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Trump suggests he'd 'sacrifice' himself and go to jail over gag order violations 2024-05-07 17:14:40+00:00 - Donald Trump was held in contempt Monday for violating a gag order in his hush money trial for a 10th time, and New York state Judge Juan Merchan has warned the former president that he may be jailed if he keeps it up. But Trump suggested that he's not deterred by the prospect of jail time. In fact, he said, he would "sacrifice" himself to protect the sanctity of his free speech rights. "This judge has given me a gag order and said you're going to jail if you violate it. And frankly, you know what? Our Constitution is much more important than jail,” he told reporters outside the courtroom later that day. “It’s not even close. I’ll do that sacrifice any day.” Trump has repeatedly attempted to paint his gag order infractions as a battle to assert his right to free speech, including the freedom to attack court staff, prosecutors, the jury and witnesses, if his sanctioned public statements are the measure. When imposing the gag order, Merchan cited “not only fear on the part of the individual targeted, but also the assignment of increased security resources to investigate threats and protect the individuals” that would “risk impeding the orderly administration” of the court. (Trump has pleaded not guilty to the 34 counts of falsifying business records.) Trump's portrayal of himself as a political martyr is not out of character: He has long claimed, when faced with potential repercussions for his actions, to be a victim of a "weaponized" criminal justice system. His claims of political persecution have also galvanized his supporters and made for effective fundraising. Before court was adjourned Monday, an email was sent to Trump's supporters seeking donations for his presidential campaign and the Republican National Committee, Politico reported. The subject line read: “They want me in HANDCUFFS.”
3 things we learned from Disney's latest earnings report 2024-05-07 17:14:00+00:00 - More than 6 million people subscribed to Disney+ in the past three months, helping Walt Disney Co. post a surprise profit in its on-demand video streaming division, executives with the entertainment giant said Tuesday. The earnings boost comes after a rough 18 months at the House of Mouse. In early 2023, CEO Bob Iger announced that 7,000 jobs would be cut across the company as part of a broader plan to slash costs and stabilize the company financially. At the same time, Disney found itself in a bitter political feud with Florida Gov. Ron DeSantis over who should govern a slice of land in Orlando that the company had staked out for its expanding footprint. With those challenges now in the past, here are three things we learned from Disney's second-quarter earnings report. Disney turned a profit on streaming for the first time The company's direct-to-consumer business, which includes Disney+ and Hulu, posted $47 million in profit for the quarter, a sharp turnaround from its $587 million loss in the year-ago period. Revenue also showed solid growth, rising 13% to $5.64 billion. "The big surprise of the day came on the streaming front, which finally managed to bring profits — way ahead of predictions — amid Hollywood's massive strike period," said Thomas Monteiro, senior analyst at Investing.com. "This indicates that perhaps the more global, low-production-cost Netflix-like model is probably the way to go in an operation that needs to rethink its growth expectations as a whole." As of March, Disney+ subscriptions were up 6% to 117 million, while Hulu subscriptions grew 1% to 50 million. "Looking at our company as a whole, it's clear that the turnaround and growth initiatives we set in motion last year have continued to yield positive results," CEO Bob Iger said in a statement. Entertainment and media giants like Comcast-owned NBCUniversal, Warner Bros. Discovery and Paramount Global (the parent company of CBS News) have struggled to turn a profit on streaming given the hefty costs of producing content. For Disney, the challenge now will be to sustain momentum in streaming, with invigorating the business while containing costs a key priority for Iger since he re-took the helm of Disney in 2022. Expect to see more sports content on Disney+ The 2024 Women's NCAA basketball tournament was a viewership bonanza for ESPN, Disney officials said Tuesday. still nearly 19 million viewers watching South Carolina battle Iowa in championship finale wasn't enough juice to boost the sports programming network into the black this quarter. ESPN's profit fell 9% in the second quarter to $780 million, compared to $858 million a year ago. Revenue grew 4% to $3.8 billion. Disney said the loss stems in part from the network spending more money on production when it aired one additional college football championship game. In an effort to boost ESPN's revenue, Disney executives said Tuesday that a sample version of its content from ESPN+ will be folded into what Disney+ subscribers can see starting later this year. Short snippets of live sports events and limited sports news will be used to appeal to the casual sports fan, the company said. The theme parks are chugging along With the pandemic in the rear-view mirror, Disney's global theme parks are flying high. Revenue at its U.S. parks — Walt Disney World in Orlando and Disneyland in Anaheim, California — rose 7%, while the overseas parks reported a 29% increase. Disney executives acknowledged that the company has been wrestling with higher costs at its theme parks during the quarter due to inflation. In the U.S., that has been offset partly by increased guest spending due to higher ticket prices and hotel room rates. Overseas, Hong Kong Disneyland benefited from the opening of World of Frozen, a section of the park that includes rides based on the popular "Frozen" movies, in November. —The Associated Press contributed to this report.
Labour must not cave in to pressure over zero-hours contracts 2024-05-07 17:04:00+00:00 - It is disheartening to read that not only is Labour planning to further dilute its employee rights package but that it is doing so to appease businesses (Labour’s ‘new deal for workers’ will not fully ban zero-hours contracts, 1 May). Your article appeared online on May Day. You don’t have to wrap yourself in the red flag and sing The Internationale to recognise that having a motivated, educated and supported workforce is good for business, the economy and society. Both the party and those in business lobbying for the changes are ignoring the lessons of recent history and are taking a depressingly narrow view of labour market flexibility and efficiency. The introduction of the minimum wage 25 years ago has been hailed as one of the great postwar economic policy successes. But at the time, business groups warned, wrongly, of mass job losses. Today’s supposed business opposition to the plans reflects a zero-sum game and binary approach to business management, in which employment rights must hit the bottom line. Such thinking is a powerful factor in the UK’s seemingly endless productivity crisis. The impulse is to cut costs (including for labour) rather than long-term investment in people and planet. Such investment creates lasting value delivered by well-trained, motivated employees. We have to stop fetishising numerical labour market flexibility (head count and costs) above a functional flexibility approach (requiring investment in people, with careful management). Chris Rowley Professor emeritus, Bayes Business School, City, University of London While I appreciate that employers need to be prevented from exploiting workers, I am strongly opposed to an outright ban on zero-hours contracts. I’m in my 50s and have a military pension that I top up with a part-time zero-hours job. If I was forced into a permanent fixed contract I would leave my job and not get another one. While I would be worse off financially, the flexibility afforded by my current arrangements are really important to me. I may well be in a minority, but those shaping our future should remember that one size rarely fits all, and if they want to keep people like me economically active, then we should be free to choose how we are employed. Perhaps a middle way would be for zero-hours contracts to be available to those of us over a certain age. This would prevent the young being exploited by unscrupulous employers, but maybe that would be seen as discriminatory. Jason Lumley Wokingham, Berkshire In my experience of working in HR for over 30 years, zero-hours contracts can be useful if drawn up correctly. They should offer employee not only the opportunity to refuse working the shift being offered by the employer, but also the ability to work elsewhere. Casual employment can offer flexibility to both parties. But I accept that some unscrupulous employers may have chosen to exploit their employees by only issuing such contracts. Tony Leather South Shields, Tyne and Wear Zero-hours contracts suit some people. Perhaps Labour should enforce a higher hourly rate for such flexible working – a zero-hours premium – that would encourage employers to assess their staffing requirements a bit more rigorously. Michael Heaton Warminster, Wiltshire
Garmin Navigates to New Highs Driven By Wearables Trend 2024-05-07 16:52:00+00:00 - Key Points Garmin is a leading provider of GPS and smartwatch fitness trackers. The company posted record first-quarter revenues in its Fitness, Outdoors, Aviation, and Marine segments and reaffirmed full-year 2024 guidance. At its annual meeting on June 7, 2024, Garmin will vote on a $3.00 annual cash dividend paid out in equal quarterly distributions. 5 stocks we like better than Garmin Garmin Ltd. NYSE: GRMN launched in 1989 with the sole focus of providing GPS devices for consumers. Years later, the advent of smartphone GPS apps like Google Maps, Apple Maps, and Waze could have spelled death for the company. However, the computer and technology sector giant has thrived by branching out to become one of the largest providers of smartwatches and fitness trackers. Get Garmin alerts: Sign Up Dedicated GPS While commuters and consumers are used to using a smartphone navigation app, Garmin users love having a dedicated GPS that doesn’t rely on cellular connectivity. The advantages of having a dedicated GPS include better battery life, more coverage and data privacy. Since it uses satellite tracking and preloaded maps, Garmin GPS devices can be used in the wild where there are no cellular towers. This is why Garmin GPS is often the brand of choice with boaters, pilots, hikers, and fishermen who routinely traverse rural and distant locations. Flourishing Wearables Business Garmin has become a favorite among smartwatch users, notably for fitness tracking. Runners, swimmers, cyclists and gym rats love Garmin smartwatches to track calories and measure pulse, resting heart rate, heart rate variability (HRV), stationary time and hourly activity. For women, its purpose-built smartwatches feature menstrual cycle tracking, pregnancy tracking, sleep score, body battery, and stress score tracking. Garmin continues to roll out features and next-gen versions of its smartwatches. Daily Bull Flag Breakout GRMN formed a daily bull flag breakout pattern. The preceding flagpole run-up peaked at $149.50 before the parallel upper and lower trendlines generated a reversion down to $138.86. GRMN shares bounced and broke through the $144.54 upper trendline resistance heading into its Q1 2024 earnings release. The report triggered a gap up to $151, which ground up to a $166.44 swing high. The daily relative strength index (RSI) surged to the overbought 82-band. Pullback support levels are at $153.33, $144.84, $134.11 and $123.46. Solid Q1 2024 Results Garmin crushed Q1 2024 EPS, reporting $1.42 versus $1.01 consensus analyst, a 41-cent beat. Operating income grew 51% YoY to $298 million. Revenues surged 20.4% YoY to $1.38 billion, crushing the $1.25 billion consensus estimates. Gross margins expanded to 58.1% and operating margins to 21.6%. Garmin was named Supplier of the Year by Independent Build Builder Inc. Segment Growth Garmin Today GRMN Garmin $169.96 +2.08 (+1.24%) 52-Week Range $99.61 ▼ $170.87 Dividend Yield 1.72% P/E Ratio 23.97 Price Target $153.50 Add to Watchlist The company hit record first-quarter revenues in four of its segments -- Fitness, Outdoors, Aviation, and Marine -- and also saw an increase in its Auto Origination Equipment Manufacturer (OEM) segment. The Fitness segment revenues surged 40% YoY to $343 million, driven by the strong demand among athletes for its newly launched Forerunner 165 series. Its Outdoor segment revenues rose 11% YoY to $366 million, resulting in $107 million in operating income. The Aviation segment had a 2% increase in sales driven by growth in OEM products. Its Marine segment revenues rose 17% YoY to $327 million, primarily driven by the acquisition of JL Audio. Garmin's Auto OEM segment saw a 58% YoY increase to $129 million, driven by increased domain controller shipments to BMW. While the gross margin was 18%, the company recorded a loss of $16 million in the quarter. Reaffirmed Guidance Garmin Dividend Payments Dividend Yield 1.71% Annual Dividend $2.92 Dividend Increase Track Record 1 Year Annualized 3-Year Dividend Growth 6.76% Dividend Payout Ratio 41.18% Next Dividend Payment Sep. 27 See Full Details Upbeat CEO Insights Garmin reaffirmed its full-year 2024 guidance of pro forma EPS of $5.40 to $5.44 consensus estimates. Full-year revenues are expected to be around $5.75 billion versus $5.73 billion consensus estimates. The Board recommends a $3.00 dividend paid out in four quarterly payments of 75 cents per share, and the vote will be held at the annual meeting on June 7, 2024. Garmin CEO Clifton Pemble noted that the positive trends concluding 2023 were strengthened in Q1 2024. Pemble reminded analysts that the first quarter is typically the low point of seasonal sales and, as such, will just reaffirm its prior guidance. Pemble commented, “ Our products are unique, highly differentiated compared to a lot of products that are on the market. So people look to our products for particular inspiration around activity, but sports wellness, all those things is something that we're known for. So we're definitely seeing people appreciate our products for those things. Registrations have been strong. So we're seeing that follow through at retail, and we still see the majority of our users that are coming in as new users to Garmin as opposed to repeat.” Garmin analyst forecasts and price targets are on MarketBeat. Before you consider Garmin, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Garmin wasn't on the list. While Garmin currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Everton shareholders demand end to ‘farce’ of 777 takeover 2024-05-07 16:46:00+00:00 - Everton shareholders have urged the club’s owner, Farhad Moshiri, and the Premier League to end the “farce” of a proposed takeover by 777 Partners after the troubled company was accused of fraud worth hundreds of millions of dollars. The investment firm 777, co-founded by Josh Wander and Steven Pasko, agreed a deal to buy Moshiri’s 94.1% stake in Everton eight months ago but has been unable to meet the Premier League’s criteria for allowing the takeover to proceed. These include the repayment last month of a £158m loan to MSP Sports Capital and two local businessmen, Andy Bell and George Downing, with 777 having been granted a short-term extension to repay the loan. The Miami-based company was also reportedly late last week with a £15m loan to Everton for working capital. It has loaned the financially troubled club more than £200m. Further doubt was cast over 777’s ability to fund its acquisition of Everton and pass the Premier League’s owners’ and directors’ test at the weekend when the company was accused of fraud in a lawsuit filed at a district court in New York. The lawsuit, the 17th in which 777 Partners and its affiliates have been named, was submitted by a pair of London-based asset management companies, Leadenhall Capital Partners LLP and Leadenhall Life Insurance Linked Investments Fund plc. They accuse 777 of pledging more than $350m (£279m) in assets as collateral to Leadenhall despite knowing the assets had been pledged to another lender (“double-pledging”), were not owned by Wander’s entities or did not exist. The lawsuit alleges that Wander and Pasko “are operating a giant shell game at best, and an outright Ponzi scheme at worst” and claims: “The only question now is whether Leadenhall will be able to recover millions of dollars in damages from a house of cards on the brink of collapse.” When contacted, 777 declined to comment on the allegations. An Australian airline owned by 777, Bonza, entered voluntary administration last week. The football investigations website Josimar revealed on Monday that 777’s two main creditors in its takeover of Standard Liège, the club’s former owner Bruno Venanzi and the former owners of its stadium, are seeking to have the company’s assets in Belgium seized. Despite the lawsuits and numerous problems at other football clubs in 777’s portfolio, Moshiri has maintained the company is “the right partner” for Everton. The Everton shareholders’ association (EFCSA), however, which has about 1,500 members and owns just under 5% of the club, has condemned the failure of Moshiri and the Premier League to end a damaging takeover saga. Everton could be at increased risk of entering administration while the episode drags on. The EFCSA said in a statement: “We are the oldest shareholders’ association in the world and are dismayed by the lack of respect being shown to our football club by the largest shareholder, Farhad Moshiri, and the Premier League during what seems a never-ending change of ownership process. We have observed with concern and frustration as it became increasingly clear that a fit-for-purpose process cannot possibly take this long as the Premier League continues to demonstrate their inability to regulate. “In the absence of the Premier League making a timely decision we insist that the Everton board, and Farhad Moshiri in particular, stop this damaging process now and recognise that 777 Partners are not at this time fit-and-proper prospective owners of Everton Football Club. The powers that be are being disrespectful to our fellow shareholders, our fantastic worldwide fanbase and football as a whole by continuing to allow this farce to continue. We demand a decision and we demand it now.” The Premier League declined to comment on Leadenhall’s lawsuit and the implications for 777 passing its owners’ and directors’ test.
Kenvue, Crocs rise; Disney, Teradata fall, Tuesday, 5/7/2024 2024-05-07 16:45:15+00:00 - Stocks that traded heavily or had substantial price changes on Tuesday: The Walt Disney Co., down $11.08 to $105.39. The entertainment giant’s revenue fell shy of forecasts and said it expects its streaming video business to weaken. Kenvue Inc., up $1.20 to $20.08. The maker of Band-Aids and Tylenol reported better-than-expected profits and revenue for the latest quarter. Crocs Inc., up $9.86 to $136.49. The shoe maker’s results breezed past analysts’ estimates and it raised its forecasts for the full year. Lucid Group Inc., down 43 cents to $2.62. The maker of the Lucid Gravity electric SUV lost more money last quarter than analysts expected. Builders FirstSource Inc., down $38.26 to $162.62. The Texas-based supplier wood, insulation and other building materials warned of a weakening multi-family market and higher mortgage rates. Teradata Corp., down $5.24 to $32.72. The cloud data analytics company lowered its forecast for full-year earnings. Celsius Holdings Inc., down $1.38 to $76.95. The energy drink brand’s revenue for its latest quarter fell below Wall Street’s estimates. Bloomin’ Brands Inc., down $1 to $23.96. The operator of Outback Steakhouse and other restaurant chains’ earnings were short of forecasts.
P&O Ferries boss asked if he is ‘modern-day pirate’ for paying staff £4.87 an hour 2024-05-07 16:39:00+00:00 - The boss of P&O Ferries has been asked if he is “a pirate” who appears to be “robbing staff blind” – as he confirmed to MPs that the group’s seafarers had been receiving pay rates even lower than he had previously told parliament. Peter Hebblethwaite previously appeared in front of a joint transport and business committee in March 2022 to respond to P&O Ferries sacking 786 staff and replacing them with low-paid agency workers. At the time he told parliamentarians that the lowest-paid agency worker would receive £5.15 an hour – only for a Guardian and ITV News investigation this March to reveal how some P&O seafarers were receiving an hourly rate as low as £4.87. On Tuesday, in an appearance before the business and trade committee, which was prompted by the reports, the chair, Liam Byrne MP, opened by asking Hebblethwaite: “Are you basically a modern-day pirate? … You seem to be robbing your staff blind.” The ferry group’s chief executive said without the mass sackings “P&O would not be here today” – before admitting “the lowest, fully consolidated hourly pay is about £4.87”. The Guardian and ITV News had asked P&O specifically about a £4.87 an hour figure less than two months ago, when a P&O spokesperson said: “We do not recognise the pay rates that you are referencing. No member of our crew on our Dover-Calais vessels earns less than $2,400 per month, equivalent to £5.20 per hour.” The UK minimum wage is £11.44 an hour – but the rates do not apply to maritime workers employed by an overseas agency who work on foreign-registered ships in international waters. As P&O uses that model, the pay rates onboard its vessels are legal. Asked whether he could live on £4.87 an hour, Hebblethwaite replied: “No, I couldn’t.” In March, as part of its response to the 2022 dismissals, France signed a decree that would force cross-Channel operators to pay their workers the French minimum wage of at least €11.65 (£9.95) an hour. A similar UK law is expected to come into force this summer and P&O told MPs it would abide by both sets of legislation. The Guardian and ITV’s reporting also highlighted how the low-cost crew – who had been hired via a Malta-based employment agency and came from countries including India, the Philippines and Malaysia – were understood to have been working for months on the ships without a day off. The workers said they had to remain onboard until their contract ended, with one describing the experience as like being in “jail”. Hebblethwaite appeared to dispute this and told the committee P&O “contracted” cross-Channel ferry staff on the basis of seven days off a month. Byrne said: “Both ITV and the Guardian found people working 12-hour shifts, seven days a week, for up to 17 weeks at a time without a day off, and without permission to leave the ship. You’ve just told the committee that people have seven days off a month.” Hebblethwaite replied: “The maritime labour convention requires seafarers to have a minimum of two and a half days off per month. On Dover-Calais, we contract for seven days off.” Bryne said: “So the conclusions of this investigation, from ITV and Guardian, are wrong?” After a four-second silence, Byrne pressed: “Is that a yes?” Hebblethwaite said: “I can only tell you what we do.” skip past newsletter promotion Sign up to Business Today Free daily newsletter Get set for the working day – we'll point you to all the business news and analysis you need every morning Enter your email address Sign up Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy . We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. after newsletter promotion After the select committee session, a series of P&O seafarers contacted the Guardian and ITV News to reiterate that they did not receive seven days off a month. One said they had “never had seven days off per month across the Channel, you can trust us”. After the committee session closed, the Guardian and ITV News asked P&O how many days off a month seafarers working on P&O cross-Channel ferries typically received – and if the company had misled parliament. P&O did not provide a response to either question but Hebblethwaite had told the committee “the terms under which the crew is employed is set by the crewing agent”. P&O’s chief executive said he earned a £325,000 basic salary and received an £183,000 bonus in April 2023. “I reflected on accepting that payment. But ultimately I did decide to accept it,” he said. “I do recognise it is not a decision that everybody would have made.” He also told MPs: “We recognise that we made a very difficult decision two years ago – one that was legal and one that I wish we had never ever had to make in the first place. “But we also have to acknowledge that without that difficult decision P&O would not be here today and we would not have been able to preserve the 2,000 jobs we have been able to preserve, take the 135,000 tonnes of CO 2 emissions that we have taken out of our carbon footprint, open up new routes and continue to serve the most important trade route between the UK and the continent.” Hebblethwaite added that P&O “didn’t sack anyone [in 2022]. We did initiate a redundancy programme” and that the welfare of crew onboard the company’s ships was “second to none”.
Senators Seek to Curb Facial Recognition at Airports, Citing Privacy Concerns 2024-05-07 16:36:42+00:00 - A bipartisan group of senators is pushing to halt the expansion of facial recognition technology at airports in the United States and restrict its use as part of the Federal Aviation Administration reauthorization bill that is making its way through Congress. Citing privacy concerns, Senators Jeff Merkley, Democrat of Oregon, and John Kennedy, Republican of Louisiana, are proposing to block the expansion of the technology until 2027 and require the Transportation Security Administration to make clear that passengers can opt out at airports where it is in use. With a Friday deadline for renewing the aviation law, the proposal is among the amendments likely to get a vote before the bill can pass. It has pit privacy advocates in both parties against consumer and industry groups that argue that the technology has the potential to vastly cut down on wait times at airports and increase convenience and safety. Under a plan from the Transportation Security Administration, the government would expand facial recognition technology to more than 430 airports, from 25, as part of an effort to speed up the check-in process. Using kiosks with iPads affixed to them, passengers have their photographs taken and matched to an image from a government database instead of presenting a physical identification card.
TikTok sues US to block law that could ban the social media platform 2024-05-07 16:29:38+00:00 - TikTok and its Chinese parent company filed a lawsuit Tuesday challenging a new American law that would ban the popular video-sharing app in the U.S. unless it’s sold to an approved buyer, saying it unfairly singles out the platform and is an unprecedented attack on free speech. In its lawsuit, ByteDance says the new law vaguely paints its ownership of TikTok as a national security threat in order to circumvent the First Amendment, despite no evidence that the company poses a threat. It also says the law is so “obviously unconstitutional” that its sponsors are instead portraying it as a way to regulate TikTok’s ownership. “For the first time in history, Congress has enacted a law that subjects a single, named speech platform to a permanent, nationwide ban, and bars every American from participating in a unique online community with more than 1 billion people worldwide,” ByteDance asserts in the lawsuit filed in a Washington appeals court. The law, which President Joe Biden signed as part of a larger foreign aid package, marks the first time the U.S. has singled out a social media company for a potential ban, which free speech advocates say is what would be expected from repressive regimes such as those in Iran and China. The lawsuit is the latest turn in what’s shaping up to be a protracted legal fight over TikTok’s future in the United States — and one that could end up before the Supreme Court. If TikTok loses, it says it would be forced to shut down next year. The law requires ByteDance to sell the platform to a U.S.-approved buyer within nine months. If a sale is already in progress, the company would get another three months to complete the deal. ByteDance has said it doesn’t plan to sell TikTok. But even if it wanted to divest, the company would need Beijing’s blessing. According to the lawsuit, the Chinese government has “made clear” that it wouldn’t allow ByteDance to include the algorithm that populates users’ feeds and has been the “key to the success of TikTok in the United States.” TikTok and ByteDance say the new law leaves them with no choice but to shut down by next Jan. 19 because continuing to operate in the U.S. wouldn’t be commercially, technologically or legally possible. They also say it would be impossible for ByteDance to divest its U.S. TikTok platform as a separate entity from the rest of TikTok, which has 1 billion users worldwide — most of them outside of the United States. A U.S.-only TikTok would operate as an island that’s detached from the rest of the world, the lawsuit argues. The suit also paints divestment as a technological impossibility, since the law requires all of TikTok’s millions of lines of software code to be wrested from ByteDance so that there would be no “operational relationship” between the Chinese company and the new U.S. app. The companies argue that they should be protected by the First Amendment’s guarantee of freedom of expression and are seeking a declaratory judgment that it is unconstitutional. The Justice Department declined to comment on the suit Tuesday. And White House press secretary Karine Jean-Pierre declined to engage on questions about why the president continues to use TikTok for his political activities, deferring to the campaign. Rep. Raja Krishnamoorthi, an Illinois Democrat who is the ranking member of the House Select Committee on the Chinese Communist Party, issued a statement Tuesday defending the new law. “This is the only way to address the national security threat posed by ByteDance’s ownership of apps like TikTok. Instead of continuing its deceptive tactics, it’s time for ByteDance to start the divestment process,” he said. ByteDance will first likely ask a court to temporarily block the federal law from taking effect, said Gus Hurwitz, a senior fellow at the University of Pennsylvania’s Carey Law School who isn’t involved in the case. And the decision whether to grant such a preliminary injunction could decide the case, because its absence, ByteDance would need to sell TikTok before the broader case could be decided, he said. Whether a court will grant such an injunction remains unclear to Hurwitz, largely because it requires balancing important free speech issues against the Biden administration’s claims of harm to national security. “I think the courts will be very deferential to Congress on these issues,” he said. The fight over TikTok comes amid a broader U.S.-China rivalry, especially in areas such as advanced technologies and data security that are seen as essential to each country’s economic prowess and national security. U.S. lawmakers from both parties, as well as administration and law enforcement officials, have expressed concerns that Chinese authorities could force ByteDance to hand over U.S. user data or sway public opinion by manipulating the algorithm that populates users’ feeds. Some have also pointed to a Rutgers University study that maintains TikTok content was being amplified or underrepresented based on how it aligns with the Chinese government’s interests — a claim the company disputes. Opponents of the law argue that Chinese authorities — or any nefarious parties — could easily get information on Americans in other ways, including through commercial data brokers that rent or sell personal information. They say the U.S. government hasn’t provided public evidence that shows TikTok has shared U.S. user information with Chinese authorities or tinkered with its algorithm for China’s benefit. “Data collection by apps has real consequences for all of our privacy,” said Patrick Toomey, deputy director of the ACLU’s National Security Project. “But banning one social media platform used by millions of people around the world is not the solution. Instead, we need Congress to pass laws that protect our privacy in the first place.” Jameel Jaffer, executive director of the Knight First Amendment Institute at Columbia University, expects TikTok’s lawsuit to succeed. “The First Amendment means the government can’t restrict Americans’ access to ideas, information, or media from abroad without a very good reason for it — and no such reason exists here,” Jaffer said in a statement. Although TikTok prevailed in earlier First Amendment challenges, it isn’t clear whether the current lawsuit will be as simple. “The bipartisan nature of this federal law may make judges more likely to defer to a Congressional determination that the company poses a national security risk,” said Gautam Hans, a law professor and associate director of the First Amendment Clinic at Cornell University. “Without public discussion of what exactly the risks are, however, it’s difficult to determine why the courts should validate such an unprecedented law.” __ Associated Press writers David Hamilton and Seung Min Kim contributed to this report.
Panera says it is phasing out its controversial Charged Lemonade nationwide 2024-05-07 16:24:00+00:00 - A Panera Bread spokesperson says the restaurant chain is phasing out its Charged Lemonade, a highly caffeinated beverage that has been blamed for at least two deaths in lawsuits. The beverages prompted controversy in October following a lawsuit filed by the family of 21-year-old Sarah Katz, a University of Pennsylvania student with a heart condition who died after consuming Charged Lemonade. A second lawsuit was filed in December by the family of Dennis Brown, a Florida man with a chromosomal deficiency disorder and a developmental delay who also died after drinking a Charged Lemonade. A third lawsuit was filed in January by Lauren Skerritt, a 28-year-old Rhode Island woman, which claimed the beverage left her with “permanent cardiac injuries.” A spokesperson for Panera said Tuesday that the nationwide discontinuation of the Charged Lemonade comes after a “recent menu transformation.” “We listened to more than 30,000 guests about what they wanted from Panera, and are focusing next on the broad array of beverages we know our guests desire — ranging from exciting, on-trend flavors, to low sugar and low-caffeine options,” the spokesperson said. Panera previously advertised its Charged Lemonade as “Plant-based and Clean with as much caffeine as our Dark Roast coffee.” But the lawsuits said that at 390 milligrams, a large, 30-fluid-ounce Charged Lemonade has more caffeine in total than any size of Panera’s dark roast coffee, referring to the amount of caffeine that is in the drink with no ice. Panera has since updated its nutrition information to reflect how much caffeine is in the Charged Lemonade with ice, listing the large size of the blood orange Charged Lemonade, for example, as having 302 milligrams. According to the Food and Drug Administration, healthy adults can generally safely consume 400 milligrams of caffeine a day. After NBC News broke news of the first lawsuit, which referred to Charged Lemonade as “a dangerous energy drink,” Panera put more detailed disclosures in all of its restaurants and on its website warning customers to consume Charged Lemonade in moderation, stating that it is not recommended for children, people sensitive to caffeine or pregnant or nursing women. A friend said Katz likely had no idea there was caffeine in the beverage when she purchased it before her death. “She was very, very vigilant about what she needed to do to keep herself safe,” Victoria Rose Conroy told NBC News in October. “I guarantee if Sarah had known how much caffeine this was, she never would have touched it with a 10-foot pole.” Panera has previously expressed sympathy for the Katz and the Brown families. Following the second suit, it said in a statement that it felt the customer’s “unfortunate passing was not caused by one of the company’s products” and said that it stands by the safety of the items on its menu. The restaurant chain did not comment on the third lawsuit. On Monday evening, two Panera employees who spoke to NBC News on condition of anonymity because they feared they could lose their jobs confirmed that they had received memos earlier in the day from staff above them stating that their restaurants would no longer be ordering ingredients to make Charged Lemonade. The memos, which were shared with NBC News, came from a manager in one case and a regional manager in another case, the employees said. One memo said the Charged Lemonade would be replaced within two weeks. The first employee identified himself as an associate at a Panera restaurant in Missouri, while the other said she was a manager at a Panera in Pennsylvania. But not all Panera employees were immediately aware of the change. At a Panera restaurant in the Queens borough of New York City on Tuesday morning, three associates said they had not heard that the Charged Lemonade would be discontinued. Elizabeth Crawford, a partner at the Philadelphia-based law firm Kline & Specter, PC, who represents the plaintiffs in the three lawsuits, said Tuesday that Panera had taken a “good step.” “This is exactly what we set out to do, to some extent, is to make sure that this poison is taken off the shelves,” she said in an exclusive interview with NBC News. “Obviously, it won’t bring back Sarah, and it won’t bring back Dennis, and the life that Lauren used to have.” “But at least what it will do is prevent this from happening to someone else,” she said.
Pinterest Prospers From AI Boosting Shop-Ability and Relevance 2024-05-07 16:07:00+00:00 - Key Points Pinterest grew its monthly active users by 12% to 518,000 in Q1 2024. Pinterest drove its platform's highest user and revenue growth since Q1 2021. Adjusted EPS more than doubled in Q1 2024, and adjusted EBITDA margin rose 1,100 bps to 15%. 5 stocks we like better than Pinterest Social commerce platform Pinterest Inc. NYSE: PINS shares are climbing towards 52-week highs on the heels of a spectacular Q1 2024 earnings report. The rebound in the advertising market, coupled with its artificial intelligence (AI) powered personalization and shop-ability effects, bolstered the company's revenue growth and monthly active users (MAUs). Pinterest has also scaled up its third-party partners, such as Amazon.com Inc. NASDAQ: AMZN and Alphabet Inc. NASDAQ: GOOGL. The resurgence in ad spending has been reflected in the performance of other computer and technology sector companies like Snap Inc. NYSE: SNAP and Google. Get Pinterest alerts: Sign Up Revenue Growth Drivers Pinterest brands itself as a visual search and discovery platform. Users visit the site to get lifestyle, home, fashion, hobby, meal and activity ideas and lists. The platform also provides relevant purchase options. Pinterest has stated that four drivers can bolster its revenues: Grow users and deepen engagements per user. Increase ad load by driving the synergies between the user's commercial intent and relevant ads. Execute on its lower funnel revenue opportunity. Drive demand through third-party resellers, partners and international markets. Using AI to Drive Personalization and Relevance Pinterest has long stated that personalization is a growth driver. The company has aggressively implemented next-gen AI and large language models (LLMs) to improve user experiences. It has also transitioned from CPU to GPU, enabling it to serve 100x size models. For example, its recommendation models originally focused on delivering content to drive greater viewing times in the immediate moment. With AI implementation, the focus is on user intent, helping to incorporate proprietary signals in its recommendation models to satisfy intent and optimize the depth of engagements. This includes driving more actual outcomes like clicks, conversions and saves and helping users navigate their inspiration-to-action journey. A Positive Alternative to Traditional Social Media Pinterest is known as a positive, non-confrontational, non-controversial, unintrusive and non-political platform. As such, it’s quickly becoming a positive alternative to traditional social media. This is evidenced by the accelerating growth of Pinterest's monthly users, most of whom are joining through the mobile app. Gen Z is Pinterest's fastest-growing demographic, representing 40% of its 518 million global users. Its Gen-Z users rate Pinterest high on promoting and preserving well-being metrics like bellowing, self-worth, and purpose compared to other social media sites. This has resulted in the rare phenomenon of aging down, i.e., bringing younger users to the platform. Daily Descending Triangle Breakout PINS formed a descending triangle breakout pattern. The descending triangle commenced at $41.80 on February 6, 2024. Shares sold off to the $33.52 flat-bottom lower trendline. The descending trendline capped the bounce attempts as PINS moved closer to the apex. PINS broke down on April 15, 2024, as shares sank to a new swing low at $30.56 on April 25, 2024. Shares recovered to the flat-bottom trendline level heading into its Q1 2024 earnings release. PINS gapped up to $37.91 following the report and continued to grind up towards its 52-week highs. The daily relative strength index (RSI) bounced and flattened at the 75-band. Pullback support levels are at $37.91, $35.44, $33.52 and $30.56. Stellar Q1 2024 Performance Pinterest Today PINS Pinterest $41.90 +0.52 (+1.26%) 52-Week Range $20.88 ▼ $42.09 P/E Ratio 199.53 Price Target $41.26 Add to Watchlist Raised Guidance Pinterest reported Q1 2024 EPS of 20 cents, beating consensus estimates by 7 cents. GAAP net loss was $25 million, while adjusted EBITDA was $113 million. Revenues surged 22.8% YoY from $740 million to $700.28 million. Its global MAUs rose 12% YoY to 518 million. The majority of growth came from the Rest of the World (ROW). Average revenue per user (ARPU) rose 19% YoY to $6.04 in the United States and Canada. Global ARPU rose 10% YoY to $1.46. Pinterest provided upside Q2 2024 revenue guidance to $835 million to $850 million, representing 18% to 20% YoY growth. Non-GAAP operation expenses are expected in the range of $490 million to $505 million. AI and Shop-Ability Driving Greater ROI for Advertisers Pinterest CEO Bill Ready was upbeat about the quarter and how AI investments were paying off. Ready stated, “Thanks to our investments in AI and shop-ability, we’re driving even greater returns for advertisers and gaining access to performance budgets. We’re executing with tremendous clarity and focus, shipping new products and experiences that users want, and in doing so, we’re finding our best product market fit in years.” Pinterest also completed its rollout of direct links in the first quarter. This reduces friction and improves actionability, taking the user directly to an advertiser's product page. Clicks to advertisers have more than doubled YoY. Pinterest analyst ratings and price targets are on MarketBeat. Before you consider Pinterest, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Pinterest wasn't on the list. While Pinterest currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
The great wealth transfer has started — but millennials, Gen Z may not inherit as much as they anticipate 2024-05-07 16:01:00+00:00 - There’s a massive wealth transfer underway. “It has started and it’s only going to accelerate,” said Liz Koehler, head of advisor engagement for BlackRock’s wealth advisory business. Baby boomers are set to pass more than $68 trillion on to their children. And yet, some millennials and Generation Z may not be inheriting as much as they think. Recent reports show a growing disconnect between how much the next generation expects to receive in the “great wealth transfer” and how much their aging parents plan on leaving them. To that point, 68%, of millennials and Gen Zers have received or expect to receive an inheritance of nearly $320,000, on average, USA Today Blueprint found. Additionally, 52% of millennials think they’ll get even more — at least $350,000 — according to a separate survey by Alliant Credit Union. However, 55% of baby boomers who plan to leave behind an inheritance said they will pass on less than $250,000, Alliant found. Further, just one-third of white families and about one in every 10 Black families receive any inheritance at all, and more than half of those inheritances will amount to less than $50,000, according to a separate study by Federal Reserve Bank of Boston. Part of the discrepancy is because “parents are just not communicating well with their adult children about financial topics,” said Isabel Barrow, director of financial planning at Edelman Financial Engines. Tack on inflation, high healthcare costs and longer life expectancies, and boomers suddenly may be feeling less secure about their financial standing — and less generous when it comes to giving money away. Overall, fewer Americans are feeling financially confident these days, a report by Edelman Financial Engines found, and just 14% would consider themselves wealthy. Millennials may be 'richest generation in history' Still, over the next decade this intergenerational transfer could make millennials “the richest generation in history,” according to the annual Wealth Report by global real estate consultancy Knight Frank. These funds come at a time when millennials and Gen Zers are having a harder time making it on their own. In addition to soaring food and housing costs, today’s young adults face other financial challenges their parents did not at that age. Not only are their wages lower than their parents’ earnings when they were in their 20s and 30s, after adjusting for inflation, but they are also carrying larger student loan balances, recent reports show. With so much at stake, “there is so much missing that needs to be discussed with our adult children when it comes to what happens with our money,” Barrow said. Boomers need to map out a plan At the same time, views of inherited wealth are changing, according to BlackRock’s Koehler. Parents want to feel confident that the next generation is going to have the same value system around building wealth. “Firms and advisors who are doing this well are finding ways to open up the conversation so it is clear and transparent and setting common family values and expectations around philanthropic endeavors,” she said. The failure to create such a strategy is a major issue, the Edelman report found: 90% of parents intend to leave an inheritance to their children but 48% do not have a specific plan in place. That makes it even more important to map out how that money will be handed down as well as exactly how much will change hands, Barrow said, in addition to discussing it as a family. “It’s not only what are you getting but how you are getting it — all of this needs to be part of a big-picture financial plan,” she said.
TikTok Sues U.S. Government Over Law Forcing Sale or Ban 2024-05-07 16:00:07+00:00 - TikTok sued the federal government on Tuesday over a new law that would force its Chinese owner, ByteDance, to sell the popular social media app or face a ban in the United States, stoking a battle over national security and free speech that is likely to end up in the Supreme Court. TikTok said the law violated the First Amendment by effectively removing an app that millions of Americans use to share their views and communicate freely. It also argued that a divestiture was “simply not possible,” especially within the law’s 270-day timeline, pointing to difficulties such as Beijing’s refusal to sell a key feature that powers TikTok in the United States. “For the first time in history, Congress has enacted a law that subjects a single, named speech platform to a permanent, nationwide ban, and bars every American from participating in a unique online community with more than one billion people worldwide,” the company said in the 67-page petition, which initiated the lawsuit. “There is no question: The act will force a shutdown of TikTok by Jan. 19, 2025.” TikTok is battling for its survival in the United States, with the fight set to play out primarily in courts over the next few months. The battle pits Congress’s national security concerns about the social media app’s ties to China against TikTok’s argument that a sale or ban would violate the First Amendment free-speech rights of its users and hurt small businesses that owe their livelihood to the platform. The case is expected to reach the Supreme Court.
AbbVie Tracking for New Highs in 2024 2024-05-07 15:45:00+00:00 - Key Points AbbVie had a better-than-expected quarter and guided higher; the post-release price drop is a dip you can buy. Analysts lowered their targets but trimmed the high end of the range, which still implies a 16% upside and a new all-time high. The non-Humira portfolio supports revenue and earnings growth, which shows strength and is growing with acquisitions. 5 stocks we like better than AbbVie Shares of AbbVie NYSE: ABBV fell hard in the wake of its Q1 earnings report, but the dip is over. The market response to slowing Humira sales is overshadowed by strength in the non-Humira portfolio, resilient business, and a solid pipeline. Analysts trimmed their targets following the release, but that statement has a caveat. The two analysts' revisions tracked by Marketbeat include lowered price targets, but they are still at the high end of the expected range and project upside for investors. The consensus estimate forecasts a slim 6% increase for the stock, but the high-end adds another 7% to that target and opens the door for much larger gains because it would be a new all-time high for this healthcare stock. Get AbbVie alerts: Sign Up AbbVie is Positioned for Long-Term Growth AbbVie Today ABBV AbbVie $162.55 -0.18 (-0.11%) 52-Week Range $130.96 ▼ $182.89 Dividend Yield 3.81% P/E Ratio 48.23 Price Target $174.31 Add to Watchlist AbbVie had a solid quarter , highlighted by a return to growth , revenue strength, outperformance on the bottom line, and increased guidance. Together, the news should have moved the market to higher price points, but is offset by the slowdown in Humira. Humira sales fell 40% in the quarter and are expected to continue to slow due to competition from biosimilars. However, that is, in turn, offset by increased sales of key drugs Ubrelvy, Skyrizi, Venclexta, Rinvoq, and Qulipta, which are up 34%, 48%, 48%, 60%, and 98%, respectively. Humira revenues are now less than 20% of the total and will soon be overshadowed by Skyrizi. Margin is another area of strength supporting the market for this stock. AbbVie’s margin contracted compared to last year but less than expected, including the unfavorable impact of milestone payments. The takeaway is that GAAP earnings of $0.77 are up 500% YOY due to one-offs in the prior year’s results, and the $2.31 in adjusted earnings beat by a nickel and strengths are projected to continue through year-end. The guidance is the most favorable aspect of the report and includes an increase in the expected earnings. The company raised its full-year adjusted EPS guidance to a range with the low end above consensus. Because the company is building momentum in the non-Humira portfolio and Humira sales are still solid, guidance may increase later in the year. The pipeline plays into that outlook with several positive developments over the quarter, including the acquisition of ImmunoGen. ImmunoGen’s Elahere for ovarian cancer has been approved for initial treatments and is on track for approval for numerous others. AbbVie Capital Returns are as Healthy as Ever AbbVie Dividend Payments Dividend Yield 3.82% Annual Dividend $6.20 Dividend Increase Track Record 52 Years Annualized 3-Year Dividend Growth 7.84% Dividend Payout Ratio 183.98% Next Dividend Payment May. 15 See Full Details AbbVie’s capital returns are as healthy as ever. The balance sheet highlights an increase in debt and a reduction in shareholder equity, offset by an increase in cash, up 50%, and the recent acquisition of ImmunoGen, worth more than $10 billion. It is expected to impact results as soon as this year positively and should pay for itself quickly. Elahere sales are expected to grow at a 100%+ CAGR through 2029 to nearly $700 million annually, and the estimates are light given the outlook for approvals for broader usage. Until then, AbbVie’s dividend payment is about 67% of the Q1 earnings and 57% of the full-year guidance, which is sustainable. The company is expected to return to earnings growth by the end of the year and sustain it in 2025, so dividend increases should also continue. The company also repurchases shares to offset the dilutive effect of share-based compensation and lowered the count by .015% YOY in Q1. AbbVie Shows Support at a Critical Level Shares of AbbVie fell to critical support ahead of the Q1 release, retested that level after it and continue to trade above it now. The market action could be more robust but shows support at this level with average daily volume and may begin to rebound soon. If not, the price action of AbbVie could fall to retest the recent lows and possibly set a new low. The market could fall to $155 or lower before finding solid support in that scenario, but that is not expected. Before you consider AbbVie, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and AbbVie wasn't on the list. While AbbVie currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
3 Automotive Parts Makers Growing at Double-Digit Rates 2024-05-07 15:21:00+00:00 - Key Points As the automotive industry sets up for a potential comeback, three stocks could give investors double-digit EPS growth and upside through price targets. Being the first to get paid in the industry's value chain, these OEM names have analysts jumping all over them. Despite trading well below their 52-week lows, P/E ratios show markets are placing a premium quality on the future. The latest ISM manufacturing PMI index suggests that the turning point for the automotive stock sector is imminent. According to the report, a member of the primary metals industry was quoted as saying that "automotive builds continue at averages but not near maximum outputs." This could translate to there being a long runway for the industry to catch up. This sector is home to large household names like CarMax Inc. NYSE: KMX and Ford Motor NYSE: F. However, playing the value chain is often a better way to express a view for an industry, which is why original equipment manufacturers (OEMs) and other parts makers could be a more attractive growth strategy. Get alerts: Sign Up To ride this wave, investors could consider companies like Visteon Co. NASDAQ: VC, Driven Brands Holdings Inc. NASDAQ: DRVN, and LCI Industries NYSE: LCII as analysts are projecting double-digit earnings per share (EPS) growth. More Tailwinds Than Meet the Eye The U.S. economy is now at a diverging pivotal point propelled by the two most important sectors that drive gross domestic product (GDP) growth: services and manufacturing. According to the ISM Services PMI index, the services sector has been responsible for driving economic growth for over a year and a half, but that changes today. After contracting for nearly 18 months, the manufacturing sector expanded in March and then again in April. Analysts at Goldman Sachs think further — and sustained — expansion will follow in 2024. Because of this, the prices of steel and aluminum (the main components in OEMs) rose last month. Steel prices rallied from $3,330 to $3,600 in April alone, a near 10% increase that indicates growing demand for these commodities, likely spurred by automotive demand. With the Federal Reserve (the Fed) looking to cut rates this year, financing a new car could become more accessible for consumers, so these manufacturers are stocking up on the raw material needed to meet this potential future demand. 3 Stocks That Could Rally How can investors know if it’s not too late to enter this wave? Price action is a great place to start. Aside from price action, investors can gauge the market’s sentiment regarding EPS projections by comparing current forward P/E valuations against peers. Investors should look for a premium valuation, as stocks typically trade at more expensive multiples for a good reason. All three of these stocks trade below 80% of their 52-week high, which fits the Wall Street definition of a bear market: a 20% or more retracement from recent highs. Knowing this, analysts feel a lot more comfortable making bold predictions, as the upside gaps to be filled are more prominent now. 1. Visteon Visteon Today VC Visteon $116.12 +0.89 (+0.77%) 52-Week Range $105.19 ▼ $159.87 P/E Ratio 6.64 Price Target $142.36 Add to Watchlist Visteon analysts think the stock’s EPS could grow by 23.8% this year, above the automotive industry’s average expected 16%. Because of this projected outperformance, analysts at JPMorgan Chase decided to value the stock at $145 a share , or 25% higher than today’s prices. Visteon stock trades at a forward P/E ratio of 11x over the industry’s average valuation of 10x. While only a 10% premium, the market is still justifying the stock’s EPS growth projections and price targets. 2. Driven Brands Driven Brands Today DRVN Driven Brands $11.50 -0.50 (-4.17%) 52-Week Range $10.59 ▼ $28.83 Price Target $17.61 Add to Watchlist Driven Brands analysts see up to 30.7% EPS growth in the next 12 months, again beating the industry’s 16% average. Showing double-digit growth during an uncertain economic cycle, price targets reflect this added premium. Driven Brands could rally by 55.5% according to its $17.9 a share target Driven Brands becomes an outlier through its 12.5x valuation, bringing a 25% premium to boost future sentiment toward these projections and price targets. 3. LCI Industries LCI Industries Today LCII LCI Industries $104.99 -2.43 (-2.26%) 52-Week Range $102.39 ▼ $137.07 Dividend Yield 4.00% P/E Ratio 41.50 Price Target $104.20 Add to Watchlist LCI Industries will beat the industry again this year with its 26.6% EPS growth projections . Unlike its peers, today’s price targets actually reflect a single-digit downside. However, the stock’s 90% institutional ownership would give investors another leg to stand on. Among these institutional owners, Vanguard and PNC Financial Servicesdecided to boost their stakes in LCI by 0.4% and 2.1%, respectively, in the past quarter. Of these three stocks, the valuation leader is LCI Industries, whose 15x valuation calls for up to 50% premium to its peers. The Market’s Take Trading so low relative to their 52-week highs and still commanding premium valuations based on future projections, these stocks could fit the profile for investors looking for double-digit growth in one of the industries that may provide stability during uncertain economic times that could come for the second half of the year.
Freshpet Surges 10%: Fresh Highs to Come for This Pet Stock 2024-05-07 14:42:00+00:00 - Key Points Freshpet continues to build momentum and is on track for sustained profitability. Analysts are raising their targets and leading the market higher. The price action has entered a complete reversal and may gain 50% in the next 12 to 18 months. 5 stocks we like better than Freshpet Freshpet’s NASDAQ: FRPT Q1 results led the market to a 10% gain, and more fresh highs are coming. The primary takeaway is that volume gains underpin growth and provide significant leverage for this business. Headwinds remain; costs and quality are always an issue, but the stage is set for sustained improvement in sales and margin. Analysts are taking note. The revisions are positive and leading the market higher, so it may not be long until the next high is set. The question now is how high the stock can go before topping out, and it is quite a way. The post-release pop put the market above a critical resistance and pivot point, opening the door to retesting the all-time highs. That’s a gain of $60 from current levels or about 50%, which could be reached in the next 12 to 18 months. Get Freshpet alerts: Sign Up Analysts Raise Targets for Freshpet, Forecast Fresh Highs The near-term outlook is just as bullish. Marketbeat.com tracks three revisions within the first 24 hours of the release, and they are all positive. The most significant details are that the revisions are all above the consensus and current price action, and they are equal at $135, implying a 12.5% upside. The post-release revisions follow the trend set before the release, including three upward revisions into the range of $135 to $138, the highest price target issued by an analyst. The takeaway is that analysts' sentiment is converging into a narrow range, with the last six of 14 estimates within that range, leading the market for the stock higher. Because the already narrow range is narrowing even more, investors can assume that conviction is increasing within the analysts' community. Freshpet Has Solid Quarter, Gives Cautious Guidance Freshpet Today FRPT Freshpet $120.70 -0.33 (-0.27%) 52-Week Range $54.60 ▼ $127.25 Price Target $107.36 Add to Watchlist Freshpet reached an inflection point in Q3/Q4 2023 and is gaining momentum. The company reported $222.8 million in net revenue for Q1, a gain of 33.6% over last year. That is up from the previous quarter’s 29% growth and the 26% posted last year. The strength is due almost entirely to volume gains, which also accelerated sequentially by 500 basis points to 30%. Revenue outpaced the consensus by 350 basis points and significantly leveraged the bottom line. The margin news is the most impressive. The company widened its gross and operating margins on increased sales leverage, lower input costs, fewer quality control issues, and lower logistics costs. The gross margin widened by 910 bps GAAP, 680 bps adjusted, and SG&A costs fell by 750 bps GAAP and 500 bps adjusted to leave the company in surprisingly profitable conditions. GAAP earnings of 37 cents outpaced consensus by more than 50 cents to negate the expected loss and reverse losses posted last year. Guidance is favorable for this discretionary stock. The company maintained its revenue forecast of at least $950 million in sales, shy of the consensus, but likely a cautious guide given the top-line strength and building momentum. Freshpet raised its guidance for EBITDA to at least $120 million, up from a high of $110, and it may also be cautious because of the focus on operational quality. Freshpet Enters Complete Reversal The price action in FRPT stock began rebounding in late 2023 and is gaining momentum. The post-release action has the market above critical resistance at $117.50, which is now market support, and it looks solid. Assuming the market continues to support the price at this level, it should begin to move higher soon. The $117.50 level is the mid-point of a multi-year trading range and opens the door to a rally that could take the market to the range top. If not, this market could fall below critical support/previous resistance and remain range-bound until later in the year. Institutions have been buying this stock on balance for the last year and helped to lift the market. Investors can assume that institutional investors will continue to support this market over time and are likely buyers should the stock price fall. Critical support targets are $117.50, $103.50, and $91.50. Before you consider Freshpet, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Freshpet wasn't on the list. While Freshpet currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Disney to cap the number of Marvel movies it releases each year as it doubles down on 'quality' 2024-05-07 14:14:00+00:00 - Disney will release no more than three Marvel films and up to two Disney+ shows each year going forward as it works to place more focus on quality output. The announcement by CEO Bob Iger comes as Disney shares plunged 8% in Tuesday trading following the release of the entertainment giant's quarterly earnings. This year will see the release of just one Marvel film: "Deadpool and Wolverine" starring Ryan Reynolds and Hugh Jackman, slated for a July 26 release. The next Marvel film, a Captain America sequel, won't be released until at least February 2025, according to Disney's latest earnings presentation. "Thunderbolts," a film focused on Captain America sidekick Bucky Barnes, is scheduled for May 2025. Disney also has Marvel content in the works for Disney+, including ones related to Black Panther and Spider-Man — but no release dates yet. "I’ve been working hard with the studio to reduce output and focus more on quality," Iger said on the company's earnings call Tuesday. "That’s particularly true with Marvel ... Some of what is coming up is a vestige of basically a desire in the past (to) increase volume. We’re slowly going to decrease volume and go to probably about two TV series a year instead of what had become four and reduce our film output from maybe four a year to two, to the maximum three, and we’re working hard on what that path is." Disney reported quarterly revenues of $22.1 billion, short of Wall Street expectations; Disney+ subscribers of 153.6 million also failed to hit analysts' targets. It was the company's first earnings report following a tumultuous vote on whether to continue down a course led by Iger, who faced a challenge from outside investors critical of the company's performance. While Iger ultimately won that vote, Tuesday's results could spark new fears that the company may take longer to reach its financial goals. Iger also announced that the company intends to derive significant revenues from limits on Disney+ password-sharing. The company already began limiting sharing on its Hulu platform, and previously signaled account-sharing restrictions would start rolling out in June.
Too much water, and not enough: Brazil’s flooded south struggles to access basic goods 2024-05-07 13:58:03+00:00 - PORTO ALEGRE, Brazil (AP) — The mayor of a major city in southern Brazil on Tuesday pleaded with residents to comply with his water rationing decree, given that some four-fifths of the population is without running water, a week after major flooding that has left at least 90 people dead and more than 130 others missing. Efforts were continuing to rescue people stranded by the floods in the southern state of Rio Grande do Sul, as more rains were forecast for the region into next week. The capital, Porto Alegre, has been virtually cut off, with the airport and bus station closed and main roads blocked because of the floodwaters. The floods in Brazil are among extreme weather events being seen around the world. Yoga teacher Maria Vitória Jorge’s apartment building in downtown Porto Alegre is flooded, so she’s leaving it behind, having withdrawn about 8,000 reais ($1,600) from her savings to rent an apartment for herself and her parents elsewhere in the state. The Beira Rio stadium and surrounding area is flooded after heavy rain in Porto Alegre, Rio Grande do Sul state, Brazil, Tuesday, May 7, 2024. (AP Photo/Carlos Macedo) “I can’t shower at home, wash the dishes or even have drinkable water,” the 35-year-old Jorge said in her car as she prepared to travel. She had just a gallon of water for the 200-kilometer (125-mile) drive to the city of Torres, so far unaffected by the floods. Five of the Porto Alegre’s six water treatment facilities aren’t working, and Porto Alegre Mayor Sebastião Melo on Monday decreed that water be used exclusively for “essential consumption.” “We are living an unprecedented natural disaster and everyone needs to help,” Melo told journalists. “I am getting water trucks to soccer fields and people will have to go there to get their water in bottles. I cannot get them to go home to home.” The most urgent need is drinking water, but food and personal hygiene products are also in short supply. Other Brazilian states are mobilizing trucks with donations bound for Rio Grande do Sul. There were long lines and empty shelves at supermarkets in Porto Alegre on Tuesday. Some people have tried to buy bottled water since the weekend, and when they could find it, their purchases were limited to two five-liter (1.3-gallon) bottles. Public health experts say there is also growing risk of disease as much of the region remains submerged, warning that cases of dengue fever and leptospirosis, a bacterial disease, in particular could rise sharply within days. Adriano Hueck on Tuesday was attempting to retrieve medicine stocked at a friend’s warehouse, which is partially flooded. “If we can save some of it, there’s still a chance it can be useful in hospitals,” said 53-year-old Hueck, who then pointed toward another part of the city. “My house is somewhere there. You can’t even see its roof now.” Like Jorge, the yoga teacher, residents in Rio Grande do Sul who are able to flee are doing so, amid fears of shortage and disease. However, it’s difficult for many to leave Porto Alegre with main access roads blocked by floodwaters. The city’s airport and main bus terminal are filled with water and closed for the foreseeable future. Close to the airport, about 100 people of a nearby slum set up tents on the road, hoping to return to their shacks on small boats to try to save some of their belongings. Some roasted chunks of meat on improvised grills. The downpour has stopped for now, but a looming cold front will bring more severe rain starting Tuesday night, mainly in the southern part of the state, according to the National Meteorological Institute. Rainfall could exceed 150 millimeters (nearly six inches) by early Wednesday. Brazil’s southern city of Porto Alegre has been virtually cut off, with the airport and bus station closed and main roads blocked due to a massive flooding that has left at least 90 people dead and more than 130 missing in the state of Rio Grande do Sul. (UGC Video by Regis Silva @sulnalente) Late Monday, Rio Grande do Sul Gov. Eduardo Leite issued an alert for several cities close to the huge Patos Lagoon. The floodwaters in Porto Alegre and other cities pass through the lagoon to the sea. “The water level will rise and it will affect you,” he said in a video broadcast on his social media channels. “Please, believe the alerts and help us save lives. Let’s reduce the damage so we can be together to rebuild.” A member of the Civil Defense carries a child rescued from an area flooded by heavy rains in Porto Alegre, Rio Grande do Sul state, Brazil, Saturday, May 4, 2024. (AP Photo/Carlos Macedo) Porto Alegre’s metropolitan region is one of Brazil’s largest, home to around 4 million people. Damage from the rains has already forced more than 150,000 people from their homes. An additional 50,000 have taken refuge in schools, gymnasiums and other temporary shelters. Brazilian President Luiz Inácio Lula da Silva visited Rio Grande do Sul for a second time on Sunday, accompanied by Defense Minister José Múcio, Finance Minister Fernando Haddad and Environment Minister Marina Silva, among others. A resident carries his pets as he evacuates from a flooded area after heavy rain in Porto Alegre, Rio Grande do Sul state, Brazil, Tuesday, May 7, 2024. (AP Photo/Carlos Macedo) Authorities said Monday that they are concerned about the risks of hypothermia, as the temperature should drop to 10 C (50 F) on Wednesday. On Tuesday, Melo issued a plea for more donations of blankets. And it isn’t just residents who are at risk. “Our personnel has been wet for five days, shivering in the cold, staying up all night, in deficient sanitary conditions, because we’re sharing the same facilities with the displaced,” Gen. Hertz Pires do Nascimento, the army commander of Brazil’s southern region, told journalists. During Mass at the Vatican on Sunday, Pope Francis said he was praying for the state’s population. Security is another concern. Rio Grande do Sul’s public security secretariat said in a statement that police will beef up operations to prevent looting and theft. Brazil’s national guard is mobilizing to the state to reinforce security. “Even a boat was stolen this morning from the people working on the rescue. Jet Skis and houses were looted. This is deplorable and must be denounced,” Paulo Pimenta, Lula’s spokesperson, said Tuesday at a news conference. The flood disaster is also likely to affect the South American country’s food supplies. Rio Grande do Sul produces 70% of an basic Brazilian foodstuff: rice. “With the rains, I think we’ve definitely delayed the harvest in Rio Grande do Sul. So, if needed to balance production, we’ll have to import rice, import beans,” Lula said in a radio interview at Brazil’s public broadcaster. ___ Pessoa reported from Sao Paulo.
Hims & Hers Health Stock Could Become a Wealth Compounder 2024-05-07 13:45:00+00:00 - Key Points Shares of Hims & Hers stock rallied double after announcing the company's first quarter 2024 results. Investors now have additional evidence to support a bullish company thesis that could run for the next decade. Bullish EPS projections and price targets suggest the stock still needs to be done rallying. 5 stocks we like better than Technology Select Sector SPDR Fund Shares of Hims & Hers Health Inc. NYSE: HIMS are jumping by as much as 15.5% after the company released its first quarter 2024 earnings results. This quarter is arguably the most important quarter as it sets the tone for the rest of the year in any stock. In the case of Hims & Hers stock, investors have additional evidence to justify a potential investment in the name. As the United States economy experiences a pivotal year, 2024 will require investors to add more stable names to their portfolios without sacrificing above-average earnings per share (EPS) growth. The healthcare sector isn’t known for its development, typically in single-digit ranges. However, it does provide stability to portfolios. Get XLK alerts: Sign Up On the other hand, the technology sector carries higher volatility since it is composed of high-beta stocks. The trade-off comes through the sector’s attractive EPS growth rates, which typically stay in the double-digit realm. Hims & Hers stock gives investors the best of both worlds: healthcare stability and technology growth. It’s All About Growth Hims & Hers Health Today HIMS Hims & Hers Health $12.35 +0.70 (+6.01%) 52-Week Range $5.65 ▼ $17.16 Price Target $14.85 Add to Watchlist Over the past three years, the company has grown its user base to over 1.7 million, and statistics suggest it still has a long way to go. In the U.S., the telehealth market (where this company operates) was estimated to be as big as $29.6 billion in 2022 and is expected to grow at a compounded average growth rate (CAGR) of 22.9% until 2030 Attempting to take a chunk of this growth, Hims & Hers is giving Wall Street more reasons to keep betting on this future potential being more of a reality. Wall Street analysts expect the stock to deliver EPS growth of 127.3% this year. These growth rates stand over the medical information systems industry average of 36.9%. Beating competitors like Teladoc Health Inc. NYSE: TDOC and its 33% EPS growth projections, Hims & Hers commands a premium valuation over the industry, and for good reason. Compared to the medical doctor's clinics industry, which trades at a price-to-sales (P/S) ratio of 1.2x, the Hims & Hers stock today calls for a 146% premium through its 2.9x P/S multiple. Typically, stocks trade at premium valuations for good reason, and this becomes especially attractive when investors compare the stock’s valuation to its price action. Hims & her stock trades at only 68% of its 52-week high, even accounting for the post-earnings rally. Speaking of earnings, markets could be twice as excited about the stock going forward. A Stellar Start to The Year The company leads its quarterly results press release with 46% annual revenue growth and a 41% advance in yearly subscribers. Investors may notice the company’s efforts to spread the brand’s value through social media, as $130.5 million in marketing expenses (47% of revenue) secured a spot on platforms like Instagram and YouTube. Being a $2.5 billion market capitalization company requires spending these high amounts on marketing, but here’s where Hims & Hers stands out. Most companies in this stage cannot report a net positive free cash flow (operating cash flow minus capital expenditures); Hims & Hers shows roughly $15 million in free cash flow, of which $28 million was used to repurchase stock. Buying back stock in the year's first quarter means two things for investors. First, the stock is undervalued in management's eyes; second, management could expect a continuation—and expansion—in the company's current favorable free cash flow position. This is where value investors begin to compound their wealth, catching a value stock before it becomes significant, and enjoy the benefits of stock buybacks. Because of this and many other reasons, analysts at Citigroup Inc. NYSE: C saw it fit to boost their price targets for Hims & Hers up to $16 a share. The stock would need to rally by as much as 37.3% to prove these valuations right. Market’s Vote for Hims & Hers Zooming into price action, investors could compare the past quarter’s price action in Hims & Hers stock against the broader Health Care Select Sector SPDR Fund NYSEARCA: XLV and the Technology Select Sector SPDR Fund NYSEARCA: XLK, arguably the mix to which the stock belongs. Over the past quarter, Hims & her stock outperformed both exchange-traded funds (ETFs) by as much as 30%. Considering that the first quarter delivered better-than-expected results, these analysts could sweep in with a boost in their valuations and EPS projections. Now, considering that the Vanguard Group is the stock’s largest institutional owner, investors could have another leg to lean on when considering Hims & Hers’ potential as a watchlist addition. Before you consider Technology Select Sector SPDR Fund, you'll want to hear this. MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Technology Select Sector SPDR Fund wasn't on the list. While Technology Select Sector SPDR Fund currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
New data on Social Security’s finances packs a political punch 2024-05-07 13:30:31+00:00 - It was a couple of months ago when the Republican Study Committee released a controversial budget plan that, among other things, endorsed going after Social Security and Medicare. This, not surprisingly, generated some swift pushback from the programs’ Democratic champions. Soon after, however, Donald Trump apparently thought he could try to turn the tables. In late March, the former president insisted that it was Democrats who were in the process of “killing” Social Security “by allowing the INVASION OF THE MIGRANTS.” None of this made any sense. In fact, it was a reminder that the presumptive Republican nominee still, even now, doesn’t understand the basics of how Social Security works: As a Washington Post fact-check report explained, “Undocumented immigrants improve the health of Social Security and Medicare by paying payroll taxes without receiving benefits.” Trump, in other words, had reality backwards. This week, the idea that Democrats are “killing” the Social Security system became even sillier. NBC News reported: The trust funds the Social Security Administration relies on to pay benefits are now projected to run out in 2035, one year later than previously projected, according to the annual trustees’ report released on Monday. ... The Social Security trustees credited the slightly improved outlook to more people contributing to the program amid a strong economy, low unemployment and higher job and wage growth. In other words, despite longer-term challenges facing the system, Biden-era economic growth has been so strong that the Social Security system’s finances have gotten better, not worse. “This year’s report is a measure of good news for the millions of Americans who depend on Social Security, including the roughly 50% of seniors for whom Social Security is the difference between poverty and living in dignity — any potential benefit reduction event has been pushed off from 2034 to 2035,” Social Security Commissioner Martin O’Malley said in a statement. O’Malley also took the opportunity to urge Congress to extend the trust fund’s solvency “as it did in the past on a bipartisan basis.” Given that such a move would require Republicans to accept some concessions on tax policy, this seems extraordinarily unlikely. But complicating matters further is the fact Trump appears desperate to launch the largest and most aggressive mass-deportation program in generations. No matter what one’s opinion might be about immigration, there’s no great mystery as to what such a move would do to Social Security: It would weaken the system’s financial health. It’s really not that complicated. When employers hire undocumented workers, many of whom rely on fraudulent Social Security numbers, the businesses subtract payroll taxes that go toward the Social Security and Medicare systems. Those workers, however, will not receive Social Security and Medicare benefits — because they’re ineligible — which means each of those employees is inadvertently strengthening the programs’ finances: They’re putting money into the system without taking anything out. (Why would they do that? Because even after the payroll taxes are subtracted, these workers believe they’ll make more money than they would in the countries they left behind.) If Trump were to implement a mass-deportation program, and succeeded in removing millions of undocumented workers, that would weaken Social Security’s and Medicare’s finances and accelerate the social-insurance programs’ insolvency. The former president might not understand any of this, but voters should. This post updates our related earlier coverage.