Analysts Stocks

      Daily Update - April 17, 2023

      Selected highlights of the day:

      By: Matthew Otto

      Tesla will be posting it’s earning report

      This Wednesday, In advance of the call:

       

      • Wedbush analyst Daniel Ives reiterated his Outperform and a $225 price target. Ives had a stellar year in 2021 with his stock forecast leading on the car manufacturer followed by keeping his price targets above the stock price since.
      • Barclays analyst Dan Levy maintains an Overweight rating and lowers his price target from $275 to $230.

       

      Moderna and Merck

      Have announced that their experimental mRNA cancer vaccine, mRNA-4157/V940, cut the risk of death or recurrence of skin cancer by 44% compared to Merck’s immunotherapy Keytruda alone.

       

      The vaccine is custom-built based on an analysis of a patient’s tumors after surgical removal, and is designed to train the immune system to recognize and attack specific mutations in cancer cells.

      The vaccine was shown to prolong the time patients had without recurrence or death, and is part of several collaborations combining powerful drugs that unleash the immune system to target cancers with mRNA vaccine technology. The firms are in talks with US regulators about designing a late-stage trial, which is likely needed for approval of the combination regimen.

      Merck has also received headlines as it agreed to purchase Prometheus Biosciences for roughly $10.8 billion. The deal helps Merck build its autoimmune drug portfolio adding Prometheus’ star drug PRA023, a treatment for ulcerative colitis, Crohn’s disease, and other autoimmune conditions, to its lineup.

      • Citi analyst Andrew Baum reiterated a Buy rating and a $130.00 price target on Merck.Baum estimate up to $20 billion in peak sales for PRA023 after approval and a boost of 15% to 30% to long-term earnings, when stripping out one-off items

       

      Charles Schwab 

      Has reported first quarter results, with net income of $1.6bn, up 14% from the same period last year. The company saw 10% year-over-year revenue growth and organic asset growth of over 7%.

      In addition, the company announced several enhancements to Schwab Personalized Indexing (SPI), including new tools that expand the personalisation options available to clients.

       

      Earnings per share for the first quarter, which amounted to 93 cents, surpassed the Refinitiv projection of 90 cents. The company’s revenue of $5.12 billion was approximately consistent with the estimates.

      Dividend Freeze

      Mr. Crawford, the CFO of The Charles Schwab,  concluded that the primary balance sheet objective is to maintain the capital and liquidity necessary to support the company’s long-term growth. The company increased its quarterly common dividend by 14% to $0.25 per share and returned capital via common and preferred stock repurchases.

      However, due to recent events in the U.S. banking sector and resulting regulatory uncertainty, the company decided to pause its active buyback program. Nonetheless, opportunistic capital return is still an important part of Schwab’s “through the cycle” financial strategy. The company believes that current headwinds are temporary and that it is well-positioned to provide long-term value to its stockholders.

      • No analyst has provided a new recommendation at this time

      Google

      Is reportedly racing to build a new search engine powered by AI technology to protect its core business from AI-powered rivals. Bing, which recently added new AI technology, has become a serious threat to Google’s search business, and Google is upgrading its existing search engine with AI features under the project name “Magi”.

      The new search engine is expected to offer a far more personalized experience than Google’s current service, and will be designed to anticipate users’ needs. However, long before the new search engine can be built, the Magi project will add features to the existing search engine. Google plans to keep ads in the mix of search results, since search ads are the primary way it makes money.

      • Morgan Stanley analyst Brian Nowak has reiterated an Overweight rating and a $135.00 price target and sees AI-driven catalysts as further reinforcing the company’s leading position in the online ecosystem.

       

      On April 14, 2023, Citigroup reported

      Profits of $4.6 billion, or $2.19 per share on revenue of $21.4 billion. Analysts surveyed by FactSet expected the bank to earn $3.4 billion, or $1.64 per share on $20.1 billion revenue. When excluding the impact of the sale of its India-based business, Citigroup’s earnings were $1.86 per share. In the year-ago quarter Citigroup’s profits were $4.3 billion on $19.2 billion in revenue.

       

      • BMO Capital analyst James Fotheringham has maintained Citigroup’s Outperform rating and raised the price target from $56 to $68.
      • BOFA Securities analyst Ebrahim Poonawala has maintained a Buy rating and raised the price target from $56 to $58.
      • Oppenheimer analyst Chris Kotowski has maintained an Outperform rating and raised the price target from $75 to $78.
      • Wells Fargo analyst Whit Mayo maintains Overweight rating and raised the price target from $62 to $65.
      • Keefe, Bruyette & Woods analyst David Konrad maintains a Market Perform rating and raised the price target from $47 to $50.
      • Morgan Stanley analyst Betsy Graseck maintains her Underweight rating but raised the price target from $41 to $45.
      •  Piper Sandler analyst Scott Siefers has raised Citigroup’s price target from $47 to $53 while maintaining a Neutral rating.