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Benzinga has examined the prospects for many investor favorite stocks over the past week. Bullish calls included the iPhone maker, a Big 3 automaker and a restructured industrial company. Bearish calls ...
Most of the time analysts issue bullish calls on stocks. So when an analyst publishes a Hold rating, or even more rarely a Sell rating, it’s time to take note. Here are three stocks with a very bearish outlook from Goldman Sachs right now. According to the firm, these 3 stocks all deserve the most worrying ‘underperform’ rating based on their outlook for the coming months. Here we take a closer look at why Goldman Sachs is advising against these three stocks, and whether or not the rest of the Street agrees. Let’s dive in now: Seagate Technology PLCWith the HDD (hard disk drives) market in secular decline, it’s not surprising that Goldman Sachs analyst Mark Delaney remains unconvinced about Seagate Tech (STX– Get Report). His Sell rating comes with a $37 price target- suggesting prices could plummet 34% in the coming months. Indeed, the data storage company has already rallied 46% year-to-date- and for Delaney that’s a key reason for caution going forward. "We believe HDDs remain a cyclical industry, and one facing secular challenges in many parts of the market from the growth of SSDs (solid-state drives) that are based on NAND flash," Delaney told investors when he first downgraded the stock. He also prefers larger storage rival Western Digital (WDC)- which has a more neutral Hold rating from the Goldman analyst. Unlike STX, WDC also has large exposure to NAND flash, thanks to its 2016 SanDisk acquisition.Meanwhile Barclays analyst Tim Long also recently initiated STX with a Sell rating- and an even more bearish price target of $32. He warns that top-line pressure and a possible increase in research and development "could disrupt the capital return to shareholders." Overall STX scores a Hold rating from the Street based on all the ratings published over the last three months. The average analyst price target stands at $47 (16% downside potential). Gilead Sciences IncDrugs giant Gilead (GILD– Get Report) received the thumbs down from Goldman Sachs earlier this year. “We are downgrading GILD to Sell from Neutral and lowering our price target to $60 from $70 which represents -10% downside vs 17% avg upside for the rest of our coverage,” Terence Flynn wrote. Indeed, with Gilead now trading at $66 the analyst’s new $60 price target is one of the Street’s lowest price targets and suggests considerable downside risk lies ahead. With the loss of the blockbuster HCV franchise and near total market dominance in HIV (80% of US patients on anti-retrovirals are on a Gilead product), Gilead is in a period of change as management searches for new avenues to generate growth. "GILD currently trades at ~10x NTM P/E and barring another "Pharmasset" and/or internal pipeline success we find it difficult to see the stock's multiple expanding" says Flynn.According to the analyst, GILD has a “very limited” mid-to-late stage pipeline of drugs under development. The analyst told investors: “[T]he company has a new CEO and we assume that rebuilding the pipeline and improving R&D productivity across the organization will be a key area of focus… This can clearly take time and we anticipate there will be tremendous competition for innovative/growth assets.”However, the rest of the Street is notably more optimistic. Not only are we looking at a Strong Buy analyst consensus, but significant upside potential of 28% according to the average analyst price target. “We look towards the expansion of the pipeline via M&A (i.e., Galapagos so far) to drive long-term growth” writes Maxim analyst Jason McCarthy. He has a buy rating on GILD with an $84 price target. PVH CorpOne of the world’s largest apparel companies, PVH (PVH– Get Report) owns both Tommy Hilfiger and Calvin Klein. However that isn’t enough to win over Goldman Sachs analyst Alexandra Walvis. On August 30 she slashed her price target from $82 to $73 while maintaining a Sell rating. From current levels her price target indicates downside potential of almost 20%.In fact the analyst has recently issued Sell ratings on a number of apparel companies, including Ralph Lauren (RL); Levi Strauss (LEVI) and Tapestry Inc (TPR). So what's driving all these bearish calls?“The combination of persistently tough first-half retail trends and an optimistic spring ordering season has driven inventory overhangs at several multibrand retailers," Walvis revealed. "These retailers are thus tightening up ordering as we head into the critical back-to-school and holiday season. We thus see incremental sell-in risk for apparel brands, particularly those with high exposure to department stores."In particular, the Goldman analyst warned of potentially fading growth at PVH's Tommy Hilfiger brand thanks to its dependence on outlet stores, as well as challenges over at Calvin Klein. “While brands that have been investing in building strong direct-to-consumer omnichannel commerce are likely to be more insulated, we take a more cautious view on nonathletic apparel brands whose direct-to-consumer businesses are skewed towards outlet stores, particularly given challenged traffic trends in these locations,” she said. And a note of caution: Apple Inc Although Goldman Sachs has a Hold rating on Apple (AAPL– Get Report) (rather than Sell) it is worth nothing that analyst Rod Hall just made a notably bearish move on the stock. On September 13 he significantly cut his AAPL price target from $187 to $165 (24% downside potential). He blamed Apple’s accounting practices for the move: “We believe that Apple plans to account for its 1-year trial for TV+ as a ~$60 discount to a combined hardware and services bundle,” wrote Hall.“Effectively, Apple’s method of accounting moves revenue from hardware to Services even though customers do not perceive themselves to be paying for TV+. Though this might appear convenient for Apple’s services revenue line it is equally inconvenient for both apparent hardware ASPs and margins in high sales quarters like the upcoming FQ1′20 to December,” the analyst added.Discover Wall Street’s most loved stocks with the Top Analysts’ Stocks tool
Apple TV+ premiered its first show at the Tribeca TV Festival on Saturday, flaunting feminist snark, lavish period costumes and a star-studded cast in "Dickinson," a series that sheds a modern light on the life of an iconic American poet. Emily Dickinson, the prolific American poet, is played by Hailee Steinfeld, the pop star whose breakout vocal performance in Pitch Perfect 2 and debut single "Love Myself" made her a teen idol - a casting decision that Apple is likely betting on to draw young, loyal fans to the streaming service. Steinfeld's Dickinson is a firebrand who writes poetry furiously into the night and flirts with Death, a character played by rapper Wiz Khalifa, all while feeling constrained by the expectations she faces as a woman in 1850s New England.
Last year, Apple (AAPL) was the first publicly listed company to be valued at a trillion dollars. The tech giant has been an innovator since its inception.
Apple Arcade (AAPL) is a subscription gaming service that was unveiled at Apple’s annual event last week. The service will launch on September 19.
Google has agreed to make a one-time settlement of over $945 million euros to the French ministry. The ministry accused Google of evading taxes.
This weekend's Barron's offers a look at what's in store for North American railroad stocks. Other featured articles discuss changing oil stock dividends and potential results from a major media merger. "Railroad Stocks Could Run Out of Steam" by Bill Alpert suggests that cost-cutting is boosting profits for North American railroads, but declining freight volumes and increasing competition from truckers may pull the brakes on growth at the likes of CSX Corporation (NASDAQ: CSX).
Apple introduced its 2019 line of smartphones Tuesday, and pre-orders have now started. Like previous devices, the iPhone 11 features technology that has been available to Android users for some time. Today, I want to compare features of Android smartphones you can get today with those of Apple’s latest flagship smartphone.
(Bloomberg Opinion) -- Vinyl records, paper books, glossy magazines – all should be long dead, but they’re refusing to go away and even showing some surprising growth. It’s probably safe to assume that people will always consume content in some kind of physical shell – not just because we instinctively attach more value to physical goods than to digital ones, but because there’ll always be demand for independence from the huge corporations that push digital content on us.According to the Recording Industry Association of America, vinyl album sales grew 12.9% in dollar terms to $224 million and 6% in unit terms to 8.6 million in the first half of 2019, compared with the first six months of 2018. Compact disc sales held steady, and if the current dynamic holds, old-fashioned records will overtake CDs soon, offsetting the decline in other physical music sales. Streaming revenue grew faster for obvious reasons: It’s cheaper and more convenient. But people are clearly not about to give up a technology that hasn’t changed much since the 1960s.In 2018, hardcover book sales in the U.S. increased by 6.9%, paperback sales went up 1.1% and eBook sales dropped 3.6%. The number of print magazine titles published in the U.S. rose to 7,218 from 7,176, according to the Association of Magazine Media. That’s more magazines than the U.S. had in 2009. For all the havoc the digital revolution is wreaking on newsrooms, people are still starting new titles – and 96% of the magazine industry’s subscription revenue still came from the print editions, with digital providing the rest.One explanation could be that, as Ozgun Atasoy from the University of Basel and Carey Morewedge from Boston University wrote in a paper based on a series of experiments, people are more willing to buy physical goods than equivalent digital ones, and they’re likely to pay a higher price for them. Offered an easy choice, people would rather have a vinyl LP than its digital image in the cloud somewhere; it’s just that the choice isn’t there most of the time. Atasoy and Morewedge wrote that the effect is mostly explained by “psychological ownership”: It’s hard for people to feel they own something they can’t physically touch.They wrote, however, that other, unidentified factors were also at play, since psychological ownership didn’t fully explain the difference in people’s willingness to pay for the two kinds of products. I think Michael Palm from University of North Carolina-Chapel Hill put a finger on those factors in a paper published earlier this year. He suggested that physical vs. digital, or new vs. old, could be a less relevant differentiation point than corporate culture vs. independent culture.The record industry got rid of vinyl fabrication when CDs appeared. Big store chains stopped selling LPs. But small producers and record stores that also function as community centers have kept the culture and the format alive. Now, the big companies see a commercial potential again – but they’re ordering vinyl records from independent producers, who can’t always keep up with the orders, and distributing to small stores, not just to giant chains like Best Buy, which are also stocking vinyl records again.“To combat the corporate incursion into vinyl markets, some independent labels are vertically integrating and beginning to manufacture as well as distribute and sell their own records,” Palm wrote. “The stakes of vinyl’s future involve the viability of an independent supply chain for popular music, and these stakes are raised in a media landscape dominated by online access to content controlled by corporate gatekeepers.”A similar logic applies to books. According to the American Booksellers’ Association, independent bookstores’ sales went up about 5% in 2018. These stores are where people hang out, discuss their discoveries, receive recommendations and advice. They are also where the products of small publishing houses can get more attention than they do in major bookstores or on Amazon.The increase in the number of print magazines also isn’t occurring thanks to major launches by big industrial publishers. There’s space in this industry for niche publications that want intimate contact with readers, not a tiny share of the attention squandered on the internet. The Association of Magazine Media claims the average time to read an issue of a magazine published in the U.S. is almost 50 minutes. A magazine is the same kind of alternative to Instagram or Twitter as a vinyl record is to Spotify or Apple Music.This may be the last line of defense for old content formats – a line they could be able to hold forever: The preserve for independent creation, manufacturing and distribution in a world that belongs to giant corporations that mass-produce content and mass-distribute it through the cloud. The old-new dichotomy may well turn out to be misleading; there's nothing “old” about trying to go beyond the mass market.To contact the author of this story: Leonid Bershidsky at firstname.lastname@example.orgTo contact the editor responsible for this story: Tobin Harshaw at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Leonid Bershidsky is Bloomberg Opinion's Europe columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Andrew Sheets, chief cross-asset strategist at Morgan Stanley, who says the global economy may be about to surprise the world and investors are not ready for it.
Volatility is elevated as the S&P 500 stalls near historic highs, while the software industry is oddly not participating in the recent rebound.
Apple Inc struck out at a Goldman Sachs Group Inc analyst on Friday in a relatively rare public dust-up between a blue chip Wall Street firm and its client. The disagreement came after Goldman Sachs analyst Rod Hall criticized Apple's accounting methods for the tech giant's new TV+ product, saying in a research note that it may result in lower gross margins and profits. A Goldman spokeswoman declined to comment or to make the analyst available for interview.
Apple shares are up nearly 40% in 2019, largely because of excitement around Apple services like TV streaming. Why that could end badly.
Apple is launching a streaming service in November, making it a direct competitor to Disney’s service that is set to launch the same month.
(Bloomberg) -- Walt Disney Co. Chief Executive Officer Bob Iger resigned from Apple Inc.’s board, a sign of increased competition between the entertainment and technology giants.Apple said in a Friday regulatory filing that Iger quit on Tuesday. He had served as a director since 2011 and was a friend of Steve Jobs. The Apple co-founder was also a Disney board member until he died in 2011. The duo appeared on stage more than a decade ago to announce an iTunes partnership.The relationship between the two companies became more fraught after Apple expanded into original TV shows and movies, making the Cupertino, California-based company a potent new rival for Disney. That had put Iger’s role on Apple’s board in doubt.On Tuesday -- the same day Iger resigned from the board -- Apple CEO Tim Cook said the company’s TV+ service would launch Nov. 1 for $4.99 a month, undercutting the upcoming Disney+ offering. The announcement dented Disney shares.In an April interview with Bloomberg TV, Iger said he was careful to recuse himself at Apple board meetings whenever the topic of streaming video came up. He added that the topic “has not been discussed all that much” by the Apple directors, because it was relatively small and nascent. “So far it’s been OK,” he said. “I’m in constant discussion about it.”“It has been an extraordinary privilege to have served on the Apple board for eight years, and I have the utmost respect for Tim Cook, his team at Apple and for my fellow board members,” Iger said in an emailed statement.His departure leaves Apple with seven board members. The average board has 10.8 directors, according to a 2018 analysis of companies in the S&P 500 index by Spencer Stuart, a consulting firm that provides executive search and board-related services.\--With assistance from Christopher Palmeri.To contact the reporter on this story: Mark Gurman in San Francisco at firstname.lastname@example.orgTo contact the editors responsible for this story: Tom Giles at email@example.com, Alistair Barr, Mark MilianFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The development comes as both companies are preparing to release competing streaming services within days of each other.
Iger departed Apple's board the same day the company revealed new details about Apple TV+, a $4.99-per-month service that will launch on Nov. 1. Apple is spending billions in Hollywood to secure original programming for the service. The monthly subscription price for Apple TV+ undercuts Disney, which earlier this year announced its own streaming service that will feature its iconic children's content and cost $6.99 per month.
Apple Inc said https://www.sec.gov/ix?doc=/Archives/edgar/data/320193/000032019319000093/a8-kseptember201991019.htm on Friday that Walt Disney Co Chief Executive Officer Bob Iger had resigned from the company's board of directors on Sept. 10 as the two companies prepare to compete head-to-head in the streaming television business. Iger departed Apple's board the same day the company revealed new details about Apple TV+, a $4.99-per-month service that will launch on Nov. 1. Apple is spending billions in Hollywood to secure original programming for the service.
Walt Disney Co. Chief Executive Bob Iger has resigned from the board of Apple Inc. , the Silicon Valley company said in a filing late Friday. Iger resigned on Tuesday, according to the filing, which contained no other information. Earlier this week, Apple revealed that it would charge $4.99 a month for its previously announced streaming service, set to launch Nov. 1, undercutting Disney as well as Netflix Inc.'s streaming businesses. Iger had joined the Apple board in 2011, according to Disney's website. Other Apple board members include Chief Executive Tim Cook, former Genentech Chief Executive Arthur Levinson, who is the board's chairman, and former Vice President Al Gore. Shares of Apple and Disney were flat in the extended session Friday after ending the regular trading day down 1.9% and 0.4% higher.
Apple (AAPL) announced an upgrade to its Watch series with the Apple Watch 5. Here's why Apple should keep leaning into the health ecosystem to stay on top.
The S&P 500 ended the day down slightly on Friday but less than 1% below its all-time high as a drop in Apple stock countered cooling U.S.-China trade tensions. All three major U.S. stock indexes posted their third straight weekly gains, capping a week that saw signs of a potential thaw in the trade war between the world's two largest economies, which has gripped markets for months.