Trefis Week in Review – Apple & LinkedIn Webinars Next Week

June 25th, 2011 by Trefis Team
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The Week in Review

Given the positive response from our Pandora (NYSE:P) webinar earlier this week, we have scheduled two more webinars next week for Apple (NASDAQ:AAPL) and LinkedIn (NYSE:LNKD). Among readers’ favorites from the week, we also looked at upside and downside cases for RIM (NASDAQ:RIMM) as its shares continue to fall further. We assess Sirius XM’s (NASDAQ:SIRI) dependence on the auto industry, and we launch coverage on Boeing (NYSE:BA). We also looked at why AMD (NYSE:AMD) and Nvidia (NASDAQ:NVDA) shares continue to slide and what might add support to these stocks.

Insights from the Week

Relevant Articles
  1. China In Focus As Apple Reports Q2 Results
  2. Down 10% This Year, Will Gen AI Tools Help Apple Stock Recover?
  3. Down 5% Over The Last Month, Will Strong iPhone Sales Help Apple Offset Mac Headwinds In Q1?
  4. After Over A 40% Rally In 2023, Will Antitrust And iPhone Issues Hurt Apple Stock?
  5. Up 45% Since The Beginning Of 2023, Where Is Apple Stock Headed?
  6. Up 34% This Year, Will Apple Stock Rally Further Following Q4 Results?

Technology Media & Telecom

Carriers are looking to deploy their own CDNs and Akamai does not want to be left out of the network and would rather license its CDN technology to these carriers that will provide business as well as help telcos build out the capability more quickly …

Sirius’s CEO has indicated that Sirius could put its free cash flow to use by buying shares or through cash dividends — though we don’t think this could happen before 2012 …

RIM once was a great mobile phone company but it’s behind the times and its core competitive advantages are under siege. Its attempts at a playbook are a move in the right direction but will not move the needle …

The demand for “high quality” media consumption on the move is likely to get a serious boost as a result of the iCloud and other competing services …

AMD’s margins have suffered significantly in the past as a result of increased manufacturing costs and price competition. However they started recovering in 2008 and have trended higher …

Although Nokia is bleeding market share rapidly as its profit margins head south, we still believe that the market could be over-reacting to Nokia’s short-term woes …

Capturing the mobile security opportunity will be important for Symantec as the company itself acknowledges that by 2013 handheld devices will be the most popular way to access the web …

The main hang up centers around concerns over LightSquared’s signals interfering with other operators and defense GPS signals, which the company claims is an easy fix …

If we assume that Internet subscribers are a subset of pay-TV subscribers here, Time Warner Cable’s acquisition cost stands at little over $3,700 per subscriber …

The company previously revised its revenue outlook lower in Q2 by $50 million due to the Japan disaster, which we discussed in our earnings preview. The actual impact was only $10 million …

We think this move could be exaggerated due to recent market pessimism and some short-term thinking on how Nvidia’s graphics business will hold up vs. AMD and Intel …

While AMD’s high leverage could partially be the reason behind greater downfall of the stock, it also implies that stock has opportunity to recover over time and might present an attractive investment right now …

By having customers subscribe to higher tiered plans and letting allowing them access to WiMAx, Sprint could is opening the door on more WiMax pricing plans in the future and will take advantage of customers’ increasing data use …

We believe that a higher than expected growth in middleware software sales, as a result of IBM’s recent push in this segment, could result in a measurable upside to our $185 price estimate for IBM’s stock …

We expect RIM’s SG&A and R&D expenses as % of gross profits to increase dramatically in 2011. We are optimistic that this ratio will decline in 2012 as cost cutting efforts gain traction and sales recover …

The results for Q1 were also well below the previous guidance provided by RIM, which is causing investor confidence in the stock to collapse …

Smartphone sales are expected to grow at a healthy pace going forward and will drive continued growth in Pandora’s listener hours on mobile devices …

Cotendo is reportedly raising additional capital with investors such as Juniper, and is emphasizing value-added services that could challenge Akamai’s position in this market …

Historically a new CS software version is released approximately every 18 to 24 months, and Adobe has seen high volume sales growth near its launch date …

Google does not plan to offer bookings in the near future, but the addition of flight schedules to its search results could have a significant impact on online travel agencies such as Expedia …

(Trefis Pro Exclusive) Consumer, Retail, & Automotive

Last year, Home Depot received a significant boost through Senate’s energy measures, which allocated $5 billion in rebates for home owners who upgraded to energy-efficient insulation, windows and heating and cooling equipment …

But where L’Oreal still misses out is from direct selling which Avon Products champions, which could make it an attractive acquisition target for L’Oreal …

Investors’ concerns regarding Revlon’s debt levels underlies this stock volatility though its recent efforts to refinance some of its existing debt has helped to alleviate concerns …

While the cash-starved players have no choice but to squeeze R&D budgets, the bigger ones could continue investing in product innovation and delight the consumer with improved products …

We currently forecast Ann Taylor e-commerce sales to be ~$105 million in 2011. However, better than expected growth in web sales at Ann Taylor– in line with Q1 results – would mean an upside to our estimate for Ann …

The company registered 62% growth in 2010 and 53% in Q1 of 2011 in its digital revenues. We expect GameStop to show double digit growth in its digital receipts going forward …

BestBuy Mobile witnessed an impressive 25% growth in the quarter and same store sales were down 1.7%, both of which were better than what many analysts had expected …

Robert McDonald highlighted that the advertising spend will continue to be around 10% of sales, which alleviates our concerns with regards to the operating margin being strained further to meet the demand for new product launches …

This move comes from the fact that outlet stores provide higher return on capital and Banana stores provide higher margins of close to 17% to the company …

(Trefis Pro Exclusive) Financial Services

The Treasury’s ownership in the company has declined from 92% to 77%, and it still has around 1.5 billion shares available to sell over the next couple of years — or in other words – whenever it can …

However, if the current volatility in commodities and emerging markets persists, and is further compounded by factors such as the continuing sovereign debt problems in Europe, there can be a downside to our forecasts …

We expect this consolidation in Russia to help Citibank establish its business in an under served market where only about 25% of the 142 million Russians have a bank account of any sort …

In March 2010, the industry wide charge-off rate peaked at 10.9% but has declined ever since. The current charge-off rate is still higher than 3.82% that the industry enjoyed before the recession …

ETFs have been a popular instrument among investors because they can be traded on exchanges like stocks, offer diversified exposure for lower fees. As a result, ETFs have grown in recent years to become almost a trillion-dollar market …

These targets have been described as ambitious by market analysts, with the company’s largely Europe-centric operations taking a hit in recent quarters – and the situation in the region not expected to improve in the near future …

As the company narrows its focus on core P&C insurance and life insurance businesses after selling many of its other businesses, its market share could increase to 13% by the end of our forecast period, leading to just about 20% upside …

Declining delinquencies indicate that the bank may report further decline in charge-off rates in coming months which could boost the credit card operating margin for the Bank …

An estimated 16% decline in Q2 trading revenues caused by a slowdown in fixed-income, currencies and commodities trading is forcing Morgan Stanley to resort to cost cutting to resize its business and maintain profit margins …

Credit card transactions in the US grew by slightly less than 4% to reach $1.96 trillion in 2010, whereas debit card transactions grew by almost 14% to cross $1.8 trillion over the same period …

(Trefis Pro Exclusive) Energy & Natural Resources

The prices for iron ore rallied in 2010 jumping close to 20%. This run fizzled out after the Chinese demand for the ore declined in February this year leading to just a 1% increase in the prices this year …

Industrial demand for copper is the single most significant driver for its prices, outstripping supply by 300,000 tons to almost 1 million tons this year …

In 2010, Suntech generated nearly 70% of its revenues from Europe, 15% in the US and slighly more than 5% in China underscoring the industry’s reliance on European demand …

Although marketing & transportation operations generate significant revenues for Chevron, the value contribution is limited to around 4% of Chevron’s stock by our analysis …

This dividend represents an annual yield of about 5.3% based on the company’s closing price of $18.80 per share on Tuesday …

We expect these enhanced features in the E20 solar panels to more than offset any price premiums on the product, providing a significant competitive advantage over its competitors …

We saw a sharp mover higher in silver spot prices last week in part due to strong fundamental demand from major markets like India and China in addition to overall risk-off trade in global equity markets …

With the growth in the solar sector worldwide largely driven by European countries in the past, near term incremental growth will come from the U.S. …

The company is expected to invest about $111 million in its first round of exploration and may be able to conduct exploration in the remaining areas of the block depending on the solution of the dispute …

Alcoa is the largest provider to the aerospace industry in terms of market share with these operations generating almost $3 billion in revenues for the company …

The deal will give Rio Tinto full control over the coal miner and helps to secure coal assets for mining requirements in case of rising fuel prices …

He emphasizes the inherent risk that lies in reducing the fuel diversification of fuel types for U.S. energy consumption needs …

The company recently said in a press statement that it’s accelerating its iron ore expansion program in the Pilbara region of Western Australia with US$676 million funding …

Although the Italian government previously decided to continue its current incentive programs for solar projects through the end of August, the industry anticipates significant cut-backs in subsidies and other incentives at the end of the period …

(Trefis Pro Exclusive) Industrials & Transportation

The commercial airplanes division is the single-largest contributor to Boeing stock value, primarily due to the expected commercial launch of the Boeing 787 Dreamliner in the latter half of 2011 …

Given the pressure for cleaner and safer fracking techniques, companies drilling for oil & gas in shale deposits may have to hasten the adoption of these newer technologies …