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The Home Depot, Inc.
Marriott International, Inc.
The Hershey Company
Match Group, Inc.
Tiffany & Co.
Darden Restaurants, Inc.
L Brands, Inc.
Signet Jewelers Limited
AMC Entertainment Holdings, Inc.
Ruth's Hospitality Group, Inc.
Coronavirus has put it on life support, but the movie theater chain may have bought itself some time.
(Bloomberg) -- Some of Wall Street’s biggest stocks are coming off their best quarterly performance in years, and with the broader economy still grappling with the pandemic, analysts are starting to express some skepticism about high-profile rallies.The S&P 500 surged 20% in the second quarter, its biggest quarterly gain since 1998. While the superlative nature of the rally was partly a function of timing -- many components hit a bottom right before the end of the first quarter -- the move was fueled by tech and internet stocks, which outperformed the benchmark and have heavy weightings due to their massive market capitalizations.Apple and Amazon.com both gained more than 40% during the quarter, making it the iPhone maker’s best quarter since 2012 and Amazon’s best since 2010.On Wednesday, Deutsche Bank confessed it was “surprised at both the speed and magnitude of the rebound” in Apple shares, adding that the move “has us nervous.” Raymond James echoed this tone on Tuesday, seeing uncertainty surrounding Apple’s forecast given an expected delay in the iPhone 12, a product Nomura Instinet expects “will fall short of a supercycle.” Both Deutsche Bank and Raymond James still recommend buying Apple shares.Amazon remains a consensus favorite on Wall Street -- more than 90% of the firms tracked by Bloomberg recommend buying it -- but the degree to which the share price exceeds analysts’ average price target is near a multiyear high, suggesting that even bulls aren’t expecting much additional upside.Among other mega-cap names, Microsoft rose 29% over the second quarter, its best such showing since 2009. Both Facebook and Google-parent Alphabet notched their biggest quarterly gain since 2013, with Facebook up 36% and Alphabet up 22%, based on its Class A shares. Netflix rose 21% last quarter.All are at or near record levels, and the rallies will soon be tested as each member of the group is scheduled to post quarterly results before the end of the month, with Microsoft and Netflix reporting next week.Apple EstimatesFor Apple, the rally has come despite a more tepid view for its upcoming results. Wall Street expects third-quarter earnings, excluding some items, of $2.03 a share, a consensus that is down 6.8% from where it was three months ago. The consensus for revenue has declined 0.9% over the same period.While analysts debate whether the results will justify the recent gains, many of these names are seen as potential pandemic winners. Microsoft is expected to see stronger demand for its cloud-computing and workplace collaboration products as people continue to work remotely, while the e-commerce wave lifting Amazon and others is seen as outlasting the coronavirus’s impact on brick-and-mortar stores.Apple analysts also see a number of reasons to be optimistic for the long term, including the company’s services business, wearable products, and its stock-buyback program. “Overall, we believe the directionality and reasoning behind AAPL’s stock rise,” Deutsche Bank’s Jeriel Ong wrote. Still, the firm has “ambivalence at these levels.”Firms expressed a similar sentiment about Netflix, which has seen higher engagement during the pandemic. Rosenblatt Securities “struggle[s] to see the upside” from current levels given “uncertainty over how [long] this favorable environment will last.” Stifel continues “to grapple with the risk/reward profile given limited 2H visibility.”Imperial Capital downgraded the stock earlier this week, moving away from an outperform rating that it had held since starting coverage on Netflix about two years ago, according to data compiled by Bloomberg. Following the recent advance, Netflix “will begin a fairly extensive range-bound trend as other long opportunities emerge in the media space,” the firm said.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The troubled movie theater chain's share price popped, but the news that drove the advance wasn't exactly good.
It's tempting to compare Spotify's (NYSE: SPOT) recent push into original podcast content to Netflix's (NASDAQ: NFLX) wildly successful expansion into original video content. The Swedish music streaming leader has even directly encouraged such comparisons. Former CFO Barry McCarthy, who had previously served as Netflix CFO and retired earlier this year, put it bluntly last October: "So streaming was to Netflix as podcasting is to Spotify."
Amazon.com (NASDAQ: AMZN) is finally bringing the account-profile feature for its Prime Video service to the U.S. The feature is a standard on Netflix (NASDAQ: NFLX) and Disney's (NYSE: DIS) new Disney+ service. Amazon began rolling out the account enhancement earlier this year in India and some countries in Africa and Asia, but it was launching the feature in phases to the rest of the world.
Investors need to pay close attention to L Brands (LB) stock based on the movements in the options market lately.
Home Depot (NYSE: HD) proved to be resilient during the pandemic. Importantly, in the post-pandemic long run, Home Depot can stave off Amazon from encroaching on its business. The initiative aims to make it easier for customers to order online and pick up in-store, for example, which is a more profitable transaction for Home Depot compared to shipping.
Few industries have been hobbled by the coronavirus pandemic as much as movie theaters. The company warned in early June that its ability to continue as a "going concern" was in substantial doubt, an admission that the company could be forced into bankruptcy. It also lost $149 million on a generally accepted accounting principles (GAAP) basis, and the company paid out a generous dividend, making it more vulnerable to the current crisis.
The analysts covering Match Group, Inc. (NASDAQ:MTCH) delivered a dose of negativity to shareholders today, by making...
New Mountain Finance Corporation Schedules its Second Quarter 2020 Earnings Release and Dividend Announcement
Netflix (NASDAQ: NFLX) is slated to report its second-quarter results on July 16. While many companies decided not to give forecasts for the next quarter, Netflix decided to give it a shot. With coronavirus cases surging in some states in the U.S., and the threat level still high globally, Netflix should continue to experience increasing subscriber growth.
Even as the index recovered from its plunge and returned to setting new record highs, these stocks missed the boat.
U.S. tech giants face a reckoning over how Hong Kong's security law will reshape their businesses, with their suspension of processing government requests for user data a stop-gap measure as they weigh options, people close to the industry say. While Hong Kong is not a significant market for firms such as Facebook, Google and Twitter, they have used it as a perch to reach deep-pocketed advertisers in mainland China, where many of their services are blocked. "These companies have to totally reassess the liability of having a presence in Hong Kong," Charles Mok, a legislator who represents the technology industry in Hong Kong, told Reuters.
AMC Ent. Hldgs, Inc. Announces Extension of Early Deadline, Withdrawal Deadline & Expiration Time of Private Exchange Offers & Consent Solicitations
The top streaming platform impressed investors with its subscriber totals last quarter, and expects to keep audiences engaged with more content releases in the near term.
Indonesia's state owned telecoms firm PT Telekomunikasi Indonesia said on Tuesday it has unblocked streaming giant Netflix, after four years of negotiations. Telkom said the decision came after a "change in the U.S. company's approach to the country". This includes Netflix offering parental controls as well as agreeing to examine complaints from Indonesia's government or regulators over content within 24 hours.
With the stock market continuing its rebound from lows during the coronavirus market crash earlier this year, some companies' stocks have done more than recover -- they've soared to new all-time highs. Two notable businesses that have seen their shares skyrocket to record levels recently are Netflix (NASDAQ: AAPL) and Apple (NASDAQ: AAPL). Shares of Apple hit $375.77 at one point on Monday, marking a new all-time high for the stock.
Indonesia imposed a 10% value-added tax on sales by technology firms including Amazon, Netflix, Spotify and Google on Tuesday, as spending patterns shift with increased remote working as a result of the coronavirus crisis, which has hit state finances. The Southeast Asian country's tax office said in a statement that it had already assigned tax identification numbers to Amazon Web Services, Netflix, Spotify and Alphabet's Google for its Google Asia Pacific, Google Ireland, and Google LLC units.
(Bloomberg Opinion) -- It’s almost always an advantage to have a seat at the table.In March, as Congress wrestled with the ravages of the Covid-19 pandemic and debated the contours of what would soon become the largest economic bailout in U.S. history, four legislators pushed hard to make sure that franchise operators received special treatment.They wrote a letter to the two senators steering the legislation toward the finish line, Mitch McConnell and Charles Schumer, asking them to increase the amount of taxpayer funding franchises could receive. While the Coronavirus Aid, Relief and Economic Security Act didn’t ultimately provide extra money for franchises, it arguably provided something far more valuable: It mandated that franchises — regardless of how many stores or restaurants they operated or how many people they employed in those outlets — would be eligible for federal small business aid.Given that Paycheck Protection Program funds were initially supposed to go only to companies with 500 or fewer employees, this was a significant concession. It meant that large national operators, some of which employed thousands of people, could snare PPP funding by applying store by store. You know what happened after that. Big operators such as Shake Shack Inc. and Ruth’s Hospitality Group Inc. received big loans; authentically small businesses were left out; and a healthy round of public criticism of the PPP program ensued. (Shake Shack and Ruth’s Hospitality decided to return their loans.)One of the four legislators who pushed for special bailout treatment for franchises in March was Representative Kevin Hern, a Republican from Oklahoma. Hern campaigned for his House seat in 2018 as a can-do businessman who has successfully operated a chain of McDonald’s franchises in his home state. I wrote a column in April asking whether Hern had positioned his own businesses for a rescue on the taxpayers’ dime.Hern and his office declined to comment when I asked in April whether his franchises would apply for federal aid — and whether doing so would be a financial conflict of interest. They also declined to comment on any discussions Hern may have had about the CARES Act with McDonald’s Corp., the fast-food giant that doles out franchises to entrepreneurs like Hern. On Monday, the Small Business Administration finally answered one of those questions. It released the names of some of the biggest recipients of PPP funds and, as it turns out, a Tulsa enterprise controlled by Hern, KTAK Corporation I, received $1 million to $2 million.KTAK operates fast-food franchises the Hern family owns. I contacted Hern’s office again on Monday and asked for information about any role he played in getting PPP funding for KTAK. I also asked whether his family’s McDonald's franchises received PPP funding directly and, if so, how much they received. I also asked Hern’s office to disclose any other businesses in which he has a financial or management interest that received PPP funding. Hern and his representatives didn’t respond to any of those questions.In a press release, Hern’s chief of staff, Cameron Foster, said that his boss “has been open and transparent with members of the community about his family business’ need of a Paycheck Protection Program Loan during the Covid-19 crisis.” Foster also said that Hern was “happy to share that the family business was able to keep all employees either at their current level of employment or move part-time employees to full time.”If all of Hern’s employees did, in fact, stay on his companies’ payrolls, that’s a good thing. But securing PPP funding also presumably meant that Hern and his family could keep their businesses operating — a direct financial benefit for the congressman himself. And Hern got that funding ahead of somebody else, possibly much smaller businesses that lacked his resources and connections.Concerns that insiders would benefit from the PPP program have shadowed the bailout from the moment it was enacted in March. Schumer personally promised that no bailout money would go to businesses controlled by President Donald Trump or his family members. Language was added to the CARES Act to try to ensure that didn’t happen. But Congress then exempted PPP — one of the most heavily funded bailout programs — from those provisions.So far, it doesn’t appear as if the Trumps have received public funds directly. But the Washington Post reported on Monday that dozens of businesses that operate in Trump-owned or Trump-controlled buildings obtained PPP funds. Bloomberg News reported that a business partner of the Trumps in Hawaii received a PPP loan. Corporate entities tied to the family of the president’s son-in-law, Jared Kushner, also pulled in some PPP funds.The law firm founded by one of Trump’s longstanding personal attorneys, Marc Kasowitz, received PPP funds of $5 million to $10 million. Companies linked to Education Secretary Betsy DeVos and Agriculture Secretary Sonny Perdue also received PPP loans, as did a company linked to House Speaker Nancy Pelosi’s husband, Bloomberg News reported. Two Democrats, Debbie Mucarsel-Powell and Susie Lee, as well as two Republicans, Vicky Hartzler and Roger Williams, are also linked to businesses that have snared PPP funds.The SBA and the Treasury Department have been the primary administrators of the PPP program, and they’ve been unusually lax about properly overseeing and administering the hundreds of billions of dollars of taxpayer money that they’ve handed over to small businesses thus far. Treasury Secretary Steven Mnuchin resisted disclosing the identities of PPP borrowers for months until public hearings forced his hand. The SBA even waived conflict-of-interest and ethics guidelines that have traditionally prevented legislators from gaining access to the agency’s loans.So when public officials like Hern are the beneficiaries of taxpayer-funded programs like PPP, it winds up not being illegal or unethical simply because the federal government says it isn’t.Hern once owned as many as 18 McDonald’s franchises in the Tulsa area that employed more than 1,000 people, though that has shrunk to just five franchises more recently. He continues to own his McDonald’s franchises while serving in Congress because federal ethics and conflicts-of-interest guidelines allow him to. While the guidelines limit how much outside income legislators can earn while serving in Congress, they permit exceptions for performing some kinds of outside work — including practicing medicine or advising a family-owned business.Financial disclosures that Hern filed in 2018 said his restaurants contributed $25 million to $50 million of value to an overall portfolio of personal holdings worth between $38.7 million and $92.9 million at the time. An Oklahoma nonprofit news organization, The Frontier, nicknamed Hern “the McCongressman.”Hern seemed committed to altering that perception when he ran for Congress in 2018. “Kevin will use his experience and knowledge to focus on leading Congress by example, and put an end to the typical behaviors of career politicians,” his campaign pledged at the time.Maybe all that PPP money changed his mind.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Timothy L. O'Brien is a senior columnist for Bloomberg Opinion.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Wall Street analysts think Netflix will post its second quarter in a row of big subscriber gains thanks to the stay-at-home entertainment boom during the Covid-19 coronavirus pandemic.