1.Dell:-Stocks of Dell and HP traded lower in Friday’s premarket on worries over higher input costs and lengthening order backlogs due to component shortages.
HP chief executive Enrique Lores told analysts after the company’s quarterly results that it had a full quarter’s worth of order backlogs that it hadn’t been able to process yet. He added that he expected such problems to last well into 2022.
Demand for semiconductor chips that go into laptops, desktops, mobile, cameras, printers and cars has exploded in the last one year due to work-from-home becoming a way of life for many. Supplies have lagged and capacities take time to come up.
Net revenue from HP’s bread-and-butter business of personal systems was flat at $10.4 billion, with unit sales of notebooks up only 2% and desktops down 7%. That compares with IDC data showing that industry shipments of PCs rose 13% on the year in the three months through June.
The company’s printer business accounted for all the growth registered in the quarter. Net revenue in this segment jumped 24% to $4.9 billion.
2.Barclays : A U.S. judge declined to stop Johnson & Johnson from taking steps to offload widespread Baby Powder liabilities from the rest of its business, preserving the option for the healthcare company to move thousands of claims from people who used its talc products to a unit that would file for bankruptcy.
U.S. Bankruptcy Judge Laurie Selber Silverstein denied a request from plaintiffs’ lawyers to block the move late Thursday. Lawyers for cancer victims wanted her to issue a restraining order against J&J as part of her role overseeing the bankruptcy proceedings of one of the company’s former talc suppliers.
“The court rightly denied the plaintiffs’ motion aimed at preventing J&J from engaging in legitimate business transactions, in the event that it chooses to do so,” said Diane Sullivan, a Weil, Gotshal & Manges LLP lawyer representing J&J, in a statement.
The legal skirmish was unusual in that plaintiffs’ lawyers were asking the judge to forbid J&J from taking steps the company’s lawyers said it had not yet decided whether to pursue. Johnson & Johnson Consumer Inc has previously said it has “not decided on any particular course of action in this litigation other than to continue to defend the safety of talc and litigate these cases in the tort system, as the pending trials demonstrate.”
3. GENERAL MOTORS-–Public support for stronger measures to require COVID vaccinations is strong, according to a new Reuters/IPSOS poll, but for Detroit automakers the debate over vaccination policy is far from over.
General Motors Co said on Thursday it has required its U.S. salaried employees to report whether they have received COVID-19 shots, the first such action by one of Detroit’s “Big Three” automakers.
GM said the information will help “determine when GM should relax or strengthen certain COVID-19 safety protocols as recommended by the CDC and OSHA, such as mask wearing, physical distancing and facility occupancy rates,” referring to the U.S. Centers for Disease Control and Prevention and the U.S. Occupational Health and Safety Administration.
Separately, United Auto Workers President Ray Curry on Thursday expressed support for only voluntary measures to encourage vaccination or survey workers’ vaccination status.
The UAW, with nearly 400,000 members, represents U.S. factory workers at GM, Ford Motor Co, Stellantis NV as well as workers at other U.S. manufacturers, colleges, government agencies and casinos.
“We would be open to discussion about voluntary efforts,” Curry said during a videoconference on Thursday.
4.ZOOM:Zoom stock rose 3% in Thursday’s trading on an upgrade by Morgan Stanley which said the global video conferencing service is building a durable platform for growth.
Analyst Meta Marshall upgraded the stock to overweight from equal-weight and the price target to $400 from $360. The new target is about 16% higher from the stock’s current price of $346.
Marshall attributed the revised target to her view that the company has the potential to surprise on the upside over the next year.
According to the analyst, while revenue expectations are not low, they believe they are doable, which combined with FY23 guidance in a couple of quarters, gives more room for optimism on the stock at the current valuation.
A revenue beat of 5% or greater would cause a positive reaction in the stock, she said.
Marshall sees multiple drivers at the company including its international business, up market penetration and Phone, it’s internet phone service
.5.Uber – Uber Technologies is a ride-hailing giant, whose shares have been under considerable pressure in recent months, thanks in part to a perfect storm of headwinds.
The stock finds itself down around 35% from its February 2021 all-time high of $64.05. (See UBER stock charts on TipRanks)
Despite its lofty losses, Uber stock looks like a very compelling contrarian candidate for those seeking value and growth in today’s red-hot market. I am bullish on the stock.
Steering Towards Profitability
Many investors have been taking a raincheck on Uber — and its top peer, Lyft — because of a lack of profits, and a highly uncertain growth story. Some have criticized the company and the broader ride-hailing industry as having a broken business model.
Over the last three years, the company has averaged just 13% in sales growth. Pretty underwhelming, given the magnitude of Uber’s recent quarterly losses.
Yet, it’s a mistake to dismiss Uber as having a broken model just because of continued losses and underwhelming revenue.