Mobileye stock plunges, Walgreens dividend: Trending Tickers
Autonomous driving developer Mobileye (MBLY) stock plummeted on Thursday, closing the day nearly 25% lower, after forecasting a 50% drop in full-year revenue for 2024.
While topping first-quarter earnings estimates, Walgreens (WBA) announced it will be issuing cuts to its quarterly dividend to free up capital. The stock ticked lower throughout Thursday, closing over 5% lower.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Editor's note: This article was written by Luke Carberry Mogan.
Video Transcript
JOSH LIPTON: Let's start off with shares of Mobileye plunging today after it said it expects a 50% drop in revenue in the first quarter of this year. You can see that down about 25% in today's trade. So the stock cratered really this full-year revenue forecast, Julie. And it missed and missed badly what the Street had been looking for.
So looking for now, the Mobileye says between 183 and negative 1.96 billion. The Street was close to the 2.58 billion. So that's a big swing in a miss, relative to consensus. Remember, of course, Intel spun off this company back in October. Still, by the way, has a big stake. And it sounds like from Mobileye, which Mobileye makes chips and systems that power advanced driver assistance, saying the issue here is really with customers building up inventories.
JULIE HYMAN: Yeah. It was viewed as really bad news by the Street. Now there were a couple of analysts, like the folks over at Citi, who said that it doesn't change the long-term thesis, but then the analysts over a Vital Knowledge said, this is a shortfall of epic proportions. It really was a shock, it seems like, even if for the longer-term bulls.
This excess inventory commentary was really a shock for investors and Mobileye. And it didn't just take down Mobileye, by the way. It took down other chipmakers that also serviced the auto industry here, companies like NXP Semiconductor, STMicro, Texas Instruments. A lot of these stocks also taking a hit in the session here on this, because we've talked a lot about what's going on in the auto industry more broadly that there is sort of weakening demand. And so that's something that maybe is now being felt by these companies. So we'll see what continues to happen with Mobileye here after this rerating.
JOSH LIPTON: Yeah. The company did say we think customers will work through the supply in Q1. But obviously, investors were disappointed. RBC's Tom Narayan, who, by the way, was on the show-- right, he likes this name-- put out a note telling his clients still likes the name, keeps his outperform, did though trim his target off that news. So he's now at 45. He was at 54.
JULIE HYMAN: By the way, that one-day decline for Mobileye is indeed a record drop for the stock, just seeing that confirmed. Also, let's take a look at shares of the drugstore chain. Walgreens down 5% after it announced earnings today, announced cuts to its quarterly dividend to get more cash to grow its business. The health care giant said reducing its payout to shareholders to $0.25 a share will help free up capital to build out its pharmacy and health care business.
And really like, forget about the earnings for a minute, the dividend cut is really the big source of disappointment here. And it was a to the dividend as well, even for those who were expecting a dividend reduction. The fact that it was bigger than expected for many was a disappointment here.
Some of the bulls on the Street will say, OK, this is good news that they're going to be using the cash to try to grow the business. But nonetheless, for a company like Walgreens, it doesn't tend to move necessarily a lot on a day-to-day basis. 5% is a big drop.
JOSH LIPTON: Yeah. And the backstory, I mean, obviously, this is a company where we've seen some big changes in the c-suite. We had CEO Roz Brewer departed. There's a new CEO, Tim Wentworth. And he has been making moves, so cost-cutting, closing locations, maybe looking to sell the international boots chain. We've seen some reporting on that front.
Stock is down more than 30% in the past 12 months. But for most analysts, when you look at their ratings this is still very much a show me story. Most of the analysts covering this one still had a hold right now.
JULIE HYMAN: And it also sounded like from what the CEO talked about today that this might not be the last move. He said that the company is evaluating strategic options to drive sustainable long-term shareholder value. So maybe there might be some more moves to come.
