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Globe and Mail
06-05-2025
- Business
- Globe and Mail
3 Top Stock Picks By Analysts (NVDA) (LLY) (TTD)
Top Stock Picks (About (STA Research): Is a Canadian investment research company specializing in advanced stock research and analysis. Our research team comprises of Financial Professionals). NVIDIA Corporation (NVDA) Current Price: $114.50 Price Target: $172.03 Projected Upside: 50.24% Analyst Consensus: Strong Buy (35 analysts) STA Stock Analysis NVIDIA demonstrates strong financial and operational fundamentals. It has low debt, granting flexibility in uncertain market conditions, and it consistently ranks in the top quartile for returns on assets, equity, and capital, indicating efficient management. The company also maintains positive cash flow and free cash flow, showcasing strong financial health. With a large market capitalization, it enjoys stability and investor confidence. The company's revenue and earnings growth have been superior to peers over the past five years, making it a top performer in its sector. NVIDIA also delivers high gross profit relative to assets, a key metric valued by long-term investors. Its high dividend yield adds further appeal, especially for income-focused investors. Despite its strong fundamentals, NVIDIA is considered overvalued across multiple valuation metrics — including price-to-book, price-to-earnings, price-to-cash flow, and price-to-free cash flow — suggesting that much of its growth potential may already be priced in. Additionally, the stock has shown high volatility and below-median total returns over the past five years, which may not suit risk-averse investors. Its dividend growth also lags behind sector peers. NVIDIA is a fundamentally strong, well-managed company with impressive growth, profitability, and capital efficiency. However, its current valuation and volatility imply that while it's a quality business, investors should assess their risk tolerance and consider whether now is the right entry point. 2. Eli Lilly and Co. (LLY) Current Price: $823.62 Price Target: $999.09 Projected Upside: 21.30% Analyst Consensus: Strong Buy (11 analysts) STA Stock Analysis Eli Lilly & Company is fundamentally strong, with superior risk-adjusted returns, positive cash flow, and robust earnings and capital utilization. The company is highly regarded for its high market capitalization, positive free cash flow, and excellent return on assets and equity, placing it in the top quartile within its sector. Eli Lilly also provides high dividend returns, making it appealing to income-seeking investors. However, there are concerns about its valuation. The stock is priced above sector medians in terms of price-to-earnings, price-to-book value, and price-to-cash-flow ratios, indicating potential overvaluation. Additionally, the company has underperformed its peers in total returns over the past five years and has shown low dividend growth. High volatility in returns is another risk for potential investors. 3. Trade Desk, Inc. (TTD) Current Price: $54.09 Price Target: $101.15 Projected Upside: 87.00% Analyst Consensus: Strong Buy (27 analysts) STA Stock Analysis Trade Desk demonstrates strong financial health, evidenced by positive cash flow and free cash flow over the last four quarters. The company also outperforms its peers in key metrics such as return on assets, return on equity, and return on invested capital, placing it in the top quartile. Additionally, it has shown superior earnings growth over the past five years and benefits from a high market capitalization, contributing to its stability. However, the stock appears overvalued compared to its peers, trading at high price-to-book, price-to-earnings, price-to-cash flow, and price-to-free cash flow ratios. The company's returns have been volatile, indicating higher risk, and its risk-adjusted returns are below the median for its sector, which may be a concern for risk-conscious investors. Moreover, Trade Desk has underperformed in terms of dividend returns, which might make it less attractive to income-focused investors. While The Trade Desk has strong growth potential, its high valuation and volatility suggest that investors should be cautious, particularly if seeking stability or income.
Globe and Mail
14-04-2025
- Business
- Globe and Mail
Market Analysis: April 14th, 2025
Global Market Update (About (STA Research): Is a Canadian investment research company specializing in advanced stock research and analysis. Our research team comprises of Financial Professionals.) Canadian Markets The Toronto TSX rose almost 1 percent today, despite a decline in commodity prices. Investors are shifting focus toward monetary policy expectations, as a rising risk of recession in Canada has prompted economists to forecast at least two more interest rate cuts by the Bank of Canada in 2025. Slowing economic indicators and weak consumer demand are driving expectations for further monetary easing to support growth. American Markets U.S. stocks moved higher after the White House announced a temporary exemption on smartphones and computers from the latest round of tariffs targeting Chinese goods. The exemption is a relief to tech companies like Apple and Dell, which heavily rely on imports from concerns about the labor market remain elevated. The New York Federal Reserve's latest consumer expectations survey showed that the mean probability respondents assign to higher U.S. unemployment one year from now surged by 4.6 percentage points to 44%, marking the highest level since April 2020, at the onset of the COVID-19 Goldman Sachs CEO David Solomon stated that the prospect of a U.S. recession has increased, citing persistent inflation, tighter financial conditions, and growing global uncertainty. European Markets European shares rallied, largely powered by strong performance in the technology sector, which has benefited from falling bond yields and robust earnings. However, the region's broader economic picture remains concerning, particularly in Germany, where consumer spending continues to lag. The lack of consumer momentum is contributing to stagnation in the eurozone's largest economy. UK stocks gained ground after Barclays revised its Q1 GDP growth forecast upward. The bank now expects 0.7% quarter-on-quarter growth, a sharp increase from its earlier estimate of 0.2%. This optimism follows robust GDP data for February, which showed a 0.5% month-on-month increase, suggesting that the UK economy may be gaining traction despite global headwinds. Corporate Stock News Alphabet Inc/Nvidia Corp Alphabet and Nvidia have joined major venture capital firms in backing Safe Superintelligence (SSI), an AI startup co-founded by OpenAI's former chief scientist Ilya Sutskever. Despite launching only months ago, SSI has quickly become one of the most valuable AI startups. Apple Inc & Dell Technologies Inc Exempt from recent reciprocal tariffs, but new sector-specific tariffs on electronics, semiconductors, and pharmaceuticals expected within 1–2 months. JPMorgan cut target price to $245 from $270. BlackRock Inc JPMorgan cut target price to $988 from $1046 due to expected muted near-term growth. BP Plc Announced an oil discovery in the U.S. Gulf of Mexico (Green Canyon Block 584). Plans to grow Gulf production to 400,000 boepd by 2030. Golub Capital BDC Inc CVC exploring a $75B deal for Golub; unclear if it will proceed, as Golub is not considering a sale. JPMorgan Chase & Co Piper Sandler cut target price to $260 from $270 after reviewing Q1 guidance. Meta Platforms Inc Facing FTC antitrust trial to unwind acquisitions of Instagram and WhatsApp. Morgan Stanley RBC cut target price to $128 from $142; strong net interest income offset by lower non-interest income and higher expenses. Pfizer Inc Discontinued development of weight-loss pill danuglipron after a patient experienced liver injury. Other pharmacokinetic goals were met, but safety remains a concern. Ryanair Holdings Plc May cut flights at smaller Spanish airports in winter 2025–26 if Aena doesn't lower airport fees. South Bow Corp Cut crude trading team from 5 to 2 to focus on stable pipeline revenue. Keystone pipeline restart set for April 15 after North Dakota spill. Telefonica SA Sold bankrupt Peruvian unit to Integra Tec International for €900K. Integra Tec assumes €1.24B debt and minority share purchases. United States Steel Corporation Trump reiterated opposition to Japanese acquisition by Nippon Steel. C Warner Bros Discovery Inc Not selling Polish broadcaster TVN, ending speculation amid geopolitical volatility. Wells Fargo & Co Barclays cut target price on WFC to $87 from $92 on slightly lower 2025 income forecast.
Globe and Mail
11-04-2025
- Business
- Globe and Mail
Market Analysis: April 11th, 2025
Global Market Update (About (STA Research): Is a Canadian investment research company specializing in advanced stock research and analysis. Our research team comprises of Financial Professionals.) Canadian Markets Canada's TSX index surged over 2%, driven primarily by a strong rally in commodity sectors, with oil and gold prices sharply higher amid ongoing geopolitical concerns and supply constraints. The jump in resource-linked stocks helped offset lingering concerns over sluggish economic growth, as recent data revealed that Canada's GDP per capita has declined for six consecutive quarters—a sign of potential economic stagnation despite headline growth figures. American Markets US stocks opened mixed but turned positive in the afternoon session as investors digested a fresh wave of earnings reports from major U.S. banks. While results were generally solid, markets were cautious amid renewed tensions in the U.S.-China trade conflict, which escalated with new tariff threats. The U.S. dollar weakened significantly, falling to its lowest level in over a decade against the Swiss franc, as traders sought safety in haven currencies. European Markets European markets traded lower, weighed down by fears of further trade concerns. Several iconic European exports—including Germany's Birkenstocks, beer, and Riesling wine—have been targeted by the U.S. for potential new tariffs. Despite these headwinds, the European Central Bank (ECB) reassured markets, stating that financial markets remain well-functioning, and that liquidity and credit conditions remain stable. In the UK, stocks posted solid gains, led by energy and mining companies, which mirrored the global commodity uptrend. Economic sentiment was further boosted by data showing that the UK economy grew 0.5% in February, exceeding expectations. According to the Office for National Statistics (ONS), the services sector had a particularly strong month, contributing significantly to overall growth. Additionally, UK exports to the U.S. increased by £500 million, as businesses accelerated shipments to get ahead of the incoming U.S. tariffs. Corporate Stock News Alphabet Inc Google laid off hundreds in its platforms and devices unit (Android, Pixel, Chrome), following January buyout offers. The move aims for greater efficiency. American International Group Inc Jefferies raises target price of AIG to $95 from $90, expecting faster EPS growth compared to peers. Bank of New York Mellon Corp Q1 profit rose 17% to $1.15B or $1.58/share, aided by higher fee income from new clients and market volatility. Berkshire Hathaway Inc Issued a 6-tranche yen bond totaling $626.7M, the smallest yen issuance by the firm. Also maintains investments in Japanese trading houses. BlackRock Inc Q1 profit fell due to rising expenses ($3.58B vs. $3.04B). Blue Owl Capital Corp Jefferies initiates Buy rating with $16 target, citing minimal exposure to tariffs, China, or autos. BP Plc Expects Q1 gas trading to be 'weak'. Casey's General Stores Inc KeyBanc initiates Overweight rating with $500 target, citing strong profitability and store expansion outlook. Cenovus Energy Inc JPMorgan cuts target to C$32 from C$34 ahead of Q1 results. Chevron Corp PDVSA canceled Chevron's Venezuelan crude loading authorizations; some loaded cargoes to return to ports. Citigroup Inc Russian subsidiary clients received frozen coupon payments, signaling unfreezing of some sanctioned assets. Cogeco Communications Inc RBC cuts target to C$76 from C$78, citing lower U.S. revenue growth at American Broadband. Delta Air Lines Inc Tariff uncertainty delays Airbus A220 delivery. Plane may incur 25% duty; expected delivery in June. Frontier Group Holding Inc Withdraws full-year outlook, warns of Q1 loss. Inc Launching a 200B yuan fund to boost domestic sales of export goods amid intensifying U.S.-China trade war. JPMorgan Chase & Co Q1 profit up 9% to $14.6B or $5.07/share. Lucid Group Inc Acquired assets/facilities from Nikola Corp (not the business/tech). Plans to employ 300+ former Nikola staff in Arizona. Nike Inc Piper Sandler cuts target price to $70 from $90, citing macroeconomic volatility and prolonged uncertainty. Stellantis NV Global Q1 shipments down 9% YoY to 1.2M vehicles. Tesla Inc Suspended new orders for Model S/X in China amid rising tariffs. Wells Fargo & Co WFC Q1 profit was up 6%, driven by strong wealth management.
Globe and Mail
09-04-2025
- Business
- Globe and Mail
Market Analysis: April 9th, 2025
Global Market Update About (STA Research): Is a Canadian investment research company specializing in advanced stock research and analysis. Our research team comprises of Financial Professionals. Canadian Markets Canada's Toronto Stock Exchange (TSX) opened lower on Wednesday as traders were digesting headline news and looking for direction. President Trump's reciprocal tariffs on dozens of countries, which recently took effect placed significant pressure on the commodities sector, notably causing a sharp decline in oil prices. Canada ramped up its own retaliatory actions by implementing similar tariffs on vehicles imported from the United States. However, in a key difference, Canada's tariffs will not apply to auto parts or vehicles imported from Mexico, which remains an important trading partner. This move is part of Canada's ongoing efforts to defend its interests amid the escalating trade war between the U.S. and several countries. President Trump has also announced that the U.S. will impose a 34% duty on Canadian softwood lumber, set to take effect this fall. This could further strain the Canadian economy, as softwood lumber is a vital industry for Canada. These trade tensions have exacerbated the uncertainty surrounding global trade and continue to weigh heavily on market sentiment. American Markets U.S. markets were mixed in the morning as Treasury bonds experienced fresh selling pressure. The sell-off in U.S. Treasuries, part of the roughly $29 trillion Treasury market, forced investors to liquidate even their safest holdings to raise cash. This volatility in the Treasury market has ripple effects across the globe, leading to higher borrowing costs and increasing pressure on central banks worldwide to take action. By the afternoon, President Trump made an announcement indicating a shift in his trade policy, revealing that he would pause tariffs on countries with which the U.S. is currently in trade talks. However, his stance toward China remained firm, with Trump imposing additional tariffs on Chinese goods, pushing the tariff rate on certain Chinese imports to 125%. The WTO has forecasted that trade between USA and China could decrease by as much as 80% as a catalyst of the tariffs. European Markets European closed the day falling by 3%, as a result of losses in key sectors like pharmaceuticals and energy. The European Union (EU) retaliated against Trump's trade policies, approving retaliatory measures worth over €20 billion. Forecasts suggest that the tourism industry in the EU is projected to create 4.5 million new jobs by 2035. U.K. markets fell just under 3 percent, as the British economy has been hit by lowered growth forecasts for 2025, with economists now predicting just 0.8% expansion, down from the earlier forecast of 1.2%. Long-term government borrowing in the U.K. surged to levels not seen in over 25 years on Wednesday, reflecting rising financial pressures and the government's need to finance increased spending and deal with economic uncertainty. Meanwhile, U.K. lenders have cut their mortgage rates in response to these developments. consumers. Corporate Stock News Alphabet Inc: Google reached an agreement to modify its automotive services and maps platform to end a German antitrust investigation, avoiding a potential fine. Apple Inc: Apple supplier Luxshare is exploring shifting production outside China, including the U.S., to mitigate the impact of U.S. tariffs. Blackstone Inc: The firm closed a $10.8 billion European property fund, betting on a market recovery despite ongoing turmoil. Bristol-Myers Squibb Co: Won the dismissal of a class action lawsuit accusing it of fraudulently maintaining a monopoly on its blood cancer drug, Pomalyst. Chevron Corp: Plans to expand its use of a technique to fracture rock in multiple wells simultaneously, aiming to reduce costs and increase oil output in the Permian basin. Comcast Corp: Announced plans for its first Universal theme park in Europe, expected to create thousands of jobs in Bedford, U.K., by 2031. Constellation Brands Inc: Scrapped its diversity, equity, and inclusion (DEI) programs, shifting focus to local small businesses instead of diverse suppliers. Constellation Energy Corp: Defended its planned acquisition of Calpine against protests by consumer groups, arguing the deal would not harm competition. Costco Wholesale Corp: Held productive discussions with the Iowa Attorney General over its diversity policies amid legal challenges from Trump's administration. Delta Air Lines Inc: Forecast lower-than-expected profit for the current quarter due to stalled travel demand, largely attributed to Trump's tariffs. Reduced capacity growth expected in the second half of the year. Mondelez International Inc: Piper Sandler raised the target price, believing the company will not be significantly impacted by reciprocal tariffs due to its compliance with USMCA. RPM International Inc: JPMorgan lowered its target price following the company's soft third-quarter results and reduced fourth-quarter guidance. Rxsight Inc: Needham reduced its target price after the company lowered its revenue guidance due to macroeconomic headwinds. Santander: Spain's Santander is exploring options for its $8 billion majority stake in its Polish unit, including a potential sale. Tesla Inc: The FBI is investigating the damage to a Tesla Supercharger station in Washington after a reported explosion that temporarily shut it down. Tilray Brands Inc: Canaccord Genuity lowered the target price, warning that the company's growth may be impacted by delays in international sales. United States Steel Corp: Investor Ancora Holdings reversed its stance and supported the merger with Japan's Nippon Steel, while also proposing a cash offer. Volkswagen Group: VWAGY more than doubled its deliveries of battery-electric vehicles in Europe in the first quarter, signaling growing EV demand.
Globe and Mail
25-03-2025
- Business
- Globe and Mail
Market Analysis: March 25th, 2025
Global Market Update About (STA Research): Is a Canadian investment research company specializing in advanced stock research and analysis. Our small research team comprises of Financial Professionals & Financial Academics. Canadian Markets The Toronto Stock Exchange (TSX) rose as the commodity sector was higher, on oil, gold, and copper, which saw prices strengthen The Canadian aerospace industry has warned about rising costs due to tariffs, as manufacturers in this sector rely heavily on both imports and exports. Aviation companies fear that tariffs imposed on certain materials and components could lead to significant cost increases, potentially squeezing margins and delaying production timelines. American Markets In the U.S., stock indices opened weak, but managed to recover their losses, reflecting investor sentiment that remains cautious amid evolving trade policy developments. Data released today showed that American consumer confidence is at its lowest point from over a decade ago, weighing negatively on market sentiment. European Markets European stocks were trading higher, buoyed by an optimistic reading of business sentiment in Germany, the largest economy in the Eurozone. A key survey revealed that business confidence in Germany had improved, signaling potential economic stabilization in the region. UK stock markets also moved higher on the strength of the energy and building sectors, as investors bet on continued demand for energy resources and infrastructure development. However, the broader economic outlook appeared more subdued, particularly in the retail sector. British retailers reported the sharpest drop in sales volumes in eight months, with figures for March showing a steep decline. The Confederation of British Industry's (CBI) monthly gauge of retail sales dropped significantly, from -23 in February to -41 in March, marking the lowest level since July of the previous year. Retailers attributed this downturn to cautious consumer spending, with many shoppers refraining from making purchases due to ongoing economic uncertainties and inflationary pressures Corporate Stock News Alphabet Inc, Inc, & Meta Platforms Inc: India will scrap a 6% tax on digital advertisements, easing costs for U.S. tech giants like Alphabet, Amazon, and Meta. This decision follows concerns raised by Washington and President Trump's threats of reciprocal tariffs starting April 2. BlackRock Inc: BlackRock launched its first bitcoin exchange-traded product (ETP) in Europe, aiming to tap into the growing demand for cryptocurrency exposure, following success in the U.S. Blackstone Inc: Blackstone is raising at least $10 billion for a new Asia private equity fund, primarily focused on India. During a meeting in Beijing, Blackstone's Stephen Schwarzman expressed confidence in China's economic development, though the fund will not focus on China. Boeing Co: Boeing is seeking to withdraw an agreement to plead guilty to a criminal fraud charge over 737 MAX crashes. The plea deal would have branded Boeing a convicted felon, but a U.S. judge rejected it in December. Negotiations for a new agreement are ongoing. Boeing Co, Lockheed Martin Corp, & Northrop Grumman Corp: The U.S. Navy is expected to announce who will build its next-generation carrier-based stealth fighter, with Boeing, Lockheed Martin, and Northrop Grumman all competing for the contract. Bombardier Inc: Bombardier faces rising costs due to escalating U.S. tariffs and Canadian retaliatory duties, impacting components and engine repairs. Canadian Pacific Kansas City: CIBC cut its target price for Canadian Pacific Kansas City to C$124 from C$128, reflecting lower earnings expectations due to challenging weather conditions in February. Cintas Corp & UniFirst Corp: Cintas has terminated acquisition discussions with UniFirst, which was valued at $5.3 billion. UniFirst rejected earlier offers, and Cintas is no longer in talks to acquire the uniform supplier. Chevron Corp: U.S. President Trump issued an executive order imposing a 25% tariff on oil and gas bought from Venezuela, but extended Chevron's deadline to wind down operations in Venezuela by seven weeks. Citigroup Inc: Citigroup appointed Akira Hoshino as the head of markets for Japan, effective immediately. Hoshino, with over 30 years of experience, will lead the bank's business growth and markets franchise in Japan. Crown Castle Inc: Crown Castle terminated CEO Steven Moskowitz immediately, appointing Dan Schlanger as interim CEO. This follows activist pressure after the company's $8.5 billion fiber asset sale. Diversified Royalty Corp: CIBC raised its target price for Diversified Royalty Corp to C$3.1 from C$3, following strong fourth-quarter earnings and accelerated growth at Mr. Lube. Dropbox Inc: Activist investor Half Moon Capital is pushing Dropbox to end its founder control, criticizing its slowing revenue growth and payment strategy. The investor seeks to remove the company's dual-class share structure, which gives CEO Drew Houston significant voting power. HSBC: HSBC is considering outsourcing some of its fixed-income trading order flow to a third-party firm, according to Bloomberg. Lennar Corp: KBW reduced its target price for Lennar to $128 from $141, citing uncertainty around long-term housing demand and margins. KB Home: Barclays cut its target price for KB Home to $56 from $60 due to a revenue guidance reduction for full-year 2025, following lower-than-expected first-quarter orders. Mobileye Global Inc: Volkswagen is collaborating with Valeo and Mobileye to enhance partially automated driving systems in new models. This partnership focuses on technologies such as cameras, radar, and mapping. Novo Nordisk: Novo Nordisk acquired the global rights to United Laboratories International's 'triple-G' weight-loss drug candidate in a deal worth up to $2 billion. SM Energy Co: Stephens raised its target price for SM Energy to $66 from $57, citing a narrowing valuation gap with mid-cap peers due to promising exploration prospects in the Uinta Basin, Midland Basin, and South Texas. Smithfield Foods Inc: Smithfield reported stronger-than-expected demand for its packaged meats, driving sales growth and cost-cutting benefits. The company expects increased sales and profit for fiscal 2025. Tesla Inc: Tesla's market share in Europe continued to decline in February, with sales down by 42.6% year-on-year. Despite overall growth in the electric vehicle market, Tesla's share of both the overall and BEV market fell
