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Top Corporate News of the Week: BlackBerry, Boeing, Chevron, Equifax, Facebook, GE, Micron, Nike, Roku, T-Mobile and More
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It’s the weekend, but 24/7 Wall St. wouldn’t want its readers thinking we were just taking some down time. The week of September 30 has come to an end, and there were several major corporate developments this week that investors simply should not ignore or overlook.
On top of more potentially passable tax reform proposals helping the market, the news flow was less dominated by headlines about North Korea and about hurricanes and storms this past week. Investors and economists alike also got to see solid durable goods orders data, and second-quarter GDP growth was revised up to 3.1% from the prior 3.0% forecast.
24/7 Wall St. reviews 10 of the top corporate news stories that investors should not overlook. This covers the major companies with the largest news for the most part, so most of the smallest companies with huge moves were not included due to size and volume issues for most investors.
As of Friday, the markets had so far continued on with gains in 2017 for the quarter. Year-to-date gains have been massive: up 13% for the Dow Jones Industrial Average, 12% for the S&P 500 and almost 22% for the Nasdaq-100. Metals have risen in 2017, with gold up better than 11% and silver up more than 5% year to date. Treasury yields ticked up from the lowest levels of the month, and the 10-year was back above 2.30% and the 30-year was approaching 2.90%. Oil even hit $52.50 per barrel before coming off of its highs.
Here are 10 of the major corporate news events that took place in the final week of September 2017.
BlackBerry Ltd. (NASDAQ: BBRY) has seemed to do the impossible by impressing Wall Street. Its earnings report was a mere shadow of its prior glory days, but BlackBerry was up over 6% at $11.18 on Friday’s close. That is up a whopping 19% from the $9.23 share price that was there earlier in the week before earnings.
Boeing Co. (NYSE: BA) has continued to be impressive in 2017. It’s not just that the aerospace and defense giant is the best Dow stock by far (up over 60%). Boeing’s backlog of planes is now so large that the company may be set for years and years. Boeing shares were last seen at $254.21, down marginally for the week.
Chevron Corp. (NYSE: CVX) has confirmed that CEO John Watson will be retiring from the company. This confirms prior rumors that he would be out, but the effective date of February 1, 2018, hardly makes this seem like a rushed and worried exit. Chevron shares were down 0.1% at $117.50 on Friday, down from $117.29 a week earlier.
Equifax Inc. (NYSE: EFX) said its CEO was retiring at the age of 57, but this was effectively a termination or an act of “falling on the sword.” Equifax shares closed most recently at $105.99, versus a prior Friday close of $105.04. Our take: this may imply more problems are lurking, on top of just how long it took Equifax to fess up to the breach.
24/7 Wall St.Facebook Inc. (NASDAQ: FB) shares were up more than 1% at $170.87 on Friday’s close, and while that was about flat for the week, it was up from a low of $161.50 at the start of the week. It turns out that Instagram is burying Snapchat alive and that Facebook has a two-year NFL game highlight pact, but the great news here is that Facebook officially has given up on plans to split and reorganize its stock to keep Zuckerberg in control, even if he sold off more and more of the financial interest. The stock might have been down initially, but that is good news for shareholders who may want a say down the road when Zuckerberg is older and may be less interested in social media.
General Electric Co. (NYSE: GE) remains Dow’s top loser so far in 2017 with over a 20% drop, but GE shares were also fighting for the honor of having the worst performance of the week with another more than 2% drop. Selling an industrial solutions group to ABB for $2.6 billion just doesn’t move the needle for a $210 billion conglomerate.
Micron Technology Inc. (NASDAQ: MU) had an incredible week as earnings beat estimates and as the company telegraphed strong continued chip demand trends ahead. Micron ended the week at $39.33, after challenging $38.50 for the first time this year on Wednesday. In just the past three trading sessions the gain was 15%, and many analysts on Wall Street lifted their price targets for Micron into 2018. One more take is that Micron’s great news may boost six more top technology players. Micron is now up over 100% from its 52-week low.
Nike Inc. (NYSE: NKE) may have beat earnings estimates, but it was deemed a low-quality earnings beat due to cost cutting and to analysts having set the bar so low. All in all, Nike and its rivals are just hurting each other competitively right now, and there may be no end in sight. Nike shares ended Friday down more than 1% at $51.85, lower than the $53.24 a week earlier but still barely positive so far in 2017.
Roku Inc. (NASDAQ: ROKU) may not be one of the biggest and most important companies compared to the large index stocks and blue chips, but it is now a top successful IPO. The streaming media player debuted with a post-IPO gain of more than 100% from its $14 pricing. Some 38 million shares traded on its debut. Our own Doug McIntyre opined about some of the risks on Roku in a Cheddar interview, but investors are all about opportunity right now — until something goes wrong.
T-Mobile US Inc. (NASDAQ: TMUS) was down marginally from the prior week, but Sprint Corp. (NYSE: S) merger talks were more or less confirmed as being “elevated but in an at the money merger” — meaning a low premium for the debt-laden Sprint. One analyst even suggested that this merger might make T-Mobile shares worth a whopping 40% more down the road.
24/7 Wall St. had many other top corporate news events for investors to consider throughout the week worth attention.
Amazon.com Inc. (NASDAQ: AMZN) finally may have just acquired Whole Foods, and now it has a data breach at Whole Foods to contend with.
Lockheed Martin Corp. (NYSE: LMT) delivered a big dividend hike and an increased stock buyback to its shareholders.
Rite Aid Corp. (NYSE: RAD) may be headed toward the gallows on poor earnings as its stock is now down over 75% from recent highs. The stock even broke under $2 on Friday.
Friday’s top analyst upgrades and downgrades included shares of GoPro, KB Home, Rite Aid, Visa, Wynn Resorts and over a dozen more top stocks.
Jefferies has opined about the value of the market, calling it value without the trap. The firm noted:
The S&P 500 sits near multi-year valuation highs, and though it’s the most expensive stocks that have driven much of that expansion, there are actually still plenty of “cheap” stocks. Of course, those “cheap” stocks could be more expensive than they appear if numbers are coming down, and that’s why we’ve identified 32 Buy-rated stocks which are cheaper than the S&P and which have seen flat or up forward earnings revisions for at least the last two quarters.
Nomura/Instinet also urged its clients to stick with value in regional banks. It downgraded U.S. Bancorp (NYSE: USB) to Neutral in the call based on negative revision risks. The firm listed its top picks as Wells Fargo & Co. (NYSE: WFC), Huntington Bancshares Inc. (NASDAQ: HBAN) and KeyCorp (NYSE: KEY). That report said:
We view the risk of significant negative revisions as relatively low across the regional banks, with little downside from rates and loan growth; benign credit conditions and a favorable outlook for capital return add to their appeal, but we don’t view valuations as particularly compelling. Higher rates, lower taxes, and infrastructure spending could drive upside, but Washington gridlock tempers our optimism.
With the new waves of short seller reports that came out this past week, these were the most heavily shorted NYSE stocks and the most heavily shorted Nasdaq stocks.
24/7 Wall St.These are the some of the main focal points to watch in the first week of October 2017:
- Monday, 10/2: ISM/PMI manufacturing reports
- Tuesday, 10/3: U.S. motor vehicle sales
- Wednesday, 10/4: Fed Chair Yellen at the Community Banking in the 21st Century Conference in St. Louis
- Friday, 10/6: BLS unemployment and payrolls report
That’s all for now. Stay tuned for the week ahead.
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