month (TTM) P/E ratio of 25.87. The company’s TTM EPS is $11.04, and it offers a forward dividend yield of 0.51%.

Over the past year, Accenture’s stock has underperformed the broader market, with a 1-year return of -9.33% compared to the S&P 500’s gain of 24.43%. The stock’s 3-year and 5-year returns also lag the benchmark index, at 4.57% and 66.30%, respectively, versus the S&P 500’s returns of 29.97% and 89.88%. Year-to-date, Accenture’s stock is down 18.07%, while the S&P 500 has gained 15.04%.

Do you think the generative AI hype is worth its weight? 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.

Jabil Inc. (NYSE: JBL) reported its third-quarter financial results for fiscal year 2024, showcasing a mix of achievements and challenges. The company posted a net revenue of $6.8 billion, which exceeded expectations and highlighted its resilience amidst a significant transformation. This quarter, Jabil experienced a U.S. GAAP operating income of $261 million and a U.S. GAAP diluted earnings per share (EPS) of $1.06. On a non-GAAP basis, core operating income was $350 million, and core diluted EPS stood at $1.89.

CEO Mike Dastoor emphasized Jabil’s strategic moves, including divesting its Mobility business and capturing growth in the AI data center space. Despite encountering softness in multiple end markets, the company remains on track to achieve its fiscal year 2024 targets of 5.6% core margins and $8.40 of core diluted EPS. Additionally, Jabil generated over $1 billion in adjusted free cash flow and committed to repurchasing $2.5 billion of its shares.

Jabil’s performance this quarter underscores its ability to navigate complex market dynamics while focusing on long-term growth opportunities. The company is well-positioned to benefit from trends in areas such as data center power and cooling, electric and hybrid vehicles, healthcare solutions, semiconductor equipment, and automated warehousing.

Jabil Beats EPS and Revenue Expectations in Q3

The company delivered notable results when comparing Jabil’s third-quarter performance against market expectations. Analysts anticipated an EPS of $1.85 and revenue of $6.53 billion. Jabil surpassed these projections with an actual core diluted EPS of $1.89 and revenue of $6.8 billion. This outperformance demonstrates Jabil’s robust operational execution and strategic foresight.

The company’s U.S. GAAP diluted EPS of $1.06 was below the anticipated core EPS, reflecting adjustments for restructuring, severance, and related charges. However, the core metrics excluding these adjustments provide a clearer picture of Jabil’s ongoing operational strength. Although slightly lower than the previous quarter, the core operating income of $350 million aligns with the company’s strategic initiatives and market conditions.

Jabil’s ability to exceed revenue expectations despite the challenges in certain end markets highlights its diversified portfolio and strategic agility. The company’s focus on high-growth areas such as AI data centers and proactive divestment strategy has positioned it well to navigate market fluctuations and capitalize on emerging opportunities.

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Guidance for the Next Quarter

Looking ahead to the fourth quarter of fiscal year 2024, Jabil has provided a cautiously optimistic outlook. The company forecasts net revenue from $6.3 billion to $6.9 billion. U.S. GAAP operating income is expected to be between $285 million and $355 million, with U.S. GAAP diluted EPS projected to range from $1.40 to $1.88 per share. On a core basis, Jabil anticipates core operating income between $365 million and $425 million, and core diluted EPS between $2.03 and $2.43.

This guidance reflects Jabil’s confidence in its strategic direction and operational capabilities. The company’s focus on high-growth sectors and its commitment to operational efficiency are expected to drive continued performance improvements. Jabil’s proactive measures, including share repurchases and strategic divestments, are aimed at enhancing shareholder value and positioning the company for sustainable growth.

Jabil’s fourth-quarter outlook underscores its strategic agility and resilience in the face of market uncertainties. The company’s ability to provide a robust guidance range, despite the ongoing economic and geopolitical challenges, highlights its strong operational foundation and strategic foresight.

Long-Term Strategic Positioning

For the full fiscal year 2024, Jabil has reiterated its commitment to achieving net revenue of $28.5 billion, a core operating margin of 5.6%, and core diluted EPS of $8.40. The company also aims to generate over $1 billion in adjusted free cash flow, emphasizing its focus on financial discipline and shareholder returns.

Jabil’s strategic initiatives, including investments in high-growth areas and operational efficiencies, are designed to drive long-term value creation. The company’s diversified portfolio and global reach provide a strong foundation for navigating market fluctuations and capturing emerging opportunities. Jabil’s proactive approach to managing its capital structure, including share repurchases and strategic divestments, underscores its commitment to enhancing 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.

Accenture (NYSE: ACN) reported its financial results for the third quarter of fiscal 2024, ending May 31, 2024, showcasing a mixed performance. The company recorded revenues of $16.5 billion, a slight decrease of 1% in U.S. dollars but an increase of 1.4% in local currency compared to the same period last year. Consulting revenues were $8.5 billion, while managed services revenues reached $8.0 billion. The company’s GAAP operating margin improved to 16.0%, up from 14.2% in the previous year, indicating a positive trend in operational efficiency.

Accenture achieved significant milestones in new bookings, which totaled $21.1 billion, marking a 22% increase in U.S. dollars and a 26% increase in local currency. The company also reported over $900 million in new bookings related to generative AI, contributing to a total of $2 billion in AI-related bookings for the fiscal year to date. Despite these achievements, GAAP earnings per share (EPS) for the quarter were $3.04, a 3% decrease from the previous year’s $3.15. Adjusted EPS also saw a decline, falling 2% to $3.13 from $3.19.

Accenture Falls Short of Revenue, EPS Forecasts in Fiscal Q3

When comparing Accenture’s actual performance to market expectations, the results present a nuanced picture. Analysts had anticipated an EPS of $3.17 and revenue of $16.6 billion for the quarter. Accenture’s reported EPS of $3.04 fell short of expectations by $0.13, and even the adjusted EPS of $3.13 did not meet the forecasted figure. This shortfall in EPS can be attributed to higher effective tax rates and increased noncontrolling interests, which partially offset gains from a lower share count.

On the revenue front, Accenture’s $16.5 billion slightly missed the expected $16.6 billion, though it was within the company’s adjusted guidance range of $16.10 billion to $16.70 billion. The minor revenue decline of 1% in U.S. dollars was more than offset by a 1.4% increase in local currency, highlighting the impact of foreign exchange rates on the company’s financials. Despite these challenges, Accenture’s strong new bookings and continued investment in generative AI and other strategic areas underscore its commitment to growth and innovation.

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Accenture Updates Business Outlook for Fiscal 2024, Expects Full Year Revenue Growth of 1.5% to 2.5%

Accenture has updated its business outlook for fiscal 2024, reflecting cautious optimism. The company now expects full-year revenue growth of 1.5% to 2.5% in local currency, slightly narrowing the previous range of 1% to 3%. This adjustment accounts for an anticipated negative foreign-exchange impact of 0.7%, a revision from the earlier flat expectation. Accenture continues to project a GAAP operating margin of 14.8% and an adjusted operating margin of 15.5% for the full year.

For the fourth quarter of fiscal 2024, Accenture forecasts revenues between $16.05 billion and $16.65 billion, representing a 2% to 6% growth in local currency. The company also anticipates GAAP EPS to range from $11.29 to $11.44 and adjusted EPS from $11.85 to $12.00 for the full year, reflecting a slight downward revision from previous estimates. These projections include the effects of business optimization costs and gains from investments, indicating a balanced approach to managing operational efficiencies and strategic investments.

Strategic Initiatives and Shareholder Returns

Accenture’s strategic initiatives focus on driving growth and delivering value across multiple dimensions. The company has made 35 acquisitions year-to-date, deploying $5.2 billion in capital to strengthen its capabilities and market position. Additionally, Accenture’s commitment to generative AI, with $900 million in new bookings this quarter alone, highlights its proactive approach to leveraging emerging technologies for competitive advantage.

Regarding shareholder returns, Accenture declared a quarterly cash dividend of $1.29 per share, a 15% increase over the previous year’s rate. The company also repurchased or redeemed 4.3 million shares for $1.4 billion during the quarter, with a remaining share repurchase authority of approximately $3.3 billion as of May 31, 2024.

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 Goldman Sachs’ 2024 outlook, strategist David Kostin upped the S&P 500’s previous target from February’s 5,200 to 5,600 by the end of the year. Presently at 5,487, this puts the broader market growth by 2%. 

The culprits for this revision are mega-cap tech stocks and their strong earnings. In particular, the investor confidence in upward valuations based on generative artificial intelligence (AI). The tech heavyweights Nvidia (NASDAQ: NVDA), Microsoft (NASDAQ: MSFT), Alphabet (NASDAQ: GOOGL), Amazon (NASDAQ: AMZN), and Meta Platforms (NASDAQ: META) now make up a quarter of S&P 500 market cap.

Compared to an average S&P 500 company earnings per share (EPS) expectation of 6%, these five mega caps have consensus forecasts of 37%, creating a 31% EPS forecast gap. But on a long-term time scale, which mid-cap stocks have the potential to outperform the broader market in a similar manner?

Broadcom (NASDAQ: AVGO)

Over the last five years, AVGO stock has appreciated by 557%, but the fabless semiconductor company is looking to ramp up its market cap this year due to several factors. First, Broadcom established itself as a reliable supplier of everything related to data center infrastructure, from network controllers to enterprise storage.

This is demonstrated by the ongoing relationship with Google, having provided custom tensor processing units (TPUs) for Google’s increasing AI workloads. 

Secondly, to offset the somewhat cyclical nature of its core business model, Broadcom crossed a diversification milestone when it bought cybersecurity firm VMware (VMW) for $69 billion. In the latest earnings report in June, Broadcom’s revenue is now split between semiconductor solutions (58%) and infrastructure software.

Having beaten the Q2 EPS estimate of $10.84 at $10.96, Broadcom reported a non-GAAP net income increase of 20% year-over-year. Before VMware’s acquisition, the company finished the quarter with $977 million non-GAAP net income, growing its SaaS business model by 34% YoY.

Owing to this sticky model and high switching costs, it is likely that VMware will continue to boost Broadcom’s bottom line, quarter by quarter. Lastly, to invite greater retail participation, Broadcom announced a 10-for-1 stock split, scheduled to take effect on July 15th. 

Just as this move benefited Nvidia, investors should see similar capital inflows for AVGO shares as well. Over the last three months, AVGO stock is up 44%, while the 52-week average price is $1,090.77. 

Now at $1,802.52 per share, AVGO shares are heading for a $1,886.43 average price target, per Nasdaq forecasting data. The upper ceiling twelve months ahead is $2,100 per share. Of course, after mid-July, this will be split by 10x. 

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ASML Holding N.V. (NASDAQ: ASML)

As semiconductor technology underwent miniaturization waves over the decades, the technology became increasingly complex. This complexity led to few companies being able to manufacture semiconductor chips.

Dutch ASML is one of them. ASML is a layer zero company in this capacity because of its cutting-edge extreme ultraviolet (EUV) and deep ultraviolet (DUV) lithography machines. They enable the manufacturing of semiconductor nodes. While DUV handles less advanced 240 -153 nm chip nodes, EUV allows pushing the envelope into 7 nm, 5 nm, and below processes.

Divided between logic (41%) and memory (59%), ASML reported net system bookings at €3.6 billion in Q1 2024. Compared to Q1 2023 at €6.7 billion, ASML’s total net sales this Q1 were €5.3 billion. In the last five quarters, ASML generated the highest net sales of €7.2 billion in Q4 ‘23, revealing a somewhat cyclical nature of the company.

Although the semiconductor sector is cyclical, ASML’s unique wide-moat market position provides a buffer. By supplying semiconductor foundries globally, such as Samsung, Intel (NASDAQ: INTC), TSMC (NASDAQ: TSM), and others, the company is diversified against localized economic downturns.

This makes ASML one of the safest exposures in any investor’s portfolio. Over the last five years, ASML stock has increased 424%. At present, ASML shares are $1,061, significantly up from the 52-week average of $783.79 per share. Nasdaq’s forecasting puts the average ASML price target at $1,102.25 with an upper ceiling of $1,185 per share.

MicroStrategy (NASDAQ: MSTR)

As this business intelligence company became a proxy for Bitcoin (BTC), MSTR stock went up 901% over the last five years. Greatly outperforming Bitcoin itself in the last 6 months, at 167% vs 59% respectively, MicroStrategy is the stock maverick. 

The gambit is simple. The entire social structure is geared toward money devaluation because politicians are addicted to catering to their client groups. As this catering continues, federal budget deficits balloon alongside debt. In turn, the central banking system regulates the deep imbalances by constantly tampering with the money supply.

This effectively imposes an extra layer of taxation on non-client groups.

MicroStrategy bets that Bitcoin is the exit out of this system, owing to Bitcoin’s decentralized nature and its massive network effect. Although anyone can fork Bitcoin’s open source as a digital asset, this would be meaningless as that digital asset wouldn’t be anchored to a wide network of hardware assets and proof-of-work energy harnessing. 

This makes Bitcoin a separate category from millions of cryptocurrencies in the market. By leveraging debt, MicroStrategy has accumulated 214,400 bitcoins at an average purchase price of $35,158. At the present price of $1,469, MSTR stock is nearly double its 52-week average of $768.38 per share. 

What is your preferred type of asset in your portfolio: dividend-driven stocks, high-growth stocks, or cryptos? 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.

Dell Technologies (NYSE: DELL) announced today that its recently unveiled AI Factory platform will utilize Nvidia’s (NASDAQ: NVDA) high-performance GPUs to power xAI, the artificial intelligence startup founded by Elon Musk. The move comes as Dell seeks to accelerate the adoption of AI in the enterprise by simplifying the deployment process and making it more accessible to businesses of all sizes.

Dell’s AI Factory, first introduced last month, is a comprehensive offering designed to help organizations harness the power of AI at scale. By leveraging Nvidia’s cutting-edge chips, the platform will enable xAI to train and run its advanced AI models, including Grok, across traditional infrastructure and accelerated computing environments.

xAI and the AI Revolution

Founded in March 2023, xAI has quickly established itself as a major player in the AI industry. The San Francisco Bay Area-based company, which has a stated mission of “understanding the true nature of the universe,” has developed a range of AI models and tools, such as Grok and PromptIDE. Despite having only around 50 employees as of 2024, xAI has raised significant funding, reportedly raising up to $6 billion in recent Series B funding to support its ambitious plans, including constructing the world’s largest supercomputer in Memphis.

The partnership between Dell and xAI, facilitated by the AI Factory platform and Nvidia’s GPUs, is expected to play a significant role in xAI’s growth and the broader adoption of AI in the enterprise. The AI Factory provides an intelligent bundling of software and services, enabling organizations to customize and accelerate the development of in-house chatbots, digital assistants, and other AI-powered applications across various use cases, from content creation and language search to code generation and beyond.

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Dell and Nvidia Stock Brief

As of the close of trading on June 18, 2024, Nvidia’s stock price stood at $135.58, up 3.51% on the day and an impressive 173% year-to-date.

The company’s market capitalization now sits at $3.34 trillion, reflecting the growing demand for its AI-focused chips. Similarly, Dell’s stock price rose 5.01% to $149.15, with its market cap reaching $105.8 billion, as investors recognized the potential of its AI Factory offering.

By combining cutting-edge hardware, software, and services, these collaborations have the potential to accelerate the adoption of AI across industries, transforming the way businesses operate and driving unprecedented levels of innovation.

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.

Meta Platforms, Inc. (NASDAQ: META) stock has experienced volatility following its Q1 2024 earnings report, but several factors suggest the social media giant is well-positioned for future growth. The company’s strong financial performance, strategic investments in cutting-edge technologies, and recent shareholder-friendly initiatives have created a compelling case for investors looking to capitalize on the tech sector’s long-term potential.

Meta’s Q1 results demonstrated the company’s ability to maintain robust growth, with revenue increasing by 27% year-over-year and earnings per share surpassing Wall Street expectations. Additionally, the company’s massive user base, which includes over 3.2 billion monthly active users across its family of apps, provides perhaps an underrated yet unparalleled foundation for future expansion and monetization opportunities.

Meta’s heavy investments in artificial intelligence (AI) and virtual reality (VR) technologies also position the company at the forefront of the next generation of computing platforms. As these technologies mature and are widely adopted, Meta is poised to reap significant benefits from its early mover advantage and extensive research and development efforts. While currently operating at a loss, the company’s Reality Labs division has the potential to unlock new revenue streams and drive growth in the coming years as the metaverse concept gains traction.

Why Meta Stock is a Dark Horse Among Big Tech

Despite the market’s negative reaction to Meta’s plans for increased spending and the losses incurred by its Reality Labs division, the company’s core business remains strong, and its investments in AI and VR are likely to pay off in the long run. Meta’s AI capabilities have already been successfully integrated into its advertising platform, enhancing ad targeting and driving better returns for advertisers. As the company continues to refine its AI algorithms and apply them across its various products and services, it is expected to unlock new opportunities for growth and efficiency.

Moreover, the rumors of a potential stock split in 2024 have generated excitement among investors. A stock split would make Meta’s shares more accessible to a broader range of retail investors, potentially leading to increased demand and liquidity for the stock.

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META Still Undervalued When Compared to Big Tech Peers

Although Meta’s market capitalization of $1.27 trillion is smaller than that of some of its Big Tech counterparts, such as Apple (NASDAQ: AAPL) ($3.29T), Microsoft (NASDAQ: MSFT) ($3.32T), Alphabet (NASDAQ: GOOG) ($2.17T), and Amazon (NASDAQ: AMZN) ($1.90T), the company’s stock has outperformed the broader market in 2024. Meta’s shares have surged 41% year-to-date, compared to the S&P 500’s 15% gain. Moreover, Meta’s price-to-earnings (P/E) ratio of 28.7 is lower than Apple’s (33.3), Microsoft’s (38.7), and Amazon’s (51.3), indicating that the stock may be relatively undervalued compared to its peers.

Meta’s Shares Currently Trading 5% Below 52-Week High

As of the latest trading session, Meta’s stock is priced at $499.49, representing a 1.41% decline on the day. The stock is currently trading 5% below its 52-week high. However, analysts remain bullish on Meta’s prospects, with an average price target of $515.52, suggesting a potential upside of 3%.

Meta recently announced its first-ever quarterly dividend of $0.50 per share and has authorized a substantial $50 billion share repurchase program, demonstrating its commitment to returning value to shareholders. These developments have contributed to increased trading activity, with a volume of 13.06 million shares, surpassing the 3-month average of 6.51 million shares.

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 U.S. stock market saw mixed performance on Tuesday morning, with NextEra Energy (NYSE: NEE) and Boeing shares (NYSE: BA) declining while Occidental Petroleum (NYSE: OXY) experienced gains.

The divergent moves come amid significant news developments for each company, including a Senate hearing on Boeing’s safety practices, Warren Buffett’s increased stake in Occidental Petroleum, and NextEra Energy’s plans to sell equity units to fund renewable energy projects.

Boeing Faces Scrutiny Over Safety and Whistleblower Claims

Boeing CEO Dave Calhoun is set to face tough questions from U.S. senators regarding the company’s safety culture and new whistleblower allegations.

The Senate hearing follows a January mid-air emergency involving an Alaska Airlines 737 MAX 9, which raised widespread concerns about the plane’s safety. Senator Richard Blumenthal revealed that a current Boeing quality assurance investigator, Sam Mohawk, recently informed the panel of systemic disregard for documentation and accountability of nonconforming parts.

Mohawk claimed that nonconformance reports soared 300% compared to the period before the 737 MAX grounding and that the program intentionally hid faulty parts from the FAA during an inspection. While Calhoun is expected to acknowledge shortcomings, he will also emphasize Boeing’s efforts to improve.

The company has been under increased scrutiny from regulators and airlines since the January incident, with the FAA recently giving Boeing 90 days to develop a comprehensive quality improvement plan.

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Buffett Bets Big on Occidental Petroleum

Warren Buffett’s Berkshire Hathaway has significantly increased its stake in Occidental Petroleum, acquiring nearly 3 million additional shares over three trading days.

The purchases, made at an average price of $59 per share, bring Berkshire’s total holdings to 255,281,524 common shares, representing almost 29% of the company. The stake, worth approximately $15.37 billion as of Monday, underscores Buffett’s confidence in Occidental Petroleum and the U.S. shale industry.

Despite sparking takeover speculation, Buffett has denied any intentions to acquire control of the company, stating that they like OXY’s position in the Permian Basin but wouldn’t know what to do with a controlling interest. Occidental Petroleum, meanwhile, is working to close its $12 billion acquisition of Permian producer CrownRock by August 2024.

NextEra Energy to Raise Funds for Renewable Projects

NextEra Energy announced plans to sell $2 billion of equity units to Wells Fargo Securities and BofA Securities to raise capital for its renewable energy projects.

The news sent NextEra shares down 3.4% in morning trading. The net proceeds from the sale will be used to fund investments in the company’s energy and power projects, with plans to invest $12 billion in solar and $1.5 billion in battery storage from 2024 to 2027.

Each $50 equity unit will have a contract to purchase NextEra Energy common stock in three years and a 5% ownership interest in a NextEra Energy Capital Holdings debenture due June 1, 2029. NextEra Energy’s focus on renewable energy comes as the sector grows and attracts investor interest.

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.

America’s Car-Mart (NASDAQ: CRMT) has announced its financial results for the fourth quarter and the full fiscal year ending April 30, 2024. The company reported revenue of $364.7 million for the quarter, marking a 5.8% decline compared to the same period last year. Despite the dip in revenue, the gross margin improved to 35.5%, up by 200 basis points. Total collections also saw a positive trend, increasing by 5.0% to $187.2 million. Additionally, the company made a favorable adjustment to its allowance for credit loss, reducing it to 25.32% from 25.74%.

However, not all metrics painted a rosy picture. Net charge-offs as a percentage of average finance receivables rose to 7.3% compared to 6.3% in the previous year. Interest expenses also saw a significant increase, climbing by $4.9 million, or 38.2%. The quarter’s diluted earnings per share (EPS) stood at $0.06, a sharp decline from the $0.32 reported in the same quarter last year. This EPS decline is a concern for investors and market analysts alike.

CRMT Misses EPS and Revenue Expectations in Q4

When comparing the current quarter’s performance against market expectations, America’s Car-Mart fell short. Analysts had projected an EPS of $0.063, but the actual EPS came in slightly lower at $0.06. While this might seem like a minor discrepancy, it underscores the challenges the company is facing. Revenue expectations were pegged at $364.86 million, and the actual revenue of $364.7 million missed this target by a small margin. Although the shortfall in revenue is minimal, it still highlights the company’s struggle to meet market expectations.

The improvement in gross margin and total collections could be seen as positive signs, but they were not enough to offset the increased interest expenses and higher net charge-offs. These factors collectively contributed to the lower-than-expected EPS. The company’s ability to manage its finance receivables and control interest expenses will be crucial in the coming quarters to meet or exceed market expectations.

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America’s Car-Mart Focused on Improving Credit Loss Allowance Further

Looking ahead, America’s Car-Mart has provided guidance that aims to address some of the issues highlighted in the current quarter’s performance. The company plans to focus on improving its credit loss allowance further and managing its interest expenses more effectively. These steps are expected to enhance the overall financial health of the company and provide a more stable foundation for future growth.

Additionally, the company has indicated that it will continue to work on improving its gross margin and total collections. These areas have shown positive trends in the current quarter, and sustained focus on them could yield better financial results in the upcoming quarters. The management’s strategy will likely involve a combination of cost-cutting measures and revenue-enhancing initiatives to achieve these goals.

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.

Patterson Companies, Inc. (NASDAQ: PDCO) reported its fiscal 2024 fourth-quarter results, showcasing a slight increase in net sales by 0.1% year-over-year, amounting to $1.72 billion. Despite the modest growth in overall sales, internal sales experienced a minor decline of 0.5%. The company faced a challenging market environment but managed to maintain stable performance, driven primarily by strong growth in production animal and dental consumables segments, which saw a 3.7% year-over-year increase.

The fourth quarter’s GAAP earnings per diluted share were reported at $0.74, while adjusted earnings per diluted share were $0.82. Both figures were negatively impacted by $0.04 per diluted share due to a cybersecurity attack on Change Healthcare, a vendor partner. Net income attributable to Patterson Companies, Inc. for the quarter stood at $67.0 million, compared to $75.0 million in the same period last year. This decline is primarily attributed to lower equipment sales and the aforementioned cybersecurity incident.

In the dental segment, reported net sales were $657.8 million, with internal sales decreasing by 3.8% year-over-year. However, internal sales of dental consumables increased by 3.7%, excluding the deflationary impact of certain infection control products. The animal health segment reported net sales of $1.06 billion, with internal sales growth of 2.5% driven by the production animal business. This segment also saw a notable increase in value-added services by 15.0%.

Patterson Companies, Inc. (PDCO) Beats EPS Expectations by $0.01

Patterson Companies’ fourth-quarter performance slightly missed the expectations set by analysts. The expected earnings per share (EPS) for the quarter were $0.83, while the actual adjusted EPS came in at $0.82. Although the difference is minimal, it highlights the impact of unforeseen challenges, such as the cybersecurity attack, on the company’s financial performance. Additionally, the expected revenue for the quarter was $1.7 billion, and the company exceeded this expectation marginally with reported net sales of $1.72 billion.

The company’s ability to meet revenue expectations while slightly missing the EPS target indicates a resilient business model but also underscores the need for improved operational efficiency. The decline in net income compared to the previous year further emphasizes the impact of external factors and the importance of strategic adjustments to mitigate such risks. The dental segment’s internal sales decline of 3.8% contrasts with the overall positive performance in consumables, suggesting a need for targeted strategies to boost equipment and value-added services sales.

Despite these challenges, Patterson Companies demonstrated a robust performance in the animal health segment, with internal sales growth driven by consumables and value-added services. This segment’s success highlights the company’s strong positioning in the production animal market and its potential for future growth.

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Patterson Companies Expect $2.23 to $2.43 Adjusted EPS for FY 2025

Looking ahead to fiscal 2025, Patterson Companies has issued guidance for both GAAP and non-GAAP adjusted earnings. The company expects GAAP earnings to be between $2.00 and $2.10 per diluted share and non-GAAP adjusted earnings to be between $2.33 and $2.43 per diluted share.

The guidance also takes into account the expected impact of deal amortization expenses, estimated at approximately $29.1 million or $0.33 per diluted 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.

At last week’s earnings call for Q2 period, Broadcom (NASDAQ: AVGO) announced a 10-for-1 stock split scheduled for July 15th. The fabless semiconductor company headquartered in San Jose, California is following Nvidia’s lead. Since Nvidia’s own stock split took effect on June 10th, turning investors’ one share into 10 shares’ worth, NVDA stock is up nearly 9%.

Just like stock buyback programs, stock splits are becoming increasingly popular to lock in shareholders and attract new ones. Not only do stock splits increase trading liquidity by making shares more affordable, but denominational shift makes cheaper shares more perceptually attractive for retail investors habituated to small-cap stocks. 

Additionally, by going cheaper than its rival AMD (NASDAQ: AMD) presently at $130 vs $154 respectively, Nvidia closed in on its peer, making it even more comparatively enticing. With this psychology in play, in the case of both Nvidia and Broadcom, shareholders see stock splits as a sign of further growth.

But do Broadcom’s fundamentals also follow Nvidia’s?

Broadcom’s Business Model

Akin to AMD and Nvidia, Broadcom relies on outsourcing its chip designs to third-party manufacturing firms (foundries) like TSMC (NYSE: TSM) or GlobalFoundries (NASDAQ: GFS). This leaves Broadcom’s focus on innovation and marketing, keeping the company agile to market’s needs.

For instance, Broadcom is a supplier of custom tensor processing units (TPUs) to Google for its AI workloads, having excluded Marvell Technology (MRVL) as a potential candidate.

Diverting from the supply of GPUs or CPUs, Broadcom caters to a more base infrastructure layer, ranging from data centers, wireless communications, network controllers, switching chips, enterprise storage, and software solutions. In the latter category, Broadcom bought Symantec in 2019 only to sell it to Accenture. 

However, VMware (VMW) still operates under Broadcom’s umbrella, having acquired the cyber firm for $69 billion, as a direct competitor to cloud-native CrowdStrike (NASDAQ: CRWD). This diversification, with revenue split between 42% on infrastructure software and 58% on semiconductor solutions, is good news for AVGO shareholders.

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Broadcom’s Financial State Tied with Cybersecurity

In the latest Q2 earnings report delivered on June 12th, Broadcom beat earnings per share (EPS) estimate of $10.84 at $10.96. Likewise, Broadcom’s revenue of $12.49 billion beat the estimate of $12.03 billion, per LSEG data. For the non-GAAP net income, which excludes one-time expenditures and stock-based compensation, Broadcom reported a 20% YoY increase to $5.4 billion.

Also excluding VMWare integration and restructuring costs, Broadcom delivered $5.3 billion free cash flow, a YoY uptick of 18%. Owing to VMWare revenue contribution, Broadcom is now forecasting 2024 revenue outlook at ~$51 billion, up 42% from year prior. 

Before its acquisition by Broadcom, VMware ended the quarter with $977 million operating income (non-GAAP) and 81.20% gross margin, the lowest on record from the high of 86.90% in 2014. This reduction in profitability is mainly due to the cybersecurity’s competitive arena, presently spearheaded by CrowdStrike (CRWD).

However, having learned from Symantec’s acquisition, Broadcom’s restructuring efforts are likely to more than compensate for the costly $69 billion purchase. In the pre-acquisition quarter, VMware generated 34% YoY growth in software as a service (SaaS) revenue via subscriptions. 

Within a couple of years, VMware’s multi-cloud momentum of 36% SaaS ARR (annual recurring revenue) is poised to compound on AI-driven networking and data center demand. 

Analyst Forecasting of AVGO Shares

Year-to-date, Broadcom stock is up 65%. At the present price of $1,798, AVGO shares are above the all-time high of $1735 on June 14th. Over the last 52 weeks, the average price of AVGO stock is $1083.11 per share. 

Per Nasdaq’s forecasting aggregation, AVGO stock is headed for an average price target of $1886.43 per share, which will be divided by 10 next month. At that point, Broadcom will be in the range of TSMC (TSM), currently priced at $175 per share. 

Considering that VMware’s business model of long-term contracts and high-switching costs for clients is sticky, that stickiness transferred to Broadcom. Although Broadcom’s own revenue model is sticky, its core hardware business is more cyclical, now offset by the pricey acquisition. 

In the end, Broadcom’s dual market segments are forecasted to double in size. Fortune Business Insights puts cybersecurity market CAGR at 13.8% by 2030, while AI infrastructure market size is heading for a CAGR of 20.4% by 2032.

Have you ever caught yourself dismissing a certain stock because it was priced over $1,000 per share? 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.

Best Buy (NYSE: BBY) and Micron Technology (NASDAQ: MU) both received bullish analyst calls on today, while GameStop’s (NYSE: GME) annual meeting is generating significant interest among its devoted retail investor base. Let’s take a look at the three stocks to watch today.

Best Buy Gets a Boost from UBS Analysts, New Price Target

Electronics retailer Best Buy saw its shares jump 3.5% to $90.28 after analysts at UBS upgraded the stock to a Buy rating from Neutral.

The firm also raised its price target to $106 from $85, citing several potential growth drivers over the next 18 months. These catalysts include an improving housing market, a looming replacement cycle for electronics, increasing adoption of AI-powered devices, and expansion into new product categories. UBS anticipates a “nice recovery” for Best Buy’s sales in late 2024 and 2025.

The analysts also highlighted the company’s successful restructuring efforts, which have boosted its earnings potential, and its attractive valuation. Best Buy currently sports a 4.3% dividend yield and trades at a 30% discount to the S&P 500.

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GameStop Shareholder Meeting in the Spotlight

Meanwhile, GameStop is holding its annual shareholder meeting today at 12:30pm ET. The event has generated significant buzz among the company’s loyal base of retail investors on social media platforms.

GameStop’s stock, which has been a favorite of the “meme stock” crowd, has gained 67% since influential investor Keith “Roaring Kitty” Gill resurfaced in May after a three-year hiatus. Gill recently disclosed a sizable 9 million share stake in the video game retailer. However, it remains unclear exactly what issues will be discussed at the meeting or if Gill himself will attend.

GameStop shares were trading 3.6% lower at $27.67 as of 12:02pm ET.

Micron Technology Attracts Upgrade

In the technology sector, memory chip maker Micron saw its shares gap up in pre-market trading after receiving an upgrade from Cantor Fitzgerald. The firm raised its price target on Micron to $180 from $150 and reiterated its Overweight rating on the stock.

Several other analysts have also issued bullish calls and hiked their price targets on Micron in recent months. However, the company has also seen some significant insider selling, with its CEO and SVP offloading shares worth over $2.6 million between April and June. Institutions remain confident in Micron’s prospects though, with over 80% of its shares held by institutional investors. Micron posted strong fiscal Q2 results in March, beating consensus estimates with revenue of $5.82 billion.

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

The post Stocks to Watch Today: Best Buy, GameStop, and Micron Technology appeared first on Tokenist.