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This basket consists of stocks that have attracted bad press.
Dow Jones giant Walmart and Lululemon Athletica are in buy zones, while TJX, eBay and Zumiez are just below buys as retail stocks lead.
The chef behind Beckett’s Table and Southern Rail is using only ingredients purchased at Walmart for a new menu item.
(Bloomberg) -- Goldman Sachs Group Inc. is throwing everything but the kitchen sink at boosting its share of the $4 trillion U.S. market for exchange-traded funds -- even mimicking one of its Wall Street foes.The bank is adopting an approach pioneered by JPMorgan Chase & Co., filing for a line of broad-based index products that could start trading at rock-bottom prices as early as next week, regulatory records show.After getting off to a blistering start four years ago on the back of a dirt-cheap factor ETF, Goldman dropped behind its Wall Street competitor, which has ridden a strategy dubbed “bring your own assets” to a $29 billion business.Essentially cloning popular ETFs and moving client cash from those products into its own, the controversial approach may be Wall Street’s best hope for challenging the dominance of State Street Corp., BlackRock Inc. and Vanguard Group.“As we continue to grow and build out our ETF business, along with our recent acquisitions, it just makes sense in some areas for us to have the building blocks that fuel those portfolios,” said Steve Sachs, head of capital markets for ETFs at Goldman.Even before this latest chapter, the race between the Wall Street giants had enough twists and turns to power a thriller.Goldman emerged in 2015, establishing itself as a leader in factor investing with its ActiveBeta U.S. Large Cap Equity fund, ticker GSLC. The product wowed the ETF industry with a fee of just 9 basis points, unheard-of for smart beta strategies -- but newer ventures have stumbled. This year, it introduced a handful of thematic strategies, but they’ve collected less than $50 million.JPMorgan was relatively quiet until June 2018, when it kickstarted its business with a suite of vanilla ETFs called BetaBuilders. Unlike the more specialized products the bank was hawking up until then, the funds tracked broad developed-market benchmarks -- at thrift-store prices.It was an inspired play, tripling JPMorgan’s ETF assets to near $30 billion within a 14-month span and powering it ahead of Goldman.“JPMorgan saw this as a smart move ahead of anyone,” said Bloomberg Intelligence analyst Eric Balchunas. “We’ve seen how hard it is to get any assets. But bringing your own assets gets you mojo, and mojo gets people in the door and investors on the phone.”The bank made smart moves elsewhere, winning a foothold in the nascent but growing fixed-income ETF market, and planting a flag early in Europe, whose industry is around half the size of the U.S. but growing rapidly.Goldman has yet to list an ETF in the region despite some high-profile hires, though it plans to commence the business before year-end, a spokesman in London said. That puts it several years behind JPMorgan, which has $2.8 billion in assets there.Now Goldman hopes to turn the tables on its investment-banking rival by embracing the bring-your-own-assets strategy. The firm already has some experience in the area as the largest owner of GSLC, and its latest foray is fueled by a recent acquisition spree. The bank scooped up S&P’s model portfolio business and United Capital this year, giving it fresh pipelines for flows into its own funds.However, the approach isn’t without its critics, who argue there are conflicts in directing wealthy clients to a bank’s own ETFs.“We have internal affiliates in our products, but they are institutional clients and we treat them as such with their own due diligence,” said Jillian DelSignore, head of ETF distribution for JPMorgan’s asset management arm.The bank’s transfers into BetaBuilders have saved clients about $42 million a year thanks to their low price tag, according to an analysis by Bloomberg Intelligence.Ironically, if Goldman succeeds in moving wealthy clients to its in-house products, BlackRock may turn out to be the biggest loser, according to an analysis of regulatory filings.United Capital’s clients hold some $4 billion in the firm’s iShares line, which could be redeployed into Goldman’s new products. That’s especially true if the funds are cheap.“The advisers -- by being so brutal with cost obsession -- have created this monster of cost migration,” said Balchunas. “By making moves like this, the banks are able to own the end client and the flows. It’s brutal out there.”\--With assistance from Morgan Tarrant.To contact the reporters on this story: Carolina Wilson in New York City at email@example.com;Ksenia Galouchko in London at firstname.lastname@example.org;Elizabeth Rembert in New York at email@example.comTo contact the editors responsible for this story: Brad Olesen at firstname.lastname@example.org, Yakob Peterseil, Rachel EvansFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- The message to Adam Neumann was clear: You’re not Zuckerberg.Over the past month, as Neumann’s grandiose plans for We Co. started to fray, bankers began warning that he would have to loosen his iron grip on the company.The old era of Mark Zuckerburg was over, WeWork executives would soon learn. Back in 2012, Zuckerberg could take Facebook Inc. public and still retain extraordinary voting power. But that was then.And so it was that Neumann, the polarizing co-founder of WeWork, begrudgingly agreed this week to cede some of his powers. The question now: Will that be enough? Already, WeWork’s hoped-for valuation has plunged by more than half, or some $70 billion.By Friday morning, Neumann’s company had hastily filed an amended prospectus for an initial public offering -- one that will test not only WeWork and its guru-CEO but, in many ways, an entire generation of money-burning, grow-at-all-cost startups.In a matter of weeks, WeWork’s IPO has gone from one of the most hotly anticipated deals of the decade to perhaps one of the most dreaded. Despite growing skepticism over WeWork’s business prospects, Neumann has resisted corporate-governance changes that would be considered standard elsewhere.The chaos was apparent Thursday and Friday, as WeWork picked a stock exchange, emailed bankers and filed its new prospectus -- all in about 12 hours.Nasdaq ListingDefying skeptics -- among them, some of its own financial backers -- WeWork is plowing ahead with plans to go public on the Nasdaq stock market. Not even Nasdaq officials knew for certain that the company would chose the exchange until the last minute on Thursday, according to people familiar with the matter.Emails were flying into the night. The new prospectus hit just after 6 a.m. on Friday.Now, yet another deadline looms: September 27, the Friday before Rosh Hashanah, the Jewish New Year. Neumann is expected to observe the holiday and be out of communication for several days, people familiar with WeWork said. WeWork representatives did not respond to a request for comment.Neumann didn’t get where he is, atop one of the most talked-about startups of the decade, by sharing. But in a new prospectus WeWork disclosed that Neumann would wield less power via an unusual class of high-voting stock.Now, executives must persuade investors that their company -- which has raised $12 billion since its founding and never turned a nickel of profit -- is worth billions on the stock market. As of late Friday, it was unclear whether they would be able to start marketing the stock via a roadshow starting on Monday, as many had expected.$65 Billion Value?Unclear, too, is just what WeWork might fetch on the open market. Only months ago, some bankers whispered it might be worth as much as $65 billion. Now that figure has fallen to as little as $15 billion.Beyond a page or so of steps WeWork would take to tighten up its corporate governance practices, Friday’s amended prospectus was little changed from the initial one in August.The dedication, even the second time, is pure Neumann:TO THE ENERGY OF WE –GREATER THAN ANY ONE OF USBUT INSIDE EACH OF USAmong other things, the company will trim the voting advantage that gives Neumann sway over the board, and no member of his family will be allowed to sit on the board. WeWork will also announce a lead independent director by year’s end.The move leaves in place a rare three-class stock structure and Neumann still maintains a voting majority, so it’s unclear how much the changes will appease both investors and the banks in charge of managing WeWork’s IPO.Valuation QuestionsQuestions remain about how investors will value the fast-growing, money-losing office leasing business that’s backed by SoftBank Group Corp. Both of the company’s lead financial advisers --JPMorgan Chase & Co. and Goldman Sachs Group Inc. -- have previously voiced concerns about proceeding with an IPO at a valuation around $15 billion, people briefed on the discussions have said.Looking to save the IPO and limit its downside, SoftBank is in discussions to buy about $750 million worth of additional stock in the offering, the people said.The board will have the ability to remove the CEO, and the updated prospectus has taken out a clause that previously said Neumann’s wife Rebekah -- who’s listed as a founder and chief brand and impact officer of WeWork -- will have a role choosing any new chief. Some criticized the changes as not going far enough.“This is an example of posturing,” Jeffrey Cunningham, who teaches management at Arizona State University and has served on several corporate boards, said of WeWork’s changes. The company appears to be facing pressure “to go public at a time that is inappropriate and with a governance record that is questionable.”Still, the moves drove WeWork bonds to be the biggest price gainers in high-yield bond trading for part of Friday. A Fitch Ratings analyst said the changes addressed many of the issues that the ratings company raised in downgrading WeWork’s credit grade last month.“A key component of WeWork’s model is the ability to restrain growth in the event of a downturn and these governance changes increase the likelihood that an independent board will have the power to enforce such a decision,” Kevin McNeil, a director at Fitch, said in an emailed statement.\--With assistance from Michelle F. Davis, Anders Melin, Tom Giles and Crystal Tse.To contact the reporter on this story: Gillian Tan in New York at email@example.comTo contact the editors responsible for this story: Liana Baker at firstname.lastname@example.org, ;Michael J. Moore at email@example.com, David GillenFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- WeWork is pressing ahead with plans for a public listing, announcing a series of governance changes aimed at shoring up a sagging valuation and assuaging critics who say it gave too much power to a polarizing co-founder.The company will trim the voting advantage that gives chief executive officer Adam Neumann sway over the board, and no member of his family will be allowed to sit on the board, it said in a regulatory filing Friday. WeWork will also announce a lead independent director by year’s end.The moves aim to give potential investors a check on Neumann’s control of the company and address some of the most unusual dealings between founder and firm. But it left in place a rare three-class stock structure and Neumann still maintains a voting majority, so it’s unclear how much the changes will appease both investors and the banks in charge of managing WeWork’s IPO.Questions remain about how investors will value the fast-growing, money-losing office leasing business that’s backed by SoftBank. Both of the company’s lead financial advisers -- JPMorgan Chase & Co. and Goldman Sachs Group Inc. -- have previously voiced concerns about proceeding with an IPO at a valuation around $15 billion, people briefed on the discussions have said.The company and its advisers were discussing a valuation range of $15 billion to $20 billion Friday, people with knowledge of the talks said. SoftBank Group Corp., which with its affiliates is WeWork’s biggest backer with a 29% collective stake and invested in January at a valuation of $47 billion, is in discussions to buy about $750 million worth of additional stock in the offering, the people said. The company has been looking to raise at least $3 billion in the IPO, and SoftBank’s purchase would limit its dilution.Spokespeople for SoftBank and WeWork declined to comment. The Wall Street Journal reported SoftBank’s plans earlier Friday.The company plans to start its IPO roadshow as soon as Monday, though that timeline could be delayed depending on investor demand, said a person with knowledge of the matter. WeWork said Friday it picked Nasdaq as its listing venue.The new filing revealed that Neumann will return any profits he receives from the real estate transactions he has entered into with the company, and that any CEO who succeeds Neumann will be selected by board of directors.The board will have the ability to remove the CEO, and the updated prospectus has taken out a clause that previously said Neumann’s wife Rebekah -- who’s listed as a founder and chief brand and impact officer of WeWork -- will have a role choosing any new chief. Some criticized the changes as not going far enough.“This is an example of posturing,” Jeffrey Cunningham, who teaches management at Arizona State University and has served on several corporate boards, said of WeWork’s changes. The company appears to be facing pressure “to go public at a time that is inappropriate and with a governance record that is questionable.”Still, the moves drove WeWork bonds to be the biggest price gainers in high-yield bond trading for part of Friday. A Fitch Ratings analyst said the changes addressed many of the issues that the ratings company raised in downgrading WeWork’s credit grade last month.“A key component of WeWork’s model is the ability to restrain growth in the event of a downturn and these governance changes increase the likelihood that an independent board will have the power to enforce such a decision," Kevin McNeil, a director at Fitch, said in an emailed statement.WeWork, which leases and owns spaces in office buildings and then rents desks to businesses ranging from startups to large corporations, has raised more than $12 billion since its founding nine years ago and has never turned a profit.WeWork had been targeting a share sale of about $3.5 billion in September, people familiar with the matter said in July. A listing of that size would be second only to Uber Technologies Inc.’s $8.1 billion listing this year.After the company filed publicly for the offering in August, its valuation shrank amid investor scrutiny.WeWork has been driving ahead with its desire to IPO, in part to gain access to much needed capital. The company needs to raise at least $3 billion through an IPO to tap into an additional $6 billion credit line that bankers have been setting up in recent weeks. The facility requires the company to carry out its offering by Dec. 31, the people said.Share ClassesThe original IPO plan included three classes of common stock, with holders of Class A shares getting one vote per share, while Class B and Class C owners got 20 votes for each. This arrangement would have given Neumann the vast majority of the voting power.The company is changing its high-vote stock from 20 votes to 10 votes a share. But it’s keeping the different classes, which it says “may result in a lower or more volatile market price” of its Class A common stock in part because certain indices like the S&P 500 exclude companies with such structures.The high-vote stock will automatically decrease to one vote per share in the event that Neumann becomes permanently incapacitated or dies, something that would previously only have occurred if Neumann’s ownership fell to 5% or lower.The company already has taken some steps to improve its governance, such as adding a woman to its board and having Neumann return $5.9 million of partnership interests initially granted to him as compensation for trademarks used in a rebranding. Yet its IPO filing last month raised a variety of other concerns. Among them: The company paid Neumann rent and lent him money.Neumann will also limit his ability to sell stock in each of the second and third years following this offering to no more than 10% of his shareholdings. WeWork’s Class A stock has been approved for listing on Nasdaq under symbol “WE”.The New York-based company, which changed its name to the We Co. this year, disclosed in its filings that it had lost $2.9 billion in the past three years and $690 million in just the first six months of 2019. Its annual revenue, though, had more than doubled to $1.8 billion in 2018, compared with $886 million the previous year.(Adds latest valuation talks in fifth paragraph.)\--With assistance from Anders Melin, Tom Giles and Sarah McBride.To contact the reporters on this story: Gillian Tan in New York at firstname.lastname@example.org;Giles Turner in London at email@example.com;Michelle F. Davis in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Liana Baker at email@example.com, Michael J. Moore, Dan ReichlFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Goldman Sachs is growing concerned about Apple Inc., and it is not alone.While shares of the iPhone maker have been stronger of late, the advance comes in contrast to a darker view toward the stock from analysts. Goldman is merely the latest example of growing caution as it cut its price target to one of the lowest on the Street.The consensus rating for Apple -- a proxy for its ratio of buy, hold and sell ratings -- stands at 3.76 out of 5. According to Bloomberg data, that matches the lowest since the first half of 2004.Shares of Apple fell as much as 2.7% on Friday, though it last traded down 1.9%. The stock has risen more than 13% off an August low and is less than 6% below its record close. While it slipped back under the threshold with Friday’s decline, its valuation returned above $1 trillion for this first in 2019 this week.Goldman analyst Rod Hall cut his target to $165 from $187, warning of a “material negative impact” to the company’s earnings per share as a result of a plan to offer a trial period for its Apple TV+ service.Apple responded to Goldman’s report in an email: “We do not expect the introduction of Apple TV+, including the accounting treatment for the service, to have a material impact on our financial results.”Goldman’s new target is 26% below Apple’s Thursday close, and while Hall has a neutral rating on the stock, there are only a couple of firms with a target below Goldman’s, according to data compiled by Bloomberg. The average target is about $219, matching the current share price.In addition to Goldman, recent cautious calls have included New Street Research cutting its own price target earlier this week and warning of a “multi-year decline” in iPhone demand.On Friday, Rosenblatt said it was seeing “weak” pre-orders for the latest version of the iPhone. The research firm has a Street-low price target of $150 on Apple stock, and it downgraded the shares in July. That brought the number of sell ratings to five, the highest number since at least 1997, according to historical data compiled by Bloomberg.All five of the sell ratings have come this year. In January, the number of firms with buy ratings dropped below 50% for the first time since 2004.(Adds Apple comment in sixth paragraph and Rosenblatt iPhone warning in eighth paragraph.)To contact the reporter on this story: Ryan Vlastelica in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Catherine Larkin at email@example.com, Steven Fromm, Tatiana DarieFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Apple Inc. said a new video service won’t have a material impact on its financial results, seeking to counter research from a Goldman Sachs analyst who cut his share price target on concern that aggressive pricing of the TV+ offering will trim profit.Earlier this week, Apple outlined a strategy that involved lower prices on several devices and services, including a monthly cost of $4.99 for TV+. It will also be free for one year with purchases of new Apple devices. This is relatively rare for a company that has historically charged premium prices to support healthy profit margins.Rod Hall, the Goldman Sachs analyst who covers Apple, cut his price target on Apple shares to $165 from $187, saying the company’s plan to offer a trial period for TV+ was “likely to have a material negative impact” on average selling prices and earnings per share.“We do not expect the introduction of Apple TV+, including the accounting treatment for the service, to have a material impact on our financial results,” Apple said in an email.The stock jumped after the statement, trimming losses from earlier in the day. It traded down 1.8% at $219 at 2:56 p.m. in New York.The TV+ service is entering a crowded video-streaming field that already includes Netflix Inc., Amazon.com Inc., Hulu and AT&T Inc.’s HBO. In November, Walt Disney Co. plans to launch a Disney+ streaming service, with a giant catalog of titles, for $6.99 a month. Netflix’s entry-level subscription is $8.99 a month in the U.S.Apple, which doesn’t currently have a back catalog of content for TV+, announced the $4.99-a-month pricing on Tuesday, sparking a rally in its shares and declines in Netflix and Disney stock. In India, the TV+ service will be 99 rupees ($1.40) a month. (Updates with background on TV+ in final paragraphs.)To contact the reporters on this story: Mark Gurman in San Francisco at firstname.lastname@example.org;Nico Grant in San Francisco at email@example.comTo contact the editors responsible for this story: Tom Giles at firstname.lastname@example.org, Alistair BarrFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Walmart is a retail titan taking the fight to Amazon. But earnings growth is tepid. The stock is hitting new highs, but is it a good buy?
(Bloomberg) -- The economy’s biggest pillar -- the American shopper -- stood steadfast through a summer of mounting economic challenges characterized by soft global growth and trade uncertainty.Figures released Friday showed August retail sales advanced more than forecast, while consumer sentiment rebounded from an almost three-year low. Treasury yields and stocks moved higher as the data helped reassure investors that households will continue delivering for the economy and keep it moving forward, albeit at a slower pace.The value of overall sales rose 0.4% from the prior month, led by motor vehicles and online purchases, after an upwardly revised 0.8% increase in July, according to the Commerce Department. The University of Michigan’s index of consumer sentiment increased 2.2 points to 92, higher than the median forecast in a Bloomberg survey of economists.Spurred by a resilient labor market and income gains, the consumer remains the chief source of firepower for economic growth that’s slowed amid fragile global demand, uncertainty surrounding trade policy and lackluster factory output. The report suggests another solid quarter of household consumption, which grew in the April-June period at the fastest pace since 2014.“At a time when recession risk dominates most economic discussions, the strength of the U.S. consumer is among the more compelling examples of an economy that is still firing on all cylinders,” Tim Quinlan, senior economist at Wells Fargo Securities LLC, said in a report.Sales in the closely watched “control group” subset -- which some analysts view as a more reliable gauge of underlying consumer demand -- increased 0.3%, matching projections. The measure excludes food services, car dealers, building-materials stores and gasoline stations.In their effort to preserve the longest-running U.S. expansion, Federal Reserve policy makers reduced their benchmark interest rate by a quarter point in July. They’re projected to lower it again next week as a bulwark against the possibility that sluggish global demand and weaker trade spill over into the domestic economy more broadly.Trade tensions showed some easing this week, with China saying earlier Friday that it’s encouraging companies to buy U.S. farm products including soybeans and pork. The two sides are set to resume face-to-face discussions in coming weeks. Improved chances of an agreement have helped return U.S. stocks to near a record high, even after President Donald Trump imposed levies on a wide range of Chinese goods as of Sept. 1.The Michigan sentiment survey showed tariffs remain a concern. Some 38% of respondents made spontaneous references to the negative economic impact, the most since March 2018, according to the report.Nonetheless, consumers were more upbeat in August than a month earlier about current economic conditions and expectations.While the retail sales report was solid overall, some of the details were more mixed: Seven of 13 major categories showed monthly declines, including restaurants, which posted the biggest drop in almost a year.Grocery stores, department stores and apparel retailers registered declines in receipts from a month earlier. What’s more, the gain in the control group subset was the smallest in six months, indicating personal consumption will decelerate from the robust second-quarter pace.On the positive side, spending at automobile and parts dealers climbed 1.8% from the prior month, the most since March, after increasing 0.1% in July. Industry data from Wards Automotive Group previously showed August unit sales rose 0.9% after falling in July to a three-month low.Non-store sales, which includes online shopping, jumped 1.6%. The category posted a 1.7% gain in July amid Amazon.com Inc.’s 48-hour Prime Day event, which the company said surpassed sales from the previous Black Friday and Cyber Monday combined. The promotion, now in its fifth year, likely drove comparison shoppers to rivals like Walmart Inc. and Target Corp.Filling-station receipts decreased 0.9%, the report showed, after gasoline prices dropped 3.5% in Thursday’s consumer-price data. The retail figures aren’t adjusted for price changes, so sales could reflect changes in gasoline costs, sales, or both.Get MoreRetail sales estimates in Bloomberg’s survey of economists for ranged from a 0.2% decline to a 0.6% gain from the prior month. Control-group sales increased an annualized 8.1% over the latest three months versus a 9.4% rate in the same period through July.The sales data don’t capture all of household purchases and tend to be volatile because they’re not adjusted for changes in prices. Personal-spending figures, which also span services, will offer a fuller picture of consumption in data due at the end of the month. \--With assistance from Jordan Yadoo, Mark Tannenbaum and William Edwards.To contact the reporter on this story: Vince Golle in Washington at email@example.comTo contact the editors responsible for this story: Scott Lanman at firstname.lastname@example.org, Jeff KearnsFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
A leading Indian trader body asked the government on Friday to ban upcoming festive sales on Amazon's local unit and its rival Flipkart, saying their deep discounts violate the country's foreign investment rules for online retail. The two e-commerce firms typically hold annual festive season sales ahead of key Hindu festivals Dussehra and Diwali, which are due this year in October, when Indians make big ticket purchases such as cars and gold jewellery. Walmart-owned Flipkart's six-day sale begins Sept. 29, while Amazon is yet to announce dates.
Two weeks ago, Walmart (NYSE:WMT) sued Tesla (NASDAQ:TSLA).Source: fotomak / Shutterstock.com The complaint, filed in New York state court, accuses Elon Musk's company of "widespread, systemic negligence" that caused Tesla's solar panel systems to spark fires at "no fewer than seven Walmart stores."The lawsuit may not inflict much direct economic harm on Tesla, but the company's reputation could suffer a serious blow from the fact that its giant corporate customers are litigating and griping.InvestorPlace - Stock Market News, Stock Advice & Trading TipsShortly after Walmart filed suit, for example, Amazon (NASDAQ:AMZN) complained that a blaze on the roof of one of its Southern California warehouses also involved a Tesla solar panel system. Tesla called it "an isolated incident."Unfortunately for Tesla, these "isolated incidents" are piling up like kindling around a funeral pyre. Tesla's Trouble Could Benefit SunPowerAccording to the Better Business Bureau, Tesla takes the grand prize for most customer complaints per solar megawatt installed. During the last year, the Bureau received an average of 20 customer complaints per 10 megawatts of solar capacity installed by Tesla. * 7 Discount Retail Stocks to Buy for a Recession That number of complaints was more than seven times the number of complaints about SunPower (NASDAQ:SPWR).Not surprisingly, as customer lawsuits and complaints accumulate around Tesla, its growth trajectory is atrophying. Even prior to the Walmart lawsuit, Tesla's solar operations had been losing market share and gaining negative press. In fact, Tesla's solar installations have been trending lower for several years, even though the total volume of U.S. solar installations has been growing.Meanwhile, the company's more well-known electric vehicle business is also facing a series of setbacks and skeptics. Tesla stock is down 35.1% over the past two years.Against this backdrop of dwindling installations, the Walmart lawsuit is unwelcome news for Tesla. Walmart has been a major customer. It has leased roof space at 240 stores to Tesla to install and operate solar systems.Clearly, Tesla will not be signing up a 241st Walmart rooftop any time soon. On the contrary, Walmart is already signing new installation agreements with alternative solar system providers … including SunPower.I recommended SunPower stock to my subscribers in the July issue of my newsletter, Fry's Investment Report -- and those shares have already made peak gains of better than 30%.It is probably no coincidence that Walmart struck a new installation contract with SPWR stock last year, soon after Tesla's solar panels began detonating on the retailer's rooftops. Specifically, Walmart contracted with SunPower to install solar systems at 21 sites in Illinois -- 19 stores and two distribution centers.Contract "wins" like these are a big part of the reason why SunPower's solar deployments are ramping up so significantly. SunPower stock is already the No. 1 provider of solar systems to U.S. commercial and industrial customers like Walmart and Target (NYSE:TGT).In other words, Tesla's troubles in the solar industry can be nothing but good news for SPWR stock - and the Fry's Investment Report portfolio.Along with Tesla there are a lot of companies out there jumping on the solar bandwagon, and there is clearly a lot of investing potential here.The International Energy Agency (IEA) anticipates global spending on solar power to total $4 trillion over the next two decades -- or about $180 billion per year.But it's all about finding the right companies that offer significant long-term potential.That's why I've released an "all solar" edition of Fry's Investment Report.In it, besides SPWR stock, I share other recommendations to get investors in on this technology's profit ground floor. And I've packed it full of other research laying out my case for solar's blindingly bright future.To learn more, I strongly suggest you go here to find out how to join Fry's Investment Report.Eric Fry is a 30-year international finance expert, former hedge fund manager, and InvestorPlace's resident expert on global investment trends. He founded his own investment management firm and served as a partner several others. One of the few analysts who predicted the last big market crash, in 2007-'08, Eric showed his readers how to profit off of companies that eventually went bust. His readers could have walked away with gains like 1,415% on Countrywide Financial, 4,408% on Fannie Mae, and even 6,425% on Freddie Mac. With Fry's Investment Report, Eric's goal is to track the world's biggest macroeconomic and geopolitical events - and help investors make big gains from those emerging opportunities. Click here to learn more. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Big IPO Stocks From 2019 to Watch * 7 Discount Retail Stocks to Buy for a Recession * 7 Stocks to Buy Benefiting From Millennial Money The post What Happened After Walmart Sued Tesla appeared first on InvestorPlace.
Rising long-term treasury yields are likely to support banks' financials to some extent. But lower interest rates and other concerns are expected to be headwinds.
Deutsche Bank (DB) agrees to pay settlement charges despite not admitting the allegations. Also, it agrees to share information with the regulators that can help prove other banks guilty.
The NFL kicked off its 100th season in less than spectacular fashion, with multiple blowouts and media reports of at least one team already tanking. The epicenter of that emptiness is in Florida, where all three NFL franchises — the Jacksonville Jaguars, Miami Dolphins and Tampa Bay Buccaneers — have struggled to fill their stadiums. The Tampa Bay Times’ Thomas Bassinger, noting that not even a pregame concert featuring Tim McGraw was enough to fill Raymond James Stadium for the Buccaneers’ opener, wrote, “Maybe the Bucs, not the Rays, should consider playing half their season in Montreal.” In Miami, the Dolphins’ announced attendance for its season opener was a sellout at just over 65,000 fans.
At the height of the so-called "Retail Apocalypse" in 2017, everyone was counting out big box retailer Target (NYSE:TGT). Its closest peer and biggest rival, Walmart (NYSE:WMT), had adjusted to e-commerce disruption by building out a robust online business and expanding its omni-channel capabilities. Target, quite simply, had not done any of that.Source: Robert Gregory Griffeth / Shutterstock.com The result? While Walmart was rattling off big comparable sales growth quarter after big comparable sales growth quarters that year, Target had a tough time just comping positive. Investors thought the writing was on the wall -- Target was doomed, thanks to e-commerce disruption. As such, in July 2017, TGT stock was a $50 stock trading at a dirt cheap 10x trailing earnings multiple, and coming off the heels of a 30% sell-off over the prior 52 weeks.How times have changed since then.InvestorPlace - Stock Market News, Stock Advice & Trading TipsToday, the retail apocalypse has turned into a retail recovery, and TGT stock is a $110 stock trading at a highly respectable 18x trailing earnings multiple, with an impressive trailing 52-week gain of nearly 25%.What happened? Over the past two years, Target has built out a robust online business. The Minneapolis company rapidly expanded its omni-channel capabilities. And, it dramatically refreshed its in-store presentations to be more tech-savvy.The result? Target has consequently rattled off nine consecutive quarters of positive comps, including decade-best traffic growth numbers over the past few quarters. This big growth streak has powered a huge rally in Target stock. * 7 Stocks to Buy In a Flat Market All of this should continue for the foreseeable future. Except for one part -- the huge rally. Put simply, TGT stock was dirt cheap two years ago. Today, it's fully valued. So, while healthy growth should persist, multiple expansion should not. Ultimately, valuation friction will likely limit further near-term upside in Target stock. Target will Continue Firing on all CylindersFrom where I sit, the fundamentals underlying TGT stock look really good. They broadly support the idea that positive comps, margin expansion, and healthy profit growth are here to stay for the foreseeable future.Starting at the top, the U.S. consumer remains healthy, supported by strong labor conditions (low unemployment and strong wage growth) and favorable spending conditions (low rates and more rate cuts on the way). Indeed, the U.S. and global economic environments appear to be improving, as evidenced by upward movement in Citi's Economic Surprise Index and a stabilizing global OECD leading indicator, respectively.Healthy economic conditions are keeping the U.S. retail sales environment similarly robust. Over the past three months, retail sales are up 3.2%. Within that strong U.S. retail sales environment, general big-box retailers like Target and Walmart are gaining share because they are expanding their product assortments and becoming all-in-one, one-stop-shops with unparalleled convenience.Further, within that expanding general big-box retail space, Target is the the cream of the crop. Sure, Walmart is bigger. But, Target is growing more quickly -- both online and offline -- and has been growing more quickly for seven straight quarters.Net net, Target is the hottest company in the hottest space in a stable growth U.S. retail market supported by healthy labor, economic, and spending conditions. Broadly, that means Target will continue to report solid numbers for the foreseeable future. Target Stock is Fully Valued for Big GrowthThe problem with Target stock is that it will likely lose its biggest driver: multiple expansion.Over the past two years, TGT stock has gained about 90%. During that stretch, Target's trailing price-to-earnings multiple has risen about 60%, while trailing EPS has risen about 30%. When it comes to the 90% gain in TGT stock over the past two years, two-thirds of that gain has been driven by multiple expansion.That multiple expansion probably won't persist going forward. At the current moment, Target stock trades at just under 18x forward earnings. That's above the market average forward earnings multiple of 17x. One could reasonably argue that TGT stock is actually due for some multiple compression over the next few years, edging back to a market multiple.Big picture, Target stock is no longer in a position to drive growth through multiple expansion. Instead, all growth going forward will be from earnings improvement. How much are earnings projected to rise? About 7% next year and 10% the year after that. Assuming multiple compression back toward the market multiple, then you're looking at potential gains in TGT stock over the next few years of about 7%-8%. * 10 Stocks to Sell in Market-Cursed September That's fine. But, not compelling. As such, at current levels, I think valuation friction ultimately limits near to medium-term upside in TGT stock. Bottom Line on TGT StockTarget is a great company, and TGT stock is a great holding. But, what I loved about Target stock back in mid-2017 -- an improving growth trajectory converging on a significantly discounted valuation -- no longer remains true today. Instead, what you have is a stable and healthy growth trajectory, coupled with an above-normal valuation.That's an okay combo. But not a great one. As such, I think the best of the TGT stock rally is in the rear-view mirror.As of this writing, Luke Lango did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Battered Tech Stocks to Buy Now * 7 Strong-Buy Stocks Hedge Funds Are Buying Now * The 7 Best Penny Stocks to Buy The post After Retail Recovery, Beware Near-Term Valuation Friction on Target Stock appeared first on InvestorPlace.