Newsquawk Daily US Equity Opening News - EBAY announces buyback; WM and PNR raise dividend; PFE up after guidance

TODAY’S AGENDA:

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  DAY AHEAD: US manufacturing output and industrial production are both expected to rise in November. The NAHB’s housing market index is seen rising 1 point in December to 47. In supply, the UK will sell GBP 3.75bln of 2029 debt, and the US will sell USD 13bln of 20yr bonds.


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  BROKER MOVES - TSLA upgraded at Mizuho with PT matching St. high; MTCH downgraded at Jefferies. To download the full list, please click here.
  

EQUITY NEWS:

TECH:

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  Tech Deals: China reportedly poised to investigate more US tech deals after the Nvidia (NVDA) probe, via The Information. China is moving slowly on the Synopsys (SNPS) - Ansys (ANSS) antitrust review. It is reopening the Nvidia-Mellanox review in response to US export restrictions. Numerous other deals could be subject to Chinese review.


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  Arm Holdings (ARM), Qualcomm (QCOM) - Arm Holdings Plc and Qualcomm Inc. are embroiled in a legal dispute before a Delaware jury, centred on Qualcomm’s 2021 acquisition of Nuvia and a licensing agreement for Arm’s technology. The conflict, arising from a shift in their relationship, could disrupt the chip industry, Bloomberg said.


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  ByteDance - TikTok and its parent company ByteDance have requested the US Supreme Court block the upcoming ban on the app, set for January. The move comes as they seek a delay while appealing the decision, citing support from President-elect Donald Trump. Separately, TikTok CEO Shou Chew met with US President-elect Donald Trump at Mar-a-Lago ahead of a US ban set for January, over national security concerns. The meeting followed Trump’s comments about possibly reversing the ban to protect the app.


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  OpenAI - OpenAI has begun rolling out ChatGPT Search to all users, including those using mobile apps and the website. The move, which intensifies competition with Alphabet’s Google (GOOG), was previously available only to paid subscribers.


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  On Semiconductor (ON) - On Semiconductor and Denso are expanding their partnership to enhance autonomous driving and advanced driver assistance systems.


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  Affirm Holdings (AFRM) - Affirm announces a USD 750mln convertible senior note offering maturing in 2029.


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  Rimini (RMNI) gets a favorable ruling in Oracle (ORCL) litigation appeal.


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  NXP Semiconductors (NXPI) - NXPI to acquire Aviva Links in a USD 242.5mln all-cash transaction.

COMMUNICATIONS:

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  Netflix (NFLX) - U.S. President-elect Donald Trump will meet Netflix co-CEO Ted Sarandos at Mar-a-Lago, despite Sarandos’ history of supporting Democratic candidates, Reuters reports. The meeting follows Trump’s recent outreach to business leaders, including a planned meeting with Amazon (AMZN) founder Jeff Bezos.


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  Meta Platforms (META) - Meta has agreed to an AUD 50mln settlement with Australia’s privacy watchdog over the Cambridge Analytica scandal, CNBC reports. The case involved the unauthorised sharing of personal data from 311,127 Australian users. Meta settled without admitting wrongdoing. META is also to be fined EUR 251mln by Ireland following two inquiries into personal data breaches. Separately, Meta's Threads has over 100mln DAUs and 300mln MAUs.


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  Alphabet (GOOG) - Google launched ‘Whisk’, a generative AI tool allowing users to create images by inputting subject, scene, and style images for remixing. It is powered by Google’s Gemini and Imagen 3 models.


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  Universal Music Group (UMGNF) - Universal Music Group’s Virgin unit has agreed to acquire Downtown Music Holdings for USD 775mln. Founded in 2007, Downtown, initially a music publisher, now offers a range of services to independent artists, including music creation, distribution, and royalty collection.

CONSUMER:

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  Betting Names (DKNG) - Lawmakers and regulators are dialling up their scrutiny of the industry as reports about the recent resurgence of gambling addiction and catastrophic losses incurred by consumers continue to mount. The Senate Judiciary will hold a hearing later this morning exploring pitfalls that have emerged since sports gambling went mainstream, via Politico.


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  eBay (EBAY) - Board authorised an additional USD 3bln for its stock repurchase programme on December 12th; the programme has no expiration date, and adds to the previously authorised amounts.


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  McCormick (MKC) - McCormick is in talks to acquire Sauer Brands, the owner of Duke’s mayonnaise, from Falfurrias Capital Partners. The deal, potentially valued at over USD 1bln, is not final, and talks could end without an agreement or another buyer could emerge, Bloomberg reports.


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  Alibaba Group (BABA) - Alibaba expects to record a loss exceeding USD 1bln from the sale of its department store chain, Intime, to Youngor Group for around USD 1.02bln. The sale marks the company’s continued shift away from offline retailing amid growing competition from platforms like Pinduoduo and Douyin.


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  Walmart (WMT), Meituan (MPNGY) - Walmart China has formed a strategic partnership with China’s largest food delivery company Meituan, to boost its e-commerce business. The partnership, which integrates Walmart stores with Meituan’s delivery network, comes after Walmart’s exit from a previous partnership with JD.com (JD).


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  Amazon (AMZN) - Teamsters at Amazon’s DIL7 delivery station in Skokie, Illinois, overwhelmingly voted to authorise a strike for improved wages, benefits, and workplace safety. It follows similar strike authorisations at two New York City facilities. Separately, a Senate report claims Amazon ignored its internal studies suggesting that productivity targets in its warehouses contributed to worker injuries; the company rejected the findings, arguing that its safety measures are effective and disputes the report’s conclusions. In other news, Taiwan is reportedly in talks with Amazon's Kuiper on satellite communications, via FT.


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  Automakers - The NHTSA has finalised rules for its whistleblower programme, offering awards of 10-30% of fines from successful enforcement actions involving traffic safety violations, WSJ reports. The programme is aimed at employees or contractors in the vehicle industry.


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  Ford (F) - The U.S. Department of Energy has closed a USD 9.63bln loan to BOSK for constructing three EV battery plants for Ford. The plants, located in Tennessee and Kentucky, will produce 120 GWh of batteries annually and create up to 7,500 jobs.


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  Volkswagen (VWAGY) - Volkswagen management and unions held prolonged talks over cost-cutting measures, but no deal was reached. Key issues, including plant closures, remain unresolved. Unions have threatened unprecedented strikes if no agreement is found, as VW struggles with rising costs and increasing competition.


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  Gaming and Leisure Properties (GLPI) completes the previously announced USD 395mln acquisition of the land and real estate assets of Bally's Kansas City Casino and Bally's Shreveport Casino and Hotel from Bally's Corporation (BALY).


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  Ags - China’s import curbs on agriculture are causing a soybean shortage, particularly in the south, Bloomberg reports. Delays at customs are now exceeding 20 days, compared to the usual 5. As a result, some soybean crushers in Guangdong’s Dongguan have suspended operations for three weeks due to supply shortages.

MATERIALS:

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  Dow Inc. (DOW) - CEO James Fitterling purchased 25.6K shares on December 12th for a total USD 1.06mln.


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  Nucor (NUE) - Nucor sees Q4 EPS between 0.55-0.65 (exp. 0.87). The decline is attributed to reduced steel mill earnings, lower volumes, and lower selling prices, though raw materials segment earnings are expected to rise.


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  Rio Tinto (RIO), BHP Group (BHP) - BHP and Rio Tinto, alongside BlueScope Steel, will develop Australia’s largest electric iron-making furnace at Kwinana, near Perth. The pilot will produce 30-40k tons of molten iron annually, using natural gas and hydrogen supplied by Woodside Energy to decarbonise steel production.

ENERGY:

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  Oil Spill - A Russian tanker, the Volgoneft-212, ran aground in the Black Sea, spilling heavy fuel oil into the Kerch Strait, WSJ reports. The incident was caused by stormy weather, and resulted in one crew member’s death, while 13 others were evacuated. Another tanker nearby was also damaged.


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  US LNG - The Biden administration’s study on liquefied natural gas exports, expected to release soon, will not declare that approving more shipments contradicts the public interest, reports suggest. The study, ongoing since January, examines climate, economic, and national security aspects.


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  Shell (SHEL) - Shell has resumed operations at the crude distillation unit at its Norco, Louisiana refinery (240k BPD capacity) after shutting it down on Thursday due to a leak.


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  Tidewater (TDW) - CEO Quintin Kneen purchased 41.6K shares on December 13th for a total USD 2.0mln.


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  Kosmos Energy (KOS) - KOS does not intend to make a firm offer for Tullow Oil (TLW LN).

INDUSTRIALS:

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  Bouygues SA (BOUYY) - Bouygues Construction secured a major contract for the Suburban Rail Loop East project in Melbourne, Australia, valued at AUD 1.7bln (approx. EUR 343mln for Bouygues). Tunnelling will begin in 2026, with the first trains scheduled to enter service in 2035.


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  Waste Management (WM) - Waste Management raised its quarterly dividend +10% to 0.825/shr.


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  Pentair (PNR) - Pentair raised its quarterly dividend +9% to 0.25/shr.


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  Amentum Holdings (AMTM) - FY24 adj. EPS 2.01 (vs 1.86 Y/Y), FY24 revenue USD 13.86bln (vs 13.37bln Y/Y). Sees FY25 adj. EPS between 2.00-2.20 (exp. 1.41), and sees FY25 revenue between USD 13.8-14.2bln (exp. 13.98bln).


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  Ryder System (R) - Ryder appointed John Diez as President and COO, and Cristina Gallo-Aquino as EVP and CFO, both effective January 1st.


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  Joby Aviation (JOBY) - Completed a landmark series of major aerostructure tests for certification credit with the FAA.


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  Lockheed Martin (LMT) - Elon Musk continues to mock LMT's costly fleet of F-35 fighter jets, via FT.

HEALTHCARE:

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  Pfizer (PFE) - Reaffirms FY24 guidance, provides FY25 guidance. FY25 adj. EPS view 2.80-3.00 (exp. 2.88), revenue 61-64bln (exp. 63.2bln). Expects an additional 500mln in savings in 2025 from ongoing cost realignment programme.


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  Merck (MRK) - Merck will discontinue Phase 3 trials for vibostolimab (KeyVibe programme) and favezelimab (KEYFORM programme) after futility analyses showed no survival benefit. Safety profiles were consistent, but immune-related adverse events increased.


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  CVS Health (CVS), Cigna (CI), UnitedHealth (UNH) - Shares of pharmacy benefit managers, including CVS Health, UnitedHealth, and Cigna, fell on Monday following President-elect Donald Trump’s comments about targeting drug-industry middlemen, which have been blamed for increasing medicine costs.


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  Sanofi (SNY) - Sanofi provided a preliminary estimate for the impact of currency fluctuations on its Q4 results; expects a 1-2% negative impact on sales, and a 4-5% negative impact on EPS.


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  Sandoz (SDZNY) - Sandoz has taken additional steps to resolve ongoing US Generic Drug antitrust class action litigation, with a provision of USD 256mln set aside to cover potential settlement costs. The company notes no impact on its FY or mid-term financial guidance.


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  Becton Dickinson (BDX) - Becton Dickinson reached a USD 175mln settlement with the SEC over past disclosures regarding the Alaris System, acquired in 2015. BD admits no wrongdoing, requires no financial restatements, and maintains its FY25 guidance and capex plans.


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  Molina Healthcare (MOH) - Molina Healthcare secured new contracts in Michigan and Idaho to provide dual-eligible Medicare-Medicaid plans. Michigan’s contract spans 11 regions for seven years, while Idaho’s contract covers integrated plans statewide for four years.


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  Eli Lilly (LLY) announces regulatory approval for insulin manufactured in Egypt.


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  Teva (TEVA) and Sanofi (SAN FP) announced its Phase 2b RELIEVE study met primary endpoints in patients with ulcerative colitis and Crohn's Disease.


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  Gilead Sciences (GILD) and Terray Therapeutics announce multi-target research collaboration to discover and develop novel small molecule therapies; Gilead transaction expected to reduce Cos. 2024 EPS by USD 0.01.

FINANCIALS:

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  Goldman Sachs (GS) - Goldman Sachs’ alternative investment arm has acquired a majority stake in Dutch generic drugmaker Synthon from BC Partners, with BC retaining a minority stake to support future growth. Financial details of the deal were not disclosed.


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  Bank of America (BAC) - CEO says the bank outlook is optimistic given expectations for regulation and growth, via CNBC.


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  Blackstone (BX) - Blackstone is considering selling the Grand Wailea Resort in Maui, Hawaii, which it acquired in 2018 for USD 1.1bln, BBG reports. No final decision has been made yet, and Blackstone may retain the property.


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  Apollo Global (APO) - Apollo Global Management is in talks to finance a new initiative for Mexico’s soccer league to sell its television rights collectively. Currently, the country’s teams negotiate these deals individually. The deal is still under negotiation.


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  Axis Capital (AXS), Enstar Group (ESGR) - Axis and Enstar agreed to a USD 2.3bln loss portfolio transfer reinsurance deal, covering Axis’ reinsurance segment reserves from 2021 and prior. Closing is expected in H1 2025, with Axis anticipating a USD 60mln benefit over time.


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  UK Banks - Barclays (BARC LN) has lost the UK court challenge re. motor finance; Barclays was attempting to appeal the ruling that it failed to fairly treat customers when purchasing a used car.

REAL ESTATE:

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  NY Real Estate - The Real Estate Board of New York is suing the city over a new law requiring landlords to pay broker fees, instead of passing them on to tenants, Bloomberg reports. The board argues that the rule will disrupt the rental market and cause unintended consequences.

UTILITIES:

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  Ameren Corporation (AEE), American Tower (AMT) - Ameren appointed American Tower CEO Steven Vondran to its board of directors, effective January 1st.


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  Pacific Gas and Electric (PCG) - The Biden administration is to provide a USD 15bln low-interest loan commitment to PCG to support projects aimed at fighting climate change and improving the electrical grid, via WSJ.

17 Dec 2024 - 13:59- Research Sheet- Source: Newsquawk