Ford Motor Company

Ford Recalls More Than One Million Explorer SUVs Over Suspension Issue With Fix Costing $180 Million

12:16 PM, Jun 12, 2019 — Ford Motor Company (F) issued four safety recalls on Wednesday, including a notice for about 1.2 million of its Explorer SUV because of a suspension issue that will cost the carmaker an estimated $180 million to fix.

The Dearborn, Mich.-based company said it was recalling 2011 to 2017 Explorers because vehicles that have frequent “full rear suspension articulation” may have lead to a fractured rear suspension toe link, which can raise the risk of crash because it cuts steering control.

“One customer reported hitting a curb when the toe link broke,” the company said. “Ford is not aware of any reports of injury related to this condition in markets included in this action.”

The recall affects 1.2 million US vehicles, 28,000 in Canada and one in Mexico. They were built at Ford’s Chicago Assembly Plant between May 2010 and January 2017. The $180 million cost of the field service action to correct the issue will be incurred by Ford’s North America business, it said in a separate regulatory filing Wednesday.

“For the full year, we continue to expect company adjusted (earnings before interest and tax) to be higher than in 2018,” the company said.

Ford also said it’s recalling 123,000 North American 2013 F-150 pickups because powertrain control module software that was used to service the vehicles in another recall was incomplete. Trucks without the calibration that was intended to be done in the service could be at risk for unintended downshifting because of output speed sensor failure.

The company also issued a recall for 4,300 model year 2009-16 Ford Econoline vehicles for a loss of motive power issue and it recalled 12,000 Taurus, Flex and Lincoln models also over suspension toe line fracture issues.

In the regulatory filing, Ford also said a US Court of Appeals for the Federal Circuit earlier this month ruled in favor of a Customs and Border Protection decision that the company’s Transit Connects passenger wagons later converted into cargo vans are subject to a 25% duty for cargo vehicles, rather than the 2.5% passenger vehicle charge. Ford said it’s evaluating its options over the ruling and will treat either a refund or a higher rate payment as a special item.

Companies: Ford Motor Company
Price: 9.86 Price Change: -0.06 Percent Change: -0.55

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H&R Block Tops Expectations With Fourth-Quarter Results as It Snaps Up Wave Financial for $405 Million

9:44 AM, Jun 11, 2019 — H&R Block (HRB) reported better-than-expected results for its key fourth-quarter period and said it will pay $405 million to acquire Wave, a financial solution platform focused on small business owners.

Revenue slowed to $2.33 billion in the fiscal fourth quarter — the period when the tax-preparation company derives most of its sales — from $2.39 billion in the same period of 2018. But that was ahead of the consensus on Capital IQ for $2.32 billion.

Earnings from continuing operations fell to $4.32 in the three months ended April 30 from $5.43 a year earlier, although that also was ahead of the Street’s views for $4.15 a share on a normalized basis.

“Our strategic investments led to numerous improvements across our tax business,” said Chief Executive Jeff Jones. “We delivered great value for our clients and took overall market share by offering upfront transparent pricing, focusing on the quality of our service, enhancing our DIY offerings, and innovating in Virtual.”

For fiscal 2019, the number of US tax returns prepared by or through H&R Block rose 1.5% to 20.3 million. But full-year revenue fell 2.1% to $3.1 billion, “driven by targeted price decreases in our US Assisted tax business,” the company said.

Shares in H&R Block were up 3.7% in early trading as the company raised its quarterly dividend by 4% to $0.26 a share and extended its stock buyback authorization to June 2022. There’s about $1 billion remaining to repurchase under the program.

And H&R Block said the deal for Toronto-based Wave Financial will bolster its position in the small business market and generate $40 million to $45 million of revenue for fiscal 2020.

“Bookkeeping and cash flow management are significant pain points for small business owners and essential to successful annual tax preparation,” Jones said in a separate statement. “Wave provides us the opportunity to accelerate our small business strategy and is a great strategic fit, as both companies can leverage each other’s capabilities to bring tax and financial solutions to small business owners, serving more clients in more ways.”

Companies: H&R Block, Inc.
Price: 28.37 Price Change: +1.43 Percent Change: +5.31

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Weekly Commodities ETF Report: Crude Ends Week Higher on Increase in Inventories; Gold Surges as Disappointing May Jobs Data Spark Hopes for Interest Rate Cut

(MT Newswires) – Crude ended Friday’s session higher after a bigger-than-expected increase in US inventories, which wiped out the prior week’s decline. The Energy Information Administration reported Wednesday that stockpiles of crude oil rose by 6.8 million barrels to 483.3 million barrels in the week ended May 31. This compares with the American Petroleum Institute, meanwhile, which said Tuesday that crude inventories grew by 3.5 million barrels. Finally, energy services firm Baker Hughes (BHGE) reported Friday that the number of oil rigs operating in the US dropped by 11 to 789 in the week that ended June 7, the fewest in operation since Feb. 2, 2018. The combined oil and gas rig count in the US fell by nine to 975 as gas rigs rose by two to 186. Meanwhile, the US Treasury’s Office of Foreign Assets Control announced Friday fresh sanctions against Iran’s largest petrochemical company, Persian Gulf Petrochemical Industries company, for providing financial support to the engineering conglomerate of the Revolutionary Guard. The foreign assets watchdog also designated Persian Gulf Petrochemical’s 39 subsidiary petrochemical companies and foreign-based agents.

Light, sweet crude oil for July delivery gained 1.37% for the week, settling at $52.59 per barrel at the end of Friday’s session. In other energy futures, gasoline was down 1.40% during the week and settled at $1.71 per gallon on Friday. Natural gas fell 5.03% for the week but closed up Friday at $2.32 per 1 million British thermal unit.

The SummerHaven Dynamic Commodity Index Total Return Index (SDCITR) rose 1.35% this week, compared with a decline of 1.95% the prior week.

Gold ended Friday’s session at $1,342.70, near its highest level in about five years. The yellow metal has ended in positive territory for eight consecutive sessions now, but this week’s gain of 2.67% was bolstered by weaker-than-expected US jobs growth in May, which also spurred declines in the dollar and US Treasury yields. In contrast, copper closed Friday’s session lower at $2.65 per pound, and fell 0.27% for the week — the eighth consecutive weekly decline amid worsening trade and signs that economic growth across the globe is slowing. Additionally, the disappointing US jobs data out Friday had weakened the demand outlook for metals. The US said May nonfarm payrolls increased 75,000 in May, down from the revised April figure of 263,000 and badly missing consensus for 180,000. The unemployment rate was steady at 3.6% versus the 3.7% expected.

In agriculture commodities, corn fell 2.75% in the week and settled at $4.16 per bushel in Friday’s session; wheat slipped 0.26% lower and settled at $5.05 per bushel at the end of Friday’s session; and soybeans was down 2.62% for the week, and closed Friday in the red at $8.56 per bushel. Earlier this week, Reuters reported that two Chinese state-owned companies — OFCO and Sinograin — will divert up to 7 million tonnes of soybeans bought from the US to state reserves. The amount to be stockpiled is what is remaining from the 14 million tonnes of soybeans that the two companies ordered in December 2018 from the US, the Tuesday report added. The beans are yet to be shipped. One of the sources reportedly said the move is Beijing’s preparation for “a long-drawn trade war.” Other commodities were mixed: sugar had a weekly increase of 3.48% and settled at a price of $1.25 per pound on Friday; coffee was around $1.01 per pound at Friday’s close, down 3.99% for the week; and cocoa was up 2.04% for the week and closed Friday’s session at $2,466 per tonne.

 

Copyright © 2019 MT Newswires, www.mtnewswires.com.

 

Information Contact: Justin Hillstrom – 720.917.0770 Email: Justin.hillstrom@alpsinc.com, Website is www.uscfinvestments.com

Justin Hillstrom is a registered representative of ALPS Distributors, Inc.

Investing involves risks, including loss of principal.

Commodity ETP Disclosures:  Download a copy of a Fund’s Prospectus by clicking one of the following:  USCIUSOUSLUSOUUSODBNOUNGUNL, UGA, or CPER  

Please read any Prospectus carefully before investing.

These Funds are not mutual funds or any other type of Investment Company within the meaning of the Investment Company Act of 1940, as amended, and are not subject to regulation thereunder.

Commodity trading is highly speculative and involves a high degree of risk. Commodities and futures generally are volatile and are not suitable for all investors. Investing in commodity interests subject each Fund to the risks of its related industry. An investor may lose all or substantially all of an investment. These risks could result in large fluctuations in the price of a particular Fund’s respective shares. Funds that focus on a single sector generally experience greater volatility. Leveraged and inverse exchange-traded products pursue daily leveraged investment objectives which means they are riskier than alternatives which do not use leverage. They are not suitable for all investors and should be utilized only by investors who understand leverage risk and who actively manage their investments. For further discussion of these and additional risks associated with an investment in the Funds please read the respective Fund Prospectus before investing.

The SummerHaven Dynamic Commodity Index Total ReturnSM (SDCITR) is an index designed to reflect the performance of a portfolio of 14 commodity futures. The index is reformulated each month from 27 possible futures contracts. The 14 selected contracts are equally weighted and represent six sectors: Energy (WTI crude oil, Brent crude oil, natural gas, heating oil, gasoil, RBOB gasoline), Precious Metals (gold, silver, platinum), Industrial Metals (aluminum, copper, lead, nickel, tin, zinc), Grains (corn, soybeans, soybean meal, soybean oil, wheat), Livestock (live cattle, feeder cattle, lean hogs) and Softs (coffee, cocoa, cotton and sugar). One Cannot invest directly in an index.

Performance is historical and does not guarantee future results; current performance may be lower or higher. Investment returns/principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Most recent performance is available at www.uscfinvestments.com.

We advise you to consider a fund’s objectives, strategies, risks, charges and expenses carefully before investing. The Prospectus contains this and other information. Download a copy of a fund’s Prospectus by clicking the following: SDCI. Please read any Prospectus carefully before investing

Past performance does not guarantee future results.

This information is intended for U.S. residents.

Funds distributed by ALPS Distributors, Inc.

USO001994 Ex. 9/30/2019

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Barnes & Noble to Be Acquired by Waterstones Parent Elliott in $683 Million Deal

9:31 AM, Jun 7, 2019 — Barnes & Noble (BKS) will be acquired by an affiliate of Elliott Management that also owns the largest retail bookseller in the UK, in a deal valued at $683 million as the chain faces growing competition from e-commerce that’s weighed on sales.

The takeover will see the New York-based bookstore founded by Chairman Leonard Riggio bought for $6.50 a share in an all-cash deal, a 43% premium to the closing price on Wednesday, a day before rumors of the transaction were reported, it said in a statement Friday.

“We are pleased to have reached this agreement with Elliott, the owner of Waterstones, a bookseller I have admired over the years,” Riggio said. “In view of the success they have had in the bookselling marketplace, I believe they are uniquely suited to improve and grow our company for many years ahead.”

Shares in the retailer were up nearly 11% in early trading Friday, after surging 30% by the close the day earlier.

When the deal closes, Elliott will own both Barnes & Noble and Waterstones, the UK chain that has 293 bookstores and branches in Ireland, Brussels and Amsterdam. While the companies will operate independently, Waterstones Chief Executive James Daunt will also take over the helm of the US retailer.

Riggio said he will “do everything I can” to ease Daunt’s transition.

Barnes & Noble has been struggling with growing competition from online commerce including Amazon.com (AMZN), which has been a rival in book sales for several years amid the growth of digital readers. In the fiscal third quarter reported in March, sales were flat year-on-year at $1.2 billion, but a comparable store sales growth of 1.1% was the “best quarterly performance in several years,” it said at the time.

“Physical bookstores the world over face fearsome challenges from online and digital,” said Daunt. “We meet these with investment and with all the more confidence for being able to draw on the unrivaled bookselling skills of these two great companies. As a place in which to choose a book, and for the sheer pleasure of visiting, we know that a good bookstore has no equal.”

The Elliott takeover caps a strategic review process that Barnes & Noble announced last October. The retailer’s board has approved the deal and is recommending the takeover to shareholders, who still need to vote on the plan. Regulators also need to approve the deal, which is expected to close in the third quarter of this year.

Companies: Barnes & Noble, Inc.
Price: 6.61 Price Change: +0.65 Percent Change: +10.91

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Snap Jumps as Pivotal Research Boosts Rating as Revamped Android App, New Lenses Lure Users

4:01 PM, Jun 6, 2019 — The parent company of social-media app Snapchat got a boost from Pivotal Research Group on Thursday, which said user growth has “prospectively” turned a corner after the revamp of its Android app and amid new offerings within the program.

The rating on Snap (SNAP) was raised to buy from hold and the stock’s price target was lifted to $17.25 from $13.15, Pivotal senior research analyst Michael Levine said in a note.

Shares in the company jumped nearly 7% in late trading.

Levine said he’s confident that the launch of Snapchat revamped app for Alphabet’s (GOOGL) Android mobile operating system “is doing well” although that was likely already anticipated by the buy side. By the end of the first quarter, the app was available to everyone and has resulted in a 6% increase in the number of users sending Snaps in the first week of upgrading, the company said in April.

“Less appreciated based on our industry checks, we think the latest launch of lenses is among some of the most impressive product innovation we have seen in some time from the company,” said Levine. Snapchat’s popular filters and lenses offer uses the chance to change and manipulate their appearance on the app.

Daily active users reached 190 million in the first quarter of this year, up from 186 million in the fourth quarter but slightly lower than 191 million in the same period of 2018. Pivotal sees 2019 full-year sales of $1.64 billion and $2.2 billion in 2020. Expectations are for a full-year loss of $0.15 a share before swinging to 2020 earnings of $0.03 a share.

Media buyers who concluded they didn’t need to add Snap to their marketing plans could change their views into the second-half of the year, and that could “serve as a catalyst under appreciated by investors,” Levine said.

Risks include user growth slowing faster than expected and declines in advertising and over saturation of online marketing within ad budgets, the analyst said.

Companies: Snap Inc.
Price: 13.83 Price Change: +0.89 Percent Change: +6.88

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El Paso Electric to Be Acquired by JPMorgan’s Infrastructure Investment Fund in $4.3 Billion Cash Deal

9:50 AM, Jun 3, 2019 — El Paso Electric (EE) said Monday it has agreed to be purchased by J.P. Morgan Investment Management’s Infrastructure Investments Fund in an all-cash deal for $4.3 billion.

The power company said the fund will pay its stockholders $68.25 for each share, a 17% premium to El Paso’s closing price on Friday. The deal, which is expected to close in the middle of next year, includes the company’s debt, El Paso added.

El Paso was up nearly 14% in early trading.

“As we look to the future and the long-term investment required to meet the growing energy needs of our communities, we are confident IIF is the ideal partner for our region and EPE,” said Mary Kipp, the El Paso’s chief executive. “This agreement demonstrates that IIF values local job retention and growth; creating a sustainable path to enhance our renewable energy resources and protecting the environment; and treating our 1,000 employees, their families and our customers with transparency and respect.”

The company said the deal contains pledges from IIF that its union and non-union employees will stay in place and remain headquartered in El Paso, Texas. The company added that it and the IIF have pledged to $21 million in credits on customers’ electric bills over three years.

According to El Paso, it and IIF will establish a Community Economic Sustainability Fund to invest $100 million to fund economic development over 20 years in the service area.

“As a long-term owner of utilities, we understand the importance of EPE’s mission and believe our resources and experience can expand EPE’s leadership as a provider of safe, clean, affordable and reliable energy,” said Matthew LeBlanc, chief investment officer of J.P. Morgan’s Infrastructure Group.

J.P. Morgan Investment Management is a unit of JPMorgan Chase (JPM).

Price: 66.42 Price Change: +8.22 Percent Change: +14.12

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Weekly Commodities ETF Report: Crude Ends Week Lower as Tariffs on Mexican Imports Hurt Global Energy Demand; Gold Higher on Safe-Haven Sentiment

(MT Newswires) – Crude ended Friday’s session lower, heading for the second week of declines as US President Donald Trump’s threats to impose tariffs on Mexico, the largest recipient of US oil exports, added to concerns that a worsening trade environment would undermine global energy demand. Trump had tweeted that the US would impose a 5% tariff on all goods from Mexico — in a bid to curb the supposed high flow of illegal immigrants into the US from Mexico. Back home, the Energy Information Administration reported that inventories fell by 282,000 barrels over a week to May 24 – that compared with expectations for an 857,000-barrel drop in a Reuters’ survey of analysts. The American Petroleum Institute, which released crude supplies data a day later than usual due to the Memorial Day holiday, said the crude inventories fell by 5.3 million barrels. Finally, energy services firm Baker Hughes (BHGE) reported Friday that the number of oil rigs operating in the US rose by three in the week that ended on May 31 to 800. The combined oil and gas rig count in the US rose by one to 984 as gas rigs fell by two to 184.

Light, sweet crude oil for July delivery fell 8.47% for the week, settling at $56.59 per barrel at the end of Friday’s session. In other energy futures, gasoline was down 8.13% during the week and settled at $1.85 per gallon on Friday. Natural gas fell 4.69% for the week, settling at $2.55 per 1 million British thermal unit.

The SummerHaven Dynamic Commodity Index Total Return Index (SDCITR) was 1.95% lower this week.

Gold wrapped up the Friday session at $1,292.40 with a 7-week high; earlier in the session it breached the psychologically important $1,300.00 level after the US threat to impose tariffs on Mexican imports, even as it continued with its protracted trade war with China, sent traders scurrying for less riskier assets. Gold rose 2.13% in the last five days. Meanwhile, copper closed Friday’s session at $2.65 per pound, and fell 1.88% for the week even as speculators off-loaded their positions in industrial metals amid fears of a global recession. With the lower-than-expected manufacturing data from China reported Friday, investors are now concerned that the protracted trade war between the US and China has contributed to a slowdown in Asia’s biggest economy. China’s official manufacturing Purchasing Managers Index (PMI) fell to 49.4, down from 50.1 in April. Econoday estimates had been expecting a reading of 50.0.

In agriculture commodities, corn rose 9.55% in the week and settled at $4.27 per bushel in Friday’s session; wheat jumped 7.57% and settled at $5.03 per bushel at the end of Friday’s session; and soybeans was up 7.04% for the week, and closed Friday in the red at $8.78 per bushel. Earlier this week, Bloomberg reported that China said it is putting purchases of American soybeans on hold as the trade war between the two countries escalated. However, China did not cancel purchases that have already been made. The largest soybean buyer has yet to take delivery of about 7 million tons of US soybeans, which it had committed to buying for the current marketing year, the report added. Other commodities were mostly higher: sugar had a weekly increase of 3.78% and settled at a price of $1.21 per pound on Friday; coffee was around $1.05 per pound at Friday’s close, up 12.64% for the week; and cocoa was down 0.91% for the week and closed Friday’s session at $2,400 per tonne.

The SummerHaven Dynamic Agriculture Index Total Return Index (SDAITR) was down 3.20% for the week.

Copyright © 2019 MT Newswires, www.mtnewswires.com.

 

Information Contact: Justin Hillstrom – 720.917.0770 Email: Justin.hillstrom@alpsinc.com, Website is www.uscfinvestments.com

Investing involves risks, including loss of principal.

Commodity ETP Disclosures:  Download a copy of a Fund’s Prospectus by clicking one of the following:
USCIUSAGUSOUSLUSOUDNOUSODBNOUNGUNL, UGAUHNor 
CPER  

Please read any Prospectus carefully before investing.

These Funds are not mutual funds or any other type of Investment Company within the meaning of the Investment Company Act of 1940, as amended, and are not subject to regulation thereunder.

Commodity trading is highly speculative and involves a high degree of risk. Commodities and futures generally are volatile and are not suitable for all investors. Investing in commodity interests subject each Fund to the risks of its related industry. An investor may lose all or substantially all of an investment. These risks could result in large fluctuations in the price of a particular Fund’s respective shares. Funds that focus on a single sector generally experience greater volatility. Leveraged and inverse exchange-traded products pursue daily leveraged investment objectives which means they are riskier than alternatives which do not use leverage. They are not suitable for all investors and should be utilized only by investors who understand leverage risk and who actively manage their investments. For further discussion of these and additional risks associated with an investment in the Funds please read the respective Fund Prospectus before investing.

Please read the Prospectus carefully before investing.

Performance is historical and does not guarantee future results; current performance may be lower or higher. Investment returns/principal value will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Most recent performance is available at www.uscfinvestments.com.

Past performance does not guarantee future results.

This information is intended for U.S. residents.

Funds distributed by ALPS Distributors, Inc. 

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Dell First Quarter Adjusted Earnings Surpass Analysts’ Estimates

6:21 AM, May 31, 2019 — Dell Technologies (DELL) posted a modest uptick in revenue during its fiscal first quarter while adjusted earnings per share beat analysts’ estimates, bolstered by coverage expansion in the company’s client solutions group segment.

The Round Rock, TX.-headquartered manufacturer of laptops and electrical devices reported revenue of $21.91 billion in the three months ended May 3, up 3% from the corresponding quarter of the prior year, but below the consensus estimate of analysts polled by Capital IQ for $22.2 billion.

The results were bolstered by a 6% increase in revenue at Dell’s client solutions group unit to $10.91 billion. This helped to offset a 5% decline in revenue at the infrastructure solutions group segment. Revenue from VMWare gained 13% to $2.28 billion.

Adjusted diluted earnings per share came in at $1.45, ahead of the $1.20 per share average estimate of analysts. Adjusted earnings per share from the prior year quarter were not immediately available.

“I am pleased that we grew revenue and profitability while taking share in a dynamic environment,” said Tom Sweet, chief financial officer. “We remain focused on long-term relative growth and innovating across our family of businesses to help our customers transform for their digital future.”

Companies: Dell Technologies Inc.
Price: 66.41 Price Change: +0.21 Percent Change: +0.32

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Best Buy Tops Expectations in Fiscal First Quarter While Reiterating Outlook Amid China Tariff Hikes

9:05 AM, May 23, 2019 — Electronics retailer Best Buy (BBY) reported better-than-expected results for its fiscal first quarter, while the incoming chief executive said guidance for the year was reiterated as it balances the strong outcome with the increase in Chinese import tariffs.

Earnings rose to $1.02 a share on a non-GAAP basis from $0.82 a share previously, beating the consensus on Capital IQ for $0.87 a share. Revenue in the three months ended May 4 was slightly stronger year-on-year, hitting $9.14 billion from $9.11 billion. That was about in line with analysts’ expectations.

Enterprise comparable sales rose 1.1% while domestic comps were up 1.3% in the quarter. International comps decreased 1.2%.

Best Buy’s shares were up 2.8% in pre-market trading Thursday, adding to the big-box store’s gains of about 31% so far this year.

“We reported comparable sales growth at the high end of our guidance and delivered better-than-expected profitability,” said Hubert Joly, the company’s chief executive.

Best Buy reiterated its full-year fiscal 2020 outlook for enterprise revenue of $42.9 billion to $43.9 billion, comparable sales growth of 0.5% to 2.5% and non-GAAP earnings of $5.45 to $5.65 a share.

“As we look to the full year, we are reiterating the guidance we provided at the beginning of the year,” said Corie Barry, the company’s chief financial officer who will replace Joly as CEO next month,. “This outlook balances our better-than-expected Q1 earnings, the fact that it is early in the year and our best estimate of the impact associated with the recent increase in tariffs on goods imported from China.”

President Donald Trump earlier this month increased the levies on $200 billion of Chinese goods to 25% from 10% amid worsening trade tensions between the world’s biggest economies.

Best Buy also projected second-quarter revenue of $9.5 billion to $9.6 billion, comp sales growth of 1.5% to 2.5% and EPS of $0.95 to $1. The Capital IQ consensus is for earnings of $0.97 a share, revenue of about $9.5 billion and comp sales growth of 1.7%.

Companies: Best Buy Co., Inc.
Price: 70.40 Price Change: +1.23 Percent Change: +1.78

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Target - $TGT

Target Gets Rating Boost at Morgan Stanley as Retail ‘Survivor’ Seen With Healthy Top-Line Growth

1:30 PM, May 20, 2019 — Target (TGT) is likely to see moderation in the erosion of its margin in the near term and its top-line growth is seen staying healthy after a reinvigoration for the company that’s positioning itself as a retail “survivor,” Morgan Stanley said in a note.

The Minneapolis-based department-store chain had its rating raised to equal weight from underweight by the investment bank on Monday, with a $67 price target. The shares were up 1.4% in afternoon trading.

“We see less near-term downside after the stock’s recent ~15% decline,” equity analyst Simeon Gutman said in the note. “We still have concerns around TGT’s medium-term margins, but they seem to be reflected in the stock’s below-average valuation and risk/reward now looks balanced.”

Morgan Stanley sees “flattish” earnings before interest and tax margins this year, below Target’s guidance for expansion of about 10 basis points but improving from a 35-point decline in 2018. Still, the risk of missing the guidance is reflected in the stock’s “relatively inexpensive valuation,” Gutman said.

“We see limited multiple downside at these levels given our view that TGT is establishing itself as a Retail ‘survivor’,” along with Amazon.com (AMZN), Walmart (WMT) and Costco (COST), he said.

Target’s drivers of its top-line growth have included strong merchandising, greater penetration of its private brand and the bankruptcy of Toys ‘R’ Us, which gave Target a way to gain share in the toy and baby categories.

“TGT is capable of delivering a higher rate of comp growth than retailers trading at similar multiples (low to mid single digits vs. low single digits on average),” Gutman said. “TGT has established itself as a mass merchant that we believe will stay relevant in the eyes of consumers over time, behind only AMZN, WMT and COST.”

Still, there’s lingering concerns over Target’s supply-chain strategy, which is store-based and could limit margins improving or bring investment needs back into focus, Morgan Stanley’s analyst said.

“At some point store-based fulfillment may no longer be able to support the size of the e-commerce business,” Gutman said, adding that the retailer itself believes that’s many years away.

Companies: Target Corporation
Price: 72.00 Price Change: +1.11 Percent Change: +1.57

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