Twitter Acquires News Startup Scroll in Push for Subscriptions

By Sheila Dang

Twitter has been working to offer new types of content on its social media site, including audio and long-form content, after previously acquiring newsletter platform Revue.

Scroll allows users to subscribe and read news articles from publishers including Insider, BuzzFeed and USA Today without ads. The company says publishers who work with Scroll earn more money than they would by selling advertising.

The deal will help Twitter build a subscription feature, such as letting users access premium features from news outlets or a writer’s Revue newsletter, Twitter added.

Financial terms of the deal were not disclosed.

(Reporting by Sheila Dang. Editing by Mark Potter)

Why Shares Of Twitter Are Down By 13% Today?

Twitter Video 30.04.21.

Twitter Stock Dives As Quarterly Report Fails To Meet Traders’ Expectations

Shares of Twitter found themselves under significant pressure after the company released its quarterly earnings report. Twitter reported revenue of $1.04 billion and GAAP earnings of $0.08 per share, beating analyst estimates on both earnings and revenue.

The company stated that average monetizable daily active users totaled 199 million, which was mostly in line with the analyst consensus.

In the second quarter of 2021, Twitter expects to record revenue of $980 million – $1.08 billion and GAAP operating loss of $170 million – $120 million. Twitter does not expect to grow its revenue in the second quarter, and it looks that the market was not ready for this lack of growth after strong earnings reports from other tech companies.

What’s Next For Twitter?

While Twitter managed to beat analyst estimates, it has clearly missed traders’ expectations. The stock had a strong start of the year as traders bet that digital trends accelerated by the pandemic will help company grow at a fast pace.

Unfortunately for Twitter bulls, the company does not expect to increase its revenue in the second quarter, which is a strong bearish catalyst for a tech company in today’s market environment.

Analysts expect that Twitter will report earnings of $0.91 per share in 2021 and $1.23 per share in 2022, so the stock is trading at a forward P/E of 46 at current price levels. This is a rich valuation so Twitter should show the market how it will return to fast growth or the stock will find itself under more pressure.

It should be noted that analysts have already rushed to cut their price targets for Twitter stock, but most targets remain far above from current levels which means that analysts believe that the stock is a buy. While analysts remain optimistic, it remains to be seen whether Twitter shares will attract speculative traders who will be ready to buy the dip in the near term.

For a look at all of today’s economic events, check out our economic calendar.

Twitter Q1 Earnings and Revenue to Rise 27%; Target Price $75

Twitter, an online social media company that enables users to send and read short 140-character messages called “tweets”, is expected to report its first-quarter earnings of $0.14 per share, which represents year-over-year growth of over 27% from $0.11 per share seen in the same quarter a year ago.

The San Francisco, California-based company would post revenue growth of 27% for the quarter ended March 2021.

“We expect solid 1Q21 results, key focus areas at the print will include (i) DAU growth trends, which decelerated slightly to +27% y/y in 4Q; (ii) Top-line trends, including commentary on Direct Response ads/results of the newly re-launched MAP product. We raised ’21-’26 revenue and EBITDA following the bullish multi-year guide at Twitter’s (TWTR) analyst day, price target to $68 from $58, maintain Market Perform,” noted John Blackledge, equity analyst at Cowen.

“We estimate total revenue of $1.03BN for 1Q21, +27.9% y/y, vs. guidance of $940MM-$1.04BN, and ~1% above consensus. We forecast TWTR’s reported ad revenue to grow 31.5% y/y 1Q21 vs. reported growth of +0.4% y/y in 1Q20 and 30.5% growth in 4Q20; our forecast comprises a ~30.8% US adv. growth, slightly below our est. for ~32.4% growth in Int’l adv.”

Twitter shares rose about 23% so far this year. At the time of writing, the stock was trading 1.40% lower at $66.08 on Monday.

Twitter Stock Price Forecast

Thirty-four analysts who offered stock ratings for Twitter in the last three months forecast the average price in 12 months of $75.78 with a high forecast of $112.00 and a low forecast of $52.00.

The average price target represents a 14.51% increase from the last price of $66.18. Of those 34 analysts, 14 rated “Buy”, 19 rated “Hold” while one rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $68 with a high of $91 under a bull scenario and $52 under the worst-case scenario. The firm gave an “Equal-weight” rating on the social media company’s stock.

“Lack of Negative Revisions and Relative Valuation: Valuation continues to be expensive, but we think investors are likely to continue to pay a premium for TWTR given 1) continued turnaround progress and 2) platform scarcity,” noted Brian Nowak, equity analyst at Morgan Stanley.

“Execution Risk Remains Around Driving Advertiser ROI: Advertiser ROI has clearly improved on Twitter, but the company needs to improve ad targeting and measurability to compete with the larger players. To do that it will have to further personalize the content that users see and use its data more effectively, both of which remain key strategic challenges (and priorities) for management.”

Several other analysts have also updated their stock outlook. Twitter had its price objective raised by Argus to $82 from $72. The brokerage currently has a buy rating on the social networking company’s stock. Truist upgraded Twitter from a hold rating to a buy rating and increased their price objective to $74 from $64.

Moreover, BMO Capital Markets raised their price target to $75 from $45 and gave the stock a market performance rating. Susquehanna raised their price target to $70 from $58 and gave the stock a positive rating. Susquehanna Bancshares raised their price target to $70 from $58 and gave the stock a positive rating.

Check out FX Empire’s earnings calendar

Earnings to Watch Next Week: Tesla, Alphabet, Microsoft, Facebook, Apple and Amazon.com in Focus

Earnings Calendar For The Week Of April 26

Monday (April 26)

IN THE SPOTLIGHT: TESLA

The California-based electric vehicle and clean energy company Tesla is expected to report its first-quarter earnings of $0.79 per share, which represents year-over-year growth of over 240% from $0.23 per share seen in the same quarter a year ago.

The high-performance electric vehicle manufacturer’s revenue would grow over 70% to $10.2 billion. The electric vehicle producer has beaten earnings per share and revenue estimates by over 60% of the time in the last two years.

“Updating the model for the 1Q deliveries of 184,800 which were over 20% above our forecast. We also made adjustments to our volume forecasts for the remainder of the year to account for the strong start while allowing for potential supply constraints and other factors. The net result is we raise our FY21 delivery forecast by 3% to 809k units,” noted Adam Jonas, equity analyst at Morgan Stanley.

“We note our FY volume is modestly below consensus as we allow for a ‘margin of safety’ given highly fluid supply chain issues impacting the industry. Our forward year volume forecast increases very slightly (approx. 1%) to 1.1mm units. This impact, along with some other minor adjustments to the model lifts our target to $900 from $880 previously. We do not change our bull or bear case valuations at this time.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE APRIL 26

Ticker Company EPS Forecast
CBU Community Bank System $0.81
BOH Bank of Hawaii $1.18
DORM Dorman Products $1.02
FBP First Bancorp FBP $0.24
PHG Koninklijke Philips $0.29
OTIS Otis Worldwide Corp $0.62
CHKP Check Point Software Technologies $1.49
LII Lennox International $1.29
ACI AltaGas Canada $0.50
CAJ Canon $0.24
TSLA Tesla $0.79
RRC Range Resources $0.27
HTLF Heartland Financial USA $1.14
OMF OneMain Holdings $2.04
AXTA Axalta Coating Systems $0.42
AMKR Amkor Technology $0.41
TNET TriNet $1.32
SSD Simpson Manufacturing $0.92
PCH Potlatch $1.71
WRI Weingarten Realty Investors $0.41
CATY Cathay General Bancorp $0.78
IBTX Independent Bank $1.30
JJSF J&J Snack Foods $0.12
AIN Albany International $0.62
CNI Canadian National Railway USA $0.99
NXPI NXP Semiconductors $2.21
SBAC SBA Communications $2.45
AMP Ameriprise Financial $4.73
ARE Alexandria Real Estate Equities $1.85
SSNC SS&C Technologies $1.10
SUI Sun Communities $1.16
BRO Brown & Brown $0.56
PKG Packaging Of America $1.47
UHS Universal Health Services $2.15
MKSI MKS Instruments $2.17
AGNC American Capital Agency $0.64
CDNS Cadence Design Systems $0.74
MASI Masimo $0.88
RMBS Rambus $0.28
WWD Woodward $0.80
SANM Sanmina $0.82
TOP Topdanmark A/S kr5.74
KOF Coca Cola Femsa Sab De Cv $13.82
BAYRY Bayer AG PK $0.77
FIX Comfort Systems USA $0.56
SCCO Southern Copper $0.85
AMG Affiliated Managers $4.26
TV Grupo Televisa Sab $0.10
EGOV NIC $0.23
TOWN Townebank $0.65

Tuesday (April 27)

IN THE SPOTLIGHT: ALPHABET, MICROSOFT

ALPHABET: The parent of Google and the world’s largest search engine that dominates internet search activity globally is expected to report its first-quarter earnings of $15.45 per share, which represents year-over-year growth of about 57% from $9.87 per share seen in the same quarter a year ago.

The Mountain View, California-based internet giant would post revenue growth of more than 25% to around $42.2 billion. It is worth noting that the company, on average, has delivered an earnings surprise of over 25% in the last four quarters.

Alphabet’s better-than-expected results, which will be announced on Tuesday, April 27, would help the stock hit new all-time highs. Alphabet shares surged more than 30% so far this year. On Friday, the stock closed 2.1% higher at $2,299.93 – close to the record high of $2,304.09.

GOOGL still favorable set up after strong YTD gains. GOOGL has outperformed major indices YTD as investor sentiment turned positive. Our checks have been broadly positive, indicating accelerating momentum in the ad business and sustained strength in Cloud,” noted Brent Thill, equity analyst at Jefferies.

GOOGL remains a top large-cap pick as we believe it should benefit in 2021 from ad spend recovery, pent-up demand for Google Cloud, and call options on Waymo and other non-advertising initiatives.”

MICROSOFT: The Redmond, Washington-based global technology giant would report its fiscal third-quarter earnings of $1.76 per share, which represents year-over-year growth of over 25% from $1.40 per share seen in the same quarter a year ago. The world’s largest software maker’s revenue would rise over 17% to around $41 billion, up from the $35.02 billion a year earlier.

“An improving spending environment drives several sources of potential upside to Q3, most prominently around the hybrid cloud engine (Azure + Server Products) and Windows OEM. Strong positioning for multiple secular trends and an attractive valuation make MSFT a Top Pick in Software,” noted Keith Weiss, equity analyst at Morgan Stanley.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE APRIL 27

Ticker Company EPS Forecast
PCAR PACCAR $1.29
ENTG Entegris $0.72
NVS Novartis $1.57
CROX Crocs $0.88
MMM 3M $2.25
MSCI Msci $2.29
JBLU JetBlue Airways -$1.68
PII Polaris Industries $1.54
GLW Corning $0.42
HAS Hasbro $0.66
AWI Armstrong World Industries $0.96
UBS UBS Group $0.52
ABB ABB $0.28
BP BP $0.43
UPS United Parcel Service $1.63
ST Sensata Technologies $0.74
CNC Centene $1.65
SYF Synchrony Financial $1.50
IVZ Invesco $0.62
TRU TransUnion $0.80
SCL Stepan $1.43
FELE Franklin Electric $0.39
RTX Raytheon Technologies Corp $0.88
ABG Asbury Automotive $3.58
LECO Lincoln Electric $1.18
ROP Roper Industries $3.32
SHW Sherwin-Williams $1.65
DTE DTE Energy $2.09
FISV Fiserv $1.13
MMC Marsh & McLennan Companies $1.70
GE General Electric $0.02
WM Waste Management $1.00
CEQP Crestwood Equity Partners $0.34
LLY Eli Lilly $2.12
ADM Archer-Daniels Midland $1.00
ECL Ecolab $0.82
PHM PulteGroup $1.19
HUBB Hubbell $1.67
PPBI Pacific Premier Bancorp $0.63
SSTK Shutterstock $0.70
UMBF UMB Financial $1.47
GPK Graphic Packaging $0.25
PSB PS Business Parks $1.67
RNST Renasant $0.63
CHE Chemed $4.20
MANH Manhattan Associates $0.32
USNA USANA Health Sciences $1.58
TXN Texas Instruments $1.56
SYK Stryker $1.98
MDLZ Mondelez International $0.69
MXIM Maxim Integrated Products $0.75
COF Capital One Financial $4.17
TER Teradyne $1.04
PFG Principal Financial $1.35
APAM Artisan Partners Asset Management $1.10
CALX Calix $0.20
VALE Vale $1.01
MATX Matson $1.86
AMGN Amgen $4.00
EIX Edison International $0.67
ENPH Enphase Energy $0.41
SBUX Starbucks $0.52
ATRC AtriCure -$0.41
AMD Advanced Micro Devices $0.44
TRMK Trustmark $0.61
EGP EastGroup Properties $1.39
WSBC WesBanco $0.70
ROIC Retail Opportunity Investments $0.24
OKE ONEOK $0.77
IEX IDEX $1.41
V Visa $1.27
NOV National Oilwell Varco -$0.23
CSGP CoStar $2.40
OLN Olin $1.34
MSFT Microsoft $1.76
BYD Boyd Gaming $0.44
ESS Essex Property $3.04
EQR Equity Residential $0.68
TX Ternium $2.29
EHC Encompass Health Corp $0.80
GOOGL Alphabet $15.45
QTS QTS Realty $0.65
BXP Boston Properties $1.55
UDR UDR $0.48
FTI FMC Technologies -$0.08
GOOG Alphabet $15.45
CHRW C.H. Robinson Worldwide $0.97
FFIV F5 Networks $2.39
FEYE FireEye $0.07
CB Chubb $2.45
TENB Tenable Holdings Inc $0.06
ILMN Illumina $1.36
NAVI Navient $0.78
HIW Highwoods Properties $0.87
AAT American Assets $0.35
JNPR Juniper Networks $0.25
ACGL Arch Capital $0.50
FIBK First Interstate BancSystem $0.73
NCR NCR $0.47
TKC Turkcell $0.17
AJRD Aerojet Rocketdyne $0.46
ZBRA Zebra Technologies $4.39
MKL Markel $12.29
AMX America Movil Sab De Cv Amx $0.33
MSTR Microstrategy -$0.19
VIST Vista Oil Gas $0.07
IBA Industrias Bachoco Sab De Cv $1.54
BSBR Banco Santander Brasil $0.19
SAN Banco Santander $0.11
OMAB Grupo Aeroportuario Del Centro Nort $0.37
NMR Nomura -$0.21
IRBT Irobot $0.06
HSBC HSBC $0.60
ATLCY Atlas Copco ADR $0.40

Wednesday (April 28)

IN THE SPOTLIGHT: FACEBOOK, APPLE

FACEBOOK: The world’s largest online social network is expected to report its first-quarter earnings of $2.35 per share, which represents year-over-year growth of over 37% from $1.71 per share seen in the same quarter a year ago.

The Menlo Park, California-based social media conglomerate would post revenue growth of over 33% to around $23.6 billion. It is worth noting that the company, on average, has delivered an earnings surprise of over 22% in the last four quarters.

“Monetization Potential: We are positive on FB’s monetization roll-out of Instagram as well as FB’s ability to continue to innovate and improve its monetization (Canvas Ads, Dynamic Ads, video). Combined with the high and growing engagement we see monetization upside going forward,” noted Brian Nowak, equity analyst at Morgan Stanley.

“Investing from Position of Strength to Drive Faster Long-Term Growth: We are modeling ~28% GAAP opex (excl. one-time items) growth in 2021, implying an incremental ~$15bn in opex. Our base case model implies opex per employee moderates in ’21 while FB hiring remains roughly flat on an absolute basis. We believe FB will grow EPS at a ~29% CAGR (2019-2022).”

APPLE: The consumer electronics giant would post its second-quarter earnings of $0.99 per share, which represents year-over-year growth of over 54% from $0.64 per share seen in the same quarter a year ago. The iPhone manufacturer would post revenue growth of over 33% to around $77.6 billion.

“We expect the strength of Apple’s broad portfolio of products & services to help re-rate AAPL shares, amplified by today’s product launch event. We forecast Product growth of 43% Y/Y and Services growth of 19% putting us at $80.2B in revs and $1.03 in EPS for the March Q, 4-5% ahead of consensus,” noted Katy Huberty, equity analyst at Morgan Stanley.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE APRIL 28

Ticker Company EPS Forecast
SHOO Steven Madden $0.19
IPG Interpublic Of Companies $0.16
SNY Sanofi $0.83
GD General Dynamics $2.31
APH Amphenol $0.44
SIRI Sirius XM $0.06
LIVN LivaNova PLC $0.15
SLAB Silicon Laboratories $0.76
HUM Humana $7.21
AVY Avery Dennison $2.01
OSK Oshkosh $1.14
NYCB New York Community Bancorp $0.27
DAN Dana $0.46
MAS Masco $0.66
TEVA Teva Pharmaceutical Industries $0.58
ETR Entergy $1.24
BA Boeing -$1.17
EVR Evercore Partners $2.63
ROL Rollins $0.11
YUM Yum Brands $0.85
PAG Penske Automotive $1.81
BCO Brinks $0.71
R Ryder System $0.58
CIT CIT $0.98
TDY Teledyne Technologies $2.59
TKR Timken $1.20
OC Owens Corning $1.42
SAIA Saia $1.37
SWK Stanley Black & Decker $2.56
MCO Moody’s $2.80
PB Prosperity Bancshares $1.38
BSX Boston Scientific $0.30
GIB CGI Group USA $1.03
CME CME $1.75
ROK Rockwell Automation $2.15
SPOT Spotify -$0.57
GRMN Garmin $0.88
SIX Swiss Exchange -$1.29
IART Integra LifeSciences $0.56
BPOP Popular, Inc. $1.91
BXMT Blackstone Mortgage $0.61
AER AerCap $1.13
LFUS Littelfuse $1.92
VRT Veritas Pharma $0.12
SLGN Silgan $0.71
HELE Helen Of Troy $1.56
HES Hess $0.36
ADP ADP $1.82
NSC Norfolk Southern $2.55
SC Santander Consumer USA $1.45
RJF Raymond James Financial $2.09
PPC Pilgrim’s Pride $0.27
PSA Public Storage $2.70
FORM FormFactor $0.39
PTC PTC $0.72
EQIX Equinix $6.63
VVV Valvoline Inc $0.37
ESI Itt Educational Services $0.32
MXL MaxLinear $0.50
CLR Continental Resources $0.30
BSMX Santander Mexico Fincl Gp Sab Decv $0.17
PDM Piedmont Office Realty $0.47
WCN Waste Connections $0.67
AVB AvalonBay Communities $1.94
PGRE Paramount Group $0.21
AGI Alamos Gold $0.13
EBAY eBay $1.07
MAA Mid-America Apartment Communities $1.61
OI Owens-Illinois $0.28
QCOM Qualcomm $1.67
ALGN Align Technology $2.00
DRE Duke Realty $0.39
NGVT Ingevity Corp $1.07
AZPN Aspen Technology $1.16
NLY Annaly Capital Management $0.26
FB Facebook $2.35
MC Moelis & Company $0.87
NOVA Nova Mentis Life Science Corp -$0.34
MGM MGM Resorts International -$0.86
MTH Meritage Homes $2.52
GRUB GrubHub $0.03
CNO CNO Financial Group $0.50
WERN Werner $0.63
CONE CyrusOne $0.98
AR Antero Resources $0.39
AMED Amedisys $1.43
KRC Kilroy Realty $0.99
EXR Extra Space Storage $1.48
AFL Aflac $1.20
AVT Avnet $0.56
BLKB Blackbaud $0.63
WELL Welltower Inc $0.75
TROX Tronox $0.27
AUY Yamana Gold USA $0.07
AM Antero Midstream Partners $0.22
CNMD CONMED $0.43
CHX ChampionX Corp $0.05
RE Everest Re $4.55
HOLX Hologic $2.62
CDE CoEUR Mining $0.08
MOH Molina Healthcare $3.78
TYL Tyler Technologies $1.31
AXS Axis Capital $0.65
SIGI Selective $0.97
NOW ServiceNow $1.34
CAKE Cheesecake Factory -$0.15
MUSA Murphy USA $0.83
MTDR Matador Resources $0.37
ALSN Allison Transmission $0.90
RNR Renaissancere $0.74
PEGA Pegasystems $0.02
CCS Century Communities $1.52
UCTT Ultra Clean $0.82
TTEK Tetra Tech $0.75
CINF Cincinnati Financial $1.27
F Ford Motor $0.15
ASGN On Assignment $1.10
AAPL Apple $0.99
WH Wyndham Hotels & Resorts Inc $0.25
ORLY O’Reilly Automotive $5.27
ISBC Investors Bancorp $0.29
LOGI Logitech Internationalusa $0.96
SID Companhia Siderurgica Nacional $0.28
YMZBY Yamazaki Baking ADR $1.17
GSK Glaxosmithkline $0.59
LPL Lg Display $0.29
TS Tenaris $0.06
TOTDY Toto $0.51
UMC United Microelectronics $0.10
ASX Advanced Semiconductor Engineering $0.12
DB Deutsche Bank $0.49
FNF Fidelity National Financial $1.28
WWW Wolverine World Wide $0.38
DISCA Discovery Communications $0.66
DISCB Discovery Communications Discb $0.66
DISCK Discovery Communications Disck $0.66
EAT Brinker International $0.79
FCNCA First Citizens Bancshares $12.11
PAC Grupo Aeroportuario Del Pacifico $0.64

Thursday (April 29)

IN THE SPOTLIGHT: AMAZON.COM

The eCommerce leader for physical and digital merchandise is expected to report its first-quarter earnings of $9.98 per share, which represents year-over-year growth of about 100% from $5.01 per share seen in the same quarter a year ago.

The Seattle, Washington-based multinational technology giant would post revenue growth of about 40% to around $105.1 billion. It is worth noting that the company, on average, has delivered an earnings surprise of about 187% in the last four quarters.

“We expect strong 1Q21 results with revenue and Op Inc. 3% & 11% above consensus estimates. Key rev. drivers include eCommerce, AWS, Adv., & Sub. rev. Our 1Q21 Op Inc. est. is driven by AWS & Adv., offset partially by COVID-19 costs. 2Q21 revenue guide is key, we expect AMZN eCommerce growth of +15% y/y despite tough comps. We remain bullish on’21 Op margin expansion, our est. is 17% above consensus,” noted John Blackledge, equity analyst at Cowen.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE APRIL 29

Ticker Company EPS Forecast
RDSA Royal Dutch Shell £0.83
AGIO Agios Pharmaceuticals -$1.23
STM Stmicroelectronics $0.39
JHG Janus Henderson Group PLC $0.82
THRM Gentherm $0.58
FBC Flagstar Bancorp $2.65
CAT Caterpillar $1.93
TFX Teleflex $2.44
CNX Consol Energy $0.28
CBRE CBRE Group Inc $0.70
AMT American Tower $2.32
BLMN Bloomin’ Brands $0.34
TREE LendingTree -$0.21
TAP Molson Coors Brewing -$0.12
MO Altria $1.04
SAH Sonic Automotive $0.94
TROW T. Rowe Price $2.90
VC Visteon $0.32
TW Towers Watson $0.43
HSY Hershey $1.82
CCOI Cogent Communications $0.18
KEX Kirby $0.14
SPGI S&P Global Inc $3.13
BAX Baxter International $0.64
SO Southern Co. $0.83
SWI Solarwinds $0.19
BGCP BGC Partners $0.19
COHU Cohu $0.79
CWT California Water Service -$0.06
CFR Cullen/Frost Bankers $1.42
LH Laboratory Of America $7.34
TMHC Taylor Morrison Home $0.76
GPI Group 1 Automotive $4.39
NEM Newmont Mining $0.80
FMX Fomento Economico Mexicano Sab $8.67
AOS A.O. Smith $0.56
WAB Westinghouse Air Brake Technologies $0.85
WEX WEX $1.58
COLB Columbia Banking System $0.63
WLTW Willis $3.26
PATK Patrick Industries $1.32
VLY Valley National Bancorp $0.29
MMP Magellan Midstream Partners $0.87
KHC Kraft Heinz $0.60
IP International Paper $0.59
BC Brunswick $1.45
KIM Kimco Realty $0.30
KDP Keurig Dr Pepper $0.31
TMO Thermo Fisher Scientific $6.69
EEFT Euronet Worldwide $0.35
MTSI MACOM Technology Solutions $0.47
EXLS ExlService $0.99
AIT Applied Industrial Technologies $0.98
COR CoreSite Realty $1.33
STRA Strayer Education $1.49
IDA IdaCorp $0.83
GNRC Generac $1.87
ALNY Alnylam Pharmaceuticals -$1.73
XEL Xcel Energy $0.61
AIMC Altra Industrial Motion $0.76
TPX Tempur Sealy International $0.51
OSTK Overstock $0.07
NOC Northrop Grumman $5.48
FCN FTI Consulting $1.18
MDC MDC $1.37
SYNH Syneos Health Inc $0.74
BMY Bristol-Myers Squibb $1.83
DPZ Dominos Pizza $2.94
ATI Allegheny Technologies -$0.24
CMCSA Comcast $0.59
CG Carlyle $0.54
MRK Merck & Co $1.62
PCG PG&E $0.27
MA Mastercard $1.57
MCD McDonalds $1.81
LKQ LKQ $0.63
CMS CMS Energy Corporation $1.19
AGCO AGCO $1.11
ICE Intercontinental Exchange $1.30
PH Parker-Hannifin $3.75
CFX Colfax $0.39
BCE BCE (USA) $0.58
EME EMCOR $1.17
ABMD Abiomed $1.10
ERJ Embraer -$0.33
TXT Textron $0.47
CARR Carrier Global Corp $0.38
PRFT Perficient $0.68
KBR KBR $0.46
CHD Church Dwight $0.80
WST West Pharmaceutical Services $1.42
ADS Alliance Data Systems $3.23
CTXS Citrix Systems $1.42
NVT nVent Electric PLC $0.35
CUZ Cousins Properties $0.70
RMD ResMed $1.22
CUBE CubeSmart $0.45
TXRH Texas Roadhouse $0.59
GLPI Gaming And Leisure Properties $0.83
KLAC KLA-Tencor $3.59
OFC Orate Office Properties $0.55
FIVN Five9 $0.13
TEX Terex $0.22
X United States Steel $0.91
CRUS Cirrus Logic $0.69
SWKS Skyworks Solutions $2.34
WDC Western Digital $0.67
SWN Southwestern Energy $0.25
ACHC Acadia Healthcare $0.45
DLR Digital Realty $1.57
BVN Compania De Minas Buenaventura $0.11
GILD Gilead Sciences $2.02
AEM Agnico Eagle Mines USA $0.57
COLM Columbia Sportswear $0.33
TWTR Twitter $0.14
AJG Arthur J. Gallagher $1.83
FHI Federated Hermes Inc $0.77
PEB Pebblebrook Hotel -$0.44
CWST Casella Waste Systems $0.04
CXP Columbia Property $0.33
CPT Camden Property $1.23
COG Cabot Oil Gas $0.33
SGEN Seattle Genetics -$0.59
ATR AptarGroup $0.90
LPLA LPL Financial $1.58
EVTC Evertec $0.53
EXPO Exponent $0.43
DXCM Dexcom $0.31
ZEN Zendesk $0.12
PFPT Proofpoint $0.39
THG Hanover $0.75
FSLR First Solar $1.00
FBHS Fortune Brands Home Security $1.04
FWRD Forward Air $0.56
MMSI Merit Medical Systems $0.37
SPSC SPS Commerce $0.38
INT World Fuel Services $0.28
SKYW SkyWest $0.89
ERIE Erie Indemnity $1.41
POWI Power Integrations $0.55
ROG Rogers $1.79
OMCL Omnicell $0.67
BIO Bio-Rad Laboratories $2.50
HIG Hartford Financial Services $0.75
EMN Eastman Chemical $1.91
HP Helmerich & Payne -$0.61
EBS Emergent BioSolutions $1.55
PACB Pacific Biosciences Of California -$0.45
AMZN Amazon $9.98
FTNT Fortinet $0.74
NATI National Instruments $0.31
ALGT Allegiant Travel -$2.59
FTV Fortive Corp $0.60
MHK Mohawk Industries $2.80
BMRN BioMarin Pharmaceutical $0.27
VRTX Vertex Pharmaceuticals $2.76
MGNX MacroGenics -$0.51
KMPR Kemper $1.35
MDRX Allscripts Healthcare Solutions $0.15
COP ConocoPhillips $0.60
SHEN Shenandoah Telecommunications $1.01
USM United States Cellular $0.43
MTZ MasTec $0.77
GT Goodyear Tire & Rubber $0.08
TDS Telephone Data Systems $0.44
ETN Eaton $1.25
REGI Renewable Energy $0.20
PRAH PRA Health Sciences Inc $1.34
HUBG HUB $0.46
TPR Tapestry Inc $0.30
PRGO Perrigo $0.56
BLDR Builders Firstsource $0.81
BBD Banco Bradesco $0.10
TPL Texas Pacific Land $5.79
ASEKY Aisin Seiki Co $0.88
NLSN Nielsen $0.32
ARW Arrow Electronics $2.27
CLGX CoreLogic $0.97
TFSL Tfs Financial $0.07
UBSI United Bankshares $0.74
GRA W.R. Grace $0.73
PTCT PTC Therapeutics -$1.59
INSM Insmed -$1.02
TOELY Tokyo Electron Ltd PK $1.25
BBVA Banco Bilbaoizcaya Argentaria $0.15
GOL Gol Linhas Aereas Inteligentes -$0.91
SRCL Stericycle $0.59
AUOTY AU Optronics $0.33
CX Cemex Sab De Cv $0.03
PBR Petroleo Brasileiro Petrobras $0.12
TOT Total $0.85
AMRN Amarin -$0.03
TWOU 2U -$0.23
LYG Lloyds Banking $0.07
BEN Franklin Resources $0.74

Friday (April 30)

Ticker Company EPS Forecast
LYB LyondellBasell Industries $2.51
AVNT Avient Corp $0.72
BCPC Balchem $0.80
JCI Johnson Controls $0.49
HOCPY Hoya Corp $0.81
CL Colgate-Palmolive $0.79
BCS Barclays $0.41
AON AON $4.05
HUN Huntsman $0.58
PNM PNM Resources $0.19
XOM Exxon Mobil $0.60
CHTR Charter Communications $4.25
PSX Phillips 66 -$1.28
ITW Illinois Tool Works $1.90
GWW Grainger $4.31
HRC Hill-Rom $1.43
POR Portland General Electric $0.87
BSAC Banco Santander Chile $0.41
ABBV AbbVie $2.81
WY Weyerhaeuser $0.88
WPC W. P. Carey $0.51
SHLX Shell Midstream Partners $0.35
CVX Chevron $0.90
NWL Newell Brands Inc $0.13
MITSY Mitsui & Company $10.53
CLX Clorox $1.47
LAZ Lazard $0.88
LHX L3Harris Technologies Inc $2.96
KMTUY Komatsu $0.32
BNPQY BNP Paribas ADR $0.59
APELY Alps Electric $0.27
ALNPY ANA Holdings ADR -$0.90
PSXP Phillips 66 Partners $0.83
AZN Astrazeneca $0.68

 

Twitter Could Rally to 100

Twitter Inc. (TWTR) has rallied more than 14% since Monday’s opening bell and may be engaged in a long-awaited breakout run above resistance in the mid-70s, posted just six weeks after the social media giant came public in 2013. The sky’s the limit if that happens, as we have seen with other big tech leadership in the last decade. A new advertising platform has energized the latest uptick but the initiative has been adding points since it was first announced in 2020.

Political Pressure Eases

Social media sentiment has steadily improved since the 2020 presidential election, which culminated in Twitter and Facebook Inc (FB) banning President Donald Trump for Terms of Service violations. In addition, there has been less talk about a repeal of FCC Section 230 liability protections under the Biden administration and a recent Congressional hearing on big tech abuse proved to be little more than off-Broadway theater.

The company took another step to bolster ad revenue on Thursday, hooking up with research firm Nielsen (NLSN). Twitter executive Doug Brodman crowed about the partnership, noting “Nielsen’s cross-media suite will make it easier to augment our client’s video strategy and planning with Twitter’s premium video inventory and optimize audience reach and frequency alongside other top video platforms. Ultimately, this expanded partnership brings increased transparency, clarity and value to Twitter’s video solutions.”

Wall Street and Technical Outlook

Wall Street analysts still have not jumped on the bull bandwagon, with a modest ‘Hold’ rating based upon 10 ‘Buy’, 25 ‘Hold’, and 4 ‘Underweight’ recommendations. In addition, four analysts recommend shareholders close positions and move to the sidelines. Price targets currently range from a low of just $30 to a Street-high $95.00 while the stock is now trading about $2 below the median $72.50 target.

Twitter ended a long-term decline in the mid-teens in 2017 and turned higher, stalling in the mid-40s in 2018. A 2019 breakout attempt failed, yielding a two-year low during the pandemic decline, followed by an uptick that reached the 2013 high at 74.73 in February 2021. A breakout failed after hitting an all-time high at 80.75 while the decline into March found support at the 50-day moving average. Positive price action since that time bodes well for a durable breakout and rally into triple digits.

For a look at all this week’s economic events, check out our economic calendar.

Disclosure: the author held no positions in aforementioned securities at the time of publication.

Twitter Gains Amid Clubhouse Buyout Speculation

Twitter, Inc. (TWTR) shares added nearly 3% Wednesday after Bloomberg reported that the social media giant considered acquiring popular invitation-only audio-chat app, Clubhouse. The platform allows users to host shows, listen to panel discussions and engage in live chats.

People familiar with the matter said both parties discussed a possible valuation of $4 billion for Clubhouse but added that the negotiations had ceased. A potential buyout would have brought across the app’s 10 million active weekly users and complemented Twitter’s own recently launched beta-stage audio offering, Spaces. Such is the success of the Clubhouse app, other tech companies, including Facebook, Inc. (FB), Microsoft Corporation (MSFT), and Salesforce.com, inc. (CRM) have begun to develop similar features on their social media platforms.

As of April 8, 2021, Twitter stock has a market value of $55.1 billion and trades up 27.41% YTD. Over the past 12 months, the shares have surged nearly 170%. From a valuation standpoint, the stock trades 46% above its five-year average forward earnings multiple of 49 times.

Wall Street View

In February, Piper Sandler analyst Thomas Champion bumped up the investment firm’s price target on the stock to $61 from $45 while reiterating his ‘Neutral’ rating. Champion believes the company sits well-positioned to capitalize on daily active user growth it gained from the U.S. election. He also likes improvements the social media giant has made to its products and advertising.

Elsewhere, the stock receives 25 ‘Hold’ ratings, 10 ‘Buy’ ratings, 4 ‘Sell’ ratings, and 1 ‘Underweight’ rating. Twelve-month price targets range from a Street-high $95 to a low of $30. Through Wednesday’s close, the shares trade 5% below the median analyst price target of $72.50.

Technical Outlook and Trading Tactics

Twitter’s share price has remained in a steady uptrend since the 50-day SMA crossed above the 200-day SMA last summer. After a recent retracement to the 50-day SMA, the stock has regained upside momentum, with the MACD moving above its trigger line to generate a buy signal.

Active traders who buy here should look for an initial retest of all-time high (ATH) at $80.75, followed by a possible move higher. Protect against losses by placing a stop-loss order either beneath the 50-day SMA or under last month’s swing low at $59.28, depending on personal risk tolerance.

For a look at today’s earnings schedule, check out our earnings calendar.

NFT Auction for Jack Dorsey’s First Tweet Ends, $2.5M Remains Highest Bid

At the beginning of March, Dorsey made the headlines when he announced that he would auction the tokenized version of his first-ever tweet. He said that he would immediately exchange the proceedings for Bitcoin and would donate the entire amount to charity via GiveDirectly.

The Twitter boss, who is a well-known Bitcoin fan, published his first post on the platform exactly 15 years ago, on March 21, 2006, tweeting: “just setting up my twttr.” That tweet was put to the sale as a unique digital signature on an NFT marketplace called Valuables.

Who Is the Lucky Buyer?

The highest bidder is Sina Estavi, the CEO of Bridge – a blockchain oracle network built on Tron. He offered to pay $2.5 million worth of ETH for Dorsey’s tokenized tweet. Interestingly, Estavi made the $2.5 million bid the very same day when the Twitter CEO launched the auction. No other person had topped that figure for two weeks after that.

However, that was not the only offer. In fact, based on the last few bids, we can see that Estavi competed with Justin Sun, the founder and CEO of Tron – the same blockchain platform that Estavi’s Bridge is built on. The highest bid coming from Sun was $2 million.

On a side note, Sun was in the spotlight last year when he paid $4.5 million for dinner with legendary investor Warren Buffett, although the event occurred at a much later date than initially planned.

As for Estavi, he also offered over $1 million for Elon Musk’s first NFT, which is a techno song clip with the lyrics: “NFT for your vanity. Computers never sleep. It’s verified. It’s guaranteed.” However, Musk eventually turned down the offer last week, saying:

“Actually doesn’t feel quite right selling this. Will pass.”

What Are NFTs Anyway?

For those unfamiliar, NFTs are blockchain-based digital tokens representing something unique or scarce. What sets these tokens apart is that they are not replicable fungible, such as Bitcoin, Ethereum, or fiat money. In other words, any ETH unit is not different than the rest of the ETH units in terms of value, which is not true about NFTs. While they can reside on the same blockchain and be issued by the same entity, each NFT has its own value.

NFTs are probably the fastest-growing sector within the crypto industry right now, together with Decentralized Finance (DeFi). They can be used to tokenize both digital and physical objects, with use cases ranging from collectibles, art, sports, fashion items, certificates, and even real-estate.

Russia Slows Twitter’s Speed After Protest Row, Threatens Total Block

The move, which escalates a growing stand-off between Moscow and U.S. social media, comes weeks after Russian authorities accused Twitter and others of failing to delete posts it said illegally urged children to take part in anti-Kremlin protests.

Twitter did not immediately respond to a request for comment.

Russia has traditionally taken a more hands-off role in policing the internet than neighbouring China. But as domestic political tensions have risen this year over the arrest and jailing of Kremlin critic Alexei Navalny, something which triggered nationwide protests, it has signalled a tougher line.

Roskomnadzor, the state communications regulator, said in a statement that as of Wednesday there were more than 3,000 posts containing illegal content on Twitter, which it accused of ignoring its deletion requests for years.

Twitter is already under pressure in Russia after it was named as one of five social media platforms being sued for allegedly failing to delete posts urging children to take part in illegal protests, the Interfax news agency cited a Moscow court as saying on Tuesday.

The regulator did not mention content related to opposition protests in Wednesday’s statement, but referred to what it said was illegal content on Twitter containing child pornography, information about drug abuse and calls for minors to commit suicide.

“The slowing down will be applied to 100% of mobile devices and on 50% of non-mobile devices,” the regulator said.

“If (Twitter) continues to ignore the requirements of the law, the enforcement measures will be continued… (right up to blocking it),” the regulator said.

TOUGHER INTERNET LAWS

Vadim Subbotin, an official at the watchdog, said it was possible that the authorities could target and slow down other internet platforms if they failed to comply with the law, the Interfax news agency reported.

The Kremlin said there was no desire to block content but that companies had to abide by the law.

Parliament’s lower house in December backed big new fines on platforms that fail to delete banned content and other legislation that would allow them to be restricted if they “discriminate” against Russian media.

Moscow has gradually introduced tougher internet laws in recent years, requiring search engines to delete some search results, messaging services to share encryption keys with security services and platforms to store user data on servers in Russia.

Some of those measures have spurred fears of China-style Internet curbs, but have only been partially successful.

Russia tried to ban the Telegram messenger service in 2018 for example, but proved technically unable to block the app and last year publicly lifted the ban.

(Reporting by Anastasia Teterevleva and Maria Kiselyova; Additional reporting by Alexander Marrow; Writing by Tom Balmforth; Editing by Andrew Osborn and Alex Richardson)

Twitter Shares Hit All-Time High on Aim to Double its Revenue by 2023

Twitter shares hit an all-time high on Thursday after the social media giant said it forecasts total annual revenue to reach $7.5 billion or more by 2023 and the number of monetizable daily active users to reach 315 million or more in the last quarter of 2023.

Ahead of Analyst Day this afternoon, Twitter has set its high long-term objectives for daily users and revenue.

Following this optimism, Twitter shares surged over 65% in 2020 and added another 40% gain so far this year. The stock hit an all-time high of $80.75, rising over 12% on Thursday.

“We aim to deliver 315M or more mDAU in Q4 2023, which represents a ~20% compound annual growth rate from the base of 152M mDAU we reported in Q4’19, which was our most recent reported mDAU metric when we first shared our ambition in March of 2020,” the announcement was made in an SEC filing.

On February 9, the social media giant reported earnings per share of 38 cents on revenue of $1.29 billion in the fourth quarter, beating Wall Street’s consensus estimates for 29 cents on revenue of $1.18 billion. Moreover, monetizable daily active users rose more than 25% to 192 million in the December quarter, just short of consensus estimates of 193.5 million.

Twitter forecasts revenue in the range of $940 million and $1.04 billion in the first quarter. That compared with analysts’ estimates for $964.6 million.

“Given the hiring and investment decisions made in 2020 and previous years, along with anticipated 2021 headcount growth, we expect total costs and expenses to grow 25% or more in 2021, ramping in absolute dollars over the course of the year,” Twitter said.

Twitter Stock Price Forecast

Thirty-three analysts who offered stock ratings for Twitter in the last three months forecast the average price in 12 months of $65.16 with a high forecast of $95.00 and a low forecast of $50.00. The average price target represents a -17.50% decrease from the last price of $78.98. From those 33 analysts, 12 rated “Buy”, 19 rated “Hold” and two rated “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $54 with a high of $79 under a bull scenario and $39 under the worst-case scenario. The firm gave an “Equal-weight” rating on the social media giant’s stock.

Several other analysts have also updated their stock outlook. BMO raised the price target to $75 from $45. Twitter had its price objective upped by Loop Capital to $95 from $56. They currently have a buy rating on the social networking company’s stock. JP Morgan Chase reissued a buy rating and set a $77 target price. Deutsche Bank boosted their price objective to $76 from $65 and gave the stock a buy rating.

Analyst Comments

“Lack of Negative Revisions and Relative Valuation: Valuation continues to be expensive, but we think investors are likely to continue to pay a premium for TWTR given 1) continued turnaround progress and 2) platform scarcity,” said Brian Nowak, equity analyst at Morgan Stanley.

“Execution Risk Remains Around Driving Advertiser ROI: Advertiser ROI has clearly improved on Twitter, but the company needs to improve ad targeting and measurability to compete with the larger players. To do that it will have to further personalize the content that users see and use its data more effectively, both of which remain key strategic challenges (and priorities) for management.”

U.S. Market Wrap and Forecast for Friday

Major benchmarks sold off at the start of Thursday’s session while a congressional committee debated the implications of last month’s Gamestop Inc. (GME) frenzy. Risk-adverse instruments surged to monthly highs in the first half of the day, shaking out a few weak hands. An afternoon bounce pushed a few points above opening prints but SP-500 Volatility Index (VIX) held firmly in the green into the closing bell.

Mean Reversion

Traders sold many stocks that had rallied to unsustainable price levels, including Tesla Inc. (TSLA), squaring positions ahead of Friday’s options expiration finale. GME and its companions sold off as well, hitting 4-week lows. High yield plays perked up, attracting buying interest for the first time in 2021.  FAANG stocks ticked lower in unison, displaying none of the leadership that generated impressive 2020 returns.

Marriott International (MAR) closed higher despite a 59% year-over-year revenue decline, with executives hoping vaccines translate into a booking resurgence and travel season that keeps hotels from going bankrupt. Fauci said vaccines were reducing COVID-19 infections this morning, which we assumed long before he reached that conclusion. That now needs to translate into baby boomers leaving their caves and spending billions in their favorite destinations this summer.

Friday Expiration

Friday options expiration is often sloppy and uncomfortable, with position squaring more important to the ticker tape than short-term price patterns. Limited exposure makes sense during this period but stocks that have sold off into popular strikes could offer good trade entries into Monday’s options hangover. Twitter Inc. (TWTR) comes to mind in this regard, dropping three or four points this week before bouncing just above the 70 strike.

Home Depot Inc. (HD) highlights next week’s earnings calendar, with the Dow component grinding through the sixth month of a narrow range price pattern. Macy’s Inc. (M) is also on the schedule, shining a light on one of the fallen angels of last month’s Gamestop squeeze. Sadly, M and the mall anchor group have no future, beyond the lipstick put on the pig in recent months, because e-commerce is an unstoppable monster.

For a look at all of today’s economic events, check out our economic calendar.

U.S. Market Wrap and Forecast for Wednesday

Major indices oscillated near the flatline in a lazy Tuesday session, with small caps attracting the most buying interest. Gold, bonds, equities, and VIX traded in lockstep while the WTI Crude Oil contract continued its bullish assault, lifting to the highest high since January 2020. Long-time laggard SPDR S&P Oil & Gas Exploration & Production ETF (XOP) rallied to a 52-week high, outperforming the broad-based SPDR Select Sector Energy ETF (XLE).

Netflix Testing Resistance

Netflix Inc. (NFLX) gained 2%, continuing a recovery wave after filling the post-earnings gap on Jan. 27. The stock posted an all-time high after the release and promptly sold off, failing the breakout when it traded through 575. The stock closed about 16 points below that level, setting up an interesting test in coming days. Alphabet Inc. (GOOG) is the only member of the FAANG quintet currently in breakout mode after Apple Inc. (AAPL) reversed on Jan 26.

Former Reddit favorites took another big hit, dropping Gamestop Inc. (GME) below 50 for the first time in nearly three weeks. A true believer messaged me on Monday morning, convinced the stock must rally between 500 and 800 soon because that’s where the biggest open interest was located. Numerous attempts to instruct these folks on the history of broken bubbles is invariably met with derision.

Looking Ahead to Wednesday

Keep an eye on Zoom Video Communications Inc. (ZM) in coming sessions. The stock rose 4% to a two-month high on Tuesday after Dow component Salesforce.com Inc. (CRM) said its employees would continue to work remotely part-time or full-time after the pandemic runs its course. Twitter Inc. (TWTR) earnings this evening could also impact Wednesday’s market, with the stock sitting near resistance ahead of the release.  Even so, the company is not big enough yet to leave a deep footprint on the ticker tape.

The second impeachment trial is sapping market interest, killing momentum from stimulus legislation that is needed to keep bulls on the offensive. Americans on both sides of the aisle are exhausted after the election conflict and reliving the sad tale isn’t the best way to encourage higher equity prices. Meanwhile, the slow drift higher continues unabated while bears wait patiently for a more reliable selling opportunity.

For a look at all of this week’s economic events, check out our economic calendar.

 

Too Tough to Buy Twitter at 60

Twitter Inc. (TWTR) reports Q4 2020 earnings after Tuesday’s closing bell in the United States, with analysts expecting a profit of $0.31 per-share on $1.19 billion in revenue. If met, earnings-per-share (EPS) will mark a 106% profit increase compared to the same quarter last year. The stock lost ground in October despite beating Q3 top and bottom line estimates after modest revenue growth failed to inspire buying interest.

No Backlash After Trump Ban

The social media sector sold off in January after banning Donald Trump for Terms of Service violations but an expected backlash never materialized. Ironically, punitive actions taken by Twitter and Facebook Inc. (FB) have lower the prospects for repeal of FCC section 230, which provides limited immunity for their platforms. The rule was a frequent Trump political target but the Biden administration is unlikely to bite the hand that feeds it.

KeyBanc Capital Markets analyst Justin Patterson upgraded Twitter to ‘Overweight’ in late January, noting, “Our view is that execution is improving, and the combination of a cyclical ad recovery and new products creates potential for revenue to outpace our above-consensus revenue estimates in 2021 and 2022. We see sustainable 20%+ annual revenue growth from the core business, with monetization of Revenue (estimated $36B TAM) and other new services creating significant option value.”

Wall Street and Technical Outlook

Wall Street consensus now stands at a skeptical ‘Hold’ rating based upon 12 ‘Buy’, 21 ‘Hold’, 1 ‘Underweight’, and 4 ‘Sell’ recommendations. Price targets currently range from a low of just $17 to a Street-high $67 while the stock has opened Tuesday’s U.S. session about $8 below the high target. Additional upside will be tough with this lofty placement but a strong quarterly report could generate higher targets.

The stock posted an all-time high at 74.73 a month after coming public in 2013 and sold off in a three-year downtrend. It broke out above tough resistance in the mid-40s in September 2020 and is now trading less than two points below the .786 Fibonacci selloff retracement level. This marks major resistance for uptrends cutting through old supply, raising odds for a reversal and intermediate correction that could offer a low risk buying opportunity in the 40s.

For a look at all of this week’s economic events, check out our economic calendar.

Disclosure: the author held no positions in aforementioned securities at the time of publication. 

U.S. Market Wrap and Forecast for Tuesday

Major benchmarks popped up to new highs at the start of Monday’s U.S. session but conviction was low, yielding a slow motion downtick that got bought over the noon hour. SP-500 Volatility Index (VIX) gained about 2% despite higher equity prices, signaling nervousness about the endless uptick. Even so, the U.S. government is about to send citizens another barrel of greenbacks, just in time to reload slumping Robinhood accounts.

No Love For FAANG Stocks

Amazon.com Inc. (AMZN) failed a symmetrical triangle breakout last week and is consolidating near the February low, about to enter the eighth month of dead sideways action. There’s a lot of ‘dead’ money hanging around big tech stocks these days, with more aggressive capital rotating into fintech, EV plays, and SPACs. The GameStop ‘event’ hasn’t helped traditional buying interest, unnerving many risk-adverse bulls.

Other tech stocks gained ground on Monday, lifting shares of NVIDIA Corp. (NVDA), International Business Machines Corp. (IBM), and Advanced Micro Devices Inc. (AMD). However, PHLX Semiconductor Index (SOX) looks like its grinding through a corrective pattern that could roll over and test the January low at any time. Twitter Inc. (TWTR), General Motors Co. (GM), and Walt Disney Co. (DIS) posted strong upside as well, which is more bearish than bullish headed into their mid-week reports.

Looking Ahead to Mid-Week

Partisan politics could control price action through mid-week, with an impeachment trial and its foregone conclusion feeling like a waste of time during stimulus negotiations. In addition, the rally is getting ‘long in the tooth’, raising odds for a multiweek reversal that ‘sticks’. The Nasdaq-100 index tested or crossed the 200-day EMA five times in 2019 but just once in 2020 and it’s now been 10 months since that instrument shook out weak hands.

This week’s economic calendar is light as a feather, with the CPI report on Wednesday and UMich Sentiment on Friday. Neither is likely to move bond or equity markets, allowing macro influences to control the ticker tape. The upcoming holiday weekend in the United States could impact trading later in thes week, with a well-documented positive bias likely to support higher prices. Even so, a contrarian would say that clear blue skies foretell ominous dark clouds.

For a look at all of this week’s economic events, check out our economic calendar.

Twitter Gains Ground Ahead Of Q4 Earnings Report

Twitter Video 08.02.21.

Twitter Stock Gets To Multi-Year Highs

Shares of Twitter gained upside momentum and are trying to settle above the $58 level after a Bloomberg report stated that the company was evaluating subscription offerings to boost its revenue.

Subscriptions are widely used in the digital world to provide recurring revenue for companies but Twitter has failed to build a successful subscription business. The company may introduce subscriptions for some of its services or features, but it remains to be seen whether any decisions have already been made.

Twitter will provide its quarterly report on February 9, after market close, and analysts will surely ask questions about company’s plans in the subscription space. Currently, the company is expected to report fourth-quarter earnings of $0.31 per share and report an annual loss of $0.77 per share. However, investors’ attention may shift from the earnings report to the company’s comments about future revenue streams.

What’s Next For Twitter?

Twitter shares managed to quickly rebound after the sell-off which happened at the beginning of the year when the company decided to ban Donald Trump from tweeting after unrest in Washington.

The competition did not emerge as the alternative service Parler was quickly banned by Apple, Google and Amazon, and its survival is under question. The market quickly realized that Twitter’s leading position in its market segment was not under threat, and traders rushed to buy shares after the sell-off.

While Twitter’s shares are at multi-year highs, the company’s stock is well below the all-time high levels near $75 which were reached soon after the company’s IPO. If Twitter presents are viable strategy in the subscription space, investors’ interest will increase, and the stock will have a good chance to continue the current upside move. If the shares are also supported by a strong quarterly report, Twitter will gain solid upside momentum.

For a look at all of today’s economic events, check out our economic calendar.

Earnings to Watch Next Week: Twitter, General Motors, Coca-Cola, PepsiCo and Walt Disney in Focus

Earnings Calendar For The Week Of February 8

Monday (February 8)

IN THE SPOTLIGHT: KKR & Co.

KKR & Co Inc, an American global investment company that manages multiple alternative asset classes, is expected to post earnings of $0.41 per share for last quarter of 2020 with revenue of around $983.08 million. The U.S. private equity firm reported EPS of $0.44 per shares with revenue of $962.07 million in the same period a year ago.

“While we see an attractive organic asset growth trajectory, we also see a recessionary backdrop that raises risk to KKR‘s fee-related earnings growth story if fundraising slows, transaction fees stall, and costs don’t flex as performance fees and investment income decline,” noted Michael Cyprys, equity analyst at Morgan Stanley.

“Recessionary backdrop raises risk of balance sheet marks and limited book value growth that could dampen prior ROE generation of mid-teens to 20%+. C-corp structure (as of July 1, 2018 ) with no K-1s should help expand the investor base over time.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE FEBRUARY 8

Ticker Company EPS Forecast
GPN Global Payments $1.77
RCL Royal Caribbean Cruises -$5.04
SAIA Saia $1.29
ENR Energizer $0.89
HAS Hasbro $1.14
L Loews $0.74
CNA CNA Financial $0.99
DNB Dun & Bradstreet $0.26
AMG Affiliated Managers $3.68
CUB Cubic -$0.01
RAMP Liveramp Holdings Inc $0.07
BECN Beacon Roofing Supply $0.60
JKHY Jack Henry Associates $0.87
KKR KKR & Co LP $0.41
RE Everest Re $0.46
ACM AECOM $0.57
RGA Reinsurance Of America $1.10
OMF OneMain Holdings $1.98
VRNS Varonis Systems $0.12
LEG Leggett & Platt $0.70
SSD Simpson Manufacturing $0.66
AMKR Amkor Technology $0.35
BLKB Blackbaud $0.71
ESE ESCO Technologies $0.49
TTWO Take Two Interactive Software $0.94
NUAN Nuance Communications $0.19
CHGG Chegg $0.49
BAP Credicorp USA $1.60
HQY Healthequity Inc $0.31
CDK Cdk Global $0.68
CORT Corcept Therapeutics $0.17
SPG Simon Property Group $0.90
YALA Yalla $0.12
IX Orix $1.97
RBC Regal Beloit Corporation $1.58
TYOYY Taiyo Yuden ADR $2.47
MAURY Marui ADR $0.98
MELI MercadoLibre $0.39
OSH Oak Street Health -$0.23

 

Tuesday (February 9)

IN THE SPOTLIGHT: TWITTER

Twitter, an online social networking service that enables users to send and read short 140-character messages called “tweets”, is expected to report a profit of $0.25 in the fourth quarter, which represents year-over-year growth of 16% from the same quarter last year when the company reported $0.25 per share.

The social media company will report revenue of $1.19 billion, up over 17% from the year-ago quarter.

“Lack of Negative Revisions and Relative Valuation: Valuation continues to be expensive, but we think investors are likely to continue to pay a premium for TWTR given 1) continued turnaround progress and 2) platform scarcity,” said Brian Nowak, equity analyst at Morgan Stanley.

“Execution Risk Remains Around Driving Advertiser ROI: Advertiser ROI has clearly improved on Twitter, but the company needs to improve ad targeting and measurability to compete with the larger players. To do that it will have to further personalize the content that users see and use its data more effectively, both of which remain key strategic challenges (and priorities) for management.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE FEBRUARY 9

Ticker Company EPS Forecast
GT Goodyear Tire & Rubber $0.22
HBI Hanesbrands $0.29
WCC Wesco International $1.37
HAIN Hain Celestial $0.30
ARMK Aramark -$0.41
CNC Centene $0.47
GRA W.R. Grace $0.86
MAS Masco $0.74
SEE Sealed Air $0.78
INCY YTE $0.53
SPGI S&P Global Inc $2.54
JLL Jones Lang LaSalle $3.93
FOXA Twenty-First Century Fox -$0.06
IIVI Ii Vi $0.90
J Jacobs Engineering Group Inc $1.27
MLM Martin Marietta Materials $2.28
FIS Fidelity National Information Services $1.57
WLTW Willis $5.03
NVT nVent Electric PLC $0.42
AVNT Avient Corp $0.45
VSH Vishay Intertechnology $0.28
TDG TransDigm $1.99
IT Gartner $0.82
DD DuPont $0.85
CARR Carrier Global Corp $0.36
NRZ New Residential Investment $0.32
CVE Cenovus Energy USA -$0.06
ENPH Enphase Energy $0.41
AKAM Akamai $1.31
CCK Crown $1.27
THC Tenet Healthcare $1.79
NCR NCR $0.59
OI Owens-Illinois $0.34
HIW Highwoods Properties $0.47
EGP EastGroup Properties $0.61
FISV Fiserv $1.29
WELL Welltower Inc $0.13
UDR UDR $0.09
ACGL Arch Capital $0.38
TWTR Twitter $0.29
FMC FMC $1.47
BKH Black Hills $1.15
CNO CNO Financial Group $0.59
AIZ Assurant $2.07
DEI Douglas Emmett $0.01
PEAK Healthpeak Properties Inc $0.05
G Genpact $0.49
PRI Primerica $2.50
VOYA Voya Financial $1.45
YELP Yelp $0.00
CDAY Ceridian HCM Holding Inc $0.07
LYFT Lyft Inc -$0.72
CSCO Cisco Systems $0.76
MAT Mattel $0.23
QGEN Qiagen $0.65
EXC Exelon $0.73
EXAS Exact Sciences -$0.19
OMC Omnicom $1.63
AMX America Movil Sab De Cv Amx $0.40
VERX Vertex Inc. Cl A $0.07
OJIPY Oji ADR $1.62
RANJY Randstad Holdings $0.49
FOX Twenty First Century Fox -$0.06
KT KT $0.18
SHCAY Sharp ADR $0.08
COTY Coty $0.07

 

Wednesday (February 10)

IN THE SPOTLIGHT: GENERAL MOTORS, COCA-COLA

GENERAL MOTORS: the world’s largest auto manufacturers which ranked number 18 on the Fortune 500 rankings of the largest United States corporations by total revenue is expected to report a profit of $1.64 in the fourth quarter of 2020, which represents year-over-year growth of over 3000% from the same quarter last year when the company reported $0.05 per share.

The auto manufacturer will report revenue of $36.9 billion, up about 20% from the year-ago quarter.

“We are Overweight based on General Motors’ (GM) diversified portfolio, with multiple ways for GM to enhance shareholder value, through: EVs, ICE and Autonomy. GM also has leading North American margins, generates strong cash flow, and has a robust balance sheet,” wrote Joseph Moore, equity analyst at Morgan Stanley.

“We believe that the market is underestimating the SOTP of the GM enterprise via: 1) Legacy ICE, 2) GM EV, 3) GM‘s Ultium Battery business, 4) China JVs, 5) GM Finco, 6) GM Cruise, 7) hidden franchise value in brands such as Corvette and 8) GM Connected Services. GM management has a proven track record to allocate capital away from structurally challenged areas towards re-positioning the business model.”

COCA-COLA: The largest manufacturer, distributor and marketer of soft drink concentrates and syrups in the world is expected to report a profit of $0.42 in the fourth quarter of 2020, which represents a year-over-year decline of over 4.5% from the same quarter last year when the company reported $0.44 per share.

The auto manufacturer will report revenue of $8.74 billion, up about 4% from the year-ago quarter.

“We are Overweight on Coca-Cola (KO) after significant stock underperformance given COVID-19 impacts on KO‘s on-premise eating / drinking out business (~40% of sales) and gas & convenience (~10%) with gov’t mandated restaurant closures and reduced foot traffic. COVID impacts drove a large -26% organic sales decline in 2Q20, but trends improved to -MSD% in July/August and -LSD% in September/October. We forecast a recovery to ~8% organic growth in 2021/2022 with a post-COVID recovery in away-from-home,” said Dara Mohsenian, equity analyst at Morgan Stanley.

“We believe Coke‘s LT top-line growth outlook is above peers, with strong pricing power, and favourable strategy tweaks under Coke’s CEO, including increased innovation and a cultural shift towards a total beverage company.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE FEBRUARY 10

Ticker Company EPS Forecast
BDC Belden $0.77
PAG Penske Automotive $2.13
TMHC Taylor Morrison Home $0.82
CDW CDW $1.50
IPG Interpublic Of Companies $0.80
UAA Under Armour Inc -$0.07
CIM Chimera Investment $0.31
TEVA Teva Pharmaceutical Industries $0.63
GM General Motors $1.64
IQV IQVIA Holdings Inc $2.00
KO Coca-Cola $0.42
EEFT Euronet Worldwide $0.73
BG Bunge $1.77
CME CME $1.37
BXMT Blackstone Mortgage $0.60
CCJ Cameco USA -$0.04
HCSG Healthcare Services $0.29
AEIS Advanced Energy Industries $1.34
EFX Equifax $1.82
TRMB Trimble Navigation $0.51
EQC Equity Commonwealth $0.02
IRBT Irobot $0.20
ELY Callaway Golf -$0.21
EQIX Equinix $1.49
PACB Pacific Biosciences Of California $0.42
UBER Uber -$0.53
HP Helmerich & Payne -$0.79
TYL Tyler Technologies $1.42
KGC Kinross Gold USA $0.22
PAYC Paycom Software $0.79
WTS Watts Water Technologies $1.01
HR Healthcare Realty $0.04
QLYS Qualys $0.70
TTGT TechTarget $0.41
SLF Sun Life Financial USA $1.08
XPO XPO Logistics $0.68
EXEL Exelixis $0.05
BHF Brighthouse Financial Inc $2.65
AVLR Avalara Inc -$0.06
STAG STAG Industrial $0.08
IFF International Flavors Fragrances $1.19
MFC Manulife Financial USA $0.56
CPA Copa -$2.09
SONO Sonos Inc $0.85
NGVT Ingevity Corp $0.78
REXR Rexford Industrial Realty $0.07
FR First Industrial Realty $0.18
RUSHA Rush Enterprises $0.54
MC Moelis & Company $1.29
CINF Cincinnati Financial $1.19
EQR Equity Residential $0.25
SSNC SS&C Technologies $1.05
CERN Cerner $0.78
NLY Annaly Capital Management $0.29
MOH Molina Healthcare $1.14
AIN Albany International $0.66
WU Western Union $0.42
PDM Piedmont Office Realty $0.05
BE Bloom Energy Corp $0.00
MGM MGM Resorts International -$0.95
ZNGA Zynga $0.09
ASGN On Assignment $1.15
ORLY O’Reilly Automotive $5.09
WH Wyndham Hotels & Resorts Inc $0.04
SAVE Spirit Airlines -$1.43
COHR Coherent $0.78
PVG Pretium Resources $0.08
PRSP Perspecta Inc $0.52
GOCO Gocompare.Com $0.46
PS Pluralsight Inc -$0.02
PTVE Pactiv Evergreen $0.26
AMAT Applied Materials $1.27
NTAP NetApp $1.01
CF CF Industries $0.08
SPWR SunPower $0.10
UA Under Armour C share -$0.07
Z Zillow $0.28

 

Thursday (February 11)

IN THE SPOTLIGHT: PEPSICO, WALT DISNEY

PEPSICO: The company which holds approximately a 32% share of the U.S. soft drink industry is expected to report a profit of $1.45 in the fourth quarter of 2020. According to Zacks Research, analysts expect that PepsiCo will report full-year 2022 earnings of $5.51 per share, with EPS estimates ranging from $5.50 to $5.55.

The company also recently announced a quarterly dividend, which was paid on Thursday, January 7th.

“We are Overweight on PepsiCo (PEP). We forecast Pepsi will post superior topline growth relative to peers driven by exposure to the higher growth/higher margin snacks category (2/3 of PEP‘s profit). Snacks is a higher growth category given: (1) shift to snacking vs. sit-down meals; (2) less pressure from health/wellness vs. beverages, and (3) PEP’s leading share in snacks vs. fragmented competition, driving share gains, and higher margins/ROIC,” said Dara Mohsenian, equity analyst at Morgan Stanley.

“We also see more structural Pepsi market share benefits post COVID-19, as PEP uses its DSD distribution advantage, to gain shelf space and share in snacks, and in beverages, where PEP is advantaged vs competition with much lower mix in away-from-home.”

Walt Disney, a family entertainment company will post EPS of -$0.33 per share in the fiscal quarter.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE FEBRUARY 11

Ticker Company EPS Forecast
NNN National Retail Properties $0.65
MT Arcelormittal -$0.02
HII Huntington Ingalls Industries $4.56
TSN Tyson Foods $1.52
IRDM Iridium Communications -$0.08
PPC Pilgrim’s Pride $0.32
BWA Borgwarner $0.89
ZBRA Zebra Technologies $3.81
AZN Astrazeneca $0.55
PEP PepsiCo $1.45
FAF First American Financial $1.66
TAP Molson Coors Brewing $0.77
DUK Duke Energy $1.03
BAM Brookfield Asset Management USA $0.60
K Kellogg $0.89
NUS Nu Skin Enterprises $1.19
MAC Macerich -$0.12
THS TreeHouse Foods $1.07
KIM Kimco Realty $0.10
SON Sonoco Products $0.77
POOL Pool $0.76
LH Laboratory Of America $7.83
SSTK Shutterstock $0.52
GNRC Generac $1.97
R Ryder System $0.94
TPX Tempur Sealy International $0.51
KHC Kraft Heinz $0.73
NSIT Insights $1.50
SAFE 3 Sixty Risk $0.29
ALNY Alnylam Pharmaceuticals -$1.93
WSO Watsco $1.01
ILMN Illumina $1.10
NSP Insperity $0.30
ENS Enersys $1.19
MHK Mohawk Industries $2.87
DXCM Dexcom $0.93
TEX Terex $0.02
SPSC SPS Commerce $0.34
AEM Agnico Eagle Mines USA $0.64
CGNX Cognex $0.29
CUZ Cousins Properties $0.19
BIO Bio-Rad Laboratories $3.30
DLR Digital Realty $0.18
FWRD Forward Air $0.72
SGEN Seattle Genetics $0.89
DVA DaVita Healthcare Partners $1.91
CC Chemours Co $0.42
EXPE Expedia -$1.95
BRX Brixmor Property $0.05
SHO Sunstone Hotel Investors -$0.37
FRT Federal Realty Investment $0.28
REG Regency Centers $0.20
DIS Walt Disney -$0.33
VRSN Verisign $1.35
JCOM J2 Global $2.80
TWOU 2U -$0.09
RARE Ultragenyx Pharmaceutical -$1.06
NWE Northwestern $1.35
FLO Flowers Foods $0.24
TU Telus USA $0.19
NCMGY Newcrest Mining Ltd PK $0.59
CX Cemex Sab De Cv $0.02
SBGSY Schneider Electric SA $0.63
AEG Aegon $0.13
NVDA Nvidia $2.80
BCS Barclays $0.20
NICE Nice Systems $1.54
BFAM Bright Horizons Family Solutions -$0.24
AGIO Agios Pharmaceuticals -$1.41
ALKS ALKERMES $0.07
WST West Pharmaceutical Services $1.13
HTA Healthcare Of America $0.43
LPSN LivePerson -$0.01
DAVA Endava Ltd $0.35
JAMF Jamf $0.01
ALXO Alx Oncology Holdings Inc. -$0.39
OMAB Grupo Aeroportuario Del Centro Nort $0.23

 

Friday (February 12)

Ticker Company EPS Forecast
D Dominion Resources $0.76
HUN Huntsman $0.45
SXT Sensient Technologies $0.62
AIMC Altra Industrial Motion $0.69
LECO Lincoln Electric $1.06
PRLB Proto Labs $0.51
MCO Moody’s $1.94
NWL Newell Rubbermaid $0.48
WPC W. P. Carey $0.49
ENB Enbridge USA $0.46
AUY Yamana Gold USA $0.10
YMZBY Yamazaki Baking ADR $0.40

 

Three Top Earnings Plays This Week

U.S. markets wrap up fourth quarter earnings season in style this week, with three trading favorites posting results and guidance. Twitter Inc. (TWTR) kicks things off after Tuesday’s closing bell, followed by General Motors Co. (GM) on Wednesday, and Walt Disney Co. (DIS) on Thursday. All these stocks are currently situated at or near new highs, sporting high valuations that add considerable downside risk.

Major benchmarks posted all-time highs heading into Friday’s close, highlighting broad optimism about the Biden administration’s massive stimulus bill, now working its way through Congress. Meanwhile, fourth and fifth COVID-19 vaccines are headed toward approval and distribution, keeping the economic world on track for a strong recovery in the second half of the year. Those catalysts could keep bulls in charge of the ticker tape into the second quarter.

Twitter

Twitter is expected to post a profit of $0.31 per-share on $1.19 billion in revenue. The stock broke out above the December high at 56.11 last week and is finally closing in on 2014’s all-time high at 74.73, posted less than two months after the 2013 IPO. The company is releasing a new advertising platform that should benefit from a cyclical ad recovery in coming months, encouraging analysts to factor in 20%+ annual revenue growth in coming years.

General Motors

General Motors should report a profit of $1.66 per-share, much higher than the $0.05 earned in the same quarter last year, while revenue rises to $36.34 billion.   The company has benefited from EV-driven revaluation of major auto manufacturers following rival Tesla Inc. (TSLA) historic uptrend. GM expects to have 30 fully-electric vehicles in production by 2025 and is seeking to establish the highest EV market share in North America.

Walt Disney

At first glance, there’s no reason for Walt Disney to be trading just below January’s all-time high heading into this week’s report. The entertainment giant is expected to lose $0.38 per-share on $15.85 billion as a result of empty movie theaters, cruise ships in dry dock, and socially-distanced theme parks. However, the Disney+ streaming service is growing at a phenomenal rate and should pass Netflix Inc. (NFLX) in worldwide subscribers in the next two years.

For a look at all of this week’s economic events, check out our economic calendar.

Disclosure: the author held no positions in aforementioned securities at the time of publication.

U.S. Market Wrap and Forecast for Monday

January’s Non-Farm Payrolls report added 49,000 new jobs while the unemployment rate fell from 6.7% to 6.3%. December jobs were revised sharply lower, continuing a bleak employment scenario as the Western world works through the last stages of the winter’s second pandemic wave. The equity market yawned and bonds sold off after the news, squaring positions into the weekend so that short-term options market makers get paid.

Ford vs. Tesla

SP-500 Volatility Index (VIX) fell to the lowest low since early December. GameStop Inc. (GME) shareholders declared their loyalty in a widely read Reuters article, ready to become the bagholders of a new generation. Ford Motor Co. (F) CEO Jim Farley (no relation) declared the new Mustang Mach-E will compete successfully with Tesla Inc.’s (TSLA) Model Y, forgetting that brand is everything in the third decade of the new millennium.

Snap Inc. (SNAP) recovered after a 9% post-earnings decline, lifting to an all-time high. Fitness juggernaut Peloton Interactive Inc. (PTON) fell into the 140s despite beating top and bottom line estimates and raising first quarter guidance. The company has to compete with real fitness centers in coming quarters, lowering expectations about their vertical growth trajectory. Wynn Resorts Ltd. (WYNN) hit an 11-month high despite a 58.5% year-over-year revenue decline, offering shareholders an opportunity to get out with their capital still intact.

Heading into Monday

Fourth quarter earnings season draws to a close next week, with reports from Dow components Cisco Systems Inc. (CSCO) and Walt Disney Co. (DIS) as well as Twitter Inc. (TWTR), and General Motors Co. (GM). Disney is trading near an all-time high even though their wildly successful streaming service has done little to replace income lost from empty movie theaters, dry-docked cruise ships, and socially-distanced theme parks.

Sky’s the limit for U.S. equities, at least until the Biden administration hits a brick wall with their massive stimulus bull. At least to the point, left-leaning politicians have avoided most of the logistical mistakes made by the Obama administration in 2009.  The Republican Party is trying to rebrand itself after the departure of Donald Trump and their infighting has allowed the Democratic-controlled Congress to move aggressively on economic policy.

For a look at all of today’s economic events, check out our economic calendar.

Twitter Radioactive After Trump Suspension

Twitter Inc. (TWTR) is trading lower by 12% in the first hour of Monday’s U.S. session, after Friday’s announcement it had permanently suspended President Donald Trump’s account. The social media giant also cleaned house over the weekend, banning hundreds of accounts linked to violent extremist groups that include QAnon. Dozens of users with large numbers of followers reported sharp decreases but the company hasn’t provided exact numbers.

Section 230 Repeal Less Likely

The President wants to repeal FCC section 230, which provides liability protection for social media companies. Democrats had shown sympathy for the action, with Facebook Inc. (FB) CEO Marc Zuckerberg drawing intense criticism after Russian interference in the 2016 election. However, Twitter has gained ‘political capital’ from the suspension, making repeal less likely under the Biden administration. Even so, the voluntary and involuntary departure of sympathizers could impact ad revenue.

Twitter issued a statement after the action, noting “in the context of horrific events this week, we made it clear on Wednesday that additional violations of the Twitter Rules would potentially result in this very course of action. Our public interest framework exists to enable the public to hear from elected officials and world leaders directly. It is built on a principle that the people have a right to hold power to account in the open.”

Wall Street and Technical Outlook

Wall Street consensus viewed Twitter as over-priced ahead of Monday’s selloff, with a ‘Hold’ rating based upon 7 ‘Buy’, 17 ‘Hold’, and 1 ‘Sell’ recommendation. Price targets currently range from a low of $36 to a Street-high $65 while the stock opened Monday’s U.S. session about $3 below the median $50 target after closing out last week at $51.48. This placement suggests the stock is now fairly-valued, with good odds the decline will bottom out quickly.

Twitter rallied to a 6-year high in December after breaking out above two-year resistance in the mid-40s. The stock has been pulling back for the last four weeks and opened the session below the 50-day EMA for the first time since Nov. 20. The breakout remains intact at this time, suggesting that committed buyers will return in the mid-40s. However, all bets are off if there’s more violence between now and the Jan. 20 inauguration.

For a look at all of today’s economic events, check out our economic calendar.

Disclosure: the author held no positions in aforementioned securities at the time of publication.

Twitter Rallies to a 6-Year High

Twitter Inc. (TWTR) rallied to a 6-year high in the first hour of Wednesday’s U.S. session, following a key JPMorgan upgrade. The stock has been on a roll so far in 2020, now posting an impressive 72% year-to-date return. Even so, the social media giant is still trading 20 points below December 2013’s all-time high at 74.73, highlighting years of sub-par performance compared to rival Facebook Inc. (FB) and other industry players.

Trading at Discount to Rivals

The stock is trading at a substantial discount to Snap Inc. (SNAP) and Pinterest Inc. (PINS), with both issues zooming to all-time highs this year. However, a new advertising platform, ongoing activist pressure, and a management buyback plan are improving mixed sentiment, raising odds the company will earn up to 30 times 2022 EBITDA (earnings before interest, taxes, depreciation, and amortization) and 9.5 times projected 2022 revenue.

JPMorgan analyst Doug Anmuth upgraded the stock to ‘Overweight’ on Wednesday, raising the price target to $65 while noting, “we are bullish on online advertising in 2021 and expect industry growth to reaccelerate. We believe Twitter will show the biggest rebound given its sharper pandemic-driven ad decline, along with revenue prioritization throughout the company, early benefits from rebuilt ad tech through the new Ad Server and rollout of Map 2.0, and increases in both advertiser count and ad load”.

Wall Street has been playing ‘catch-up’ throughout the year, with Twitter outperforming their modest expectations. Consensus stands at a mixed ‘Hold” rating based upon 7 ‘Buy’ and 19 ‘Hold’ recommendations. One analyst now recommends that shareholders close positions and move to the sidelines. Price targets currently range from a low of just $36 to a Street-high $65 while the stock opened Wednesday’s session $8 above the median $47 target.

Wall Street and Technical Outlook

A 7-week rally has now mounted resistance at the .618 Fibonacci retracement of the 2013 to 2016 downtrend at 51, opening the door to continued upside that should reach the .786 retracement at 62. That price level is narrow-aligned with multiple whipsaws that followed the 2014 reversal, marking the last major barrier before Twitter reaches and tests the all-time high in the 70s. While all systems are ‘go’, a trip into that peak could easily take another 6 to 12 months.

For a look at all of today’s economic events, check out our economic calendar.

Disclosure: the author held no positions in aforementioned securities at the time of publication.

Mixed Bag of Quarterly Reports from Tech-Heavyweights Could Pressure US Stock Indexes on Friday

U.S. stock indexes posted a volatile reaction to a mixed bag of quarterly reports from top-tier technology companies after the closing bell on Thursday. Yesterday’s late reports came amid turbulence on Wall Street, with soaring coronavirus cases and uncertainty about a fiscal relief bill in Washington dimming the outlook for an economic recovery and knocking over 3% off the S&P 500 so far this week.

After the cash market close on Thursday, Alphabet (Google) rallied, Apple sank, Twitter tumbled and Facebook dropped. Share swings in these companies following their earnings reports after the bell sent exchange-traded funds tracking the S&P 500 and NASDAQ Composite down about 1% each, suggesting downside pressure on Wall Street on Friday.

Alphabet Sales Growth Revived as Advertisers Flock Back to Google

Google parent Alphabet Inc on Thursday powered back to sales growth, beating analysts’ estimates for the third quarter as businesses initially hobbled by the coronavirus pandemic resumed advertising with the internet’s biggest supplier of ads.

Alphabet shares, up 13% on the year, rose 8.5% after hours to $1,689.89.

Apple’s Late iPhone Launch Temporarily Wiped $100 Billion Off Its Stock Value

The late launch of new 5G phones caused Apple Inc’s customers to put off buying new devices, leading the company on Thursday to report the steepest quarterly drop in iPhone sales in two years.

Apple fell over 5% at one point in after-hours trade, wiping $100 billion from its stock market value.

Since 2013, Apple has delivered new iPhones each September like clockwork. But pandemic-induced delays pushed the announcement back a month, with some devices still yet to ship.

Even as booming sales of Macs and AirPods boosted overall revenue and profit above what analysts had expected, iPhone sales dropped 20.7% to $26.4 billion.

Twitter Warns US Election Could Affect Ad Sales, Shares Drop 16%

Twitter Inc on Thursday added fewer users than Wall Street had expected and said a rise in expenses would accelerate in the fourth quarter, sending its shares tumbling 16%.

The San Francisco-based social media company said it expected expenses to increase by close to 20% in the fourth quarter compared with a year ago due to an increase in investments.

The company also cautioned that it was hard to predict how advertisers would react as the U.S. presidential election nears on November 3.

Shares of Twitter fell to $44.00 in after-market trading.

Facebook Anticipates Tougher 2021 Even as Pandemic Boosts Ad Revenue

Facebook Inc on Thursday warned of a tougher 2021 despite beating analysts’ estimates for quarterly revenue as businesses adjusting to the global coronavirus pandemic continued to rely on the company’s digital ad tools.

The world’s biggest social media company said in its outlook that it faced “a significant amount of uncertainty,” citing pending privacy changes by Apple and a possible reversal in the pandemic-prompted shift to online commerce.

“Considering that online commerce in our largest ad vertical, a change in this trend could serve as a headwind to our 2021 ad revenue growth,” it said.

Shares of the company were lower in extended trading.

Amazon Sees Pandemic Boosting Holiday Sales and Investment in Delivery

Amazon.com Inc on Thursday forecast a jump in holiday sales – and costs related to COVID-19 – as consumers continued to shop more online during the pandemic.

A company executive added that heightened spending on delivery infrastructure would likely continue over years, and shares fell 2% in after-hours trading.

For the fourth quarter, Amazon said it expects net sales of $112 billion to $121 billion. That would mark the company’s first over $100 billion and follows a third-quarter revenue beat that analysts such as eMarketer’s Andrew Lipsman did not expect.

“While it was clear that the pandemic-driven shift to e-commerce would keep Amazon’s topline elevated, it surprised by easily surpassing an already high bar,” Lipsman said.

Revealing Summary

Without Facebook, Apple, Amazon, Netflix and Alphabet – the so-called FAANG stocks – the S&P 500 would be down about 4% in 2020, compared with the index’s 2% year-to-date rise, according to a research note from Bespoke Investment Group on Thursday.

“Due to both the huge weight of these stocks and their outperformance, the market has become more reliant on them than ever before for its gains,” according to Bespoke.

For a look at all of today’s economic events, check out our economic calendar.