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Canaccord: 3 FAANG Stocks to Buy Into Earnings

Canaccord: 3 FAANG Stocks to Buy Into Earnings

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It’s going to be a busy week on Wall Street. Several industry heavyweights, including four of the five FAANG stocks, are gearing up to release their quarterly numbers, and investors are anxiously waiting to see the extent of COVID-19's impact on profits.

With the ongoing public health crisis forcing several names to cut quarterly guidance, it’s no wonder investors are concerned. Against this backdrop, research firm Canaccord Genuity reevaluated several names in its coverage universe to see how they stack up ahead of their earnings releases. Ultimately, Maria Ripps, one of the firm’s analysts, concluded that there are still exciting opportunities out there, pointing specifically to three FAANG stocks.

Bearing this in mind, we used TipRanks’ database to find out what the rest of the Street has to say about the three FAANG stocks’ prospects going into their earnings releases. The platform revealed that each has received enough bullish calls to earn a “Strong Buy” consensus rating. Here’s the lowdown.

Facebook (FB)

The first of Canaccord’s picks is social media titan Facebook, which is preparing for its earnings release on April 29. The company already provided investors with a brief business update at the end of March, but the firm is looking forward to a more in-depth look at the state of its affairs during the global pandemic.

Canaccord's Maria Ripps says that she’ll be looking out for further detail on the impact of social distancing on user engagement. It should be noted that according to the company’s March update, FB saw a significant rise in engagement across its family of apps, particularly its messaging services in several of the countries impacted the most by COVID-19.

Based on this, the analyst predicts global MAU growth in Q1 2020 will reach 8.1%, up from 7.6% in the previous quarter. Additionally, Ripps thinks that because “virtually all social interactions have been moved online during the pandemic”, engagement is slated to get a boost of 30 basis points sequentially, or 100 basis points on a year-over-year basis.

However, when it comes to FB’s advertising segment, it’s an entirely different story. Expounding on this, Ripps stated, “Despite the surge in user engagement, COVID-19 has created a significant amount of economic uncertainty globally, and Facebook has observed a weakening of its advertising business as a result. We are forecasting advertising revenue growth to decelerate to ~17% year-over-year in Q1 2020 (vs. 24.6% reported and 26% ex-FX in 4Q19) on the heels of this economic weakness, particularly given Facebook’s exposure to small- and medium-sized businesses, along with anticipated advertising targeting headwinds.”

Having said that, the social media giant is expected to provide a glimpse of the progress it has made integrating and testing shopping features within Instagram. With online shopping surging as consumers are forced to stay at home, Ripps believes the update could be a positive one. Management’s outlook for the second quarter and full year 2020 as well as an update on CCPA implementation should also provide more clarity on FB’s standing within the market.

Taking all of this into consideration, Ripps kept her Buy rating and $230 price target as is. Should this target be met, a twelve-month gain of 23% could be in the cards. (To watch Ripps’ track record, click here)

In general, other analysts are on the same page. With 36 Buy ratings, 1 Hold and 1 Sell assigned in the last three months, the word on the Street is that FB is a Strong Buy. The $220.35 average price target brings the upside potential to 17.5%. (See Facebook stock analysis on TipRanks)

Amazon (AMZN)

Moving right along to one of the “A’s” in FAANG, we come to eCommerce and web services behemoth Amazon. The company is set to report its first quarter 2020 results after the closing bell on April 30, and with it already up 30% year-to-date, investors are cautiously optimistic.

As a result of the COVID-19 pandemic, there has been a surge in the demand for essential products like groceries, healthcare products and other household items, which bodes well for the company’s eCommerce segment. Ripps points out the company has made a significant investment to ensure it’s able to meet this demand.

“The company has taken several steps to ensure its customers are receiving these much-needed deliveries as quickly as possible, including the hiring of more than 100,000 new full- and part-time associates and delayed fulfillment of non-essential products, and has implemented a number of changes to its operations to ensure the safety of all employees, particularly those in warehouse and fulfillment roles,” Ripps explained. She added, “Over the long-term, we anticipate that the COVID-19 pandemic will accelerate existing eCommerce trends, benefitting platforms such as Amazon.”

This should translate to hefty revenue gains, in the Canaccord Genuity analyst’s opinion. Ripps estimates that the total revenue growth rate will come in at 22% year-over-year, which is at the high end of management’s guidance. As for AWS, the news is also expected to be good. “For AWS, we see revenue growing 36% year-over-year (vs. 34% in Q4) as demand for cloud computing also spiked in Q1 due to COVID-19, leading to pricing power that should drive AWS operating margin back to 27% (vs. ~26% in full year 2019),” the analyst commented.

That being said, fulfillment costs are expected to increase thanks to mounting expenses as the company tries to keep pace with the demand. Like FB, its digital advertising business could also take a hit due to the effects of the pandemic. However, with respect to the former, Ripps thinks the expansion of AWS margin will offset growing fulfillment costs, with the analyst calling for a sequential consolidated operating margin expansion of 120 basis points.

To this end, Ripps stayed with the bulls, reiterating a Buy recommendation and $2,600 price target. This target implies shares could surge 9.5% in the next year.

Looking at the consensus breakdown, out of 43 total reviews published recently, 42 were bullish. As a result, AMZN earns a Strong Buy consensus rating. At $2,527.62, the average price target suggests 6% upside potential. (See Amazon stock analysis on TipRanks)

Alphabet (GOOGL)

Last but certainly not least we have Alphabet, Google’s parent company. It’s scheduled to release its first quarter numbers on April 28, and like other digital platforms, Wall Street observers have their eyes on advertising revenues.

Amid the ongoing public health crisis, businesses globally have been forced to shut down, consumer spending on non-essentials has declined and movements and travel have largely been restricted, hitting the advertising space hard.

“The global digital advertising landscape has been negatively impacted by the economic weakness caused by the coronavirus, and we anticipate Google’s advertising revenue growth will decelerate in Q1 and will decline year-over-year in Q2. In particular, we see the company’s exposure to the travel vertical and SMBs driving a significant portion of the decline as businesses in these key segments pull back on advertising budgets,” Ripps noted. As a result, the analyst is calling for 11% year-over-year advertising growth, reflecting a deceleration from 16.7% in Q4.

However, there are several positives when it comes to GOOGL’s growth story. “Somewhat offsetting these advertising trends, we also see COVID-19 likely driving heightened demand for cloud computing as some online businesses see a surge in demand from increased time spent at home while others are forced to migrate systems and employees to remote operations,” Ripps argued. In addition, heightened levels of engagement are expected, especially on YouTube, thanks to lockdowns and social distancing measures.

It should also be noted that management could provide an update on how it will integrate Fitbit into its health and fitness offerings, along with how Waymo is holding up during the pandemic.

Based on all of the above, Ripps maintained a Buy rating. Setting a $1,550 price target, shares could climb 22% higher in the next year.

Turning now to the rest of the Street, other analysts take a similar approach. 37 Buys and a single Hold assigned in the last three months add up to a Strong Buy analyst consensus. Not to mention the $1,491 average price target implies 17% upside potential. (See Alphabet stock analysis on TipRanks)

To find good ideas for tech stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

The post Canaccord: 3 FAANG Stocks to Buy Into Earnings appeared first on TipRanks Financial Blog.

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The Coming Of The Police State In America

The Coming Of The Police State In America

Authored by Jeffrey Tucker via The Epoch Times,

The National Guard and the State Police are now…

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The Coming Of The Police State In America

Authored by Jeffrey Tucker via The Epoch Times,

The National Guard and the State Police are now patrolling the New York City subway system in an attempt to do something about the explosion of crime. As part of this, there are bag checks and new surveillance of all passengers. No legislation, no debate, just an edict from the mayor.

Many citizens who rely on this system for transportation might welcome this. It’s a city of strict gun control, and no one knows for sure if they have the right to defend themselves. Merchants have been harassed and even arrested for trying to stop looting and pillaging in their own shops.

The message has been sent: Only the police can do this job. Whether they do it or not is another matter.

Things on the subway system have gotten crazy. If you know it well, you can manage to travel safely, but visitors to the city who take the wrong train at the wrong time are taking grave risks.

In actual fact, it’s guaranteed that this will only end in confiscating knives and other things that people carry in order to protect themselves while leaving the actual criminals even more free to prey on citizens.

The law-abiding will suffer and the criminals will grow more numerous. It will not end well.

When you step back from the details, what we have is the dawning of a genuine police state in the United States. It only starts in New York City. Where is the Guard going to be deployed next? Anywhere is possible.

If the crime is bad enough, citizens will welcome it. It must have been this way in most times and places that when the police state arrives, the people cheer.

We will all have our own stories of how this came to be. Some might begin with the passage of the Patriot Act and the establishment of the Department of Homeland Security in 2001. Some will focus on gun control and the taking away of citizens’ rights to defend themselves.

My own version of events is closer in time. It began four years ago this month with lockdowns. That’s what shattered the capacity of civil society to function in the United States. Everything that has happened since follows like one domino tumbling after another.

It goes like this:

1) lockdown,

2) loss of moral compass and spreading of loneliness and nihilism,

3) rioting resulting from citizen frustration, 4) police absent because of ideological hectoring,

5) a rise in uncontrolled immigration/refugees,

6) an epidemic of ill health from substance abuse and otherwise,

7) businesses flee the city

8) cities fall into decay, and that results in

9) more surveillance and police state.

The 10th stage is the sacking of liberty and civilization itself.

It doesn’t fall out this way at every point in history, but this seems like a solid outline of what happened in this case. Four years is a very short period of time to see all of this unfold. But it is a fact that New York City was more-or-less civilized only four years ago. No one could have predicted that it would come to this so quickly.

But once the lockdowns happened, all bets were off. Here we had a policy that most directly trampled on all freedoms that we had taken for granted. Schools, businesses, and churches were slammed shut, with various levels of enforcement. The entire workforce was divided between essential and nonessential, and there was widespread confusion about who precisely was in charge of designating and enforcing this.

It felt like martial law at the time, as if all normal civilian law had been displaced by something else. That something had to do with public health, but there was clearly more going on, because suddenly our social media posts were censored and we were being asked to do things that made no sense, such as mask up for a virus that evaded mask protection and walk in only one direction in grocery aisles.

Vast amounts of the white-collar workforce stayed home—and their kids, too—until it became too much to bear. The city became a ghost town. Most U.S. cities were the same.

As the months of disaster rolled on, the captives were let out of their houses for the summer in order to protest racism but no other reason. As a way of excusing this, the same public health authorities said that racism was a virus as bad as COVID-19, so therefore it was permitted.

The protests had turned to riots in many cities, and the police were being defunded and discouraged to do anything about the problem. Citizens watched in horror as downtowns burned and drug-crazed freaks took over whole sections of cities. It was like every standard of decency had been zapped out of an entire swath of the population.

Meanwhile, large checks were arriving in people’s bank accounts, defying every normal economic expectation. How could people not be working and get their bank accounts more flush with cash than ever? There was a new law that didn’t even require that people pay rent. How weird was that? Even student loans didn’t need to be paid.

By the fall, recess from lockdown was over and everyone was told to go home again. But this time they had a job to do: They were supposed to vote. Not at the polling places, because going there would only spread germs, or so the media said. When the voting results finally came in, it was the absentee ballots that swung the election in favor of the opposition party that actually wanted more lockdowns and eventually pushed vaccine mandates on the whole population.

The new party in control took note of the large population movements out of cities and states that they controlled. This would have a large effect on voting patterns in the future. But they had a plan. They would open the borders to millions of people in the guise of caring for refugees. These new warm bodies would become voters in time and certainly count on the census when it came time to reapportion political power.

Meanwhile, the native population had begun to swim in ill health from substance abuse, widespread depression, and demoralization, plus vaccine injury. This increased dependency on the very institutions that had caused the problem in the first place: the medical/scientific establishment.

The rise of crime drove the small businesses out of the city. They had barely survived the lockdowns, but they certainly could not survive the crime epidemic. This undermined the tax base of the city and allowed the criminals to take further control.

The same cities became sanctuaries for the waves of migrants sacking the country, and partisan mayors actually used tax dollars to house these invaders in high-end hotels in the name of having compassion for the stranger. Citizens were pushed out to make way for rampaging migrant hordes, as incredible as this seems.

But with that, of course, crime rose ever further, inciting citizen anger and providing a pretext to bring in the police state in the form of the National Guard, now tasked with cracking down on crime in the transportation system.

What’s the next step? It’s probably already here: mass surveillance and censorship, plus ever-expanding police power. This will be accompanied by further population movements, as those with the means to do so flee the city and even the country and leave it for everyone else to suffer.

As I tell the story, all of this seems inevitable. It is not. It could have been stopped at any point. A wise and prudent political leadership could have admitted the error from the beginning and called on the country to rediscover freedom, decency, and the difference between right and wrong. But ego and pride stopped that from happening, and we are left with the consequences.

The government grows ever bigger and civil society ever less capable of managing itself in large urban centers. Disaster is unfolding in real time, mitigated only by a rising stock market and a financial system that has yet to fall apart completely.

Are we at the middle stages of total collapse, or at the point where the population and people in leadership positions wise up and decide to put an end to the downward slide? It’s hard to know. But this much we do know: There is a growing pocket of resistance out there that is fed up and refuses to sit by and watch this great country be sacked and taken over by everything it was set up to prevent.

Tyler Durden Sat, 03/09/2024 - 16:20

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Low Iron Levels In Blood Could Trigger Long COVID: Study

Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate…

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Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate iron levels in their blood due to a COVID-19 infection could be at greater risk of long COVID.

(Shutterstock)

A new study indicates that problems with iron levels in the bloodstream likely trigger chronic inflammation and other conditions associated with the post-COVID phenomenon. The findings, published on March 1 in Nature Immunology, could offer new ways to treat or prevent the condition.

Long COVID Patients Have Low Iron Levels

Researchers at the University of Cambridge pinpointed low iron as a potential link to long-COVID symptoms thanks to a study they initiated shortly after the start of the pandemic. They recruited people who tested positive for the virus to provide blood samples for analysis over a year, which allowed the researchers to look for post-infection changes in the blood. The researchers looked at 214 samples and found that 45 percent of patients reported symptoms of long COVID that lasted between three and 10 months.

In analyzing the blood samples, the research team noticed that people experiencing long COVID had low iron levels, contributing to anemia and low red blood cell production, just two weeks after they were diagnosed with COVID-19. This was true for patients regardless of age, sex, or the initial severity of their infection.

According to one of the study co-authors, the removal of iron from the bloodstream is a natural process and defense mechanism of the body.

But it can jeopardize a person’s recovery.

When the body has an infection, it responds by removing iron from the bloodstream. This protects us from potentially lethal bacteria that capture the iron in the bloodstream and grow rapidly. It’s an evolutionary response that redistributes iron in the body, and the blood plasma becomes an iron desert,” University of Oxford professor Hal Drakesmith said in a press release. “However, if this goes on for a long time, there is less iron for red blood cells, so oxygen is transported less efficiently affecting metabolism and energy production, and for white blood cells, which need iron to work properly. The protective mechanism ends up becoming a problem.”

The research team believes that consistently low iron levels could explain why individuals with long COVID continue to experience fatigue and difficulty exercising. As such, the researchers suggested iron supplementation to help regulate and prevent the often debilitating symptoms associated with long COVID.

It isn’t necessarily the case that individuals don’t have enough iron in their body, it’s just that it’s trapped in the wrong place,” Aimee Hanson, a postdoctoral researcher at the University of Cambridge who worked on the study, said in the press release. “What we need is a way to remobilize the iron and pull it back into the bloodstream, where it becomes more useful to the red blood cells.”

The research team pointed out that iron supplementation isn’t always straightforward. Achieving the right level of iron varies from person to person. Too much iron can cause stomach issues, ranging from constipation, nausea, and abdominal pain to gastritis and gastric lesions.

1 in 5 Still Affected by Long COVID

COVID-19 has affected nearly 40 percent of Americans, with one in five of those still suffering from symptoms of long COVID, according to the U.S. Centers for Disease Control and Prevention (CDC). Long COVID is marked by health issues that continue at least four weeks after an individual was initially diagnosed with COVID-19. Symptoms can last for days, weeks, months, or years and may include fatigue, cough or chest pain, headache, brain fog, depression or anxiety, digestive issues, and joint or muscle pain.

Tyler Durden Sat, 03/09/2024 - 12:50

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February Employment Situation

By Paul Gomme and Peter Rupert The establishment data from the BLS showed a 275,000 increase in payroll employment for February, outpacing the 230,000…

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By Paul Gomme and Peter Rupert

The establishment data from the BLS showed a 275,000 increase in payroll employment for February, outpacing the 230,000 average over the previous 12 months. The payroll data for January and December were revised down by a total of 167,000. The private sector added 223,000 new jobs, the largest gain since May of last year.

Temporary help services employment continues a steep decline after a sharp post-pandemic rise.

Average hours of work increased from 34.2 to 34.3. The increase, along with the 223,000 private employment increase led to a hefty increase in total hours of 5.6% at an annualized rate, also the largest increase since May of last year.

The establishment report, once again, beat “expectations;” the WSJ survey of economists was 198,000. Other than the downward revisions, mentioned above, another bit of negative news was a smallish increase in wage growth, from $34.52 to $34.57.

The household survey shows that the labor force increased 150,000, a drop in employment of 184,000 and an increase in the number of unemployed persons of 334,000. The labor force participation rate held steady at 62.5, the employment to population ratio decreased from 60.2 to 60.1 and the unemployment rate increased from 3.66 to 3.86. Remember that the unemployment rate is the number of unemployed relative to the labor force (the number employed plus the number unemployed). Consequently, the unemployment rate can go up if the number of unemployed rises holding fixed the labor force, or if the labor force shrinks holding the number unemployed unchanged. An increase in the unemployment rate is not necessarily a bad thing: it may reflect a strong labor market drawing “marginally attached” individuals from outside the labor force. Indeed, there was a 96,000 decline in those workers.

Earlier in the week, the BLS announced JOLTS (Job Openings and Labor Turnover Survey) data for January. There isn’t much to report here as the job openings changed little at 8.9 million, the number of hires and total separations were little changed at 5.7 million and 5.3 million, respectively.

As has been the case for the last couple of years, the number of job openings remains higher than the number of unemployed persons.

Also earlier in the week the BLS announced that productivity increased 3.2% in the 4th quarter with output rising 3.5% and hours of work rising 0.3%.

The bottom line is that the labor market continues its surprisingly (to some) strong performance, once again proving stronger than many had expected. This strength makes it difficult to justify any interest rate cuts soon, particularly given the recent inflation spike.

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