RY - Royal Bank of Canada
| Previous Close | 81.80 |
| Open | 81.45 |
| Bid | 0.00 x 900 |
| Ask | 0.00 x 3200 |
| Day's Range | 81.16 - 81.87 |
| 52 Week Range | 65.76 - 82.58 |
| Volume | 544,587 |
| Avg. Volume | 975,821 |
| Market Cap | 117.172B |
| Beta (3Y Monthly) | 1.05 |
| PE Ratio (TTM) | 13.00 |
| EPS (TTM) | 6.29 |
| Earnings Date | Nov 30, 2016 - Dec 5, 2016 |
| Forward Dividend & Yield | 3.21 (3.93%) |
| Ex-Dividend Date | 2019-10-23 |
| 1y Target Est | 88.84 |
- Zacks
BSBR or RY: Which Is the Better Value Stock Right Now?
BSBR vs. RY: Which Stock Is the Better Value Option?
- Zacks
3 Top Dividend Stocks to Maximize Your Retirement Income - November 08, 2019
The traditional approaches to retirement planning are longer covering all expenses in nest egg years. So what can retirees do? Thankfully, there are alternative investments that provide steady, higher-rate income streams to replace dwindling bond yields.
- Simply Wall St.
Can We See Significant Institutional Ownership On The Royal Bank of Canada (TSE:RY) Share Register?
A look at the shareholders of Royal Bank of Canada (TSE:RY) can tell us which group is most powerful. Institutions...
- CNW Group
RBC Global Asset Management Inc. announces October sales results for RBC Funds, PH&N Funds and BlueBay Funds
RBC Global Asset Management Inc. announces October sales results for RBC Funds, PH&N Funds and BlueBay Funds
- Kiplinger
The 25 Best Canadian Dividend Stocks for U.S. Investors
The U.S. is home to literally thousands of dividend payers, which would seem to eliminate the need to look elsewhere for income. But there's a convincing case to be made for at least a couple dozen Canadian dividend stocks.Newer income investors often look for the highest-yielding dividend stocks. They see a 7% yield as being better than 6%, 8% yields superior to 7%, and so on. But that's a much riskier proposition than it seems; sometimes, high yields are indicative of a troubled stock or company.A safer approach is selecting companies with more reasonable current yields that consistently grow their payouts over time. Here in America, many investors look to the Dividend Aristocrats - a group of 57 dividend stocks in the S&P; 500 that have improved their annual payouts for at least 25 consecutive years. But America isn't the only part of the world with Aristocrats. Canada, for instance, has 82.The Canadian Aristocrats' standards aren't as stringent as those of their U.S. counterpart. To qualify for the Canadian Dividend Aristocrats, a stock must be listed on the Toronto Stock Exchange, be a member of the S&P; Canada BMI (Broad Market Index), increase its annual payout for at least five consecutive years (it can maintain the same dividend for two consecutive years) and have a float-adjusted market cap of at least C$300 million.We've trimmed down that list to 25 Canadian dividend stocks that are best suited for American investors. The following 25 Canadian Dividend Aristocrats trade on either the New York Stock Exchange or Nasdaq, and have increased their dividends annually for at least seven years. SEE ALSO: 20 Dividend Stocks to Fund 20 Years of Retirement
- CNW Group
RBC to announce fourth quarter and fiscal 2019 results
RBC to announce fourth quarter and fiscal 2019 results
- Bloomberg
France's King of Bling Has $20 Billion to Play With
(Bloomberg Opinion) -- Like expensive gems, luxury goods companies have scarcity value. If Bernard Arnault’s LVMH Moet Hennessy Louis Vuitton SE is allowed to get its hands on Tiffany & Co., the American jeweler is unlikely to come up for sale again. That’s something LVMH’s biggest rivals, Kering SA and Cie Financiere Richemont SA, might want to consider carefully.Financially they could both afford to make counterbids for Tiffany. An offer from either Cartier-owning Richemont or Gucci-owning Kering at the $120 per share price proposed by Arnault would lift their net debt to about 2.5 times Ebitda. That’s not too much of a stretch. Kering also has a 15.7% stake in sportswear maker Puma, worth about $1.8 billion, which it could reuse on something more promising.Both companies are no doubt extremely wary of taking on someone with such deep (and well-tailored) pockets as Arnault. But it’s a hard fight to sit out. Of the two, Richemont has most to lose from an LVMH-Tiffany tie up. The combined Franco-American group would take the Swiss giant’s position as the global leader in luxury jewelry, according to Bloomberg Intelligence.Arnault has a track record of turbocharging the brands he adds to his stable. Take the jeweler Bulgari, which has more than doubled its revenue since being bought by LVMH in 2011, according to analysts at Royal Bank of Canada. If LVMH repeated that trick with Tiffany, it would seriously challenge Richemont’s flagship Cartier brand.It would be a leap for Richemont to take on a lot more debt, especially when it’s still integrating the acquisition of online retailer Yoox Net-a-Porter and is developing a web joint venture with Alibaba Group Holdings Ltd. But these distractions might explain Arnault’s tactics in striking now for Tiffany.As for Francois-Henri Pinault’s Kering, it has lived with higher leverage in the past, although it tried to stick within a range of 1-2 times Ebitda. It certainly has room to expand in jewelry. Along with watches, the category accounted for just 6.8% of its sales in 2018. But many of Tiffany’s products are in the so-called “accessible” luxury segment (sometimes priced at about $1,000 or below), which Kering has been moving away from. The French group got rid of most of its stake in Puma last year to focus on the high-end stuff.Another problem for both rivals is that any counterbid would have to be above the $120 per share on the table, and would probably provoke a response from Arnault. The final purchase price would be even more of a stretch. LVMH has a “balance sheet war chest” of more than $20 billion, according to Deborah Aitken of Bloomberg Intelligence.Of course, a competing bid could be funded partly with shares, but Tiffany might well prefer cash.If Richemont and Kering can’t be enticed, the American company will have to persuade LVMH that it’s worth more without the help of an interloper bidding up the price. With its sales going in the wrong direction that looks difficult. But auction or not, it’s Tiffany’s job to make Arnault pay up.\--With assistance from Chris Hughes.To contact the author of this story: Andrea Felsted at afelsted@bloomberg.netTo contact the editor responsible for this story: James Boxell at jboxell@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
- Bloomberg
Uber Sinks to Record Low as Food Orders Lag and Lockup End Looms
(Bloomberg) -- Investors in Uber Technologies Inc. are bracing themselves for the end of a lockup period on Wednesday that’s expected to flood the market with shares of the ride-hailing giant. Those worries -- following lackluster quarterly results -- sent the company’s stock to an all-time low on Tuesday, after months of downward movement.The lockup period expiry, which will allow early investors to sell stock to a skittish public market, comes on the heels of a rocky earnings report for the company on Monday. Uber’s food-delivery business and bookings growth underperformed investor expectations, overshadowing a pledge by the money-losing company to achieve profitability by 2021.But the stock’s mostly downward trajectory since its much-hyped initial public offering in May has some investors wondering if the deluge of new shares will mark a turning point.“The one thing that is holding back Uber shares is the enormous lockup expiration that starts [Wednesday], and it is tough to get a lot of these long-only investors into the game ahead of such a mass supply hitting the market,” Evercore ISI analyst Benjamin Black said in a phone interview.There’s no consensus on the number of shares that will start trading on Wednesday. RBC Capital Markets analyst Mark Mahaney estimated that roughly 1.7 billion shares will become eligible for sale. Wedbush Securities’ Daniel Ives said he expected 763 million will hit the market. The company had about 1.7 billion shares outstanding as of Sept. 30, according to Bloomberg data.IPO specialist Renaissance Capital estimated that about 1.5 billion shares will be released for trading, which would make the expiration of Uber’s lockup the second-largest ever for a venture capital-backed company, the firm said, behind only Alibaba Group Holding Ltd.’s 1.6 billion shares.Black said it could take the market around 100 days to digest an additional supply of around 1 billion shares, based on current trading volumes.Uber’s earnings on Monday beat estimates on both revenue and loss, and could be encouraging for investors who look most closely at traditional metrics, Black said. Those investors could start taking positions once the market processes the new supply, he added.“It’s just that right now there is a buyers’ strike and the shorts can get pretty aggressive,” Black said.To contact the reporter on this story: Esha Dey in New York at edey@bloomberg.netTo contact the editors responsible for this story: Brad Olesen at bolesen3@bloomberg.net, ;Mark Milian at mmilian@bloomberg.net, Anne VanderMey, Molly SchuetzFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
Uber Profit Goal Fails to Win Over Wall Street as Eats Lags
(Bloomberg) -- Uber Technologies Inc.’s new target of achieving profitability by 2021 impressed analysts, even as shares fell amid continued competitive pressures in the food delivery business and ahead of a lock-up expiry on Wednesday.Third-quarter results were weighed down by the Eats segment, where bookings came in well below analysts’ estimates. Overall, the results prompted a mixed response from Wall Street, with analysts at RBC Capital Markets and Morgan Stanley boosting their price targets noting signs of improvement in the main ride-hailing unit, while DA Davidson and Wedbush lowered their targets citing negative market sentiment, weak results and slower growth estimates.Analysts also cautioned that longer-term investors becoming able to sell down holdings from Nov. 6 could weigh on the shares.Uber shares fell as much as 9% to an all-time low in New York on Tuesday. Peer Lyft was down as much as 2.2%.Here’s a summary of what analysts have had to say.Citi, Itay Michaeli(Buy, price target $45)More positives than negatives, with clear improvements in ride fundamentals, demonstrated by a segment Ebitda margin of 22% versus 8% in the first quarter.Ride improvements offset Eats softness, which shouldn’t come as a surprise given recent signs of competitive pressures.New break-even target implies at least $1.3b upside to 2021 consensus Ebitda.RBC Capital Markets, Mark S.F. Mahaney(Outperform, price target raised to Street-high $64 from $62)“Bad news. Good news. Great News:” Bookings, users and trips came in slightly lower than expected, while Rides and Eats revenue beat and the Ebitda loss was materially better than expected.Goal of Ebitda profitability in 2021 is achievable, and would be well ahead of Street.Wedbush, Ygal Arounian(Outperform, price target $45 from $58)“Overall this was a B- quarter by Dara & Co. as the company missed underlying bookings and ridesharing metrics which will be viewed mixed to negatively by the Street.”“Despite the clearer path to profitability, mixed results and still-negative investor sentiment is leading to a lower target multiple.”Morgan Stanley, Brian Nowak(Overweight, price target raised to $55 from $53)Target of Ebitda profitability in 2021 is $775m better than Morgan Stanley’s estimate, demonstrating impact of scale, expenditure discipline, and higher efficiency.More importantly, messaging on food delivery indicates market is becoming more rational, although fourth quarter is expected to be another tough one for Eats.New segment disclosures (for example on rides margins) will enable investors to appreciate value of each core businesses.Loop Capital Markets, Jeffrey Kauffman, Rob Sanderson(Buy, price target $48)“Fairly solid results” with better ride revenue and loss margin similar to Lyft Inc. Tough dynamics in Eats, which faces difficult comparatives, was similar to competitor GrubHub Inc.More signs of improvement than deterioration since the IPO. Shares to stabilize once expiration passes.DA Davidson, Tom White(Neutral, price target $35 from $44)“Our 2020 and 2021 revenue estimates decline by 3% and 10%, respectively, due primarily to more conservative Eats growth assumptions.”“Near-term visibility for Eats remains limited in our view, but we continue to believe that, over the long-term, Uber’s multi-product platform can be a critical differentiator in the crowded online food delivery space.”MKM Partners, Rohit Kulkarni(Neutral, price target $32)“Baby step” on path toward profitability, with top and bottom lines beating expectations.That said, “lofty” goal of reaching break-even on Ebitda during 2021 is surprising. Gross bookings continue to decelerate and variable costs, including on marketing, rise.No evidence yet that Uber has been able to stabilize bookings growth via a reduction in incentives offered to both drivers and riders.(Updates share move in fourth paragraph.)\--With assistance from Kit Rees and James Cone.To contact the reporters on this story: Joe Easton in London at jeaston7@bloomberg.net;Esha Dey in New York at edey@bloomberg.netTo contact the editors responsible for this story: Beth Mellor at bmellor@bloomberg.net, Brad Olesen, Janet FreundFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
RBC to Cut Trading, Investment-Banking Jobs in London
(Bloomberg) -- Royal Bank of Canada is cutting as many as 40 jobs at its investment bank in London, according to people familiar with the changes.The reductions are across RBC Capital Markets and affect areas including investment banking, equity sales and trading, and research, according to the people, who asked not to be identified because the moves haven’t been publicly announced. The cuts represent about 2% of the division’s workforce in the British capital.“We consistently review our businesses to ensure that we are investing in areas which deliver greatest client value and position our business for growth,” Mark Hermitage, a spokesman for RBC Capital Markets, said Tuesday in an interview. “We are consulting with a small number of U.K.-based employees on the potential impact to their roles following a recent business review.”Royal Bank has more than 2,000 employees in RBC Capital Markets in London, and the firm has been adding to those ranks in recent years. To contact the reporters on this story: William Canny in Amsterdam at wcanny3@bloomberg.net;Doug Alexander in Toronto at dalexander3@bloomberg.netTo contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, ;David Scanlan at dscanlan@bloomberg.net, Steve DicksonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- CNW Group
Modest returns for Canadian Defined Benefit Pension Plans in Q3 2019: RBC Investor & Treasury Services
Modest returns for Canadian Defined Benefit Pension Plans in Q3 2019: RBC Investor & Treasury Services
- Zacks
Itau Unibanco (ITUB) Inks Deal to Acquire Zup IT Servicos
Itau Unibanco's (ITUB) decision to acquire Zup will enable it to better serve customers with improved digital capabilities.
- Bloomberg
Oil at Highest in a Week on Possible U.S.-China Trade Deal
(Bloomberg) -- Oil closed at a one-week high as investors digested signals that a U.S.-China trade deal is imminent.Futures advanced rose 0.6% in New York on Monday. Chinese government officials are considering locations in the U.S. where leader Xi Jinping would meet U.S. President Donald Trump to sign a trade accord, people familiar with the plans said. Prices erased some of the session’s gains as doubts crept in about the extent and duration of any truce that may emerge.“As the day went on we are getting the same opaqueness about what’s actually occurring in the trade talks,” said Gene McGillian, senior analyst and broker at Tradition Energy Group in Stamford, Conn. “The market is hunting for a driver.”Prices rose as much as 2.2% in earlier trading, spurred on by the trade talks, record stock gains, positive economic data and rising bullish sentiment among money managers.Yet futures remain down about 15% from a late April peak as the trade conflict between the world’s largest economies undermines demand for fuel to run trucks, cars, planes and trains.“We are revisiting optimism about a positive outcome for U.S.-China trade talks, amplified by speculative long positioning,” said Frances Hudson, global thematic strategist at Standard Life Investments in Edinburgh, Scotland. The more recent economic data suggests the threat of recession is receding, she said.West Texas Intermediate for December delivery rose 34 cents to settle at $56.54 a barrel on the New York Mercantile Exchange.Brent for January settlement added 44 cents to close at $62.13 on the London-based ICE Futures Europe Exchange. The global benchmark crude traded at a $5.53 premium to WTI for the same month.Meanwhile, Saudi Arabia is taking measures to help ensure a successful public offering of shares in the kingdom’s oil company. Taxes on the company have been reduced, incentives have been unveiled to entice investors to hold onto their shares, and dividends may be increased.\--With assistance from Alex Longley.To contact the reporter on this story: Jacquelyn Melinek in New York at jmelinek@bloomberg.netTo contact the editors responsible for this story: David Marino at dmarino4@bloomberg.net, Catherine Traywick, Joe CarrollFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- CNW Group
McGill Desautels Faculty of Management in Collaboration with RBC Future Launch and The Globe and Mail Launch National Personal Finance Course
MONTREAL , Nov. 1, 2019 /CNW Telbec/ - To help Canadians better understand how to manage their personal finances, McGill University's Desautels Faculty of Management has collaborated with RBC Future Launch and the Globe and Mail to increase access to, and deliver personal finance education to all Canadians across the country for free. The McGill Personal Finance Essentials program launches today, which marks the start of financial literacy month in Canada .
- CNW Group
RBC Canadian Core Real Estate Fund raises $1.25 billion in first equity tranche, exceeding subscription targets
RBC Canadian Core Real Estate Fund raises $1.25 billion in first equity tranche, exceeding subscription targets
- Bloomberg
Pound Complacency Will End With Bang If 2017 Vote Is Any Guide
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.Pound traders looking forward to quiet before the U.K.’s December election could be in for a rude awakening.A gauge of swings in the currency over the next two months is hovering near six-week lows, following a delay to Brexit and signs that a Conservative Party victory could help to stabilize British politics. Yet if the 2017 snap election is anything to go by, a surge in the polls by the Tories’ opponents could still knock the currency off course and drive volatility back up.This time around, turbulence could return on any boost for the Labour party and its socialist agenda, the Brexit party and its no-deal strategy, or a hung Parliament that could prolong the stalemate in Westminster.Two-month volatility jumped when then-Prime Minister Theresa May announced in April 2017 that a snap poll would be held in June the same year. Yet it quickly reversed course and hit fresh cycle lows, before rising again as the election loomed into view.Jeremy Corbyn’s Labour did better than expected and May ultimately lost her parliamentary majority before failing to secure an exit from the EU.“All we can say at this point is, with the Tories no longer the party of no deal, Tories up in the polls is good and Labour up is bad,” said Adam Cole, head of currency strategy at RBC Europe. “We’re stuck in a $1.2750-$1.3000 range until we get a steer either from the polls starting to shift, or the major parties shifting policy.”Options currently show the market cooling off following the most turbulent month for the pound in nearly three years. Realized volatility surged as traders braced for a chaotic exit from the European Union in October, then saw the prospect vanish as Britain secured a third extension, this time until Jan. 31.Concerns about a no-deal Brexit sent the U.K. currency briefly below $1.22 on Oct. 8, only for the pound to enjoy its best two-day run in a decade days later when the potential for a divorce deal sent sterling flying.Short- and medium-term positioning turned more balanced after U.K. Prime Minister Boris Johnson won lawmakers’ backing for his Brexit deal. Appetite for longer term volatility eased further when he secured an election for Dec. 12.Demand for options trades that will pay off following a large swing in the pound before Nov. 31 currently stands near a two-month low. According to Bloomberg’s options-pricing model, there is a 70% probability that the pound will trade within a 1.2650-1.3250 range against the dollar in November.NOTE: Vassilis Karamanis is an FX and rates strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice(Rewrites from paragraph 1.)\--With assistance from Charlotte Ryan.To contact the reporter on this story: Vassilis Karamanis in Athens at vkaramanis1@bloomberg.netTo contact the editors responsible for this story: Paul Dobson at pdobson2@bloomberg.net, William Shaw, Michael HunterFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
Pound Needs More Than Election Date to Sustain October’s Rally
(Bloomberg) -- Sign up to our Brexit Bulletin, follow us @Brexit and subscribe to our podcast.Pound traders are unlikely to find that the promise of a December U.K. election provides an escape from the Brexit maze.The currency was little changed after Prime Minister Boris Johnson won backing in Parliament for a Dec. 12 general election. An election is unlikely to send the pound plunging with the Conservatives ahead in the polls, strategists say. Yet there is enough uncertainty around the result and the Brexit outcome that it also won’t prompt a huge rally.“The most severe of the longer-term structural risks facing the U.K. -- a no-deal crash out -- have all but evaporated,” said Ned Rumpeltin, European head of currency strategy at Toronto-Dominion Bank. “There is a lot of good news in the price, and the balance of headlines may not be as constructive once we head into an election cycle.”The pound is headed for its best month against the dollar since January 2018, with the risk of a no-deal Brexit reduced after lawmakers voted to force Johnson to seek an extension to the deadline. The election now looks set to become a proxy vote on European Union membership.The pound was steady at $1.2863 on Tuesday after Parliament voted, and climbed 0.1% to 86.37 pence per euro. The yield on U.K. 10-year government bonds dipped to 0.71%.Wary InvestorsEven as polls suggest a Tory-led government is the most likely outcome, the market will be mindful of risks around Jeremy Corbyn. Investors have long been wary of a government led by the left-wing Labour leader, who is seen nationalizing parts of the economy, boosting borrowing and redistributing income.There is also the question of how the two main parties position themselves on Brexit. If Labour opts to campaign on a platform of no Brexit or an arrangement where Britain maintains close ties with the EU, while the Conservatives go for a departure at any cost, volatility will likely pick up into the vote, according to Thu Lan Nguyen, a currency strategist at Commerzbank AG.“I wouldn’t expect a large market reaction in pound spot rates,” said Nguyen. “Rather, I think we will see a repricing on options markets, factoring in an increased political risk around the date of the elections.”Option pricing has been subdued in recent days, with implied volatility in the pound staying low in the shorter and longer term. This suggests traders foresee smaller jumps in the currency, reflecting optimism about the fading risk of no-deal, contained by pessimism caused by simmering political uncertainty.Persistent question marks over Brexit itself could also keep a lid on the pound. Traders may also shift their attention to the risk of the second phase of Brexit negotiations when Britain will have to decide its future relationship with the EU.“The capacity for sterling to enjoy a major relief rally that ‘it’s over’ may be more constrained than others may think because, let’s face it, it’s not over,” said Toronto-Dominion’s Rumpeltin. “Not by a long shot.”(Updates with Tuesday’s Parliament vote.)\--With assistance from Katherine Greifeld.To contact the reporters on this story: Charlotte Ryan in London at cryan147@bloomberg.net;Anooja Debnath in London at adebnath@bloomberg.netTo contact the editors responsible for this story: Paul Dobson at pdobson2@bloomberg.net, William Shaw, Michael HunterFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- GuruFocus.com
6 Stocks With Low Price-Sales Ratios
Royal Bank of Canada tops the list Continue reading...
- Bloomberg
RBC’s Record Canadian Bail-In Bond Gains in Trading Debut
(Bloomberg) -- Royal Bank of Canada’s biggest bail-in bond on record saw spreads tighten in secondary trading after the deal was oversubscribed by investors when first sold on Monday.RBC’s C$2.5 billion ($1.91 billion) of five-year notes were quoted at a spread of 96.8 basis points over Canada’s 1.5% bonds due 2024 compared to 97.8 basis points yesterday, according to Bloomberg Valuation bid prices. The deal’s order book was oversubscribed around 1.5 times, people familiar with the transaction said on Monday.The lender’s 2.609% bonds saw this increased demand amid a mixed tone in the global financial markets ahead of the Federal Reserve and Bank of Canada monetary policy meetings on Wednesday.“A benchmark deal of that size will dictate how the bail-in sector trades,” Andrew Torres, chief executive officer at Toronto-based Lawrence Park Asset Management, which manages over C$500 million of assets. “The lead syndicate got the balance right.”Canadian systemic banks began building their buffers of senior bail-in eligible securities in September 2018, and RBC was the first to sell the debt with a C$2 billion dollar deal. The bonds are designed to help prevent a repeat of the 2008 financial crisis when taxpayers worldwide had to rescue banks. Bail-in bonds are riskier than deposit notes because they may be converted to equity in the event a bank runs into trouble.The biggest Canadian banks, including RBC, may together issue at least C$108 billion more of bail-in eligible senior bonds to comply with total loss-absorbing capacity (TLAC) requirements by Nov. 1, 2021, according to latest Bloomberg Intelligence estimates released Sept. 14.RBC last priced a benchmark-size, senior bail-in deal in loonies in July when it sold C$2 billion of five-year securities at a spread of 97.1 basis points over Canada’s 2.5% bonds due 2024, according to data compiled by Bloomberg. A representative for RBC hasn’t replied to a request for comment.To contact the reporter on this story: Esteban Duarte in Toronto at eduarterubia@bloomberg.netTo contact the editors responsible for this story: Nikolaj Gammeltoft at ngammeltoft@bloomberg.net, Christopher DeReza, Allan LopezFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
Gold Ekes Gain as Economic Data, Global Tumult Spur Fed Cut Bets
(Bloomberg) -- Gold futures pared their weekly gain on Friday as progress in the U.S.-Chinese trade talks weighed against weaker-than-expected U.S. data that reinforced expectations the Federal Reserve will cut borrowing costs next week.The U.S. and China are close to finishing some sections of phase one of the trade agreement, officials said in a statement. Trump has said he wants to sign the first phase of a trade deal with China in November. The progress caused a pullback in demand for gold as a haven, sending the metal for immediate delivery as much as 0.2% lower.Still, bullion futures are up 0.7% this week, trading above $1,500 an ounce, as attention shifted to the Fed’s Oct. 29-30 gathering, when officials are expected to reduce interest rates by a quarter percentage point. Lower borrowing costs increase the appeal of non-interest bearing precious metals.U.S. reports this week showing slower home sales and a drop in key measures of business investment fueled demand for the commodities as havens.“The gold rally continues, along with palladium and silver as price breakouts make news and attract momentum traders following worried investors globally,” George Gero, a managing director at RBC Wealth Management, said in an emailed note Friday.Bullion has gained about 17% this year as many central banks adopt looser monetary policy in efforts to support their economies hurt by trade wars.Geopolitical uncertainty around the globe has also supported haven demand for gold. French President Emmanuel Macron blocked the European Union’s attempt to delay Brexit for three months. Concerns over a U.S. presidential impeachment and the nation’s trade war with China could also mean more gains for the metal, Richard Hayes, chief executive officer of the Perth Mint, said Friday in a Bloomberg TV interview.Gold futures settled less than 1% higher to $1,505.30 an ounce at 1:30 p.m. on the Comex in New York, after reaching the highest in two weeks.Silver futures also advanced on Friday. On the New York Mercantile Exchange platinum posted a fourth straight gain, and palladium slipped, but managed a 1.5% weekly increase.\--With assistance from Ranjeetha Pakiam.To contact the reporters on this story: Justina Vasquez in New York at jvasquez57@bloomberg.net;Elena Mazneva in London at emazneva@bloomberg.netTo contact the editors responsible for this story: Lynn Thomasson at lthomasson@bloomberg.net, Will Wade, Christine BuurmaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
Amazon Analysts Keep the Faith as Stock Falls on Profit Drop
(Bloomberg) -- Amazon.com Inc. fell on Friday, after the e-commerce company reported its first quarterly profit drop since early 2017, as well as a miss for next quarter’s guidance.The results prompted price-target cuts from a number of analysts, including Goldman Sachs, RBC Capital Markets, and Baird. However, Wall Street remains overwhelmingly positive in the tech behemoth’s long-term growth prospects; the stock has 54 buy ratings, compared with two holds and zero sells, according to data compiled by Bloomberg. Despite the earnings decline, analysts see upside from investments in one-day shipping, as well as growth in its advertising and Amazon Web Services businesses.“The whole picture points to short-term pain for a visible long-term gain,” Bloomberg Intelligence said.The stock fell as much as 4.8% on Friday. While Amazon remains up 14% for 2019, it has dropped more than 7% from a September peak.Here’s a roundup of what analysts are saying about Amazon’s report:Goldman Sachs, Heath Terry(Buy, cuts price target to $2,200 from $2,350)The deceleration at AWS raises some competitive concerns; still, continue to believe in the relatively early-stage shift of workloads to the cloud, the transition of traditional retail online, and the continued development of the advertising business.With revenue growth accelerating for the second quarter in a row and a strong history of the company’s investments driving faster growth, still sees AMZN as one of the best risk/rewards in the sector.Jefferies, Brent Thill(Buy, price target $2,300)Quarterly sales beat consensus while operating income was at high-end of guidance. However, outlook represents top and bottom-line downside to consensus at the midpoint and high-end.That said, near-term pressure from one-day shipping has little bearing on ability to generate profit upside from faster sales growth at higher-margin AWS and advertising.UBS, Eric J. Sheridan(Buy, $2,100)Not surprised with the initial negative stock reaction, but says it might be more of a reflection of a broader risk-off market environment among tech investors.Says AWS sales growth was better than feared, while other revenue (predominantly advertising) demonstrated solid re-acceleration.Given investments, an overall Ebit above the high end of management guide is a positive outcome.RBC, Mark S.F. Mahaney(Outperform, price target cut to $2,500 from $2,600)This was a slightly soft quarter for AWS, likely due to Amazon’s push into large-scale enterprise in addition to perhaps some pricing pressure.AWS growth and profit outlook deserves the most attention right now, while rest of the buy thesis is fully intact.BMO Capital Markets, Daniel Salmon(Cuts price target to $2,000 from $2,280)AWS results were below expectations, but continues to see strong long-term growth.Advertising revenue growth accelerated ahead of expectation, driven by targeting improvements, ad load increases, and easier comparisons. Optimistic there could be upside against easy comparatives from a year ago.Baird, Colin Sebastian(Outperform, price target cut to $2,080 from $2,150)“We are buyers of Amazon on a pullback as investors digest the cost of one-day Prime.”Do not believe implied growth slowdown reflects any meaningful change in trends with the core segments. Expects low-midpoints of quarterly revenue guidance to prove conservative.Morgan Stanley, Brian Nowak(Overweight, price target $2,100)Quarter was lower than expected, but MS says one-day efficiency improved dramatically, which is key for long-term.Cost and complexity of competing with Amazon is rising as firm raises consumer expectations quickly. Estimates 25% of U.S. units went through one-day delivery in third quarter.(Updates shares in fourth paragraph.)\--With assistance from Beth Mellor, William Canny and Ryan Vlastelica.To contact the reporters on this story: Kit Rees in London at krees1@bloomberg.net;Joe Easton in London at jeaston7@bloomberg.net;Erin Roman in London at eroman16@bloomberg.netTo contact the editors responsible for this story: Beth Mellor at bmellor@bloomberg.net, Namitha JagadeeshFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
U.S. Shields Citgo From Creditors in Win for Venezuela’s Guaido
(Bloomberg) -- Venezuela’s opposition scored a last-minute victory Thursday as the Trump administration stepped in with a measure to protect the nation’s most prized asset abroad from creditors before a key debt payment.The U.S. Treasury Department updated its sanctions guidelines to temporarily put transactions pertaining to Petroleos de Venezuela’s 2020 bonds, backed by 50.1% of Citgo Holding Inc.’s shares, on the same footing as other financial deals that are prohibited. Timing was of the essence: Advisers to National Assembly President Juan Guaido said they lacked the funds to make a $913 million debt payment due Monday.Washington’s decision to block holders of PDVSA’s 2020 bonds from seizing their collateral for 90 days followed months of lobbying by Venezuelan opposition leaders. They warned that losing Citgo would be a political catastrophe for Guaido, whom the U.S. and almost 60 other countries recognize as the nation’s rightful leader. With the Trump administration’s support, Guaido and his allies effectively run Houston-based Citgo, yet have little operational control over its parent PDVSA.Citgo said in a statement that it’s “gratified” by the decision, while Guaido’s office said it “welcomes” the move.“We will continue working in all legal ways to achieve the irrefutable protection of this and all the assets of the Venezuelan people,” Guaido’s office said. “This amendment from the U.S. Treasury Department recognizes the strategic value of Citgo for the present and future of Venezuela.”Guaido’s team also faces a cash crunch. While the U.S. froze accounts linked to Nicolas Maduro’s regime, it has refrained from handing them to the Venezuelan opposition out of fear that it would prompt litigation from creditors. Even if that money was available, Guaido would’ve needed approval from the National Assembly. Last week, the legislature passed an accord calling the PDVSA 2020 bonds unconstitutional because they weren’t approved in the first place.“The Treasury Department is giving a strong signal that it wants creditors and the Guaido administration to reach a refinancing agreement,” said Francisco Rodriguez, director of Oil for Venezuela. “What Treasury has essentially done here is grant the Guaido team the 90-day truce they requested.”The PDVSA 2020 bonds rallied Thursday by the most since December 2017 as investors took some relief that the Trump administration left room for a deal in the coming months. The notes now trade at 34 cents on the dollar from about 90 cents in June.London-based Ashmore Group Plc holds about half of the bonds, according to data compiled by Bloomberg. BlackRock Inc., T Rowe Price Group Inc. and the Royal Bank of Canada are among the other largest reported holders.Right-wing groups, including Grover Norquist’s Americans for Tax Reform, had argued that the Trump administration should refrain from intervening because that would interfere with property rights. But a bipartisan bloc of U.S. senators and representatives including Marco Rubio, Ted Cruz and Lizzie Fletcher urged the president to take action.They argued that a PDVSA default would open the door for Russia’s state oil giant Rosneft to take control of Citgo shares. PDVSA pledged a 49.9% stake in the Houston-based refiner to Rosneft as collateral on a loan in late 2016. Rosneft said earlier this month that it “has no intentions to enter into real ownership and management of the company.”U.S. Treasury Secretary Steven Mnuchin has previously said that, in the event of a PDVSA default, Citgo’s loan from Russia would be reviewed by the department’s Committee on Foreign Investment in the U.S., which can derail deals on national security concerns.(Adds Citgo and Guaido statements in fourth and fifth paragraphs.)To contact the reporter on this story: Ben Bartenstein in New York at bbartenstei3@bloomberg.netTo contact the editors responsible for this story: Carolina Wilson at cwilson166@bloomberg.net, Alec D.B. McCabe, Robert JamesonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
- Bloomberg
Kuwait's New Realism Owes More to Oil Majors Than to Greta
(Bloomberg Opinion) -- The best way to avoid owning a stranded asset is to not have that asset in the first place. Kuwait is considering cutting expansion plans for its oil production, as reported by Bloomberg News. This is apparently due to expectations that mounting concern about climate change will curb demand. Yet there are also more prosaic considerations of cost and competition at play here.State-owned Kuwait Petroleum Corp. had a goal of getting production to 4 million barrels a day by 2020 and 4.75 million a day by 2040. As of now, capacity is pegged by the International Energy Agency at slightly below 3 million barrels a day. And production so far this year, which is subject to ongoing OPEC+ restrictions, has averaged about 2.7 million barrels a day.The 2020 target is obviously redundant regardless of the Greta Thunbergs of this world. OPEC’s own projections imply demand for its crude oil will drop another 1.2 million barrels a day in 2020. A year ago, in its most recent medium-term outlook, OPEC wrote that demand for its oil wouldn’t recover to 2018 levels until the late 2020s. Incidentally, OPEC now pegs demand for its crude oil next year at 29.6 million barrels a day, fully 3.1 million barrels less than what it projected only last November, which is equivalent to all of Kuwait’s output and then some.All this is more a function of rising U.S. supply rather than expectations of imminent peak demand; OPEC doesn’t foresee that happening this side of 2040, at least. Kuwait’s 2020 target was set almost two decades ago, when Pets.com was still a thing but neither fracking nor renewable energy were expected to take off. Delaying it by another 20 years is merely a belated recognition of reality.The new 2040 target is also somewhat redundant, but in a different way. The revision to the 2020 target reflects a global energy business that has become unpredictable across multiple dimensions, encompassing not just climate change, but technological and geopolitical changes too. To predict the world’s energy mix, or one country’s production, with any degree of exactitude 20 years out is is to get it wrong these days.What is important about Kuwait’s new target is the trend. The long-standing position of enormous expansion has given way to caution. Scenarios where oil demand peaks play a critical role in that. More pertinent is the sheer range of outcomes and what they imply for oil demand and prices. Oil has entered a period of greater competition, both between suppliers and with other fuels, meaning the range of pricing outcomes is very wide.Kuwait, like its much larger neighbor Saudi Arabia, is technically a low-cost producer. But its reliance on oil rents to fund its social contract means it actually requires a higher price: north of $50 a barrel, according to estimates from RBC Capital Markets (Saudi Arabia’s are higher still). Regardless of whether global oil demand peaks in the 2020s, ‘30s or whenever, the strategy for both countries boils down to one thing: Keep production costs as low as possible, both to be the last producers standing and to preserve as much rent as possible to ease an economic transition as and when oil demand does peak and decline.One thing we know, even if we don’t have exact numbers, is that the future barrels Kuwait and Saudi Arabia are developing today will be more expensive than those produced in the past (something any investor in any eventual IPO of Saudi Arabian Oil Co. should ponder). There’s a lesson here from the recent experience of the western oil majors. They invested vast sums in new projects in the decade leading up to 2014 on the premise of $100 oil being the new normal. The subsequent crash and realization of structural changes centered on shale and climate change exposed the fallacy of this, and those companies have paid a heavy price in the stock market. Their new mantra — most of them anyway — is to be cautious on spending, prioritizing payouts to shareholders and profits over sheer volume.Think of Kuwait’s new 2040 target in those terms. It sees the world is changing, but getting a handle on what that will mean in 2040 (or even 2030) is essentially impossible, as today’s surprising reality attests. When the path ahead is that dark and prone to pitfalls, it’s better to take incremental steps rather than big strides — or, in this case, set smaller capex budgets and stay flexible. In that sense, the climate for this industry has changed fundamentally already.To contact the author of this story: Liam Denning at ldenning1@bloomberg.netTo contact the editor responsible for this story: Mark Gongloff at mgongloff1@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Liam Denning is a Bloomberg Opinion columnist covering energy, mining and commodities. He previously was editor of the Wall Street Journal's Heard on the Street column and wrote for the Financial Times' Lex column. He was also an investment banker.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
- Bloomberg
RBC Cracks Wall Street’s Top 10 List for Advising on M&A Deals
(Bloomberg) -- Royal Bank of Canada set a goal nine years ago to become a Top 10 investment bank in the U.S. -- but cracking Wall Street’s upper echelons for advising on takeovers had proved elusive. Until now.RBC Capital Markets has risen to the No. 10 ranking for advising on announced U.S. mergers and acquisitions this year, its highest standing ever, according to data compiled by Bloomberg. The firm has 9.9% market share, with 72 deals valued at about $179 billion as of Oct. 21. Its U.S. investment banking co-head, Matthew Stopnik, anticipates more gains ahead.“We’re scratching the surface,” Stopnik said in an interview at the firm’s Lower Manhattan office. “We see an opportunity to continue to chip away and do higher quality, more meaningful transactions and build market share.”RBC Capital Markets in 2010 targeted a Top 10 U.S. ranking within three years. It expanded New York operations by hiring star bankers, and boosted lending to win bigger clients. While the efforts paid off years ago in equity financings and debt deals, the Top 10 for M&A remained out of reach.The firm has the biggest U.S. investment-banking operations of its Canadian peers including Toronto-Dominion Bank, after taking advantage of the financial crisis a decade ago to expand and recruit talent while other firms scaled back. Bank of Montreal is now aiming to take advantage of the more-recent retreat by European firms to expand its U.S. investment bank.RBC Capital Markets today has about 560 investment bankers in the U.S. -- more than double from a decade earlier, and almost three times more than in Canada. That’s helped the firm move up the league tables.“We feel like we’re gaining greater traction working on larger deals,” said Stopnik, 47. “A lot of it has to do with the hires and investments we’ve made over the years.”RBC advised Raytheon Co. this year on a $90 billion takeover by United Technologies Corp. It also was BB&T Corp.’s sole adviser on its $27.9 billion merger with SunTrust Banks Inc. and advised Broadcom Inc. on the $10.7 billion acquisition of Symantec Corp.’s enterprise security business.The firm was sole adviser and provided debt financing to Permira Holdings LLP for its $2.5 billion takeover of life-sciences company Cambrex Corp., and is advising Apollo Global Management Inc and leading financing for a purchase of radio stations owned by Cox Enterprises Inc.“In a difficult fee environment overall, we’ve made significant progress on the M&A side,” said Jim Wolfe, RBC’s other co-head of U.S. investment banking. “We’re going to be up roughly 20% year-over-year in terms of U.S. advisory fees.”This year isn’t a one-off, according to Wolfe.Since becoming co-heads in June 2018, Wolfe and Stopnik have expanded the advisory business and leveraged-finance platform. They’re pushing to build equity capital markets and gain expertise in technology and health care. They plan to add about three senior bankers to the 40-person health care group.“As we come into 2020 we’ve got the best pipeline that we’ve had in quite some time across all products, but particularly M&A,” Wolfe, 54, said in an interview. “We feel good about the ability to keep the momentum we achieved in 2019 as it relates to our advisory business.”To contact the reporter on this story: Doug Alexander in Toronto at dalexander3@bloomberg.netTo contact the editors responsible for this story: David Scanlan at dscanlan@bloomberg.net, ;Michael J. Moore at mmoore55@bloomberg.net, Dan Reichl, Josh FriedmanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
