The latest Market Talks covering Equities. Published exclusively on Dow Jones Newswires throughout the day.
1352 ET - Nintendo's Switch console is in a twilight period, and the company needs a next generation of hardware and software to reignite growth and momentum, Benchmark analyst Mike Hickey says in a research note. The Japanese videogame maker's releases this year have paled in comparison to last year's, when "The Super Mario Bros. Movie" and "The Legend of Zelda: Tears of the Kingdom" fueled sales. The Switch is entering its eighth year on the market, and its high price is a deterrent, Hickey says. Buyers are eagerly looking forward to a new console and games, he adds. Nintendo cut its Switch sales forecasts after posting disappointing first-half results. (connor.hart@wsj.com)
1344 ET - Citigroup could be the beneficiary of a Trump victory due to the general idea that a Trump administration focuses on fostering a lower regulation climate that benefits big banks, but UBS sees other catalysts that could extend near-term stock performance beyond the election, even with a Harris win. Analysts say in a research note that they see a scenario for stable-to-higher net interest income in '25, even in a declining rate scenario in the US and globally. It could mean that Citigroup would potentially hit its revenue growth target for a third consecutive year, bolstering its credibility. "Sounds generic, but for Citigroup to work as a long-term investment, it has to continue to execute on the material operational transformation it has undertaken," the analysts say. Shares rise 2% to $63.62. (sabela.ojea@wsj.com; @sabelaojeaguix)
1340 ET - Sensata Technologies is bracing for impact from further cuts to auto production in the coming months. The company's 4Q guidance disappoints investors, with an expected drop in revenue partially due to reduced production expectations in automotive and heavy vehicle industries. Interim CEO Martha Sullivan says on a call with analysts that, based on customer conversations and current inventory levels, it is "highly likely" that third-party forecasters will reduce their production forecasts again in 4Q, following cuts earlier this year. Automotive markets were down about 5% year-on-year in 3Q, Sensata says. Sensata skids 6% in afternoon trading. (ben.glickman@wsj.com; @benglickman)
1224 ET - Wedbush analysts say a Trump presidency would be an overall negative on the electric-vehicle market, as the administration is likely to pull EV rebates and tax incentives. Elon Musk's endorsement of Trump is a bet on the fact that a non-EV subsidy environment gives Tesla a clear competitive advantage, given its unmatched scale and scope within the sector, they note. Though Tesla could still be hurt by likely higher China tariffs, which would additionally keep cheaper Chinese EV-makers from flooding the U.S. market, analysts say. "If Harris wins we would expect the EV tax credits to remain the same and ultimately increase in 2025 as the goal to get more US consumers towards EVs would be a laser focus in a Harris Administration," they write. (connor.hart@wsj.com)
1213 ET - Policy dynamics stemming from the presidential election will have implications for big tech companies, Wedbush analysts say in a research note. Higher tariffs and a harsher stance on China under another Trump administration would significantly impact the supply chain, hurting companies including Nvidia, Apple and Tesla, and slowing the pace of the artificial-intelligence revolution, they write. The analysts view a Harris win as more bullish for the sector. "However, with many races on the Senate and House up for grabs, a gridlock result with a mix of blue and red in the Beltway would complicate any major policy changes for Big Tech in the near-term," they say. (connor.hart@wsj.com)
1158 ET - Marqeta seems to be paying the price for additional regulatory scrutiny on its bank partners. After disclosing lackluster 4Q guidance late Monday, CEO Simon Khalaf says on a call with analysts that regulatory changes for small banks made last year have led to delays in launching new card programs. He says Marqeta and banks' onboarding and compliance teams have had a much greater workload. Time to launch a new program grew 30% to 40% from last year, Khalaf said, which has resulted in pushed-out revenue and profits. Shares drop 40%, on pace for the stock's largest ever percent decrease. (ben.glickman@wsj.com; @benglickman)
1141 ET - Two-way trade for Canada faces near-term downside from port strikes in both Montreal and British Columbia, adding to ongoing sluggishness in imports that reflects weak underlying demand in the economy and should keep the Bank of Canada on track to cut interest rates a further half percentage point in December, CIBC Capital Markets' Katherine Judge says. The economist adds the recently completed Trans Mountain pipeline should continue to support export growth ahead, while central bank cuts will be positive for demand in the coming year. (robb.stewart@wsj.com; @RobbMStewart)
1053 ET - Pet Valu plans to lower some prices to remain competitive in a softer consumer environment. On an earnings call, executives say the company invested to strengthen direct price competitiveness with key pet specialty peers, primarily in food and key premium consumables which they say have helped the company hold its gross share in respective categories. "As the Canadian consumer continues to be challenged, we are investing in additional ways to further strengthen our value offerings, including investing further and lowering prices for our industry... tightening the gap between our stores and mass offerings," the company says. (adriano.marchese@wsj.com)
1037 ET - Hims & Hers Health logged heavy revenue gains in 3Q in part from its compounded weight-loss drug business, but the company's core telehealth business looked strong too, Piper Sandler analysts Korinne Wolfmeyer and Sarah Morin say in a research note. Management called out strong demand across the Hers platform, which focuses on women's health and personal care, as well as rising demand for personalized offerings and medications that treat multiple conditions at once, the analysts say. Stripping out the weight-loss business, the company's subscriber count in 3Q was still more than 40% higher year-over-year. (dean.seal@wsj.com)
1034 ET - Bouygues' third-quarter results should be good enough to offer investors some relief, JPMorgan analysts say in a research note. The French construction-and-media conglomerate posted quarterly revenue in line with expectations. It posted revenue beats in the following divisions: Equans, construction and immobilier. Meanwhile, it reported profits ahead of consensus estimates at all levels. The company also reiterated its full-year guidance. With shares down 10% year to date, the company's results should offer relief, Akhil Dattani and Ankur Baheti write. Shares trade 3.1% higher at 30.37 euro. (nina.kienle@wsj.com)
1019 ET - Hims & Hers Health is still benefiting from the fact that consumers are struggling to obtain branded weight-loss drugs, known as GLP-1s, TD Cowen analysts say in a research note. The stock has been volatile due to uncertainty around whether Hims can keep offering its compounded GLP-1 after a shortage of branded GLP-1s was resolved, the analysts say. But the environment for GLP-1s is still highly dynamic and Hims' compounded version is still a credible solution for consumers that can't easily get branded GLP-1s, the analysts say. That said, the risk remains that regulators could swoop in at some point with new restrictions around compounded drugs, the analysts say. (dean.seal@wsj.com)
0958 ET - Restaurant Brands International says it is seeing early signs that demand could be picking up. CEO Joshua Kobza says on an earnings call that behind these encouraging signs are the declines of gas prices, a notable slowdown in inflation, as well as interest rates going down, all giving the consumer a little more budgetary slack. These are being reflected in consumer sentiment, Kobza says, and the company is seeing positive signs for industry demand. (adriano.marchese@wsj.com)
(END) Dow Jones Newswires
November 05, 2024 13:52 ET (18:52 GMT)
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