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The Fed Is Eyeing the Job Market, but It’s Difficult to Read 2024-05-02 17:17:52+00:00 - Hiring has been rapid in recent months. That would typically make economists nervous that the economy was on the cusp of overheating: Businesses would risk competing for the same workers, pushing up wages in a way that could eventually drive up prices. But this hiring boom is different. It has come as a wave of immigrants and workers coming in from the labor market’s sidelines have helped to notably increase the supply of applicants. That has allowed companies to hire without depleting the labor pool. Yet the jump in available workers has also meant that a primary measure that economists use in assessing the job market’s strength — payroll gains — is no longer providing a clear signal. That leaves economists turning to other indicators to evaluate the strength of the job market and to forecast its forward momentum. And those measures are delivering different messages. Wage growth is still very strong by some gauges, but it seems to be cooling by others. Job openings have been coming down, the unemployment rate has ticked up recently (particularly for Black workers) and hiring expectations in business surveys have wobbled. The takeaway is that this seems to be a strong job market, but exactly how strong is hard to know. It is even harder to guess how much oomph will remain in the months to come. If job gains were to slow, would that be a sign that the economy was beginning to buckle, or just evidence that employers had finally sated their demand for new hires? If job gains were to stay strong, would that be a sign that things were overheating, or evidence that labor supply was still expanding?
Post Office investigators saw Horizon victims as ‘enemies’, inquiry told 2024-05-02 17:13:00+00:00 - Post office operators who blamed the Horizon IT system for cash shortfalls in their branches were viewed by the state-owned company’s investigators as “enemies of the business”, a public inquiry has heard. The Post Office inquiry has seen part of a draft report prepared in 2013 by investigators at the accountancy firm Second Sight, which had been asked to examine concerns around the Horizon IT system. Hundreds of people running UK post offices were wrongly prosecuted for theft and false accounting and had their lives ruined in what has been described as the worst miscarriage of justice in recent British legal history. The ITV drama Mr Bates vs the Post Office put the injustice in the spotlight earlier this year, prompting calls for ministers to address the scandal more speedily amid claims that they had sought to delay compensation payments to victims. Chris Aujard, a former senior lawyer at the Post Office, was asked at the public inquiry in London on Thursday why he had taken no action when handed a draft report by Second Sight after he joined the Post Office as interim general counsel in October 2013. He remained at the company until 2015. The Second Sight report said the culture within the Post Office investigation team “appears to be one of a ‘presumption of guilt’ when conducting an investigation, rather than one of ‘seeking the truth’”. It found certain post office operators “passionately believed” they were innocent. The draft report said: “It is the handling of this group that seems to have been seriously flawed. By failing to investigate those assertions (or even to pay proper heed to them during interviews) the investigators have alienated all of them. It is that group … who really have become enemies of the business.” Flora Page, a barrister acting for a number of victims of the scandal, put to Aujard that the report showed “needless adversarialism” by the Post Office’s investigation team. He responded: “This is a specific case of a specific team allegedly behaving in a certain way … and I do agree, this reads as though that team is adopting an adversarial approach to their investigation.” Page then asked: “This was telling you, was it not, that there were serious concerns over past prosecutions, wasn’t it?” Aujard replied he had “no specific recollection of what I thought of the document at the time” although he believed he would have asked questions about why the Second Sight report had been commissioned and whether it was an attempt to remove certain individuals from the investigation team. 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 He added: “It is a draft report that is heavily caveated and would at some point in the future had I been a permanent general counsel and stayed in the role … it would require further investigation to understand what had gone on historically in that team.” “Did it require immediate attention or not?” Page asked. “My view at the time was that given it was marked as a draft document and heavily caveated … it was something that would have required investigation in due course,” Aujard told the hearing. Wyn Williams, the retired judge heading the inquiry, asked Aujard what had happened to the draft report. He replied that when he arrived at the Post Office he would have “read it and put it to one side … I cannot recollect taking any further action in relation to this document.”
Campus Protests Give Russia, China and Iran Fuel to Exploit U.S. Divide 2024-05-02 17:09:49+00:00 - An article on a fake online news outlet that Meta has linked to Russia’s information operations attributed the clashes unfolding on American college campuses to the failures of the Biden administration. A newspaper controlled by the Communist Party of China said the police crackdowns exposed the “double standards and hypocrisy” in the United States when it comes to free speech. On X, a spokesman for Iran’s Ministry of Foreign Affairs, Nasser Kanaani, posted a cartoon of the police arresting a young protester in the guise of the Statue of Liberty. “Imprisonment of #freedom in the U.S.A.,” he wrote. As protests over the war in Gaza have spread across the United States, Russia, China and Iran have seized on them to score geopolitical points abroad and stoke tensions within the United States, according to researchers who have identified both overt and covert efforts by the countries to amplify the protests since they began. There is little evidence — at least so far — that the countries have provided material or organizational support to the protests, the way Russia recruited unwitting Black Lives Matter protesters to stage rallies before the 2016 and 2020 presidential elections.
Nearly 8 tons of ground beef sold at Walmart recalled over possible E. coli contamination 2024-05-02 17:02:00+00:00 - The history of Italian Beef The history of Italian Beef 03:13 A food distributor in Pennsylvania is recalling about eight tons of ground beef because the meat might contain E. coli. Packages of the beef, produced last month by Cargill Meat Solutions, were shipped to Walmart locations nationwide, according to a recall notice from the U.S. Department of Agriculture. There have been no confirmed reports of anyone being harmed from eating the beef, the agency said. Officials at Cargill Meat reported the possible contamination "after they identified that previously segregated product had been inadvertently utilized in the production of ground beef," the recall states. Cargill Meat told CBS MoneyWatch in an email that it reported the incident "out of an abundance of caution," adding that the meat was shipped to Connecticut, Maryland, Massachusetts, New Hampshire, New York, North Carolina, Ohio, Pennsylvania, Vermont, Virginia, Washington, D.C. and West Virginia. E. coli is a potentially deadly bacteria that often causes dehydration, bloody stool and stomach cramps in humans. The bacteria typically strikes three or four days after a person consumes food tainted with E. coli. Most people recover from exposure within a week, the USDA said, but some who get infected — particularly children — can suffer from kidney failure. Last month, walnuts sold at Whole Foods were recalled because of potential contamination with E. coli, the U.S. Food and Drug Administration said. The recalled beef from Cargill was shipped in six forms, according to the recall. They are: All Natural Lean Ground Beef with lot code 117 (2.25 pounds) Prime Rib Beef Steak Burgers Patties with lot code 118 (1.33 pounds) Fat All Natural Angus Premium Ground Beef with lot code 117 (2.25 pounds) Fat All Natural Ground Beef Chuck with lot code 118 (2.25 pounds) Fat All Natural Ground Beef Chuck Patties with lot code 118 (1.33 pounds) Fat All Natural Good Beef Sirloin Patties with lot code 118 (1.33 pounds) Cargill Meat Solutions has recalled more than 16,000 pounds of ground beef because it might contain E. coli. The above label shows one of six different beef variations that could contain the bacteria. USDA Food Safety and Inspection Service All six forms have a USDA mark of inspection on the front of its packaging and establishment number "EST. 86P" on the back, according to the recall. Customers who purchased the beef products should throw them away or return them to the place of purchase. Anyone with questions about the recall can contact Cargill at 1-844-419-1574. The Cargill announcement marks the second major beef recall this year due to an E. coli risk. The USDA in January recalled nearly 7,000 pounds of ground beef from producer Valley Meats of Illinois. Those products were shipped regionally to Illinois, Indiana, Iowa and Michigan.
Apple announces largest-ever $110 billion share buyback as iPhone sales drop 10% 2024-05-02 16:56:00+00:00 - Apple shares climbed 7% in extended trading on Thursday after the iPhone maker reported quarterly earnings that topped estimates and announced an expanded stock buyback program. Apple announced that its board had authorized $110 billion in share repurchases, a 22% increase over last year's $90 billion authorization. It's the largest in history, ahead of Apple's previous repurchases, according to data from Birinyi Associates. However, overall sales fell 4% and iPhone sales fell 10% year-over-year during the quarter, which Apple attributed to a tough comparison versus last year. Here's how Apple did versus LSEG consensus estimates in quarter ended March 30: EPS : $1.53 vs. $1.50 estimated : $1.53 vs. $1.50 estimated Revenue : $90.75 billion vs. $90.01 billion estimated : $90.75 billion vs. $90.01 billion estimated iPhone revenue : $45.96 billion vs. $46.00 billion estimated : $45.96 billion vs. $46.00 billion estimated Mac revenue : $7.5 billion vs. $6.86 billion estimated : $7.5 billion vs. $6.86 billion estimated iPad revenue : $5.6 billion vs. $5.91billion estimated : $5.6 billion vs. $5.91billion estimated Other Products revenue : $7.9 billion vs. $8.08 billion estimated : $7.9 billion vs. $8.08 billion estimated Services revenue : $23.9 billion vs. $23.27 billion estimated : $23.9 billion vs. $23.27 billion estimated Gross margin: 46.6% vs. 46.6% estimated Apple did not provide formal guidance, but Apple CEO Tim Cook told CNBC's Steve Kovach that overall sales would "grow low single digits" during the June quarter. Apple posted $81.8 billion in revenue during the year-ago June quarter and LSEG analysts were looking for a forecast of $83.23 billion. On an earnings call with analysts, Apple CFO Luca Maestri said that Apple expected double-digit year-over-year percentage growth in iPad sales in the current quarter. He added that he expected Apple's services division to continue growing at about the rate it had been in the past two quarters. Apple reported net income of $23.64 billion, or $1.53 per share, down 2% from $24.16 billion, or $1.52 per share, in the year-earlier period. Overall sales fell 4% in the March quarter. Cook told CNBC that year-over-year sales suffered from a difficult comparison to the year-ago period, when the company realized $5 billion in delayed iPhone 14 sales from Covid-based supply issues. "If you remove that $5 billion from last year's results, we would have grown this quarter on a year-over-year basis," Cook said. "And so that's how we look at it internally from how the company is performing."
Goldman Sachs to scrap cap on bonuses for hundreds of UK staff 2024-05-02 16:37:00+00:00 - Goldman Sachs has told hundreds of its top UK bankers that it is eradicating a cap on bonuses, in a move that will allow its star performers to earn up to 25 times their annual salary. Richard Gnodde, chief executive of Goldman Sachs International, made the announcement during a video message to staff on Thursday. It comes months after UK regulators confirmed they were formally scrapping EU rules that previously limited bonuses to twice an individual’s base salary. UK lenders including HSBC, Barclays and NatWest are planning to follow suit. Gnodde said in the video that ending the UK cap would help level the playing field across its international workforce. “We are a global firm and to the extent possible we adopt a consistent global approach across everything we do. The bonus cap rules were an important factor preventing us from being consistent in the area of compensation.” He said Goldman had advocated for changes that would give banks the flexibility of weighting payouts more heavily towards bonuses rather than fixed salaries. The move gives lenders more control over staff pay, depending on performance. It will also be easier to defer pay, and potentially claw back bonuses from bankers when things go wrong. The changes will apply to hundreds of Goldman’s 6,000 UK staff – known as material risk takers – who will now be able to earn up to 25 times their salaries in bonuses. “Going forward, we will be aligning UK material risk takers’ compensation mix more closely with the firm’s global compensation principles – meaning lower fixed pay, but a higher proportion of discretionary compensation,” Gnodde said. “This also reflects the prudential objective of our regulators,” he added. The change will not apply to Goldman’s EU-based bankers, and unlike UK regulators, American watchdogs do not require any guidance on maximum payouts. The bonus cap was originally part of changes introduced after the 2007-08 banking crash, and aimed to stamp out a bonus culture blamed for encouraging short-term profits over longer-term stability. The hope was that, with less of an individual’s pay riding on performance, there would be a lower incentive for risky behaviour. However, they were opposed by some UK politicians as well as the Bank of England, who argued that the clampdown would make it harder to attract skilled bankers, who would instead flee to rival hubs in New York, Singapore or Zurich. The then chancellor, George Osborne, tried to overturn the measure at the European court of justice in 2014. 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 Former chancellor Kwasi Kwarteng then took advantage of Britain’s exit from the EU, and announced plans to scrap the cap in September 2022. The changes were later approved by his successor, Jeremy Hunt, with regulators formalising the change in November last year. Goldman said in a statement: “This approach gives us greater flexibility to manage fixed costs through the cycle and pay for performance. It brings the UK closer to the practice in other global financial centres, to support the UK as an attractive venue for talent.”
TikTok and Universal resolve feud, putting Taylor Swift, other artists back on video platform 2024-05-02 16:08:00+00:00 - Ariana Grande, Drake, Lady Gaga and Rihanna are just some of the artists returning to TikTok — where Taylor Swift's music recently reappeared — with Universal Music Group and TikTok announcing a licensing deal ending a months-long spat. TikTok's more than one billion users will soon be able once again to use music recorded by UMG artists in their videos, and existing videos with music that had been muted due to copyright violations will be unmuted "in due course," the companies said Wednesday in a joint statement. The agreement ends a public rift between the two companies over royalties paid by TikTok to UMG artists, which led to the recording giant to pull the entire collection of songs from its lineup of artists off of the platform at the end of January. Indications that the standoff might be put to rest came in April, when it was disclosed that Taylor Swift's music was back on the platform before the release of her double album "The Tortured Poets Department." Financial terms of the deal were not disclosed. "By harnessing TikTok's best-in-class technology, marketing and promotional capabilities, UMG and TikTok will deliver improved remuneration for UMG's songwriters and artists, new promotional and engagement opportunities for their recordings and songs and industry-leading protections with respect to generative AI," the companies stated. "Music is an integral part of the TikTok ecosystem and we are pleased to have found a path forward with Universal Music Group," stated Shou Chew, CEO of TikTok, which is owned by ByteDance. Part of the new deal includes UMG and TikTok working together to find new monetization opportunities. They will also will work together on campaigns supporting UMG's artists across genres and territories globally. In addition, the companies will put their combined efforts toward ensuring that AI development across the music industry will protect human artistry and payments for artists and songwriters. TikTok will also work with UMG to remove unauthorized AI-generated music from the platform, as well as on tools to improve artist and songwriter attribution. TikTok plans to continue investing in building artist-centric tools that will help UMG artists realize their potential on the platform. Some include "Add to Music App," enhanced data and analytics, and integrated ticketing capabilities. "We're gratified to renew our relationship with TikTok predicated on significant advancements in commercial and marketing opportunities as well as protections provided to our industry-leading roster on their platform," Michael Nash, chief digital officer and executive vice president, Universal Music Group, stated. — The Associated Press contributed to this report.
Top New York official asks Best Buy about its commitment to LGBTQ groups after conservative pressure 2024-05-02 15:35:00+00:00 - The New York state comptroller sent a letter to Best Buy last week questioning whether the company changed its commitment to inclusivity and supporting LGBTQ groups. The letter was sent four weeks after NBC News was first to report that the consumer electronics giant offered to screen LGBTQ nonprofit donations following conservative pressure. The comptroller’s office manages the state’s $207 billion public pension fund, which has invested in Best Buy. “Diversity, equity and inclusion are fundamental values of companies with sound, sustainable, and profitable long-term strategies. Inclusion is essential for employee recruitment and retention, a driver of innovation, and an element of consumer brand loyalty,” Comptroller Thomas DiNapoli wrote to Best Buy CEO Corie S. Barry and the company’s board chairman, J. Patrick Doyle. The letter, which the comptroller’s office shared with NBC News, was sent to Best Buy after NBC News first reported on a public Securities and Exchange Commission filing that showed Best Buy offered to screen donations from its employee resource groups going to LGBTQ causes following pressure from the National Center for Public Policy Research, a conservative think tank that holds shares in the company. “I am concerned that Best Buy’s actions could be seen by shareholders, employees, customers, and other stakeholders as a departure from its stated commitment to policies and practices that promote inclusivity and support for the LGBTQ+ community,” DiNapoli wrote. “Actions that compromise or are misaligned with a company’s core values and business strategy may result in reputational risk and threaten long-term shareholder value.” DiNapoli ended by urging the company to send him responses “regarding the actions Best Buy is taking to address the risks articulated” and inviting the chief executive and board chairman to meet with his office to discuss the matter further. A spokesperson for Best Buy told NBC News on Friday that the company’s standard process in dealing with shareholders’ concerns is to listen and engage in a conversation, as the spokesperson said the company is now doing with the state comptroller. The spokesperson did not comment further on the specifics of the comptroller’s letter. In an email to NBC News, Scott Shepard, the general counsel of the NCPPR’s Free Enterprise Project, took issue with parts of DiNapoli’s letter, including his views on equity, with Shepard stating that equity “is by its own terms discrimination on the basis of race, sex and orientation against members of ‘non-diverse’ groups in ways that often violate law and the Constitution.” He also denied that the NCPPR pressured Best Buy to stop supporting LGBTQ groups in general. “What our proposal sought and what Best Buy agreed to was a process for screening company donations for whether they supported organizations that took extreme positions on issues not fundamentally connected to Best Buy’s core business purposes, of any kind,” he wrote. In a separate email to NBC News, Shepard stressed that the NCPPR’s position was not motivated by anti-LGBTQ animus, but rather a desire to get “Best Buy [to] stop being radically left-wing, and just be a little more neutral” in order to protect shareholder value. Shepard also shared with NBC News a letter from the NCPPR to Best Buy that he said outlined the deal that led his organization to withdraw its shareholder proposal. The first page of the letter — which Shepard said Best Buy drafted — states that the electronics retailer will not donate, as it had a few years ago, to The Trevor Project, an LGBTQ youth suicide prevention and crisis intervention organization, and “Our Gay History in Fifty States,” a queer history book for young adults. It also states that Best Buy has never and will not in the future fund six additional LGBTQ groups or “similar organizations,” including SAGE, which advocates on behalf of LGBTQ elders, and GLAAD, an LGBTQ media advocacy group. The second page outlines a “Charitable Giving Annual Risk Review” to be performed by Best Buy management and shared with company executives and board members to “ensure charitable giving aligns with Company strategies and fiduciary duties.” When asked about the letter, a company spokesperson did not say whether Best Buy contributed to the document in any way or whether any agreement was made. “Nothing has changed in the ways we give to LGBTQIA+ organizations,” Carly Charlson, a spokesperson for Best Buy, said in response to questions about the alleged agreement. “At Best Buy, we strongly believe in an inclusive work environment with a culture of belonging where everyone feels valued and has the opportunity to thrive.” Charlson added that Best Buy has long supported and will continue to support the Human Rights Campaign, the country’s largest LGBTQ advocacy group, which Charlson said has recognized Best Buy as one of the best places to work for the LGBTQ community for the past 18 years in its annual Corporate Equality Index. Eric Bloem, HRC’s vice president of programs and corporate advocacy, said in an email to NBC News that the group was “working with Best Buy to understand more.” “Any company that uses their Corporate Equality Index distinction as cover while working with fringe groups and bad actors does not reflect true LGBTQ+ allyship in the corporate space,” Bloem said. The monthslong email exchange between Best Buy and the NCPPR, detailed in an SEC filing, began in December when the group sent a shareholder proposal requesting Best Buy produce a report for investors about how all of its “voluntary partnerships” are benefiting the company’s business. “Best Buy has partnerships with and contributes to organizations and activists that promote the practice of gender transition surgeries on minors and evangelize gender theory to minors,” read the proposal, signed by Ethan Peck, an associate at the NCPPR’s Free Enterprise Institute. “This contentious and vast disagreement between radical gender theory activists and the general public has nothing to do with Best Buy selling electronics.” In a Jan. 17 email, Peck told Best Buy’s attorneys that the NCPPR “will withdraw its shareholder proposal if Best Buy were to end its partnerships with and contributions to” eight LGBTQ nonprofits and initiatives, which he described in the email as “predatory butchers.” The groups and initiatives are The Trevor Project, Our Gay History in 50 States, SAGE, GLAAD, It Gets Better, The GenderCool Project, GLSEN and CenterLink. Peck did not ask Best Buy to stop its donations to the HRC, saying in the email, “We understand that it’s unrealistic for Best Buy to leave HRC in the near future because of their political clout.” An attorney for Best Buy, Marina Rizzo, responded in a Feb. 5 email telling Peck that the company had reviewed the NCPPR’s concerns and informed him that Best Buy hadn’t donated in several years to two of the LGBTQ causes mentioned in the Jan. 17 email — The Trevor Project and Our Gay History in 50 States — and has never donated to the other six. She then said the company would screen certain donations from employee groups that the NCPPR may find concerning. “As discussed during our call, we do allow our individual employee organizations, including our Military ERG, Conservative employee interest group, and our PRIDE group, among many other groups, some discretion to directly support organizations of their choosing,” Rizzo wrote. “That said, any such contributions would be screened to ensure they do not advocate or support the causes or agendas you have identified as concerning. We hope this addresses the concerns.” On March 22, the NCPPR withdrew its December proposal, which, in turn, ensured that the NCPPR’s shareholder proposal regarding “voluntary partnerships” will not be presented at Best Buy’s annual shareholder meeting in June. For more from NBC Out, sign up for our weekly newsletter.
Can a ‘Not Charlotte’ Recipe Revive a Region? 2024-05-02 15:23:34+00:00 - Scott Kidd didn’t expect a terribly busy job when he became the town manager of Liberty, N.C., a onetime furniture and textile hub whose rhythms more recently centered on a yearly antiques festival. Those quiet times, less than three years ago, soon became a whirlwind. Toyota announced it was building a battery factory on the town’s rural outskirts for electric and hybrid vehicles, and since then Mr. Kidd has reviewed ordinances, met with housing developers and otherwise sought to meet the needs of a seven-million-square-foot facility. The flurry of activity reflects new investments in a region of North Carolina that has lagged behind: the Triad. The average income in Randolph County, which includes Liberty, is $47,000, and some jobs at Toyota will offer an hourly wage comfortably above that. More people moving into the area could breathe life into Liberty’s downtown. But the potential dividends for the area — which includes Greensboro, Winston-Salem and High Point, in the center of the state — depend on equipping its workers with the skills needed for those new jobs. Mr. Kidd worried that many local workers lacked the education and skills to work at the plant.
Biden condemns campus violence: 'Order must prevail' 2024-05-02 15:23:00+00:00 - President Joe Biden on Thursday urged that "order must prevail" as pro-Palestinian protests rock college campuses across the country, emphasizing that violent protest is not protected under the law. Breaking days of silence on the issue since the arrests of students and other protesters at Columbia University, the University of California, Los Angeles, and elsewhere, Biden emphasized that “peaceful protest is in the best tradition of how Americans respond to consequential issues” and that the U.S. is not a “lawless country.” “Violent protest is not protected — peaceful protest is," the president said. "It’s against the law when violence occurs. Destroying property is not a peaceful protest." Biden also said that antisemitism, threats of violence against Jewish students, hate speech or violence of any kind have no place on any campus. “Whether it’s antisemitism, Islamophobia or discrimination against Arab Americans or Palestinian Americans, it’s simply wrong,” he said. “There’s no place for racism in America. It’s all wrong, it’s un-American.” “I understand people have strong feelings and deep convictions," he added. "In America, we respect the right and protect the rights for them to express that, but it doesn’t mean anything goes. It needs to be done without violence, without distraction, without hating and within the law." In response to a shouted question by a reporter asking whether college campus protests have made him reconsider any policies on Israel's conflict with Hamas in Gaza, Biden replied, “No.” The president also said “no” to a separate shouted question asking whether he thinks the National Guard should intervene in the campus protests. Biden has come under fire from pro-Palestinian protesters who argue he is supporting genocide in Gaza as he maintains that Israel has a right to defend itself — an accusation the White House has repeatedly denied. While protesters demand an immediate cease-fire in the war between Israel and Hamas, Biden has continued to state his support of Israel even as he criticizes its handling of the war and the lives lost in Gaza in the months following Hamas' Oct. 7 attack on the country. In his remarks Thursday, Biden also criticized “those who rush in to score political points” from the protests, saying that “this isn’t a moment for politics, it’s a moment for clarity.” Biden did not specify who he was referring to, but his remarks come as former President Donald Trump, the presumptive Republican presidential nominee, has attempted to blame Biden and Democrats for the violence that has broken out during campus protests. Trump has repeatedly decried the protesters as being part of the "radical left" and has called out Biden for his lack of intervention or objection to the campus protests as police have moved to quell demonstrations.
F.T.C. Clears Exxon Mobil’s Acquisition of Pioneer Natural Resources 2024-05-02 15:21:34+00:00 - The Federal Trade Commission on Thursday approved Exxon Mobil’s acquisition of Pioneer Natural Resources as long as Exxon excludes Pioneer’s chief executive from its board. The $60 billion deal between the two Texas companies, which may become final as early as this week, would produce the dominant oil and gas producer in the Permian Basin, the country’s largest oil field, which is in Texas and New Mexico. Exxon’s purchase of Pioneer is one of several large mergers and acquisitions in the oil and gas industry in recent years. The F.T.C. accused Pioneer’s chief executive, Scott Sheffield, of colluding with officers of the Organization of Petroleum Exporting Countries and its allies to control global oil production and prices. “Mr. Sheffield’s past conduct makes it crystal clear that he should be nowhere near Exxon’s boardroom,” Kyle Mach, deputy director of the commission’s Bureau of Competition, said in a statement. “American consumers shouldn’t pay unfair prices at the pump simply to pad a corporate executive’s pocketbook.”
Meta Stock: 3 Reasons This Stumble Is a Golden Buying Opportunity 2024-05-02 12:55:00+00:00 - Key Points Shares have been consolidating after taking a dive after their latest earnings. However, the fundamental and technical business case supports the long-term opportunity. A flood of analysts also call this stock a roaring buy, and investors should be excited. 5 stocks we like better than Meta Platforms Despite notching a fresh all-time high less than a month ago, it’s been a tough couple of weeks for shares of Meta Platforms NASDAQ: META. The tech giant was already starting to see its shares soften in the second half of April as the broader market began selling off, but they took an even bigger dip last week. The main catalyst was the company’s Q1 earnings, which, despite topping analyst expectations for both topline revenue and bottom line earnings, disappointed investors. The stock gapped down as much as 15% the day after, but there the selling stopped. Meta shares are already consolidating and there are several reasons to think we could be looking at a golden buying opportunity right now. Here are the top 3. Get Meta Platforms alerts: Sign Up Strong Fundamentals for Meta Meta Platforms Today META Meta Platforms $441.68 +2.49 (+0.57%) 52-Week Range $229.85 ▼ $531.49 Dividend Yield 0.45% P/E Ratio 25.37 Price Target $513.55 Add to Watchlist First up is Meta’s fundamentals. While investors were hoping for more in the company’s latest report last week, there’s no escaping from the fact that Meta crushed expectations for their Q1 revenue and earnings. It was the second highest revenue print ever, after Q4’s, and CEO Mark Zuckerberg spoke bullishly on the company’s advances to build “the world’s leading artificial intelligence.” While investors were justifiably spooked by light forward guidance, it’s fair to say this was quickly priced into the shares with the 15% drop. Remember, this is still a $1 trillion company reporting more than 25% revenue growth. Having now had a few more days to digest the news, the sideways consolidation and inability of the bears to bring the shares down any further suggest Wall Street has gotten over it. Analyst Ratings for Meta Watching for what stocks analysts are coming out bullish on is one of the easiest ways to spot quality names amongst all the noise. This is especially true for those they give juicy price targets to. The past week has seen a host of analysts reiterating their Buy or Outperform ratings on Meta shares, and while most also trimmed their price targets, they’re still going to be very tempting. Take Loop Capital, for example, which reiterated its Buy rating on Meta shares yesterday while giving it a fresh price target of $550. From the $440 that Meta shares closed at on Wednesday night, that’s still pointing to a near-term upside of some 25%. In the past week alone, Loop Capital’s bullish stance joined that of the teams from Citigroup, Truist Financial, TD Cowen, and Royal Bank of Canada, to name just a few. While the latter trimmed its price target back from the $600 it was at before earnings, it was only brought down to $570, a full 30% higher than where shares are currently trading. Technical Setup for Meta So, with the company’s fundamentals still performing well and many analysts calling the stock a solid buy, the final reason to get excited is the technical setup. We’ve already seen how Meta’s shares are starting to trade sideways as they consolidate, which is exactly what you want to see with a stock that’s taken a sudden plunge. The other technical factor in the stock’s favor is its relative strength index (RSI). The RSI looks at a given stock's recent trading and spits out a number between 0 and 100. Anything above 70 suggests the stock is heavily overbought and due for a pullback, while anything around 30 or below indicates the opposite. With an RSI of 33, which was even lower at 29 earlier this week, it’s fair to say Meta is heavily extended. Don’t be surprised to see the momentum swing heavily to the buyer’s side ahead of the weekend. This would be a solid signal to watch for ahead of any recovery rally, which, based on the reasons above, is certainly on the cards. Before you consider Meta Platforms, 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 Meta Platforms wasn't on the list. While Meta Platforms currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
3 Staples Stocks to Cushion Lower Consumer Sentiment 2024-05-02 12:19:00+00:00 - Key Points As U.S. consumer sentiment contracts from its 3-year peak, the consumer staples sector could take over this cycle. Three stocks show investors double-digit upside and up to triple-digit EPS growth this year. Above peers and calling institutions to buy them, these names offer a potentially smoother ride in the coming quarters. 5 stocks we like better than Wells Fargo & Company Are investors in the clear for the rest of 2024? The first quarter of the year, arguably the most important as it sets the tone for what could be in the works, shows investors some of the potentially growing cracks in the economy. It is the consumer staples sector that could become the next safe haven. Recent price action in consumer discretionary stocks is a foundation for this belief. After reaching a 3-year high, U.S. consumer sentiment retraced to its worst levels since 2022, implying that not all is okay with the consumer sector. Discretionary stocks like Netflix Inc. NASDAQ: NFLX are down nearly 20% after reporting first-quarter results, showing potentially tighter budgets from the consumer end. Get Wells Fargo & Company alerts: Sign Up For these reasons, consumer staples stocks like Dutch Bros Inc. NYSE: BROS, RH NYSE: RH, and even Chewy Inc. NYSE: CHWY could be worthy watchlist additions in the new cycle. More than applying logic, here’s why each of these names carries their own merit. Coffee: It’s a Necessity Dutch Bros Today BROS Dutch Bros $26.95 -0.05 (-0.19%) 52-Week Range $22.67 ▼ $36.17 P/E Ratio 898.33 Price Target $34.44 Add to Watchlist Demand for coffee will likely hover around a tight median, regardless of whether the economy is booming or busting. For this reason, some on Wall Street see a double-digit upside in shares of Dutch Bros. Those at J.P. Morgan Chase & Co. NYSE: JPM assigned a $40 share price target for Dutch Bros stock, calling for a 48% upside from where it trades today. More than that, the Vanguard Group saw it fit to start adding to the stock as recently as last quarter. Among the $308 million in institutional inflows during the past 12 months, Vanguard represented roughly half at a total investment of $150.5 million. A quality stamp from the asset manager could have given markets the comfort they needed to bid the stock higher. Analysts think the stock could grow its earnings per share (EPS) by as much as 34.6% this year, compared to the beverage industry’s average 10.5% growth. Even its biggest competitor, Starbucks Co. NASDAQ: SBUX, can’t reach that high a growth rate, at only 15% projected for the year. Trading at 75% of its 52-week high is one way to see how far Dutch Bros stock needs to go to catch up to its former glory. Markets, however, may feel confident that it could, as the forward P/E ratio rose to 64.3x compared to the industry’s 16.3x valuation. Markets are willing to overpay for this stock and not its peers, so there must be a good reason behind this valuation. One reason is the company’s balance sheet, which shows a debt of 50% of total assets compared to Starbucks’ 150%. Because the timing of Federal Reserve (the Fed) interest cuts remains uncertain, Dutch Bros’ balance sheet and EPS projections give investors the better consumer staples bet this time. Chewy’s Duty to Furry Family Members Chewy Today CHWY Chewy $15.94 +0.89 (+5.91%) 52-Week Range $14.69 ▼ $40.78 P/E Ratio 199.27 Price Target $27.50 Add to Watchlist Just like any other family member, pets need to be cared for through food and medicine. In this way, Chewy stock is no different fromor, only in the way it is projected to grow this year. Analysts think Chewy's EPS could grow by 162.5%. The fact that the stock trades at only 37% of its 52-week high makes it a potentially irresistible discount. So bold is this proposition that even The Goldman Sachs Group Inc. NYSE: GS had to make its view known. The bank’s analysts slapped a $32 a share valuation for Chewy, daring the stock to rally by 113% from where it sits today. Knowing that one of Wall Street’s biggest investment banks is behind Chewy, bears decided to back down. Over the past month, Chewy’s short interest contracted by 11.4%, all the while Vanguard boosted its position in the stock by 13.5% in the past quarter, bringing the asset manager’s total investment to $226.9 million. The RH Discount RH Today RH RH $262.01 +17.01 (+6.94%) 52-Week Range $207.26 ▼ $406.38 P/E Ratio 47.04 Price Target $332.15 Add to Watchlist Warren Buffett decided to bet on a U.S. residential construction boom , leading him to buy names like. Because new housing inventory needs to be furnished, stocks likemore than doubled in the past 12 months However, shares of RH were left behind, now trading at only 60% of their 52-week high. Knowing that the real estate bottom is approaching and furniture demand could pop, analysts at Barclays NYSE: BCS and others saw fit to boost RH’s ratings. A $340 price target from Barclays would call for a 39% upside from today’s prices. Those at Wells Fargo & Co. NYSE: WFC see an even richer valuation, shooting for up to $360 a share, or a 47% upside, from today. Compared to Williams-Sonoma’s consensus $248 price target, representing a 12.2% downside, RH stock looks like a much better potential deal in the furniture space. While not entirely a staples play, investors can consider RH’s products a necessity in the current cycle, which should last long enough for the Fed to decide whether to cut rates this year. Before you consider Wells Fargo & Company, 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 Wells Fargo & Company wasn't on the list. While Wells Fargo & Company currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Zillow’s Earnings Dip: An Opportunity for Visionaries 2024-05-02 12:15:00+00:00 - Key Points After a 12% decline following first quarter 2024 earnings results, Zillow stock could now be a dip-buying opportunity for those with enough vision. Beating expectations came thanks to management's pivot to rentals, helping the company navigate tight real estate markets. NAR commission changes could be cleansing to keep the customer experience top-notch at Zillow. 5 stocks we like better than Jefferies Financial Group After reporting its first quarter 2024 earnings results, arguably the most important as they set the tone for the rest of the year, shares of Zillow Group Inc. NASDAQ: Z are trading lower by as much as 12% in the after-market hours following the announcement. While markets have enough evidence to dump the stock, they could ignore the big picture. The reason behind the sell-off comes mainly from management’s negative—though responsible—outlook for the next quarter and potentially the rest of the year. Driven by currently deteriorating real estate sector dynamics, management chose to keep investors in the loop rather than sell empty promises. Get JEF alerts: Sign Up As the Vanguard Real Estate ETF NYSEARCA: VNQ struggles to catch up to the broader S&P 500 after underperforming by as much as 25% over the past 12 months, a potential bottoming could be coming soon to help Zillow’s main businesses. Even if the bottom isn’t here yet, management thought of other ways to still beat expectations. Why the Negative Outlook? Has the Federal Reserve (the Fed) made up its mind? The path of interest rates for 2024 is still undefined. As mortgages now hover near 7.6%, and home prices (though recently declining) still stand 32% above their pre-pandemic levels, real estate agents now have a lot of time in their hands. According to the Intercontinental Exchange Inc. NYSE: ICE, most mortgages today carry an average interest rate of 3.25%. Because of this, most homeowners aren’t looking to get rid of their appreciated homes at dirt-cheap rates, and would-be buyers aren’t that keen to finance a new home at cyclical highs (both in price and financing rates). Because of this current environment, Zillow’s shareholder letter suggests a disappointing next quarter. More than that, recent National Association of Realtors (NAR) changes to agent commissions have made it harder for Zillow to see volumes on its platform, or so markets think. Top Quality, Top Earnings Management points to two drivers that can likely beat around the bearish bush within that same letter. First, a decline in transaction volume due to lower potential commissions is only a cleanse. According to management, 20% of real estate agents handle 80% of residential transactions. Zillow works with “four in five” out of these top-tier agents. What this means is that even if some of the nonperforming agents do fall off the platform, it only gives Zillow a stronger path to better customer experience and service through top-notch agents. Because of this talent retention, analysts at J.P. Morgan Chase & Co. NYSE: JPM still see a price target of $65 a share for Zillow. The stock would need to rally by 55% from today’s prices to prove these valuations right. Those at Jefferies Financial Group Inc. NYSE: JEF see an even richer valuation of $75 a share, reflecting a 79% upside from today. It should be no surprise to see these analysts' projections for 43.1% earnings per share (EPS) growth this year, above the real estate operations industry's 22.7% expected growth. Investors should also remember that, despite the lower guidance, Zillow still beat analyst expectations on revenue and earnings before interest, tax, depreciation, and amortization (EBITDA). Never Mind the Dip Realizing that sitting around to wait for a revival in residential transactions could prove futile, Zillow decided to move into the next best thing: the rental market. If people don’t buy expensive homes and mortgages, they will be forced to rent. According to management’s presentation on rentals, Zillow is tapping into a total addressable market worth $25 billion. Zillow’s share is projected at 1% ($250 million in additional revenue). Investors may be thinking, what will Zillow do as the new guy on the block for rentals compared to other platforms like Apartments.com? Beat them, that’s what. Rentals search traffic goes to Zillow, as it surpassed Apartments.com in 2022 and currently stands at nearly 30 million average monthly visitors, versus Apartments.com’s 22 million roughly. To quantify this positioning further, investors can check out Zillow’s press release, which shows a 31% jump in annual rentals revenue, reaching $97 million. Residential transactions revenue rose only 9%, meaning that Zillow’s new dual business could help the stock cushion a slump in real estate. To top it all off, the stock (after its earnings selloff) now trades at 68% of its 52-week high, underperforming the real estate ETF by as much as 32% in the past quarter. Before you consider Jefferies Financial Group, 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 Jefferies Financial Group wasn't on the list. While Jefferies Financial Group currently has a "Buy" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
How to Use Put Credit Spreads to Catch Falling Knives More Safely 2024-05-02 11:41:00+00:00 - When you believe a stock will rise, you can leverage a trade with stock options. Notably, taking call options is the obvious choice. After all, call options rise when the underlying stock price rises. However, if the stock doesn’t rise but instead falls, the call options can lose value fast with a risk of 100% loss. Additionally, every day you hold the call options, you will value from Theta (time decay). In a prior article, we reviewed how to use put debit spreads to profit from falling stocks. In this article, we'll review the opposite play of using put credit spreads to profit from rising stocks. It's only fitting that we cover strategies for shorts and longs on both sides of the coin. Get Intel alerts: Sign Up What is a Put Credit Spread? A put credit spread is also called a bull put credit spread, bull put spread or a short put spread. While long puts are associated with falling stocks, short puts are the opposite. Since this is a credit spread, it will provide your maximum gain up front with a credit to your account. It can only go down from there. A put credit spread is comprised of a higher strike short put and a lower strike long put with the same expirations. Wider spreads between the strike prices equate to larger maximum profits. For example, an ABC $55/$50 put credit spread is executed in 2 trades: sell short 1 ABC $55 put option and buy long 1 ABC $50 put option. Example of a Put Credit Spread with INTC Time for an example using computer and technology sector giant Intel Co. NASDAQ: INTC. INTC shares have been punished by another weak earnings report and lowered guidance. Shares crumbled towards that $30 support level. INTC has been a falling knife. Taking call options for a bounce may be too risky, especially on a falling knife, no matter how oversold it appears. To minimize the risk, we suggest executing a put credit spread strategy. This will limit our maximum loss potential. Executing the Trade INTC is trading at $30.27. We chose the May 24, 2024, expiration date which is 23 days away. We can select the INTC $31/$30 put credit spread for 56 cents. Remember, the wider the spread between the strike prices, the more maximum profit potential. Of course, the probabilities also drop proportionately. Your online broker will likely have the ability to select a put credit spread trade, which will automatically perform both legs (short $31 put and long $30 put) simultaneously. If not, then you’ll have to execute them manually. The 56-cent price is the difference between the short sell of $31 put for $1.45 and the long $30 put for 89 cents. The $1.45 would be credited to your account, and then the 89 cents would be debited back out, leaving you with a 56-cent or $56 maximum profit credit in your account to start. The Potential Outcome Upon expiration, there are 3 potential outcomes. The breakeven price on the trade is $30.44. This is derived from the $1.00 spread between the strike prices minus the $56 credit. The maximum loss is $44 if INTC closes at or below the $30 strike price of the long put. The maximum gain is $48 if INTC closes at or below the $31 short put strike price. If the number sounds familiar, it’s because that’s the credit amount that we received went we put on the trade. While there are 24 days until expiration, we are free to close out the trade anytime. Remember, Theta is our friend. The longer we hold the position, the more we gain daily from time decay working in our favor. The Pros and Cons of Put Credit Spreads Here are the potential benefits and pitfalls of trading put credit spreads. The pros are: Maximum loss is capped. Like any spread trade, the max loss is capped by taking the opposite side of the trade (IE, long INTC $30 put) in the event the trade moves against you. It's especially important when you're selling short options. Like any spread trade, the max loss is capped by taking the opposite side of the trade (IE, long INTC $30 put) in the event the trade moves against you. It's especially important when you're selling short options. Enables you to take riskier trades for a measured gain or loss. Catching a falling knife can be a painful and costly endeavor. By using a put credit spread, we have limited our losses in case we're dead wrong on the direction, and INTC continues to sink lower. Catching a falling knife can be a painful and costly endeavor. By using a put credit spread, we have limited our losses in case we're dead wrong on the direction, and INTC continues to sink lower. Cheaper than taking a long call option. If we were to take a $31 call option expiring on May 24, 2024, it would cost us a debit of 71 cents or $71. If we were to take a $31 call option expiring on May 24, 2024, it would cost us a debit of 71 cents or $71. Get paid a credit upfront. A credit spread enables you to receive the maximum profit up front in the form of a credit. It can only go downhill from there, but it's nice to be up in the account. The cons are: The maximum profit and loss are capped, as is the maximum gain. You'll see this when you execute the trade since it gets credited to your account. You can't make any more money unless you remove the long put option leg. However, this takes away your hedge. You'll see this when you execute the trade since it gets credited to your account. You can't make any more money unless you remove the long put option leg. However, this takes away your hedge. The maximum loss is still 100% of the investment. If INTC falls under $30, then your maximum loss is triggered at 44 cents or $44. While it's still a 100% loss, it's much smaller than a directional long $31 call trade. Free to Be a Knife Catcher. While it’s often shunned to catch falling knives, reversals are most profitable when you can catch them near the lows. You can minimize your exposure by using a bull put credit spread instead of going all in on long calls. If you need more time for the trade to play out, then you can also roll forward the trade to buy more time.
Starbucks: Indicators Turns Bearish, New Lows in Sight 2024-05-02 11:40:00+00:00 - Key Points Starbucks struggled in Q1 and underperformed consensus, lowering guidance for the year. Analysts are lowering their price targets, but this market still has a double-digit upside potential. Starbucks trades below the analysts' lowest target, suggesting a deep value opportunity for investors. 5 stocks we like better than Starbucks Starbucks NASDAQ: SBUX is one of many consumer-forward businesses that indicate weakness in the consumer. McDonald’s NYSE: MCD and Kraft Heinz NASDAQ: KHC revealed tepid results in fast food and consumer staple products, suggesting the squeeze is real and consumer health flagging. The difference is that Starbucks’ results were so far below expectations that they altered the full-year outlook, which is likely not an isolated incident. Starbucks may be the only one to show significant contraction this quarter, but who will be added to the list next, after another ninety days of “higher for longer” policy and 4% consumer inflation? The FOMC may be on track to cut rates, but rate cuts are unlikely before September. Consumers will continue to feel the pinch and cut back on their spending. Lattes got cut from budgets in Q1, a trend likely to continue; what business will be next? Get Starbucks alerts: Sign Up Starbucks Builds Leverage, Demand Slows Starbucks Today SBUX Starbucks $74.93 +0.49 (+0.66%) 52-Week Range $72.67 ▼ $109.72 Dividend Yield 3.04% P/E Ratio 20.64 Price Target $100.39 Add to Watchlist Starbucks struggled in Q1 , a recurring theme across segments and industries. The company wasn’t expected to post robust results, but the $8.56 billion in revenue is down 1.8% compared to last year and 650 basis points shy of the consensus. Globally, comps are down 4% and offset by a 3% increase in store count, 364 of which were added in Q1. Starbucks comps are down on a 6% decline in traffic, a worrisome detail, offset by a 2% increase in ticket average. The ticket average is up on higher prices. US comps, the largest market, are down 3%, with international down 6%. China, the 2nd largest market, is down 11% and is 18% of the net. The margin news is also unfavorable to shareholders today. The company logged triple-digit basis point declines in the GAAP and adjusted operating margin to leave adjusted and GAAP earnings at $0.68. That is shy of the consensus by $0.12 and down 8%, more than quadrupling the top-line contraction. The weakness in Q1 was compounded by the guidance, adding to the stock’s steep decline. The company cut its outlook for revenue, comp store growth, store count growth, and margin. The company sees revenue growing in the low single-digits compared to high-single to low-double, with US comps running near 1% and margin flats instead of improving. Bottom line, the bottom line outlook for this year is garbage and will be revised sharply lower. If this becomes a broader trend among discretionary/consumer names, it will undercut the outlook for S&P 500 earnings and broad market support. Analysts Cut Targets For Starbucks: A Deep Value Opportunity? Analysts rate Starbucks at a consensus Hold and see it gaining a 40% upside on average. However, the post-release activity includes at least one downgrade and numerous price target reductions; Marketbeat tracks no price target increases. The new targets are below the consensus, suggesting an upside but less than 40%. However, the stock is trading below the low end of the range, which is unchanged, indicating a deep-value opportunity. The question is how much deeper the stock may fall and how long to wait until it rebounds. The technical action is strongly bearish, creating a gap and a large red candle. The market will likely fall from the day’s lows, but support is near. Support targets near $70, and the 2022 lows should be strong enough to keep the market from falling further. If not, this stock could fall to the pandemic lows near $56. Assuming the market rebounds from critical support or higher, the first target for significant resistance is near $80 to $82, with numerous potential targets for resistance up to the $110 region. Before you consider Starbucks, 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 Starbucks wasn't on the list. While Starbucks currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Kraft Heinz: Serving Up A Tasty Dip for Investors to Snack On 2024-05-02 11:26:00+00:00 - Key Points Kraft Heinz plunges on tepid results; results weren't better than expected, but they aren't bad. The deep-value, high-yield opportunity is still available for income investors. Analysts continue to rate the stock at Hold and see it advancing at least 10%. 5 stocks we like better than Kraft Heinz As tepid as Kraft Heinz's NASDAQ: KHC Q1 results and guidance for Q2 are, they aren’t bad. The results and guidance align with the company’s forecast for Q1 and the analysts' forecasts for Q1 and Q2, which are for steady business, a return to growth, and a widening margin. The company didn’t post top-line growth in Q1 and missed the consensus mark. However, the miss is slim and compounded by margin strength that reflects the long-term outlook. Kraft Heinz is widening its margin, growing earnings despite revenue weakness, and setting up a leveraged rebound when volume growth resumes. That is expected soon. Get Kraft Heinz alerts: Sign Up Kraft Heinz Slow and Steady Progress Builds Leverage Kraft Heinz Today KHC Kraft Heinz $36.72 +0.44 (+1.21%) 52-Week Range $30.68 ▼ $41.47 Dividend Yield 4.36% P/E Ratio 15.90 Price Target $40.57 Add to Watchlist Kraft Heinz struggled in Q1 with inflation-driven price increases impacting volume, leading to a revenue contraction. The company posted $6.41 billion in Q1, a decline of 1.2% that missed the consensus mark by a slim 30 basis points. The top line was impacted by a 0.6% negative FX headwind and a 0.1% impact from divestiture, so the miss should be easy to overlook. Organic sales declined by a smaller 0.5% on a 2.7% increase in pricing, offset by a 3.2% decline in volume. North America and internationally were weak, with 1.2% and 1.3% contractions offset by a 5.5% gain in Emerging Markets. Emerging markets are one of the company’s growth pillars and helping to sustain the positive outlook. The margin news is reasonable, if not better than expected. The gross margin improved by 240 bps and the adjusted gross margin by 170 bps, leading to increased operating and adjusted operating income. Operating income includes the impact of commodity hedging; adjusting for that, operating income is up 1.7% compared to the top-line decline, attesting to the effectiveness of management's efforts at positioning the business. Guidance is just as solid. The company reaffirmed its outlook for the year, including a slight improvement in the margin outlook, 25 basis points at both ends of the range. Organic sales are expected to be flat to up 2%, with a 2% to 4% increase in earnings. Price will likely impact revenue and earnings throughout the year, and volume is forecast to resume growth in the second half. Kraft Heinz Results Unlikely to Alter the Analyst's Expectations Kraft Heinz analysts will likely make small revisions to their estimates and price targets, if any. The results and guidance align with the consensus forecasts, which suggests that the range of targets may narrow, increasing the probability that consensus is on target. Until the revisions come in, the consensus rating is to hold with a price target of $40.50. The rating and price target are steady, suggesting a 12% upside is possible. The next significant catalyst for KHC will be the next earnings report, which is due in August. Kraft Heinz Dividend Payments Dividend Yield 4.38% Annual Dividend $1.60 Dividend Payout Ratio 69.26% Next Dividend Payment Jun. 28 See Full Details Capital return is one of the reasons why analysts hold this consumer staple stock. The stock pays nearly 4.5% dividend yield with the post-release price drop, and the reliable payout may be increased within the next twelve to twenty-four months. The company is improving its earnings, lowering its payout ratio, and building leverage for a rebound that should begin this fiscal year. Corporate leverage is low, about 0.4X equity, leaving the company in a position to invest while paying dividends and repurchasing shares. Share repurchases reduced the count by nearly 1% average in Q1 and should continue opportunistically as the year progresses. The price action in KHC is down nearly 7% following the news, providing an opportunistic time to buy. The move may continue lower, but it cannot go much lower. Support targets near $35 align with the low end of the analysts' target range and are a likely floor for price action. The stock is also trading below 12X this year’s and next year’s earnings forecasts, which include growth, opening up a deep-value opportunity in the turn-around story. Before you consider Kraft Heinz, 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 Kraft Heinz wasn't on the list. While Kraft Heinz currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Yum! Brands: Can Digital Strength Offset Same-Store Declines? 2024-05-02 11:14:00+00:00 - Key Points Yum! Brands' Q1 2024 earnings fell below analyst expectations, with a decline in same-store sales impacting overall performance. The company's digital sales mix exceeded 50%, highlighting its successful transition to online and mobile ordering platforms. Despite short-term headwinds, Yum! Brands remains committed to its long-term growth strategy through global expansion, menu innovation, and digital investments. 5 stocks we like better than Yum! Brands Yum! Brands, Inc. NYSE: YUM is a global powerhouse in the quick-service restaurant industry. Yum! Brands’ earnings report for the first quarter of 2024 was recently released, disappointing analysts. With a portfolio encompassing renowned brands such as KFC, Taco Bell, Pizza Hut, and Habit Burger Grill, Yum! Brands' financial performance is a significant indicator of the health and trends within the fast-food sector. With a widely acknowledged earnings miss, Yum! Brands’ analyst community and investors are left wondering: Can Yum! Brands regain momentum and deliver value for investors despite the recent earnings miss? Get Yum! Brands alerts: Sign Up Dissecting Yum! Brands' Quarter Yum! Brands Today YUM Yum! Brands $135.07 -0.26 (-0.19%) 52-Week Range $115.53 ▼ $143.20 Dividend Yield 1.98% P/E Ratio 24.16 Price Target $144.44 Add to Watchlist Yum! Brands reported a total revenue of $1.6 billion for the first quarter of 2024, falling short of analyst expectations of $1.71 billion. This represents a 2.9% decline compared to the same period in the previous year. Earnings per share (EPS) came in at $1.15, also missing analyst estimates of $1.21. Despite the revenue and EPS figures falling below expectations, analyzing the contributing factors and considering the broader context of the company's performance is essential. One significant factor impacting Yum! Brands' Q1 results were the decline in same-store sales, which fell by 3% compared to the previous year. This decline can be attributed to several factors, including a challenging macroeconomic environment characterized by inflationary pressures and changing consumer spending patterns. The company acknowledged the problematic operating conditions but emphasized the resilience of its business model and the positive momentum observed towards the end of the quarter. Despite the challenges, Yum! Brands demonstrated strength in unit growth, opening over 800 new restaurants during the quarter, representing a 6% increase in unit count. This expansion strategy underscores the company's commitment to long-term growth and confidence in its brands' global demand. A Divisional Performance Review To gain a deeper understanding of Yum! Brands' recent financial performance, it is essential to review each division's contributions and challenges within the company’s diverse portfolio. This segmented approach reveals valuable insights into the company's operational structure and strategic responses to volatile market dynamics. KFC Demonstrating its continued strength as a global leader in the chicken category, KFC achieved a commendable 4% system sales growth, excluding the impact of foreign currency translation. This growth was primarily fueled by an 8% increase in unit count, reflecting KFC's strategic expansion into new markets and territories. While same-store sales experienced a slight decline of 2%, this figure is counterbalanced by the robust growth in unit count, indicating a net positive trajectory for the division. Of particular note is KFC's performance within the Chinese market, which remains a significant driver of the division's overall success. Taco Bell Mirroring KFC's success, the Taco Bell division also achieved a 4% system sales growth, excluding foreign currency translation. This growth can be attributed to a combination of a 3% increase in unit count and a 1% rise in same-store sales. The positive same-store sales growth indicates Taco Bell's ability to maintain customer loyalty and attract new patrons amidst a competitive fast-food landscape. Furthermore, Taco Bell U.S. exhibited a solid performance, with a 4% system sales growth and a 2% same-store sales growth, solidifying its position as a leader within the Mexican-inspired quick-service restaurant category. Pizza Hut In contrast to the positive growth observed in KFC and Taco Bell, the Pizza Hut division faced headwinds during the first quarter. System sales declined by 4%, and same-store sales experienced a more pronounced decline of 7%. This performance reflects the intense competition within the pizza segment and evolving consumer preferences. Despite these challenges, Pizza Hut continued its expansion efforts, achieving a 5% growth in unit count, demonstrating the company's long-term commitment to the brand and its potential for future recovery. Habit Burger Grill Habit Burger Grill, Yum! Brands' push into the fast-casual burger segment experienced a 2% decline in system sales and an 8% decline in same-store sales during the quarter. This performance underscores the competitive nature of the burger market, where Habit Burger Grill contends with established players and emerging concepts. The company continues refining its Habit Burger Grill strategy, focusing on menu innovation, operational efficiency, and targeted marketing efforts to enhance brand awareness and customer engagement. The performance across Yum! Brands' divisions showcase the company's diversified portfolio and ability to adapt to varying market conditions. While KFC and Taco Bell continue to exhibit robust growth, Pizza Hut faces challenges that require strategic adjustments. As a relatively new addition to the portfolio, Habit Burger Grill is undergoing a period of refinement to optimize its performance within the competitive burger segment. Embracing the Digital Frontier A notable highlight of Yum! Brands' Q1 performance achieved a record digital sales mix exceeding 50%. This milestone underscores the company's successful digital transformation and ability to adapt to evolving consumer preferences for online ordering, delivery, and mobile app engagement. The growth in digital sales contributes to revenue growth, enhances operational efficiency, and provides valuable customer data for personalized marketing initiatives. The Road Map Ahead Yum! Brands operates within a dynamic and competitive fast-food industry influenced by macroeconomic factors, evolving consumer preferences, and technological advancements. The company faces challenges related to inflationary pressures, labor costs, and changing consumer tastes. However, Yum! Brands' global scale, iconic brands, and strategic investments in digital and delivery infrastructure position the company to navigate these challenges and capitalize on growth opportunities. Looking ahead, Yum! Brands remain focused on expanding its global footprint, with a target of surpassing 60,000 restaurants in the near future. The company also emphasizes menu innovation and value offerings to cater to evolving consumer preferences. Additionally, Yum! Brands continues to invest in digital technologies and delivery partnerships to enhance customer convenience and drive digital sales growth. Yum! Brands' Q1 2024 earnings report presented mixed results, with challenges related to same-store sales performance balanced by strengths in unit growth and digital sales. The company acknowledges the problematic operating environment but remains confident in its resilient business model and long-term growth strategy. Investors should closely monitor Yum! Brands' progress in navigating market headwinds, driving digital innovation, and expanding its global reach. Before you consider Yum! Brands, 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 Yum! Brands wasn't on the list. While Yum! Brands currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys. View The Five Stocks Here
Pfizer stock gains 7% after earnings beat, company calls dividend 'secure' 2024-05-02 06:06:00+00:00 - Pfizer (PFE) beat on earnings in the first quarter of 2024, giving its stock a much-needed 7% boost Wednesday. The company reported $14.9 billion in revenue, down 19% compared to last year. That beat Wall Street estimates of $13.9 billion by 6.9%. Without its COVID products, the company is up 11% with $12.5 billion in revenues. Despite the win, investors have cooled their enthusiasm for Pfizer in recent months. In addition to waning COVID product revenues, the company lacks a near-term potential blockbuster — making it a safe but unexciting bet. Pfizer's stock is trading near its 52-week low of $25 and is down 30% in the past year, much lower than its pandemic high of $58 per share at the end of 2021. CEO Albert Bourla has made several moves to bolster the pipeline, including the $43 billion Seagen acquisition, and continues to announce new product launches — all of which will take time to bear fruit. It's why investors, despite the boost to the stock, are wary. "We continue to see PFE shares as range bound in the near-term ... [and] we do not believe that COVID upside alone ... is enough to drive shares higher in the near-term. Rather, we believe stronger new launch performance and/or further progress on the pipeline will be necessary to change the current narrative on the stock," wrote JPMorgan analyst Chris Schott in a note to clients Wednesday. Pfizer also faces the expiration of patents on some of its biggest drugs, including breast cancer drug Ibrance in 2027 and its Prevnar 13 vaccine in 2026, and has one drug, Eliquis, facing pressure from Medicare drug pricing negotiations. Lee Brown, global sector lead for healthcare at research firm Third Bridge, said in a statement that the Medicare negotiations, a part of the Inflation Reduction Act, are a concern. "Our focus remains on Eliquis with sales increasing 9% (year over year) to just over $2.0 billion and topping consensus by 4.5%. Eliquis represents nearly 14% of Pfizer’s Q1 revenue, and we recognize the uncertainty tied to the Inflation Reduction Act’s Medicare Part D price negotiations," Brown said. "The maximum fair price will be published September 1 and could materially impact Eliquis’ outlook. We also note that Eliquis faces generic competition in several international markets, as well as faces loss of exclusivity in the U.S in April 2028," he said. But beyond the product pipeline, the company's value to shareholders has remained a question in the past year. A pharmacist holds a bottle of the drug Eliquis, made by Pfizer and Bristol Myers Squibb at a pharmacy in Provo, Utah, Jan. 9, 2020. (George Frey/REUTERS/File Photo) (REUTERS / Reuters) 'The dividend is a sacred cow for us' In addition to the pipeline concerns, investors had been waiting for their share of the pandemic windfall — either through increased dividends or the company's share repurchases. But that hasn't panned out. Story continues The company said it will maintain its dividend and has no plans to cut it, which had been a concern for some investors prior to the call with profits waning post-pandemic. Bank of America managing director and senior healthcare analyst Geoff Meacham told Yahoo Finance that most businesses would cut their dividend if they were in the same position as Pfizer with muted growth prospects. "It is a diversified, big business, so it's not going to be the end of the world. But the growth is just going to look kind of nasty," he said. Pfizer has paid a dividend for 340 consecutive quarters and is focused on enhancing shareholder value, executives said on its earnings call Wednesday. CFO David Denton told investors the company is prioritizing maintaining and growing the dividend and has returned $2.4 billion to shareholders in the first quarter. In addition, Pfizer plans to de-lever from its acquisitions and other debt and reinvest $2.5 billion in internal R&D. "Our No. 1 priority from a capital allocation perspective is both supporting and growing our dividend over time — and that is not at risk," Denton said. While the yield from Pfizer is not considered low, at more than 6% annually, its quarterly dividend is just $0.42. And investors have worried the company will have to cut the dividend as its revenues right-size in coming months both from the pandemic impact as well as patent cliffs. But CEO Bourla emphasized that is not the case. "The dividend is a sacred cow for us. The dividend — it is secure, and we will continue our policy on [the] dividend as we have promised repeatedly," he said on the earnings call. Bourla has also made bold personal moves to back the company's outlook, including putting all of his pension into Pfizer's stock earlier this year. The company has no plans to repurchase shares in the year, adding to the reasons investors are no longer excited. Anjalee Khemlani is the senior health reporter at Yahoo Finance, covering all things pharma, insurance, care services, digital health, PBMs, and health policy and politics. Follow Anjalee on all social media platforms @AnjKhem. Click here for in-depth analysis of the latest health industry news and events impacting stock prices Read the latest financial and business news from Yahoo Finance
Why Pfizer Stock Blasted More Than 6% Higher Today 2024-05-02 05:55:00+00:00 - Pfizer (NYSE: PFE) stock got a very effective shot in the arm on Wednesday. This was supplied by its latest earnings release, which saw the storied pharmaceutical company notch double beats on analyst estimates and provide encouraging guidance. The company's share price ended the day more than 6% higher, in contrast to the 0.3% slump of the S&P 500 index. The Covid effect not as damaging as feared For its first quarter, Pfizer reported before market open, the pharmaceutical giant took in just under $14.9 billion in revenue. While this was 20% below its first-quarter 2023 revenue, it wasn't unexpected -- the company continues to see a notable fall-off in sales of its Covid products (namely the Comirnaty vaccine and Paxlovid, a drug). Removing such goods from the equation, Pfizer would have enjoyed 11% year-over-year revenue growth. That dynamic also affected profitability. Non-GAAP (adjusted) net income saw a steeper fall, tumbling by 34% to $4.7 billion ($0.82 per share). At first glance, those drops were seriously bad news. However, analysts were expecting far worse. On average, they were estimating that Pfizer's revenue would total barely over $14 billion, and adjusted net income would be a mere $0.33 per share. In the earnings release, the company quoted its CEO Albert Bourla as attributing the better-than-expected performance to "increased revenue from several of our recent commercial launches and acquired products, as well as robust year-over-year growth for several key in-line brands, namely the Vyndaqel family, Eliquis, and the Prevnar family." Pfizer also did well with oncology drugs such as Ibrance and Xtandi. Full-year profitability guidance raised Pfizer's double beat on trailing results was compounded by a raise in profitability guidance. The company now believes its full-year adjusted net income will land at $2.15 to $2.35 per share, giving it a real shot at exceeding the collective $2.21 estimate from analysts. It left its revenue forecast unchanged; this stands at $58.5 billion to $61.5 billion, with the average prognosticator estimate at $60 billion. Should you invest $1,000 in Pfizer right now? Before you buy stock in Pfizer, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Pfizer wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $529,390!* Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. Story continues See the 10 stocks » *Stock Advisor returns as of April 30, 2024 Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Pfizer. The Motley Fool has a disclosure policy. Why Pfizer Stock Blasted More Than 6% Higher Today was originally published by The Motley Fool