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Softbank’s investment in Uber is based on a 30% discount to its peak valuation. According to Reuters:
Japan’s SoftBank Group Corp is offering to purchase shares of Uber Technologies Inc at a valuation of $48 billion, a 30 percent discount to its most recent valuation of $68.5 billion, a person familiar with the matter said on Monday.
The investment, which was approved by the Uber board in October, would also trigger a string of governance changes at Uber that would limit some early shareholders’ voting power, expand the board from 11 to 17 directors and cut the influence of former Chief Executive Travis Kalanick.
Wells Fargo & Co. (NYSE: WFC) faces yet another scandal. According to The Wall Street Journal:
Employees say lofty rewards tied to revenue pushed foreign-exchange staff to ignore agreed-upon fees. Years of whispers were confirmed in a conference call.
A major challenger to Tesla Inc. (NASDAQ: TSLA) has hit trouble with its financials. According to Bloomberg:
The dwindling empire of China’s Jia Yueting, who once boasted he would leapfrog Tesla Inc., faces a new hurdle as his U.S. electric car startup struggles to raise a $500 million funding round, people familiar with the matter said.
A convertible note of more than $400 million, with a 12 percent interest charge, becomes payable immediately if Faraday & Future Inc. can’t raise the Series A round by December, the people said, asking to not be identified as the matter is private. The electric carmaker, which is also dealing with about $100 million of unpaid bills, hasn’t been able to line up funding after months of searching as it tries to pay off Chinese investors who financed the debt, the people said.
Meredith Corp. (NYSE: MDP) could start huge layoffs after its takes over Time Inc. (NYSE: TIME). According to the New York Post:
Get ready for a bloodbath under Time Inc.’s new owner — starting with the publishing giant’s CEO.
Rich Battista is expected to end his year-old stint as chief executive after the publisher of Time, People and Sports Illustrated completes its $2.8 billion sale to rival Meredith Corp. in the first quarter of 2018.
Battista will be just one casualty among many, insiders say, as Meredith — whose bread and butter is women- and family-focused titles like Better Homes & Gardens and Martha Stewart Living — is promising $400 million to $500 million in “cost synergies” over the first two years of the combination.
Cyber Monday sales hit $6.6 billion. According to 24/7 Wall St.:
Cyber Monday sales, critical to e-commerce revenue for the holiday season, surged 16.8% to $6.59 billion, according to industry research. The data also show that total online sales have topped $1 billion every day in November.
SpaceX, run by Elon Musk, raised money that pegged its valuation close to $22 billion. According to CNBC:
Elon Musk’s SpaceX has raised another $100 million as part of its latest funding round, according to new regulatory documents.
In August, the space exploration company sold $349.9 million worth of shares, a Securities and Exchange Commission (SEC) filing showed. That amount has now risen to $449.9 million, a new filing showed on Monday, adding an extra $100 million onto the current fundraising effort.
The latest injection of cash values SpaceX at $21.5 billion, according to Equidate, a platform that facilitates the trading of shares in private technology firms
Kroger Co. (NYSE: KR) reported its fiscal third-quarter financial results before the markets opened on Thursday. The company said that it had $0.44 in earnings per share (EPS) and $27.75 billion in revenue, compared with consensus estimates from Thomson Reuters of $0.40 in EPS and revenue of $27.46 billion. In the same period of last year, the retailer posted EPS of $0.41 and $26.56 billion in revenue.
During the quarter, total sales increased 4.5% year over year, but excluding fuel total sales increased 3.0% compared to last year.
Kroger also notched 1.1% in identical supermarket sales growth, without fuel, for the third quarter.In terms of guidance for the fiscal 2017 full year, management expects to see EPS in the range of $2.00 to $2.05, as well as identical supermarket sales growth exceeding 1.1%. The consensus estimates call for $1.97 in EPS and $121.8 billion in revenue for the year.On the books, Kroger’s cash and temporary investments totaled $352 million at the end of the quarter, down from $374 million in the same period from last year.
Rodney McMullen, board chair and chief executive, commented:
The holidays are always Kroger’s time to shine. In fact, we had our best ever Black Friday results for general merchandise, led by record sales at Fred Meyer. Everything we are doing revolves around our associates providing friendly service and fresh products to our customers.This quarter shows that by investing for the future, our business continues to improve and gain momentum. We remain confident in our ability to continue to grow identical supermarket store sales and market share for the balance of the year and in 2018.
Shares of Kroger closed Wednesday at $24.38, with a consensus analyst price target of $23.23 and a 52-week range of $19.69 to $36.44. Following the announcement, the stock was up about 10% at $26.80 in early trading indications Thursday
The Conference Board has released its latest view on consumer confidence, showing that it remains at a 17-year high. November’s index for confidence rose to 129.5 in November from 126.2 in October. Dow Jones and Reuters were both calling for an expected drop to 124.0.
Gains were seen in both the current view and in the future. The Present Situation Index increased from 152.0 in October to 153.9 in November. The Expectations Index rose from 109.0 in October to 113.3 in November.
While this report was released on November 28, the Conference Board and Nielsen showed that the cutoff date for the preliminary results was November 14.
Consumers’ assessment of current conditions improved moderately in November, and the optimism about the short-term outlook was also more favorable. Consumers’ assessment of the labor market also improved, and it was also shown that the outlook for the job market was more upbeat in November than in October. The subindex readings and data were shown as follows:
The percentage saying business conditions are “good” increased from 34.4% to 34.9%.
Those saying business conditions are “bad” declined from 13.5% to 12.7%.
Those stating jobs are “plentiful” increased from 36.7% to 37.1%.
Those claiming jobs are “hard to get” decreased slightly, from 17.1% to 16.9%.
The percentage of consumers expecting business conditions to improve over the next six months increased slightly, from 22.1% to 22.4%.
The percentage of consumers expecting business conditions to worsen decreased from 7.0% to 6.5%.
The proportion expecting more jobs in the months ahead increased from 18.7% to 22.6%.
Those anticipating fewer jobs declined from 11.6% to 11.0%.
Regarding their short-term income prospects, the percentage of consumers expecting an improvement decreased marginally, from 20.3% to 20.1%.
The proportion expecting a decrease in short-term income prospects was shown to be virtually unchanged at 7.6%.
Lynn Franco, Director of Economic Indicators at The Conference Board, said:
Consumer confidence increased for a fifth consecutive month and remains at a 17-year high. Consumers’ assessment of current conditions improved moderately, while their expectations regarding the short-term outlook improved more so, driven primarily by optimism of further improvements in the labor market. Consumers are entering the holiday season in very high spirits and foresee the economy expanding at a healthy pace into the early months of 2018.
Most eyes may be on Jerome Powell’s testimony to get confirmed as chair of the Federal Reserve. That being said, the Dow and S&P 500 hit fresh all-time highs on Tuesday. On last look, the Dow was up 76 points at 23,657 and the S&P 500 was up almost eight points to 2,609
TOP HOUSEING MARKETS
The huge growth of sales on the internet has been staggering and should continue this year. Last year between November 1 and December 31, online sales hit $91.7 billion, up 11% from $82.5 billion in 2015. The 2016 holiday season also broke a major the e-commerce record, as Cyber Monday became the largest online shopping day in U.S. history, generating $3.45 billion in online sales, up 12% from 2015. Black Friday wasn’t far behind, with sales jumping nearly 22% year over year to $3.34 billion. While this year’s numbers aren’t all in yet, they are expected to be gigantic.
Clearly the companies that dominate the internet are poised to do well, but there are some old-school brick-and-mortar stocks that also have a big internet presence and look poised to post gigantic sales as well. Jefferies has focused on what is expected to be another banner year during the holiday season, and the firm likes two top retail stocks.
We also screened our Wall Street research database for other internet and retail companies that will be the big winners.
This top retailer has traded sideways for almost all of 2017 but is Jefferies favorite specialty retailer for the holidays. Kohl’s Corp. (NYSE: KSS) operates department stores in the United States that offer private label, exclusive and national brand apparel, footwear, accessories, beauty and home products to children, men and women customers. The company also sells its products online at Kohls.com and through mobile devices.
While retail chains have suffered from internet pressure, Kohl’s has held its own as consumers see the company as a solid discount retailer. In addition, Amazon is growing its partnership with the department store chain. Last summer, the two companies announced that Kohl’s would begin selling Amazon devices, such as the Echo and Fire tablets, at 10 of its stores. Kohl’s also will be accepting Amazon.com returns at certain U.S. locations.
Jefferies is very bullish on the company’s prospects for the season and noted this:
45% of respondents from our survey intend to increase spending at Kohls this holiday season. The analyst thinks that the company is a share gainer as their initiatives to drive traffic appears to take hold and will benefit from peer store closings, new brand additions and omni-channel initiatives. Margins are on the upswing, driven by growth in regular priced sales, while cost savings and efforts to right size select boxes are also helping.
Investors receive a 4.88% dividend. The Jefferies price target for the stock is $48, and the Wall Street consensus target is $43.11. But the stock was trading at $45.15 early Monday.
The giant retailer posted huge quarterly results and also is Jefferies favorite stock for the holidays. Wal-Mart Stores Inc. (NYSE: WMT) is the world’s largest retailer, operating retail stores in various formats, including Sam’s Club, in the United States as well as a growing e-commerce business (including Jet.com). Internationally Walmart also operates locations in Argentina, Brazil, Canada, China, Japan, Mexico and the United Kingdom.
Each week, nearly 260 million customers and members visit the company’s 11,535 stores under 72 banners in 28 countries and e-commerce websites in 11 countries. With fiscal year 2016 revenue of $482.1 billion, Walmart employs approximately 2.2 million associates worldwide.
The Jefferies report had this to say:
The company’s big earnings-per share beat last week reflected strong +2.7% U.S. comparisons and the 1 & 2-yr comparison trends accelerated with the best performance in 8 years. Wal-Mart’s omni-channel momentum continued in the quarter with healthy gross merchandise volume and owned e commerce growth plus broad-based strength in stores.
The company announced earlier this year a massive $20 billion stock repurchase plan that was met with open arms by Wall Street. Many think it is in an effort to ward off potential activist investors. Most shareholders could care less.
Shareholders receive a 2.24% dividend. Jefferies has a $110 price target, while the consensus target is $99.94. The shares traded recently at $97.50.
This absolute leader in online retail and dominate player in cloud storage business remains the top internet pick at many firms on Wall Street. Amazon.com Inc. (NASDAQ: AMZN) serves consumers through retail websites that primarily include merchandise and content purchased for resale from vendors and those offered by third-party sellers.
Amazon Web Services (AWS) is also the undisputed leader in the cloud now, and many top analysts see the company expanding and moving up the enterprise information value chain and targeting a larger total addressable market. The company serves developers and enterprises through AWS that provides compute, storage, database, analytics, applications and deployment services that enable virtually various businesses.
The company absolutely blew out earnings, and the Merrill Lynch report said this:
Strong quarter with top and bottom line beat. International, retail, subscriptions (Prime) and AWS above expectations. Raising revenue estimates by 2% and price objective based on 1.2x gross merchandise value, and 7.0x AWS revenues in sum of the parts. Amazons share should continue to expand supported by new categories; Prime customer lock-in, and growing traction in international.
Most on Wall Street agree that Amazon remains the top destination for increased spending during this year’s holidays with broad advances in toys and electronics. Toss in the fact that Amazon Prime members receive free shipping on many products and there is no reason to believe that the company will not continue its domination of internet sales.
The $1,220 Merrill Lynch price target compares with a consensus target of $1,227.32. The shares were last seen at $1,208.50.24/7 Wall St.
Merrill Lynch Has 4 Top Oil Stocks for 2018 With Oil at 2-Year Highs
This company has had its share of issues over the past few years but seems like a solid and safe holiday retail total return play now. Target Corp. (NYSE: TGT) is one of the largest discount retailers in the United States, operating roughly 1,800 Target stores across the country. The company sells merchandise in its Signature Categories Style, Baby, Kids and Wellness, as well as other products in both physical Target stores and online at Target.com.
The company seems to be working away from the headline issues that have dogged it. With the economy looking better and the holiday shopping season in full effect, many expect the company to post outstanding results. Merrill Lynch said this when the company reported earnings most recently:
Target’s adjusted fiscal third quarter earnings per share was above forecast with better-than-expected comps and gross margins. Two-year comparisons and traffic trends accelerated. Our fiscal 2019 earnings per share remains $4.45 given the tough-to-predict promotional environment and channel mix impact on gross margins in the fiscal fourth quarter. We reiterate Buy as the company’s turnaround efforts are gaining traction. We also see Target as a “discount store decade” beneficiary.
And despite warning of a difficult holiday season this year, the company appears to have had a solid start to the traditional shopping period, as Merrill Lynch said this in a new report:
On Thanksgiving(stores opened at 6pm for Black Friday deals, same as last year) and Black Friday, traffic was healthy across the store. We saw particular strength in electronics (Samsung & LG 4K TVs, PS4 & Xbox One video games, Beats headphones), seasonal, and toys (with 1,400 new & exclusives items). We also observed steady traffic in apparel and home, which we believe is supported by the launch of eight new brands since last holiday.
Shareholders receive a stellar 4.44% dividend. The Merrill Lynch price objective is $72. The consensus target is $43.11 and shares traded at $55.75
CONSUMER CONFIDENCE HITS 17 YEAR HIGH
With home prices continuing to rise at an annual clip of 6% or more, buying a home becomes an even more important decision for buyers. The last thing you want to do is buy a home in a market that is dying.
Chances are a first-time buyer who has not struck gold in some way or another will not be able to afford to buy a house in San Jose, California, where the median price tops $1 million. There are, however, other markets that offer more realistically priced homes.
The economic data researchers at Realtor.com have pored over data on the number of home sales, prices, inventories and new construction in the country’s 100 largest markets, along with local economies, population trends, median incomes and other factors, to come up with a list of the best real estate markets for next year.
Realtor.com Chief Economist Danielle Hale noted:
People are going to continue to seek out pockets of affordability that remain in the market. A lot of these places are more affordable than surrounding areas, yet still have strong economies. Even though prices are expected to grow, most of these markets will still remain relatively affordable in 2018.
Here are the 10 top housing markets for 2018, along with median home price, predicted sales growth and predicted price growth.
Las Vegas, Nevada
> Median home price: $285,045
> Predicted sales growth: 4.9%
> Predicted price growth: 6.9%
> Median home price: $339,300
> Predicted sales growth: 6.0%
> Predicted price growth: 5.6%
> Median home price: $275,050
> Predicted sales growth: 5.5%
> Predicted price growth: 6.0%
> Median home price: $385,050
> Predicted sales growth: 4.6%
> Predicted price growth: 6.4%
> Median home price: $224,950
> Predicted sales growth: 3.0%
> Predicted price growth: 7.0%
Salt Lake City, Utah
> Median home price: $360,828
> Predicted sales growth: 4.6%
> Predicted price growth: 4.5%
Charlotte, North Carolina
> Median home price: $325,045
> Predicted sales growth: 6.0%
> Predicted price growth: 3.0%
Colorado Springs, Colorado
> Median home price: $375,000
> Predicted sales growth: 3.1%
> Predicted price growth: 5.7%
> Median home price: $358,501
> Predicted sales growth: 1.0%
> Predicted price growth: 7.7%
> Median home price: $199,586
> Predicted sales growth: 7.5%
> Predicted price growth: 1.0%
NOVEMBER NEWSLETTER 10