The latest Market Talks covering Technology, Media and Telecom. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.
0814 GMT - Just Dial's Ebitda margin is seen by management as improving further after this margin expanded by 340bps on quarter in 4Q FY 2024, ICICI Securities analysts say in a research report. Management has guided for over 30% Ebitda growth and over 15% revenue growth for FY 2025, and plans to achieve at least half of this growth via price increases, the analysts note. Some of the Indian search engine provider's key strategic initiatives include automation of processes which have resulted in less dependence on workforce, the analysts add. The brokerage raises the stock's target price to INR1,260.00 from INR1,101.00 with an unchanged buy rating. Shares are 4.5% higher at INR1,055.10. (ronnie.harui@wsj.com)
0652 GMT - The pressure of TSMC's margin in 2024 could propel the chip maker to increase prices in 2025, Morgan Stanley analysts say in a research note. Higher costs from equipment depreciation and higher electricity costs in Taiwan could weigh on TSMC's 2024 gross margin, the analysts say. They reckon a 5% price hike for 2025 could be possible given TSMC's substantial value-add and on that basis, TSMC's gross margin could recover to 53%-54% in 2025. MS believes the stock could further re-rate on AI growth and investors may look through its 2024 margin compression and focus more on 2025 and 2026. The U.S. bank maintains an overweight rating on TSMC and keeps its price target at NT$860. Shares last closed 6.7% lower at NT$750.00.(sherry.qin@wsj.com)
0107 GMT - Axiata Group's subsidiary Dialog's proposed merger with Airtel Lanka looks like a positive development as it is poised to yield long-term synergies, Maybank IB analyst Tan Chi Wei says in a note. However, he reckons integration costs may need to be absorbed, potentially delaying Axiata's net profit recovery in the initial years. But Tan maintains a positive outlook on Axiata's risk-reward profile, with the potential net profit recovery and balance sheet improvement to act as catalysts for re-rating. Maybank maintains a buy rating on Axiata and keeps its target price at MYR3.50. Shares are 0.8% higher at MYR2.57. (yingxian.wong@wsj.com)
0052 GMT - Analysis of other apps' revenue-per-user trends leaves Jefferies analyst Wei Sim feeling positive about the prospects for Life360's ad business. Sim tells clients in a note that there is a general trend of revenue per monthly active user increasing over time, with a ceiling to monetization yet to be established. He observes that Meta has increased its revenue per user more than tenfold in 12 years. The metric is also influenced by the affluence of end users and their data availability, both of which Sim sees as positives for monetization efforts at family safety app developer Life360. Jefferies has a buy rating and A$17.20 target price on the stock, which is down 0.1% at A$13.07. (stuart.condie@wsj.com)
2117 GMT - Netflix is hoping customers see its advertising-supported subscription tier as still better than cable. Co-CEO Greg Peters says in a video with 1Q earnings that greater awareness of the quality of the company's ad experience should help boost subscriptions. He says that the linear TV ad experience is still "quite poor" in many places around the world. He also mentions low price and tools like integrated payments as drivers of growth for the ad tier. Ads membership grew 65% sequentially in 1Q, keeping pace with the quarter-on-quarter changes in the previous two reporting periods. Netflix shares are down 3.9% to $587.22 after-hours. (ben.glickman@wsj.com; @benglickman)
1942 GMT - Apple is looking to a crop of enterprise customers, including retailer Lowe's and software maker SAP, to showcase the Vision Pro's usefulness to corporate buyers, and justify its $3,500 price. Though adoption by a wide business audience remains tricky. Cisco built an app for the "mixed-reality" headset, but says it only selectively handed out a small number of headsets inside the company. "It's not like every desk at Cisco has a Vision Pro," said Jeetu Patel, general manager of Cisco's security and collaboration products. (belle.lin@wsj.com)
1339 GMT - Tesla is undergoing a thesis-changing shift, one that could push the stock towards a potentially painful transition in ownership base, according to Deutsche Bank in a research note. Tesla's high likelihood of pushing out its Model 2 will create significant earnings and free-cash-flow pressure on estimates in 2026 and beyond, say the analysts. This ties Tesla's future to cracking the code on full driverless autonomy with its Robotaxi, "which represents significant technological, regulatory and operational challenges," the analyst says. They think certain investors who focus on Tesla's volume and cost advantage may potentially throw in the towel and be replaced by AI/tech investors with longer time horizons. Deutsche Bank downgrades Tesla to hold and cuts the price target to $123 from $189. Shares fall 3% to $150.76 in early trading. (denny.jacob@wsj.com; @pennedbyden)
0937 GMT - ASML Holding's order intake in the first quarter was so low that there was virtually no meaningful demand from key customers like Taiwan Semiconductor Manufacturing Co. or Intel, but these chip makers are expected to place orders before the end of the year, Citi analysts write in a note to investors. "Both of these have yet to order for their 2025 needs, so we do expect them to order in the coming 6 months," they say. Commentary from ASML management that the Dutch semiconductor-equipment maker should achieve revenue of up to EUR40 billion next year remains convincing, the analysts say. ASML shares trade 0.1% higher at EUR852.80. (mauro.orru@wsj.com)
0935 GMT - ASML Holding can expect a significant volume of orders from Taiwan Semiconductor Manufacturing Co. in the coming quarters since it hasn't placed many for a few months now due to a weak recovery in the semiconductor market, Berenberg's Tammy Qiu writes in a research note. Qiu also expects order momentum from Intel to continue as it looks to compete with TSMC with its 18A process technology. ASML's 1Q orders slipped to EUR3.61 billion from EUR3.75 billion a year earlier against a Visible Alpha forecast of nearly EUR5.10 billion. However, this doesn't indicate that the Dutch semiconductor-equipment maker won't be able to achieve its 2025 revenue guidance since orders can vary a lot by quarter, Qiu says. ASML shares trade 0.1% higher at EUR852.60. (mauro.orru@wsj.com)
0922 GMT - Nokia 1Q results missed expectations on weaker sales and although earnings this year should be fairly back-end loaded, predictability remains limited, Kepler Cheuvreux analyst Sebastien Sztabowicz writes. Despite a weaker-than-expected start to the year and challenging near-term market conditions, management confirmed improved underlying trends in network infrastructure from the second half of the year and reaffirmed its targets for the current year. Kepler Cheuvreux retains its hold rating, as sales and margins should be slightly squeezed in coming quarters, there is increased risk of disruption from the gradual introduction of Open RAN that allows operators to build networks using equipment from several different suppliers, and valuation isn't sufficiently discounted. It has a EUR3.30 price target. Shares trade 1.2% lower at EUR3.12. (dominic.chopping@wsj.com)
0916 GMT - Deliveroo maintained its full-year guidance after first-quarter growth despite operating in a market with robust competition, AJ Bell Investment Director Russ Mould writes in a note. However, there are signs it is losing market share to rival Just Eat Takeaway in the U.K. as Deliveroo's first-quarter gross transaction value growth was slightly lower, Mould says. "The problem for Deliveroo is not just that it is scrapping with several others for a piece of the same pie but that the pie is getting smaller as people become less willing and able to splash out on regular takeaways," Mould adds. Deliveroo shares are up 6.4% at 129.00 pence. Just Eat shares are up 0.2% at EUR13.34. (najat.kantouar@wsj.com)
0857 GMT - The cost of insuring euro credit against default falls as market sentiment turns positive ahead of Netflix 1Q earnings on Thursday. "In the absence of pivotal macro data, investor focus remains on the earnings season," UniCredit analysts say in a note. Netlix is the first major tech company to release 1Q earnings. The iTraxx Europe Crossover index, which tracks euro junk bond CDSs, falls 5 basis points to 336bps in morning trade. The iTraxx Europe Main index, which tracks euro investment grade CDSs, falls 1bp to 61bps, S&P Global Market Intelligence data show. (miriam.mukuru@wsj.com)
(END) Dow Jones Newswires
April 19, 2024 04:20 ET (08:20 GMT)
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