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BenzingaEditorial

Redefining Biggest Blue-Chips in the Age of COVID-19

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Global economy corona virus

The origin of the name for these companies comes from the poker world as the blue-colored chips as the highest available denomination in the game. And these are the companies with the highest value in the corporate world. But even blue chips are structurally challenged with this unprecedented health crisis that has put the world to a virtual standstill. Now what constitutes a blue-chip has been opened for debate as many go for the 30 members of Dow Jones Industrial Average. But there is a case for some companies even outside this privileged circle as the point is about leadership, disrupting the status quo and withstanding the test of time, downturns included. And whichever method you opt for- most likely, the company is also going under a structural change to cope with the COVID-19 reality we are faced with

The Boeing Company (NYSE:BA)

It’s generally not good business practice to openly expect your customers to go out of business but its CEO David Calhoun was quick to respond to NBC News that it is most likely for a major U.S. carrier to be forced out of business.  And even largest of the blue-chip stocks, aerospace and defense giant, had to entirely suspend its dividend as a result of these unprecedented times.

Amazon (NASDAQ:AMZN)

The e-commerce giant has plenty of room to grow but at a cost. It’s the most obvious ‘winner’ of the pandemic that resulted in surging sales but profit took the burden and there are more COVID-19 related costs ahead, $4 billion to be precise. Nonetheless, its success story remains as the biggest of the internet era as it went a long way since entering the field as a humble online bookseller. Meanwhile, it is running out of ways to stop the JEDI contract that Microsoft (NASDAQ:MSFT) won so it might as well settle that this battle has been lost but Amazon knows that this particular loss can have a domino effect on its overall business. And other than embracing cloud competing, Microsoft has been an integral player of the PC revolution as it gave people stuff to do with their computers and greatly aided the whole tech industry back in the days. And despite many players entering the field, it has seen a renaissance in the past decade so it won’t make things easier for Amazon that has many more untapped resources to exploit such as  artificial intelligence, data analytics, blockchain, and advertising.

Facebook (NASDAQ:FB)

There is a debate whether the social media giant is too young to be a considered as a blue chip but the undebatable fact is that it captured almost the whole population as its userbase. And there are so many directions to evolve in, but it is without a doubt a clear leader. It became public only 8 years ago and was followed by a great deal of controversy. It can be said that the only cloud on Facebook’s sky is presented by regulatory risk and the decreased ad spending which is altered dramatically by this crisis  – but there’s no dispute when it comes to its success.

Visa (NYSE:V)

As for its public trade history, it isn’t much older than Facebook as it entered this frame four years earlier but its history goes way beyond the New York Stock Exchange as it was initially formed by Bank of America (NYSE:BAC). It earned its blue-chip status earned with its leadership. Even though it bears no credit risk, by providing an infrastructure that covers the globe it secured its high profits. More recently, competition from alternative payment methods such as PayPal (NASDAQ:PYPL) has risen, and that’s forced Visa to be vigilant in defending its territory. But Visa is well positioned as it is forging partnerships with up-and-coming players in payment processing rather than trying to defeat them directly. As long as it can keep participating in the industry’s innovations, it should remain a blue-chip player in the payments industry despite the latest significant deterioration in spending. Government-imposed measures that aim to contain the spread have put the world on pause, pulling the economy into a recession in which travel, restaurant, entertainment and fuel are among the worst hit. And even this storm didn’t prevent Visa from topping both revenue and earnings estimates.

ExxonMobil (NYSE:XOM)

A representative of the energy industry, more precisely, oil and gas industry giant that has evolved from its roots as part of the Rockefeller Standard Oil empire to its current position as a major integrated energy company. But even the mightiest can fall… Energy prices are generally extremely volatile but we just witnessed an unprecedented collapse of oil prices in which no company was spared. Exxon recently reported a loss of $610 million in the first quarter and this is its first quarterly loss since at least 1988. But the Trump administration is not letting the industry die and only giants such as Exxon and Chevron Corporation (NYSE:CVX) are strong enough to actually benefit from it. So, if you are still optimistic about oil and not among those who feel it is a ‘ticking time bomb’ due to crumbling prices and over supply, it might be your best shot.

Extra caution ahead

Todays’ market (and that of near future) will be filled with uncertainty. Success should never be taken for granted as even Apple’s (NASDAQ:AAPL) investors fear the company’s best days are behind it due to the lack of revolutionary products in the recent years. But that’s what blue-chips are about- being able to thrive against all odds and even turbulent times and all the above companies withstood quite a few tests over history so they are among the most likely ones to find their way out of this one.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

BenzingaEditorial

This Week’s Earnings Repertoire

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During the previous shortened week, COVID-19 outbreaks grew while vaccine developments provided a glimpse of hope of finally putting an end to COVID-19. This week, Zoom Video Communications, Inc. (NASDAQ: ZM), CrowdStrike Holdings, Inc. (NASDAQ: CRWD), DocuSign Inc (NASDAQ: DOCU), salesforce.com, inc. (NYSE: CRM), Five Below (NASDAQ:FIVE), and Kroger (NYSE:KR) are set to deliver their earnings reports.

Zoom

The question on everyone’s mind is can Zoom maintain its growth momentum? On Monday afternoon, Wall Street expects Zoom to report earnings of 76 cents per share on revenue of $693.95 million. Just one year ago, Zoom delivered earnings of 9 cents per share on revenue of $166.59 million. The economy might have plunged during the coronavirus pandemic, but Zoom stock skyrocketed as its cloud-based video collaboration platform became the textbook definition of the work and study-at-home lifestyle. However, its stock fell 15% with positive coronavirus vaccine developments so investors will be watching churn rates to see the percentage of users who are cancelling their subscriptions.

Crowd Funding

Software stocks altogether have gone on a massive rally March and cybersecurity stocks were among the biggest winners as companies needed additional security for their home-office setting. CrowdStrike surged as much as 202% year to date, with 93% and 13% gains over six months and last thirty days, respectively. But CrowdStrike also needs to show it can maintain its strong growth when corporations decide to return to an office setting.

Wall Street expects CrowdStrike to breakeven on revenue of $212.60 million. Exactly one year ago, it lost 7 cents per share while generating revenue of $125.12 million.

DocuSign

After close on Thursday, Wall Street expects the digital signature company to earn 13 cents per share on revenue of $361.15 million. One year ago, it earned 11 cents per share on revenue of $249.50 million. By providing individuals and businesses the ability to digitize an agreement process, it greatly benefited from remote work and social distancing. Its stock skyrocketed 80% during the past six months with almost 210% year to date, whereas the S&P rose only 12% during the same timeframe. But its valuation is being questioned with the upcoming vaccine. DocuSign needs to show it diversify its offerings, such as its contract lifecycle management platform.

Salesforce

Wall Street expects Salesforce to earn 75 cents per share on revenue of $5.25 billion. This figure equals earnings during the same quarter last year, whereas revenue amounted to $4.51 billion.

The company’s SaaS business model and its customer relationship management services have become a must have for developing companies. But after Dow Jones report that the cloud giant is in advanced talks to acquire Slack (NYSE: WORK) at an undisclosed amount, the stock retracted. With its negotiating and collaborating features Slack would immediately position Salesforce to challenge Microsoft’s (NASDAQ: MSFT) enterprise dominance it owes to Office365. But with Slack now valued at $22 billion,  it would Salesforce’s largest acquisition and based on how the market received the news, investors seem concerned.

Five Below

The youth-focused retailer has been one of the rare specialty retailers to outperform the COVID-19 storm that left many retailers fighting for mere existence. While temporary store closures did hurt its sales during fiscal first quarter, the retailer managed to bounce back to growth in its fiscal second quarter, with sales inching higher by 2%. But Five Below needs to show gains in both store expansion and sales growth to support management’s ambitious plans to expand its footprint.

Kroger

Although demand for consumer staples remains elevated, rivals like Walmart Inc (NYSE: WMT) and Costco Wholesale Corporation (NASDAQ: COT) reported slowing sales gains. Yet, Wall Street expects this leading grocery store chain to report head-turning growth metrics, while forecasting a revenue boost of 7% for the quarter.

The question of the week

Besides their earnings reports, the above companies have an important question to answer. Considering these companies greatly benefited from remote work, they need to prove they can keep their growth momentum even if positive vaccine developments encourage consumers to go back to offices and stores.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

Alibaba’s Sophisticated Monopoly Strategy Expands to EVs

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By being a Chinese multinational company specialized in e-commerce, retail, Internet, and technology, Alibaba Group Holding Limited (NYSE: BABA), or just Alibaba.com, has a lot of reasons to be under the spotlight. But over the last month, it was mentioned due to three main reasons: the suspended blockbuster IPO of Ant Financial, the most recent earnings that failed to dazzle investors, and the anti-monopoly rules aimed at giving regulators more control over monopolies.

Even though Alibaba CEO Daniel Zhang labeled these plans as “timely and necessary”, both Alibaba’s and other Chinese tech giants’ shares plunged earlier this month as much as 20% in just two weeks. Alibaba’s fintech affiliate, Ant Group was close to making a record with a $37 billion IPO on November 5th, with an estimated valuation of almost $300 billion. However, this blockbuster IPO, publicized as the largest in history, was suspended due to above-mentioned regulations. Alibaba, as a major shareholder with a 33% ownership stake in Ant Group, felt the impact of these imposed brakes directly. But there is so much more to Alibaba’s ground-breaking success than attracting sellers by eliminating listing fees. This company excels at identifying and seizing unique business opportunities.

EV News

There is no tech giant that can allow itself not to think ahead, what will be the next big thing. Many tech giants both in the US and China already teamed up with traditional carmakers, trying to be a part of the transition to electric and autonomous vehicles. Back in 2015, Alibaba joined forces with Shanghai Automotive Industry Corporation, one of the “Big Four” state-owned Chinese automakers, to create an operating system for EVs. This cooperation advances when Alibaba recently invested in Zhiji Motor, a new electric vehicle arm launched by SAIC. Huawei also plans to get into the car industry by providing Information Communication Technology equipment for the automakers. This type of cooperation is already seen in Chinese EV startups like Xpeng Inc (NYSE: XPEV) and Nio (NYSE: NIO), who are aiming to challenge other than Tesla (NASDAQ: TSLA) itself. Alibaba already has worked with  BMW (OTC: BMWYY) and Volkswagen Group’s owned (OTC: VWAGY) Audi over the years so it is no stranger to the automotive business.

What do investors fear?

Investors were not impressed with Alibaba’s last quarter earnings. The company achieved adjusted income of $2.65 per share with a revenue of $22.8 billion. Wall street’s expected earnings were $2.12 per share with revenues of $23.2 billion. However, when looking at the revenues in the Chinese currency, the estimate was 154.9 billion yuan, while the company achieved 155.06 billion. Maybe the investors expected more, having in mind the positive trend which Amazon (NASDAQ: AMZN) and other e-commerce companies are having. The fact is there are six companies which take up almost 60 percent of the global online purchasing pie, with Alibaba owning two of them. Other than two more Chinese companies with a substantial share,  there is eBay (NASDAQ: EBAY) and JD.com (NASDAQ: JD) who have simpler business models which are less exposed to antitrust measures. Due to strong competition, as well as tighter regulations and the law of large numbers, Alibaba’s e-commerce revenues will probably decelerate in the following year. Considering that this is where Alibaba generates most of its revenue, with which I subsidizes the growth of other core segments that are still unprofitable (Alibaba Cloud, Digital Media and Entertainment, and Innovation Initiatives), it’s no wonder that investors were not delighted.

Conclusion

November was a rough month for Alibaba, but it is recovering. Not to mention that Chinese economy has emerged as the fastest recovering economy from the pandemic, while also being projected to be the single economy to report YoY growth this year. Alibaba remains as an international e-commerce empire that keeps evolving with green development initiatives. Although Ant Group IPO has slim chance to take place next year, the IPO’s collapse won’t impact Alibaba’s near-term growth. However, it won’t generate cash or boost its earnings as Alibaba had planned.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

Weekly Retail Recap

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This week has brought a bunch of retail earnings reports, showing that specialty stores are on their way back to health.

Urban Outfitters shows strength ahead of holiday season

Urban Outfitters (NYSE: URBN) reported its quarterly profits rose 38 percent as strength of its brands combined with reduced operating expenses drove growth. Stock climbed as earnings reached a record despite the pandemic. The retailers managed to earn $77 million, or a record 78 cents a share, even though revenue fell 1.8% YoY to $970 million, exceeding Wall Street expectations for both EPS of 45 cents and revenue of $931.5 million.

Burlington Stores tops Q3 estimates but warns on weak start to Q4

While sales were challenged due to a weak August which saw deficient inventory levels and delayed back to school purchases, Burlington Stores (NYSE: BURL) saw comparable store sales trends improve significantly throughout the other two months of the quarter. The company did not provide any formal guidance, but revealed that the undergoing quarter has gotten off to a weak start.

Dick’s Sporting Goods came out with solid earnings and big news

Dick’s Sporting Goods (NYSE: DKS) reported solid earnings Tuesday, with sales at stores open for at least one year growing 23.2% over last quarter. But its major news was that the CEO Ed Stack is stepping down after 36 years in which he transformed his family’s small business into a national presence, took the company public and enacted a strong stance on the US gun debate. The current president Lauren Hobart will be promoted to this role on February 1, and by doing so, she will become company’s first female chief executive.

Nordstrom’s turnaround is real

The iconic fashion retailer reported better than expected third-quarter results. Nordstrom (NYSE: JWN) delivered the quarterly earnings of $0.22 per share, beating the Zacks Consensus Estimate of $0.01 per share but significantly below last year’s $0.81 per share. This has been a hard year for the retailer who saw its shares lose about 42.7% since the beginning of the year while the S&P 500 gained approximately 10.7%.  But after being crushed by the pandemic, Nordstrom now managed to crush Q3 earnings estimates, proving that it is already on the road back to health. COVID-19 gave a severe blow to the retailer due to its focus on selling dressy apparel for work and social events, resulting in sales sinking more than 40% YoY during the first six of the year. But this month, Nordstrom stock has doubled with growing hopes of upcoming COVID-19 vaccines. Also on a bright note, the company is poised to exceed its cost-cutting goals this year, including substantial and permanent reductions to its overhead costs.

American Eagle Outfitters – Sometimes a Beat Just Isn’t Enough

American Eagle Outfitters (NYSE: AEO) posted quarterly earnings of $0.35 per share exceeding Zacks consensus which looked for the company to post $0.33. However, revenue numbers didn’t fare quite so well as it amounted $1.03 billion for the quarter ended October 2020, missing the Zacks Consensus Estimate by 2.08%. This compares to year-ago revenues of $1.07 billion. The company did not provide any fourth quarter or full year guidance. For Q4, Street analysts forecasted sales declining only 1% this current quarter but profits are expected to drop another 14%, with an overall loss for the year.

Gap fell short

The Gap Inc (NYSE: GPS) shares tumbled as earnings fell short, but the retailer remains optimistic about the holidays.It expects fourth-quarter sales to be about equal to or slightly higher than a year ago as consumers can’t spend on entertainment and travel, the expectation is that this budget will be directed to discretionary goods during the gift giving season. But fiscal third-quarter earnings fell short of estimates as Old Navy and Athleta sales gains did not manage to offset the increased marketing costs aimed at defining core brands and growing market share.

Shares fell more than 10% in after-hours trading, having risen more than 51% since the start of this year, Gap has a market cap of $10 billion. Gap earned $95 million or earnings per share of 25 cents versus the expected $140 millionand 32 cents by Refinitiv data on a revenue of $3.99 billion versus the $3.82 billion expected.

Same-store sales were up as sales were boosted in large part by the company’s digital business, which surged 61% and accounted for 40% of total sales during the quarter. Gap said it added more than 3.4 million new customers online.

Retailers are hoping for a ‘holiday miracle’

It seems that recovery from the pandemic is underway despite a spike in COVID-19 infections across the globe. Arising number of cases could still hamper both sales and traffic in physical stores. Retailers such as Abercrombie & Fitch (NYSE: ANF) and Macy’s (NYSE: M) have cited this threat of temporary store closures. But retailers are hoping that the enthusiasm brought on by the holidays might be strong enough to conquer consumer fears of being infected by actually going shopping.  One thing is certain – in a changing apparel retail environment, the above clothing retailers now have the opportunity to fully demonstrate how vital online shopping really is.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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