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Goldman Sachs Sees Doom and Gloom in These 3 Tech Stock Giants

Goldman Sachs Sees Doom and Gloom in These 3 Tech Stock Giants

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Wall Street observers hoped last week’s gains signaled the arrival of blue skies, but the COVID-19 storm is thundering on. Stocks started the week on the back foot as U.S. crude futures landed in the red for the first time in history. The lockdowns across the world have done away with the demand for crude, causing oil supply to surge.

Against this backdrop, investment firm Goldman Sachs is taking stock of the names in its coverage universe, noting that COVID-19-induced social distancing measures have taken a “severe” toll on some of its companies’ end markets. Additionally, the firm argues that the impact on profits could last longer than previously expected.

“We conclude that a number of our companies will be slower to recover with weakness persisting into 2021 even as our economists forecast a return to GDP growth in that year. Specifically, we expect consumer electronics demand to be slow to return and ASP weakness to persist well into 2021 similar to what we have observed in prior downturns,” said Goldman Sachs analyst Rod Hall.

Using TipRanks’ database, we were able to get the full scoop on three tech stock giants that have fallen out of Goldman Sachs’ favor. The platform also revealed what the rest of the Street has to say about each. Let’s take a closer look.

Apple Inc. (AAPL)

Even tech giant Apple won’t be immune to the impacts of COVID-19, and the company could be facing a much longer recovery timeline amid the worldwide shutdowns.

Part of Goldman Sachs' concern is related to poor unit demand as well as the length of time in which this figure will return to growth. “We are now modeling a deeper reduction in unit demand through mid-2020 and then a shallower recovery into early 2021,” analyst Rod Hall explained.

However, while much of the focus is expected to center around this issue at the beginning, Hall believes an additional headwind should be sounding the alarm bells. The analyst argues average selling price (ASP) weakness could weigh on earnings through 2021. “Handset ASPs downticked to a maximum year-over-year decline of 14% in the [global financial crisis] but, importantly, did not show positive growth until Q3 of 2010 even though unit growth had returned in late 2009,” he stated.

As a result, Apple’s new phones won’t necessarily support the faster type of 5G, millimeter-wave spectrum, as the added expense might not be warranted when there’s less demand for higher quality phones. This could mean the technology might not be included in the devices until 2021.

It also doesn’t help that its services business could be hampered by COVID-19. This appears to be the straw that broke the camel’s back for Hall, and thus he downgraded his call to Sell. Based on his $233 price target, the downside potential lands at 16%. (To watch Hall’s track record, click here)

Looking at the consensus breakdown, other analysts don’t necessarily agree with Hall. 27 Buys, 6 Holds and 3 Sells issued in the last three months give Apple a Moderate Buy consensus rating. With a $308.25 average price target, shares could surge nearly 15% in the next twelve months. (See Apple stock analysis on TipRanks)

Qualcomm Inc. (QCOM)

Qualcomm has cemented its status as one of the top players in the semiconductor space. However, Goldman Sachs believes weakening smartphone demand will be its downfall.

Speaking directly to this issue, Hall argues that decelerating smartphone demand will hamper both its Qualcomm CDMA Technologies (QCT) and Qualcomm Technology Licensing (QTL) segments. As a result, the analyst expects earnings to come in below the consensus estimate for not only 2020 but also 2021.

Expounding on this, Hall stated, “We are reducing our calendar year 2020 and calendar year 2021 3G/4G/5G units estimate by 12.5% and 10.0%, respectively, to 1,588 million and 1,758 million, due to the anticipated impacts from COVID-19 and weakening consumer confidence which we believe reduces smartphone replacement rates. We have also reduced our iPhone units expectations by 7% in calendar year 2021 to 177 million.”

It should be noted that Hall believes the 5G category won’t be hit as hard thanks to the high likelihood of faster demand recovery in China, but this won’t make up for weakness in the other categories.

That being said, several factors could strengthen QCOM’s long-term growth narrative. “A sharper recovery in consumer spending on smartphones or a faster adoption of mmWave 5G devices could meaningfully increase our estimates and cause us to become more constructive. On mmWave in particular we would see a higher likelihood of faster adoption if smartphone ASPs did not deteriorate the way that we currently expect them to in our Central case modeling,” Hall explained.

In the meantime, Hall downgraded his rating from Neutral to Sell. In addition, he cut the price target from $77 to $61, implying 18% downside potential.

Turning now to the rest of the Street, other analysts are more optimistic. 12 Buys, 6 Holds and 1 Sell add up to a Moderate Buy analyst consensus. At $91.94, the average price target puts the upside potential at nearly 28%. (See Qualcomm stock analysis on TipRanks)

Nutanix Inc. (NTNX)

Cloud computing company Nutanix offers solutions to modernize datacenters and run applications at any scale, on-premises and in the cloud. Shares are up 7% in the last month, but Goldman Sachs sees overwhelming headwinds on the horizon.

Hall doesn’t dispute the fact that NTNX offers a solid product portfolio. However, the analyst cites its ability to generate revenue growth again while trimming opex/sales to maintain cash on its balance sheet as a significant concern.

Hall added, “We downgrade Nutanix to Sell driven by the ongoing free cash flow burn and high opex. We also expect revenue to be significantly impacted by COVID-19, particularly from medium-sized business customers.” On top of this, since February 2018 when the stock was added to the firm’s Buy list, NTNX shares have declined while the S&P 500 gained.

Based on all of this, Hall wrote, “We reduce our fundamental and M&A multiples due to deteriorating fundamentals and ongoing liquidity concerns given the ongoing cash burn. We now expect a potential takeout multiple closer to the lower end of the M&A comp range in the table below.”

There is something the company can do to drive a turnaround. Hall tells clients that his outlook would be more positive if NTNX can execute on its software transition at a much faster pace. Additionally, evidence of improving cash flow trends along with revenue growth and faster revenue growth combined with lower opex would help paint a prettier picture.

To this end, NTNX gets a thumbs down, with Hall downgrading the name from Buy to Sell. He also gave the price target a haircut, dropping it from $47 to $15. This conveys his belief that a twelve-month loss of 11% is in the cards.

What does the rest of the Street think about NTNX’s long-term growth prospects? It turns out that other analysts have higher hopes than Hall, with its Moderate Buy consensus rating breaking down into 7 Buys, 5 Holds and 1 Sell. Given the $31.42 average price target, shares could climb 93% higher in the next year. (See Nutanix stock analysis on TipRanks)

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

The post Goldman Sachs Sees Doom and Gloom in These 3 Tech Stock Giants appeared first on TipRanks Financial Blog.

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Pharma industry reputation remains steady at a ‘new normal’ after Covid, Harris Poll finds

The pharma industry is hanging on to reputation gains notched during the Covid-19 pandemic. Positive perception of the pharma industry is steady at 45%…

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The pharma industry is hanging on to reputation gains notched during the Covid-19 pandemic. Positive perception of the pharma industry is steady at 45% of US respondents in 2023, according to the latest Harris Poll data. That’s exactly the same as the previous year.

Pharma’s highest point was in February 2021 — as Covid vaccines began to roll out — with a 62% positive US perception, and helping the industry land at an average 55% positive sentiment at the end of the year in Harris’ 2021 annual assessment of industries. The pharma industry’s reputation hit its most recent low at 32% in 2019, but it had hovered around 30% for more than a decade prior.

Rob Jekielek

“Pharma has sustained a lot of the gains, now basically one and half times higher than pre-Covid,” said Harris Poll managing director Rob Jekielek. “There is a question mark around how sustained it will be, but right now it feels like a new normal.”

The Harris survey spans 11 global markets and covers 13 industries. Pharma perception is even better abroad, with an average 58% of respondents notching favorable sentiments in 2023, just a slight slip from 60% in each of the two previous years.

Pharma’s solid global reputation puts it in the middle of the pack among international industries, ranking higher than government at 37% positive, insurance at 48%, financial services at 51% and health insurance at 52%. Pharma ranks just behind automotive (62%), manufacturing (63%) and consumer products (63%), although it lags behind leading industries like tech at 75% positive in the first spot, followed by grocery at 67%.

The bright spotlight on the pharma industry during Covid vaccine and drug development boosted its reputation, but Jekielek said there’s maybe an argument to be made that pharma is continuing to develop innovative drugs outside that spotlight.

“When you look at pharma reputation during Covid, you have clear sense of a very dynamic industry working very quickly and getting therapies and products to market. If you’re looking at things happening now, you could argue that pharma still probably doesn’t get enough credit for its advances, for example, in oncology treatments,” he said.

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Spread & Containment

I created a ‘cosy game’ – and learned how they can change players’ lives

Cosy, personal games, as I discovered, can change the lives of the people who make them and those who play them.

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Cosy games exploded in popularity during the pandemic. Takoyaki Tech/Shutterstock

The COVID pandemic transformed our lives in ways many of us are still experiencing, four years later. One of these changes was the significant uptake in gaming as a hobby, chief among them being “cosy games” like Animal Crossing: New Horizons (2020).

Players sought comfort in these wholesome virtual worlds, many of which allowed them to socialise from the safety of their homes. Cosy games, with their comforting atmospheres, absence of winning or losing, simple gameplay, and often heartwarming storylines provided a perfect entry point for a new hobby. They also offered predictability and certainty at a time when there wasn’t much to go around.

Cosy games are often made by small, independent developers. “Indie games” have long been evangelised as the purest form of game development – something anyone can do, given enough perseverance. This means they can provide an entry point for creators who hadn’t made games before, but were nevertheless interested in it, enabling a new array of diverse voices and stories to be heard.

In May 2020, near the start of the pandemic, the small poetry game A Solitary Spacecraft, which was about its developer’s experience of their first few months in lockdown, was lauded as particularly poignant. Such games showcase a potential angle for effective cosy game development: a personal one.

Personal themes are often explored through cosy games. For instance, Chicory and Venba (both released in 2023) tackle difficult topics like depression and immigration, despite their gorgeous aesthetics. This showcases the diversity of experiences on display within the medium.

However, as the world emerges from the pandemic’s shadow, the games industry is facing significant challenges. Economic downturns and acquisitions have caused large layoffs across the sector.

Historically, restructurings like these, or discontent with working conditions, have led talented laid-off developers to create their own companies and explore indie development. In the wake of the pandemic and the cosy game boom, these developers may have more personal stories to tell.

Making my own cosy game

I developed my own cosy and personal game during the pandemic and quickly discovered that creating these games in a post-lockdown landscape is no mean feat.

What We Take With Us (2023) merges reality and gameplay across various digital formats: a website, a Discord server that housed an online alternate reality game and a physical escape room. I created the game during the pandemic as a way to reflect on my journey through it, told through the videos of game character Ana Kirlitz.

The trailer for my game, What We Take With Us.

Players would follow in Ana’s footsteps by completing a series of ten tasks in their real-world space, all centred on improving wellbeing – something I and many others desperately needed during the pandemic.

But creating What We Take With Us was far from straightforward. There were pandemic hurdles like creating a physical space for an escape room amid social distancing guidelines. And, of course, the emotional difficulties of wrestling with my pandemic journey through the game’s narrative.

The release fared poorly, and the game only garnered a small player base – a problem emblematic of the modern games industry.

These struggles were starkly contrasted by the feedback I received from players who played the game, however.

This is a crucial lesson for indie developers: the creator’s journey and the player’s experience are often worlds apart. Cosy, personal games, as I discovered, can change the lives of those who play them, no matter how few they reach. They can fundamentally change the way we think about games, allow us to reconnect with old friends, or even inspire us to change careers – all real player stories.

Lessons in cosy game development

I learned so much about how cosy game development can be made more sustainable for creators navigating the precarious post-lockdown landscape. This is my advice for other creators.

First, collaboration is key. Even though many cosy or personal games (like Stardew Valley) are made by solo creators, having a team can help share the often emotional load. Making games can be taxing, so practising self-care and establishing team-wide support protocols is crucial. Share your successes and failures with other developers and players. Fostering a supportive community is key to success in the indie game landscape.

Second, remember that your game, however personal, is a product – not a reflection of you or your team. Making this distinction will help you manage expectations and cope with feedback.

Third, while deeply considering your audience may seem antithetical to personal projects, your game will ultimately be played by others. Understanding them will help you make better games.

The pandemic reignited the interest in cosy games, but subsequent industry-wide troubles may change games, and the way we make them, forever. Understanding how we make game creation more sustainable in a post-lockdown, post-layoff world is critical for developers and players alike.

For developers, it’s a reminder that their stories, no matter how harrowing, can still meaningfully connect with people. For players, it’s an invitation to embrace the potential for games to tell such stories, fostering empathy and understanding in a world that greatly needs it.


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Adam Jerrett does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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The SNF Institute for Global Infectious Disease Research announces new advisory board

From identifying the influenza virus that caused the pandemic of 1918 to developing vaccines against pneumococcal pneumonia and bacterial meningitis in…

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From identifying the influenza virus that caused the pandemic of 1918 to developing vaccines against pneumococcal pneumonia and bacterial meningitis in the 1970s, combating infectious disease has a rich history at Rockefeller. That tradition continues as the Stavros Niarchos Foundation Institute for Global Infectious Disease Research at Rockefeller University (SNFiRU) caps a successful first year with the establishment of a new advisory board.

Credit: Lori Chertoff/The Rockefeller University

From identifying the influenza virus that caused the pandemic of 1918 to developing vaccines against pneumococcal pneumonia and bacterial meningitis in the 1970s, combating infectious disease has a rich history at Rockefeller. That tradition continues as the Stavros Niarchos Foundation Institute for Global Infectious Disease Research at Rockefeller University (SNFiRU) caps a successful first year with the establishment of a new advisory board.

This international advisory board was created in part to give guidance on how to best use SNFiRU’s resources, as well as bring forward innovative ideas concerning new avenues of research, public education, community engagement, and partnership projects.

SNFiRU was established to strengthen readiness for and response to future health crises, building on the scientific advances and international collaborations forged in the context of the COVID-19 pandemic. Launched with a $75 million grant from the Stavros Niarchos Foundation (SNF) as part of its Global Health Initiative (GHI), the institute provides a framework for international scientific collaboration to foster research innovations and turn them into practical health benefits.

SNFiRU’s mission is to better understand the agents that cause infectious disease and to lower barriers to treatment and prevention globally. To speed this work, the institute launched numerous initiatives in its inaugural year. For instance, SNFiRU awarded 31 research projects in 29 different Rockefeller laboratories for over $5 million to help get collaborative new research efforts off the ground. SNFiRU also supports the Rockefeller University Hospital, where clinical studies are conducted, and brought on board its first physician-scientist through Rockefeller’s Clinical Scholars program. “One of the surprises was the scope of interest from Rockefeller scientists in using their talents to tackle important infectious disease problems,” says Charles M. Rice, Maurice R. and Corinne P. Greenberg Professor in Virology at Rockefeller and director of SNFiRU. “The research topics range from the biology of infectious agents to the dynamics of the immune response to pathogens, and also include a number of infectious disease-adjacent studies.”

In the past 12 months, SNFiRU often brought together scientists studying different aspects of infectious disease as a way to spur new collaborations. In addition to hosting its first annual day-long symposium, SNFiRU initiated a Young Scientist Forum for students and post-doctoral fellows to meet regularly, facilitating cross-laboratory thinking. A bimonthly seminar series has also been established on campus.

Another aim of SNFiRU is to develop relationships with community-based organizations, as well as design and participate in community-engaged research, with a focus on low-income and minority communities. To that end, SNFiRU is helping develop a research project on Chagas disease, a tropical parasitic infection prevalent in Latin America that can cause congestive heart failure and gastrointestinal complications if left untreated. The project will bring together clinicians practicing at health centers in New York, Florida, Texas, and California and basic scientists from multiple institutions to help the communities that are most impacted.

“The SNFiRU international advisory board convenes globally recognized leaders with distinguished biomedical expertise, unrivalled experience in pandemic preparedness and response, and a shared commitment to translating scientific advancements into equitably distributed benefits in real-world settings,” says SNF Co-President Andreas Dracopoulos. “The advisory board will advance the institute’s indispensable mission, which SNF is proud to support as a key part of our Global Health Initiative, and we look forward to seeing breakthroughs in the lab drive better outcomes in lives around the globe.”

The new advisory board will hold its first meeting on April 11th, 2024, following the second annual SNF Institute for Global Infectious Disease Research Symposium at Rockefeller.

Its members are: Rafi Ahmed of Emory University School of Medicine, Cori Bargmann of The Rockefeller University, Yasmin Belkaid of the Pasteur Institute, Anthony S. Fauci, the former director of the National Institute of Allergy and Infectious Diseases, Peter Hotez of Baylor College of Medicine and Texas Children’s Hospital Center for Vaccine Development, Esper Kallas of of the Butantan Institute, Sharon Lewin of the University of Melbourne Doherty Institue, Carl Nathan of Weill Cornell Medicine, Rino Rappuoli of Fondazione Biotecnopolo di Siena and University of Siena, and Herbert “Skip” Virgin of Washington University School of Medicine and UT Southwestern Medical Center.


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