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.
0818 GMT - Just Eat Takeaway's partnership with Amazon in Germany, Austria and Spain is likely to be well received as it opens the door to further potential deals in other European markets, Citi analysts write in a note. This collaboration will allow Prime members to get free delivery on food delivery orders, which is expected to increase order numbers, the analysts say. However, "there's limited proof that a partnership with Amazon can drive incremental top-line growth for Just Eat Takeway," the analysts add. Investors may question the idea that incremental orders and higher frequency can offset a lack of delivery fee revenue from Prime users, the U.S. bank says. Shares are up 1.75% at EUR12.22. (najat.kantouar@wsj.com)
0442 GMT - Incremental copper demand growth forecast from data centers might look small on an annual basis, but data centers could require nearly 2.9 million metric tons of copper between 2024 and 2030, Jefferies analysts Christopher LaFemina and Patricia Hove say in a note. They estimate incremental global copper demand in data centers will increase from 241,000 tons or 0.9% of global demand in 2023 to at least 463,000 tons or 1.4% of global demand by 2030, based on what they describe as conservative assumptions. That doesn't include copper needed for the grid to power the data centers, they add. "Incremental demand for copper in DCs in an already tight market will theoretically lead to even wider market deficits and higher prices than many expect," they say. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)
0340 GMT - SM Entertainment could get an earnings boost from its new K-pop groups, Aespa and Riize, HSBC analyst Junhyun Kim writes in a note. The K-pop groups' fast-growing fandom could help the South Korean talent agency lead solid 2024 earnings growth, which could accelerate in 2025, the analyst says. Kim is especially upbeat on girl band Aespa, which has been showing positive album sales recently and fast growth in monthly listeners on global music streaming service Spotify. He expects SM's operating profit to grow 19% in 2024 and 33% in 2025. HSBC maintains a buy rating on the stock and keeps its KRW120,000 target. Shares are 1.7% lower at KRW79,900. (kwanwoo.jun@wsj.com)
0251 GMT - Telekom Malaysia and Singtel's recent joint venture to develop data centers in Johor could enhance the telco giant's earnings growth, CGS International analysts Prem Jearajasingam and Kenneth Tan say in a note. They think it offers Telekom an additional avenue for earnings growth and potential higher ROEs. Despite operational risks, they believe these can be mitigated by current demand trends and the strong partnership with SingTel, which collaborates with global private equity firm KKR in the data center sector. Analysts see the announcement incrementally positive for Telekom's revenue and net profit growth, and as a potential catalyst for a re-rating of its shares, which are trading at an undemanding valuation. CGS maintains an add rating on Telekom and keeps its target price at MYR7.30. Shares are 1.3% lower at MYR6.71. (yingxian.wong@wsj.com)
0226 GMT - Singtel and Telekom Malaysia's recent joint venture to develop data centers in Malaysia is timely, thanks to the development of a special economic zone between Singapore and the Malaysian state of Johor Bahru, RHB Singapore Research team says in a note. Singtel will develop a new hyperscale data center campus in Johor for its maiden entry in Malaysia, RHB notes. Data centers are considered as core economic enablers, the team says. With the latest JV, Singtel's overall data center capacity is set to grow from its current 62 megawatt in Singapore to more than 250 megawatt regionally over the next three years, it adds. RHB keeps a buy rating on Singtel's stock with a target price of S$3.25. The stock is last at S$2.59.(amanda.lee@wsj.com)
0221 GMT - Naver could get a weaker-than-expected valuation boost from the initial public offering of its online comics affiliate, Webtoon Entertainment, Nomura analyst Angela Hong says in a note. Hong applies a 50% holding-company discount to cut the fair value of the South Korean internet platform company's ownership in Webtoon, which is seeking a $2.3 billion-$2.7 billion market valuation. Naver's slowing gross-merchandise-value growth at its e-commerce business could also weigh on the company, she says. Nomura cuts the target price on Naver by 22% to KRW210,000 but maintains a buy rating, noting that the stock is oversold. Shares are 0.9% lower at KRW165,300. (kwanwoo.jun@wsj.com)
0217 GMT - Telekom Malaysia's JV with Singtel to develop data-center facilities in Malaysia's Johor state could bolster the Malaysian telco's leading position in the country's data-center sector, TA Securities says. The JV is expected to capitalize on increasing demand and opportunities from emerging AI application providers and multinational corporations, analyst Chan Mun Chun says in a note. Chan believes Telekom's solid balance sheet ensures sufficient funding for the project, with Telekom planning to inject approximately MYR588 million into the JV. TA Securities raises Telekom's target price to MYR7.70 from MYR7.18 while maintaining a buy rating on the stock. Shares are 1.0% lower at MYR6.73. (yingxian.wong@wsj.com)
0204 GMT - Life360 could narrow or even raise its fiscal 2024 revenue and earnings guidance ranges with delivery of a good 2Q result, Bell Potter analyst Chris Savage writes. He tells clients in a note that the location-tracking company's stronger-than-expected growth in paid users looks positive for revenue given increased subscription prices. He expects a good 2Q result and points out that 3Q is traditionally an even stronger period for the app developer. Bell Potter raises its target price 4.4% to A$17.75 and keeps a buy rating on the stock, which is down 0.4% at A$15.73. (stuart.condie@wsj.com)
0151 GMT - Malaysia is likely to see an increase in foreign direct investments from China following Premier Li Qiang's visit, Maybank analysts say, noting that investments surged after previous Chinese leaders' visits in 2013 and 2015. Based on historical trends, Malaysia could receive more investments, relaxations in visa requirements and new trade agreements, they say in a note. The current wave of positive developments could extend beyond just FDIs and major construction projects, they say. Companies with business links to China including Dialog Group, My E.G. Services, Eco World Development, AirAsia X and EP Manufacturing could be potential beneficiaries, they add. (yingxian.wong@wsj.com)
2339 GMT - Location-tracking company Life360's growth in paid accounts has already exceeded market expectations for the June half, Jefferies analyst Wei Sim says. He points out in a note to clients that Life360 recorded 2 million so-called paying circles by June 17, compared with an average analyst forecast of 1.879 million by June 30. The company's trading update implies 103,000 net additions in 2Q, which Sim observes represents an acceleration growth compared with both the March quarter and the year-earlier period. Jefferies keeps a buy rating and A$17.40 target price on Life360's Australia-listed securities, which are at A$15.80 ahead of the open. (stuart.condie@wsj.com)
2004 GMT - Technology shares again lift the Nasdaq and S&P 500 to fresh records highs as Nvidia becomes the market capitalization leader for the first time. The rest of the magnificent seven stocks trade lower. Financial markets are closed on Wednesday for Juneteenth. Economic data was mixed as retail sales rise less than expected in May, while industrial production increases more than economists forecast. Fed governor Adriana Kugler says she continues to expect it would be appropriate for the central bank to lower rates this year. DJIA gains 56 points, or 0.2%, to 38834, the S&P 500 rises 0.3% to 5487 and the Nasdaq adds 5 points to 17862. (patrick.sullivan@wsj.com)
1707 GMT - Reddit is reportedly planning to start showing ads in the comment section of its posts, which will unlock more ad inventory and drive revenue growth, JMP analysts say in a research note. The forum-based social network is enjoying robust engagement, according to the analysts' social tracker, and the addition of comment-section ads give them confidence that Reddit can sustain growth in 2H as comps get trickier. The majority of ad impressions currently come from logged-in users scrolling through the homepage, but comment ads can reach logged out visitors and broadly monetize all users, the analysts say. (dean.seal@wsj.com)
(END) Dow Jones Newswires
June 19, 2024 04:20 ET (08:20 GMT)
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