Stock Markets
Deutsche Bank bumps AT&T shares target, impacted by Apple’s AI integration
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On Friday, a Deutsche Bank analyst updated the financial model for AT&T (NYSE:T), leading to an increased price target for its shares. The new target is set at $26.00, up from the previous $24.00, while the firm continues to recommend a Buy rating for the stock.
The revision reflects minor adjustments to second-quarter and second-half 2024 forecasts, with an expectation of higher customer upgrade rates and industry switching activity. This anticipated change is attributed to the integration of generative AI into Apple (NASDAQ:)’s iOS18, slated for release in the fall of 2024. Additionally, the analyst has revised Free Cash Flow (FCF) estimates upwards after a more detailed analysis.
AT&T is regarded by Deutsche Bank as a leading choice within the Cable and Telecom sector due to its strategic position for fixed-mobile convergence. The company is also recognized for its robust wireless and home broadband industry dynamics, a positive growth outlook for its fiber broadband business, and the potential for further margin improvement as it decommissions networks.
Consistent operational execution and the possibility of increased wireless market share contribute to the favorable view. Furthermore, the analyst anticipates AT&T to resume share repurchases in the second half of 2025 following a period focused on debt reduction.
The report also suggests that the consensus FCF estimates for the years beyond 2025 might be undervaluing the company’s potential. The valuation of AT&T is deemed very attractive, with an estimated 8.5% unlevered free cash flow yield for 2024 and a multiple of 6.1 times the projected 2024 earnings before interest, taxes, depreciation, and amortization (EBITDA).
In other recent news, AT&T Inc. has declared quarterly dividends for both its common shares and two series of preferred stock. The declared dividend for the common shares is $0.27 per share, with shareholders of Series A and C preferred stocks set to receive $0.3125 and $0.296875 per depositary share, respectively.
The company’s CEO, John Stankey, has proposed that Big Tech companies contribute to the Universal Service Fund, a government initiative subsidizing telecom and broadband services. This proposal could lead to a new funding model for the program. In a separate development, AT&T is involved in a legal challenge against the reinstatement of net neutrality rules by the Biden administration.
Lastly, significant stock trading activity has been noted by Congressman Mike Kelly and Congress member Carol Devine Miller, who both recently sold their shares in AT&T.
InvestingPro Insights
As AT&T (NYSE:T) garners attention with an updated price target from Deutsche Bank, insights from InvestingPro further illuminate the company’s financial health and market position. With a market cap of $136.38 billion and a dividend yield of 5.92% as of mid-2024, AT&T stands out as a significant player offering substantial returns to shareholders. This aligns with the Deutsche Bank’s perspective on the company’s attractive valuation and robust industry dynamics.
An InvestingPro Tip indicates that AT&T has a perfect Piotroski Score of 9, suggesting strong financial health and operational efficiency. This is particularly relevant considering the company’s strategic initiatives and potential market share increase mentioned by Deutsche Bank analysts. Additionally, the company’s price to earnings (P/E) ratio stands at 12.87, reflecting a market sentiment that may factor in the anticipated growth and integration of generative AI into products affecting telecoms.
Investors interested in a deeper analysis can find additional InvestingPro Tips for AT&T, which further dissect the company’s market performance and financial stability. With a total of 12 additional tips available, including insights on shareholder yield and valuation implications, InvestingPro offers a comprehensive toolkit for those looking to make informed investment decisions. To access these tips and more detailed metrics, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
Stock Markets
Five9 stock hits 52-week low at $28.74 amid market challenges
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In a turbulent market environment, Five9 (NASDAQ:) Inc’s stock has touched a 52-week low, reaching a price level of $28.74. This significant downturn reflects a broader trend for the cloud software company, which has seen its shares plummet by -58.79% over the past year. Investors are closely monitoring Five9’s performance as it navigates through a period of heightened volatility and shifting industry dynamics, which have contributed to the stock’s current valuation at this low point. The company’s efforts to rebound from this position will be under scrutiny in the coming quarters as market participants look for signs of a strategic turnaround or further indications of market pressures.
In other recent news, Five9 Inc . has achieved an annual revenue run rate exceeding $1 billion in Q2, a significant milestone despite lowering its annual revenue guidance by 3.8% due to customer budget constraints. The company’s adjusted EBITDA margin rose to 17% of revenue, contributing to a strong operating cash flow of $126 million. The company also confirmed plans to reduce its global workforce by approximately 7% by the end of 2024, a strategic move projected to cost between $12 million and $15 million.
Five9’s recent acquisition of Acqueon, a firm specializing in proactive outbound omnichannel customer engagement, aims to expand its AI offerings and bolster its growth. This move is in line with the company’s focus on managing expenses and improving profitability, with initiatives like FedRAMP and expansion into India anticipated to improve gross margins.
In their analysis, Piper Sandler maintained an Overweight rating for Five9, with a steady price target of $47.00, while Needham and BTIG both maintained a Buy rating with price targets of $48.00 and $45.00 respectively. These ratings reflect the firms’ confidence in Five9’s strategic positioning and potential for growth, despite the current challenges and workforce reduction.
InvestingPro Insights
Amid the current market conditions, Five9 Inc’s recent performance can be put into perspective with select data from InvestingPro. The company’s market capitalization stands at roughly $2.15 billion, indicating the size and scale of the business amidst its challenges. Despite the stock’s decline, analysts are showing a hint of optimism, with 20 analysts having revised their earnings estimates upwards for the upcoming period. This could signal a potential turnaround in sentiment or underlying business performance.
Importantly, Five9’s liquid assets are reported to surpass short-term obligations, suggesting that the company maintains a degree of financial flexibility to navigate its current difficulties. Furthermore, while the stock is trading near its 52-week low, it’s worth noting that the relative strength index (RSI) suggests the stock is in oversold territory, which can sometimes precede a rebound in share price. Investors looking for comprehensive analysis and additional InvestingPro Tips on Five9 can find more insights, including 14 other tips, at https://www.investing.com/pro/FIVN.
In terms of financial health, the company operates with a moderate level of debt and is expected to become profitable this year, according to analysts’ predictions. These elements may offer some solace to investors considering the stock’s substantial price fall over the last year. For those seeking a deeper dive into Five9’s valuation and future prospects, the InvestingPro platform provides a fair value estimate of $45.04, which is considerably higher than the current trading price, suggesting potential undervaluation.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
Stock Markets
TD Cowen maintains Buy on Terns Pharmaceuticals
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TD Cowen reiterated its Buy rating on shares of Terns Pharmaceuticals (NASDAQ:TERN), following the company’s investor call. The call was held to manage expectations for the upcoming Phase 1/2 CARDINAL study data for chronic myeloid leukemia (CML). The firm noted the challenges in measuring the efficacy endpoint (EP) due to disease progression and the absence of treatment switch guidelines, which makes major molecular response (MMR) a challenging efficacy endpoint for Phase 1/2 trials.
The interim Phase 1/2 data aims to evaluate descriptive efficacy signals, considering patients’ baseline BCR-ABL levels and treatment history. The analyst highlighted that the once-daily (QD) dosing and the lack of food effect could potentially enhance the quality of life for patients compared to other allosteric tyrosine kinase inhibitors (TKIs).
Terns Pharmaceuticals has been focusing on the development of improved treatment options for CML. The company’s approach to dosing, which does not require food intake, may offer a more convenient alternative for patients, potentially leading to better adherence and outcomes.
The topline data from the 6-month Phase 1/2 CARDINAL study is anticipated to be available in 2025. This data will provide further insights into the treatment’s efficacy and safety, which are critical factors in the ongoing development and potential approval process.
Investors and stakeholders in Terns Pharmaceuticals are expected to closely monitor the progress of the CARDINAL study, as it could have a significant impact on the company’s future prospects and position in the CML treatment landscape.
In other recent news, Terns Pharmaceuticals has experienced significant developments. The biopharmaceutical company reported robust earnings and revenue results, with Mizuho Securities maintaining an Outperform rating on Terns shares, citing strong enthusiasm for the company’s drug, TERN-701, a potential treatment for chronic myeloid leukemia.
The firm expects the first interim Phase 1 CARDINAL study data for TERN-701 in December.
Terns also announced the appointment of Elona Kogan as its new chief legal officer, a move that underscores the company’s strategic development and pipeline advancement.
The company also secured an extension of its office lease in Foster City, California, through 2027, reflecting Terns Pharmaceuticals’ operational stability and long-term planning.
In terms of clinical trials, Terns has made progress in its ongoing Phase 1 study of TERN-701, with interim findings suggesting the drug can be administered once daily with or without food.
This development, coupled with the forthcoming Phase 1 data for another of Terns’ drugs, TERN-601—an oral GLP-1 receptor agonist for obesity—expected next month, underscores the company’s commitment to innovative therapies.
These recent developments, from financial performance to executive appointments and clinical trials, highlight Terns Pharmaceuticals’ ongoing efforts to advance its strategic objectives and deliver on its mission. The company’s activities are closely watched by investors and industry analysts, including those from Mizuho Securities, who continue to support the company’s potential.
InvestingPro Insights
As Terns Pharmaceuticals (NASDAQ:TERN) navigates the complexities of its Phase 1/2 CARDINAL study, investors are keeping a keen eye on the company’s financial health and stock performance. According to InvestingPro, Terns holds more cash than debt, which is a positive signal for financial stability. Additionally, with five analysts revising their earnings upwards for the upcoming period, there is a sense of optimism about the company’s potential performance.
However, it’s important to note that Terns is not currently profitable and has been quickly burning through cash, which may raise concerns about long-term sustainability. The company’s P/E Ratio stands at -5.71, reflecting these profitability challenges. Despite these hurdles, Terns has managed a 1 Year Price Total Return of 45.42%, indicating some investor confidence in the company’s growth prospects. The anticipated fair value from analysts stands at 15 USD, while the InvestingPro Fair Value is calculated at 5.8 USD, highlighting a divergence in valuation perspectives.
For those looking for more in-depth analysis, additional InvestingPro Tips on Terns Pharmaceuticals can be found at https://www.investing.com/pro/TERN, offering a comprehensive look at the company’s financial details and stock performance.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
Stock Markets
Macron discussed support for Ukraine and Gaza ceasefire with Germany’s Scholz
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PARIS (Reuters) – French President Emmanuel Macron discussed the importance of maintaining support for Ukraine and the need for a ceasefire in Gaza during talks on Friday with German Chancellor Olaf Scholz, said the French presidency.
Regarding Ukraine, the two leaders expressed their determination to support the country “for as long and as intensively as necessary” in its war against Russia, the Elysee said.
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