Wednesday, July 29, 2015
- Energy MLPs have been "whipsawed not just by fundamentally driven factors but also perhaps by more technically oriented trading," Wunderlich's Jeff Birnbaum writes, but despite a challenging backdrop, he still expects Q2 throughput trends generally will meet estimates and does not expect major guidance revisions for H2.
- Birnbaum's top picks are are Enterprise Products Partners (NYSE:EPD), Magellan Midstream Partners (NYSE:MMP) and Western Gas Partners (NYSE:WES); on EPD, he expects “solid” distribution coverage and says recent transactions will “create a slimmer, more integrated and growth-oriented asset base and better position the balance sheet for additional M&A.”
- He cuts price targets for American Midstream Partners (NYSE:AMID) and DCP Midstream Partners (NYSE:DPM) but keeps Buy ratings on both, and rates Targa Resource Partners (NYSE:NGLS) and Targa Resources (NYSE:TRGP) at Hold and thinks Q2 results may disappoint, but says the units are not expensive and may become an acquisition target in the future.
- Stating Q2 checks came back positive and that the company's long-term plan provides a path to profitability, Oppenheimer's Shaul Eyal has upgraded FireEye (NASDAQ:FEYE) to Outperform ahead of tomorrow afternoon's Q2 report.
- Eyal notes a majority of surveyed FireEye resellers met their internal sales goals, and sees greater spending discipline (following a period of aggressive sales and R&D investments) yielding operating leverage. He also expects an ongoing mix shift towards services from hardware to provide a gross margin lift. "With a constant 90% renewal rate, we believe FEYE's 2019 $2B [billings] target, which serves as the basis for improved profitability, is highly feasible."
- Shares have rallied after sporting modest gains earlier today. They're up 50% YTD.
- Believing the company may have "reset 2Q expectations enough" following its Q1 report, Longbow Research's Joe Wittine has upgraded 3D Systems (NYSE:DDD) to Neutral ahead of its Aug. 6 Q2 report.
- Wittine: "DDD could also deliver on, or express further confidence in, its goal of 2H operating leverage (note new R&D sharing agreement with U.S. Navy), or even restore guidance ... A 2Q miss appears less likely and valuation has corrected materially, limiting incremental short opportunity." He also sees the addition of 5 new 3D printer resellers since April 1 as a positive.
- 3D is rallying a day after setting a new multi-year low of $14.06, and closing $0.66 above it. Dougherty upgraded Stratasys two days ago.
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