Analyst Andy Hargreaves notes opportunities for Facebook (NASDAQ:FB) to raise ad pricing and grow monetization more than counterbalance risk of declining ad load growth. Price target $150 (premarket $127.80, +0.20%).
Although Nest Learning Thermostats, Nest Protects and Nest Cams are installed across more than 190 countries, buying availability is presently limited to only seven. Adding these four territories (availability February 15, pre-orders today) is cited to double the amount of homes in Europe with access to products of the Alphabet (GOOG, GOOGL) unit.
Further planned are expansions into additional countries and availability through energy, insurance and telecommunications partners, as global demand continues to develop.
UBS's Eric Sheridan throws in the towel on Twitter (NYSE:TWTR), downgrading to Hold from Buy as he cuts his advertising revenue estimates for 2017 and 2018 to reflect lower advertising ARPU paired with muted core MAU growth.
The new price target of $16 is down from $22, and compares to Friday's close of $17.25.
The downgrade comes as part of Sheridan's broad summary of the Internet space in which his team's channel checks point to solid demand for digital advertising, eCommerce, and online travel. Alphabet (GOOG, GOOGL) and Facebook (NASDAQ:FB) are his top picks in large-cap growth names.
The first line goes to Jeff Gundlach, who at last year's Barron's Roundtable predicted the election of Donald Trump. This year: "The history books will say that interest rates bottomed in July 2012, and double-bottomed in July 2016. At some point, the backup in rates will create competition for stocks."
He notes commodity prices look to have bottomed and the Atlanta Fed's wage-growth tracker is now up 4% Y/Y. The valuation argument for equities becomes "problematic" once the 10-year yield hits 3%, which could happen this year.
Making his last appearance at the confab, Felix Zulauf thinks stocks will struggle and end the year in negative territory, but that's mostly an H2 issue. For now, he wants to stick with what's doing well, and recommends the Vanguard Value ETF (NYSEARCA:VTV), the Russell 2000 ETF (NYSEARCA:IWM), and the Financial Sector SPDR (NYSEARCA:XLF).
He's also bullish on Japan, where a dovish BOJ and government has shown no sign of caution. Expecting a tumbling currency to occur alongside rising stocks, he's a fan of WisdomTree's Japan Hedged Equity Fund (NYSEARCA:DXJ).
Sooner or later, cash is going to be distributed, says Epoch Investment Partners' Bill Priest, giving a big part of the reason he's recommending Alphabet (GOOG, GOOGL). The free-cash-flow yield is about 7%.
Applied Materials (NASDAQ:AMAT) is in the "sweet spot" of the technology revolution, says Priest. He thinks it will generate $3 per share in cash flow in fiscal 2019.
Other picks: Universal Display (NASDAQ:OLED) and Hexcel (NYSE:HXL).
Titan had been integrated with Alphabet's (GOOG, GOOGL) X division around a year ago, though in a statement today, the company notes "exploration of high altitude UAVs for internet access" had been terminated soon thereafter.
Instead Alphabet expresses greater confidence in Project Loon, a network of balloons on the edge of space, considering the operation "a much more promising way to connect rural and remote parts of the world."
Members of the Titan team have also been reassigned to Project Wing, where automated aircraft for various delivery applications (i.e consumer goods, medicine, burritos) comprise emphasis.
The agency suggests messaging and email services such as Facebook's WhatsApp (NASDAQ:FB), Apple's iMessage (NASDAQ:AAPL), Google's Gmail (GOOG, GOOGL), Microsoft's Skype (NASDAQ:MSFT) and others request user consent prior to tracking for purpose of running personalized ads. The move is intended to balance regulation of over-the-top services with rules set in place governing more traditional telecommunications operators.
While part of an ongoing review of related matters, approval by European Parliament and European Union member states remains required for enactment into law.
In response to claims by Italy's tax authorities Google avoided €227M in taxes between 2009 and 2013, the company is said to have now offered proposal suggesting payment between €270M-€280M to settle the matter. Italy is stated to be weighing the motion.
A commitment by Google (GOOG, GOOGL) to satisfy future taxes within Italy is further cited among the remaining points under final settlement determination.
With the myriad technologies present at CES 2017, Amazon's (NASDAQ:AMZN) Alexa is considered a notably ubiquitous presence among them all, as integrations with automobiles [Ford], appliances [Whirlpool, LG], smartphones [Huawei] and a range of other applications from various companies have been illuminated throughout the week.
Analyst Heath Terry remains positive on the grouping into 2017, suggesting risk in the new year primarily stems from anticipated market entries of major private companies within the technology arena.
With notable prospective IPOs from Uber, Airbnb, Snap, Spotify and others (cites Xiaomi, Didi Chuxing, Palantir Technologies, Lufax, WeWork, Stripe, Lyft, Slack, Credit Karma) in focus among investors, and despite the risk shifts in attention may present if and when each lists, also weighs the positive of private investment exits liberating capital that may in turn funnel into existing major public issues.
Cited as Ken Sena's top internet pick, the analyst points out Amazon's (NASDAQ:AMZN) capacity to leverage data science, the opening of addressable retail markets in terms of geography and new product categories, and the company's ability to rapidly move on consumer insights, in turn driving higher frequency of utilization and increased conversion.
Also forecasts bullishly for Alibaba Group (NYSE:BABA) [another top pick, 440M active buyers, appealing China story], Facebook (NASDAQ:FB) [leading audience scale and engagement, increased integrations and data capabilities between partners, video, messaging, AR/VR positioning], Alphabet (GOOG, GOOGL), [data science and infrastructure benefits, positioning among emerging interfaces, transition of core search to action and assistance], JD.com (NASDAQ:JD) [2x China e-commerce industry growth rate, improving cost discipline and other operational initiatives, opportunities involving warehouse efficiencies and cash flow conversion], Priceline (NASDAQ:PCLN) [scale advantage, execution, value, market expansion, increasing stickiness], Tencent Holdings (OTCPK:TCEHY) [gaming, social messaging and app store platform, payments].
Top 10 overweight globally (in descending order) – Amazon (NASDAQ:AMZN), UnitedHealth Group (NYSE:UNH), Microsoft (NASDAQ:MSFT), Visa Class A (NYSE:V), Comcast Class A (NASDAQ:CMCSA), Medtronic (NYSE:MDT), Broadcom (NASDAQ:AVGO), Alphabet Class A (NASDAQ:GOOGL), Texas Instruments (NYSE:TXN), Amgen (NASDAQ:AMGN)
Top 10 underweight globally (in descending order) – Apple (NASDAQ:AAPL), Exxon Mobil (NYSE:XOM), AT&T (NYSE:T), General Electric (NYSE:GE), Berkshire Hathaway Class B (NYSE:BRK.B), Toyota (NYSE:TM), Johnson & Johnson (NYSE:JNJ), IBM (NYSE:IBM), Procter & Gamble (NYSE:PG), Commonwealth Bank of Australia (OTCPK:CBAUF)