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Benzinga Briefs

Eli Lilly's Commercial Moat, Competitor Landscape: BofA Emphasizes Strength in Incretin Space, Undervalued Assets

BofA Securities says Eli Lilly and Company (NYSE:LLY) remains a top choice in Biopharma analysis, boasting a remarkable year-to-date performance of +29% (compared to the DRG index’s +10%). 

The U.S. pharma giant continues to shine in the biopharma sector, which is attributable to outstanding revenue growth, expanding margins, and a promising pipeline compared to peers. 

Also Read: Large US Drug Makers Highlight Indian Market For Their Blockbuster Drugs Including For Weight Loss.

While the market acknowledges the potential of Mounjaro (diabetes) and Zepbound (obesity), BofA asserts that opportunities in heart disease, obstructive sleep apnea, and liver disease are significantly undervalued. 

BofA Securities has increased its price target to $1000 from $800, incorporating undervalued opportunities and the next-gen GLP-1 oral (orforglipron).

The analyst maintains a Buy rating, anticipating sustained share strength due to a scarcity of high-growth stories.

Addressing competition, the analyst highlights a substantial commercial moat for Eli Lilly, asserting that the company and Novo Nordisk A/S (NYSE:NVO) possess considerable expertise in the incretin space. Analysts note a lack of available manufacturing capacity as a key factor creating high competitive hurdles.

With the recent addition of label expansions for tirzepatide into weight loss, sales are projected to surpass $60 billion by 2030, a significant increase from $15 billion in 2024. 

Additionally, factoring in upcoming assets like the oral orforglipron (in phase 3) and the GGG agonist retatrutide (in phase 3), the global sales estimate for these assets is expected to exceed $80 billion by 2030. 

Novo Nordisk and Eli Lilly are actively working to increase supply to meet the demand spikes. Both companies have recently provided updates on their positive supply developments, assuring investors and patients.

Eli Lilly, facing challenges with the limited availability of certain doses of its diabetes drug Mounjaro, has doubled its production capacity for incretin drugs. 

The company plans to expand production further in the second half of the year, ensuring at least a 1.5-fold increase compared to the second half of 2023.

Price Action: LLY shares are up 3.66% at $781.29 on the last check Friday.

Photo via Company

Women's History Month: Pharmacy Chains CVS Health, Walgreens To Start Dispensing Abortion Pill Mifepristone In Select States

Pharmacy chain giants CVS Health Corp (NYSE:CVS) and Walgreens Boots Alliance Inc (NASDAQ:WBA) have announced plans to dispense the abortion pill mifepristone, following FDA guidelines issued last year. 

Last year, republican attorneys general in 20 states warned CVS and Walgreens against mailing abortion pills in their jurisdictions.

Both pharmacy chains confirmed their certification and intend to introduce mifepristone in stores, starting with a phased rollout in select states.

Walgreens is set to initiate the service in New York, Pennsylvania, Massachusetts, California, and Illinois within the next week, the New York Times reported, citing Fraser Engerman, Walgreens’ spokesperson. 

Meanwhile, CVS will begin dispensing in all of its Massachusetts and Rhode Island pharmacies in the coming weeks, the NYT report added, citing Amy Thibault, a CVS spokeswoman.

The pharmacy giants plan to expand their services to states where abortion is legal gradually and pharmacy dispensation is permissible, covering about half of the states. 

However, they will closely monitor states like Kansas, Montana, and Wyoming, where abortion restrictions are currently enjoined due to legal challenges.

Walgreens remains cautious, with Engerman noting they will not dispense in states with unclear laws to protect their pharmacists and staff.

A Supreme Court decision, expected later this month, could impact the availability of the medication, particularly if the ruling upholds restrictions on mailing mifepristone.

The U.S. Supreme Court is set to deliberate on the future of mifepristone, a crucial drug employed in over half of all abortions within the U.S. 

The case revolves around the FDA’s endorsement of mifepristone. 

The potential outcome could lead the court, which previously ruled 6-3, to overturn Roe and decide on this matter sometime in the forthcoming year.

Last April, a U.S. federal appeals court temporarily blocked a decision by a Texas judge to halt the FDA’s approval of a widely used abortion drug.

The abortion pill mifepristone will remain available in the U.S. for now but with some restrictions, including requiring in-person doctor visits to obtain the drug and limiting its use to the first seven weeks of pregnancy from the current ten, a federal appeals court ruled.

Price Action: CVS stock is down 0.55% at $73.96, and WBA shares are up 0.98% at $21.47 on the last check Friday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Image Via Shutterstock

Why Is Dell Technologies Stock Blasting Off?

Dell Technologies Inc. (NYSE:DELL) shares are skyrocketing on Friday.

Over the last one year, shares of the company gained over 200%, significantly outperforming the broader S&P 500’s return of around 30%.

The company teamed up with Subaru Corporation to help improve driver safety through the powerful combination of AI and high-performance storage.

This apart, Dell reported quarterly earnings of $2.20 per share which beat the analyst consensus estimate of $1.73 by 27.17%, yesterday. 

Quarterly sales clocked in at $22.3 billion, beating the analyst consensus estimate of $22.16 billion. Operating income soared 25% to $1.491 billion.

The company’s Infrastructure Solutions Group (ISG) delivered fourth-quarter revenue of $9.3 billion, down 6% year over year. 

Client Solutions Group (CSG) delivered fourth-quarter revenue of $11.7 billion, down 12% year over year.

Dell highlighted increasing demand for its AI servers and reported servers and networking revenue of $4.9 billion, with sequential growth driven primarily by AI-optimized servers.

The company also announced a 20% increase in annual cash dividend to $1.78 per common share with $0.445 per common share for the first quarterly distribution payable on May 3 to shareholders of record as of April 23.

Price Action: DELL shares are trading higher by 29.60% to $122.65 on the last check Friday. 

Photo via Shutterstock

Nvidia Supplier Taiwan Semi Faces Water Shortage Challenge as Chip Production Demand Soars

Taiwan Semiconductor Manufacturing Co (NYSE:TSM) and peer semiconductor companies are facing increasing risks of water shortages as they progress to more advanced processing technologies, according to a report by S&P Global Ratings. 

Semiconductor manufacturing, essential for producing chips for devices like smartphones and TVs, demands substantial water usage to cool machinery and clean wafer sheets meticulously. 

The report highlights a direct correlation between the sophistication of semiconductor chips and water consumption, CNBC reports

As chipmakers move to more advanced semiconductor nodes, such as TSMC’s shift to 16-nanometer processes, their water use per unit has surged by over 35%.

This growing thirst for ultra-pure water, necessary for rinsing wafers through numerous fabrication steps, poses potential risks to the global tech supply chain, especially considering TSMC’s critical role in producing approximately 90% of the world’s advanced chips for AI and quantum computing. 

The report suggests that in the face of water limitations, TSMC and similar companies might prioritize the production of high-margin advanced chips over less profitable mature chips, potentially enhancing earnings despite increased water consumption. 

TSMC has made a significant leap in its global expansion by opening its first chip plant in Japan in Kumamoto, a move aimed at diversifying supply chains amid escalating U.S.-China trade tensions. 

It has announced further investment in a second fabrication plant in Japan in partnership with Sony Semiconductor Solutions, Toyota, and Denso.

Beyond Japan, TSMC is extending its international presence with a $40 billion investment in Arizona, USA, planning two manufacturing plants to meet the American demand for semiconductors.

The quarterly results of the chip designers bear testimony to the fact that the artificial intelligence frenzy is in no hurry to cool down as U.S. Big Techs keep splurging on their AI ambitions.

Investors can gain exposure to TSMC via VanEck Semiconductor ETF (NASDAQ:SMH), which has gained 28% year-to-date.

Price Actions: TSM shares traded higher by 5.77% at $136.08 on the last check Friday. 

Also Read: Apple and TSMC Collaborate on Next-Gen 2nm Chips, Eyeing 2025 Production Start: Report

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo via Wikimedia Commons

Celsius Holdings To Gain From Favorable Cost Trends, High Retail Sales Velocity: Analyst

ROTH MKM analyst Sean McGowan reiterated the Buy rating on Celsius Holdings, Inc. (NASDAQ:CELH), raising the forecast to $90.

Celsius Holdings surpassed fourth-quarter earnings estimates with $0.17, alongside a revenue increase of 95% year over year. North American revenue spiked 97%, while international revenue jumped 68%.

Per the analyst, the results were driven by the factors that have propelled its growth over the past several years: continued expansion of distribution, increased shelf space in existing customers, and high retail sales velocity.

McGowan projects the company’s future growth to be driven by further gains in shelf space and velocity, as well as international expansion. 

The analyst forecasts revenues to grow by just under 50% in 2024, which represents slower growth, but implies an incremental revenue greater than the company’s total revenues in 2022. 

McGowan predicts favorable cost trends for the company to continue but to be offset in 2024 and beyond by international expansion, which will require additional promotion and where margins are inherently lower. 

The analyst sees gross margin percentage at just below 48% in ’24 and ’25, and a bit lower in ’26.

These apart, the analyst sees the company to continue investing in selling and marketing to maintain momentum, and expect S&M to approximate 22%-23% of revenue for the next several years.

Price Action: CELH shares are trading lower by 4.72% to $77.77 on the last check Friday.

Photo: Courtesy Celsius Holdings

Analyst Finds It Difficult To Make Numeric Assumptions For Chemours: Here's Why

BMO Capital Markets analyst John P. McNulty downgraded The Chemours Company (NYSE:CC) to Underperform from Outperform at a lowered price target of $19 (from $45).

The analyst re-rated the stock after the company disclosed management changes and further delay in filing its 10-K.

This week, the company said it is delaying its fourth quarter results and 10-K, which was previously expected on February 28 and February 29, 2024, respectively. 

RelatedChemours Stock Tumbles As Company Reveals Management Shakeup And Financial Struggles

The company expects FY23 net sales of about $6.0 billion (vs. $6.8 billion a year ago), compared to the consensus of $6.02 billion.

Chemours also announced that they have put CEO Mark Newman, CFO Jonathan Lock, and VP & Controller Camela Wisel on administrative leave pending the completion of an internal review. 

The analyst says he finds it difficult and high risk to make numeric assumptions for earnings for the company at this juncture.

Nevertheless, the analyst sees the core businesses for the company as being in the early stages of recovery with TiO2 trends turning positive, TSS likely nearing the end of the HFC destock and strong HFO demand, and APM likely nearing the bottom of its economic downturn. 

McNulty expects EPS estimates of $2.92 (vs. consensus: $3.01) in 2023, $3.50 (vs. $3.69 estimate) in 2024, and $5.43 (vs. $4.90 consensus) in 2025.

Price Action: CC shares are trading higher by 2.75% at $20.21 on the last check Friday.

Analyst Eyes Dollar General's Recovery And Dollar Tree's Steady Health Ahead Of Quarterly Reports

Renowned U.S. discount retailers Dollar Tree, Inc. (NASDAQ:DLTR) and Dollar General Corporation (NYSE:DG) are expected to report their quarterly earnings results on March 13th and 14th, respectively.

Piper Sandler analyst Peter J. Keith presented a placer foot traffic analysis of these companies to assess directional movements in traffic, which can be insightful.

For Dollar General, the analyst sees a solid improvement in foot traffic on a quarter-to-date basis in the first quarter versus the fourth quarter. However, Dollar Tree’s first-quarter analysis deciphers a slight downtick from the fourth quarter.

Supplemental Nutrition Assistance Program or SNAP benefits represent ~7.5% of sales at both Dollar General and Dollar Tree’s Family Dollar, the analyst notes.

However, while Dollar Tree’s management called out declining SNAP benefits as a headwind to Family Dollar in the third quarter, Dollar General didn’t cite SNAP headwinds in the most recent quarter but did cite them in the first quarter of 2023, Keith noted.

The analyst reiterated the Overweight rating on Dollar Tree, with a forecast of $171. Keith expects fourth-quarter earnings per share of $2.72 versus the consensus of $2.67 and guidance of $2.58-$2.78.

According to the analyst, fundamentals on core-Dollar Tree look quite healthy and suggest comp may have accelerated from the third quarter comp of +5.4% (ongoing multi-price initiatives and better holiday offering y/y). Meanwhile, FDO fundamentals appear to have stepped down in the fourth quarter for Dollar Tree, such that consensus and the midpoint of comp guidance at 0% seems appropriate.

For Dollar General (Neutral rating, $127 price target), the analyst sees fourth-quarter EPS of $1.66 versus the consensus of $1.72, as sales trends seem to improve during the fourth quarter. 

Sales trends appear to be showing continued improvement into early first quarter for Dollar General as compares continue to ease, the analyst adds. 

Certainly, the new Back to Basics strategy implemented by Dollar General CEO Todd Vasos is likely to have some positive benefits with SKU rationalization and reallocating labor investment, Keith writes.

Retailer Savers Value Village, Inc. (NYSE:SVV) is also reporting its quarterly results soon (March 7th). The analyst maintained an Overweight rating on the stock with a forecast of $24.

Price Action: DG shares are trading higher by 3.26% to $150.04 and DLTR shares are higher by 1.39% to $148.72 on the last check Friday. 

Image via Shutterstock

SoundHound AI Impresses with Subscription Backlog Surge: Analysts See Positive Outlook Despite Top-Line Miss

Wedbush analyst Daniel Ives reiterated an Outperform rating on the shares of SoundHound AI Inc (NASDAQ:SOUN) and raised the price target from $5 to $9.

The company delivered its fourth quarter results featuring a slight top-line miss and a miss on adjusted EBITDA.

Revenue of $17.1 million came in below the Street’s $17.7 million estimate. Its subscription and bookings backlog for FY23 increased 100% Y/Y to $661.0 million fueled by strong product royalties and strength in the automotive segment, noted the analyst.

The company’s FY24 guidance of $63.0 million – $77.0 million was in line with the estimate of $69.7 million and expects to see positive adjusted EBITDA as it is well-positioned to capitalize on the demand for AI chatbots, the analyst opined.

SoundHound’s acquisition of SYNQ3 Restaurant Solutions will make it the largest U.S. provider of voice AI for restaurants, extending its market reach to over 10,000 signed locations and boosting deployment of generative AI capabilities into its product portfolio.

The fourth quarter was solid as the company continues to build toward profitable growth with stable revenue pillars and strong monetization capabilities to capture demand from small players to major enterprises, noted the analyst.

Cantor Fitzgerald analyst Brett Knoblauch reiterated an Overweight rating on the shares of SoundHound AI and raised the price target from $3.60 to $5.80.

The company has redefined its backlog metric, the analyst notes. While the metric shows it is gathering momentum across its restaurant offering, a metric that includes a contractually committed revenue amount, such as remaining performance obligations (RPO), would be more useful.

While the analyst acknowledges that being tied to NVIDIA Corp (NASDAQ:NVDA) is a big positive, it has only made an investment in SoundHound way back in 2017 and nothing since then.

Growth can likely continue to be above 40% for the foreseeable future, and with SOUN being uniquely positioned in the AI market, the analyst believes raising the multiple used to value shares is warranted.

Price Action: SOUN shares are trading lower by 19.3% at $5.98 on the last check Friday.

Image: Pete Linforth from Pixabay

Target's Q4 Sales To Remain Challenged, Says Analyst

BofA Securities analyst Robert F. Ohmes has reiterated a Buy rating on the shares of Target Corp (NYSE:TGT) with a price target of $160.

Target will report its fourth-quarter earnings on March 5.

The analyst expects a comparable sales decline of (5%), in-line with (4.9%) reported in the third quarter as moderating food & beverage inflation is expected.

The analyst sees continued soft discretionary trends to offset improving traffic supported by strategic & merchandising initiatives.

Despite near-term challenges, the analyst opines that investors may look through recent pressure to a potential inflection, which TGT may see in C2Q24.

The analyst’s Gross Margin (GM) forecast is ahead of the street in both the fourth quarter of 2023 and the full year of 2024.

The analyst sees upside opportunities from freight & transportation cost recovery, potential mix tailwinds as lower-margin electronics have underperformed higher-margin discretionary categories & beauty.

The rollout & ramp up of flow & sortation centers, and lower clearance levels & other efficiencies provided by leaner inventory levels are other reasons for the upside.

The analyst says the company’s recent merchandising initiatives and new private label brand launches should improve its value perception with customers and support traffic & share gains.

Press Release: TGT shares are trading higher by 1.31% at $154.92 on the last check Friday.

Photo via Shutterstock

Why McEwen Mining Shares Are Up Today

McEwen Mining Inc (NYSE:MUX) shares are trading higher after it reported fourth-quarter FY23 results.

The company reported an EPS of $2.88 in the quarter, better than the EPS loss of $(0.79) a year ago, beating the consensus loss of $(0.20).

McEwen reported gold production rose to 42,400 oz (from 28,970 oz a year ago), while silver production declined to 635,650 oz (from 702,000 oz the prior year).

Revenue from gold and silver sales stood at $166.2 million in the year, which was higher than $110.417 million in 2022.

The company reported a gross profit of $17.8 million in 2023 versus a gross loss of $(0.5) million last year. 

Operating cash flow stood at $(42.7) million in 2023 versus $(56.6) million a year ago. Cash and equivalents stood at $27.5 million and total debt was $40.0 million at the end of 2023.

Rob McEwen, Chairman and Chief Owner said, “Our biggest single asset with the greatest near-term potential to increase our share value is our 48% owned subsidiary McEwen Copper.”

“At our Canadian and Mexican mines we are advancing two important development projects. At the Fox Complex, the construction of the underground ramp access to the Stock orebodies will start in Q1.”  

Price Action: MUX shares are trading higher by 14.56% at $7.03 on the last check Friday.

Photo via Shutterstock

Investment Advisor Vanguard's CEO Tim Buckley To Step Down, Search For Successor Underway

Thursday, Vanguard Chairman and CEO Tim Buckley disclosed that he will retire from his current position by the end of 2024. 

After more than three decades of service, Buckley leaves a legacy marked by remarkable growth and innovation. 

Vanguard’s Board of Directors has already initiated a thorough process to select a new CEO, considering candidates both within and outside the organization. 

Concurrently, the investment giant announced that Chief Investment Officer Greg Davis has been appointed as President, effective immediately.

Buckley, reflecting on his decision, stated, “In my seventh year as CEO, we have scaled our mission to more than 50 million investors, and our team is just getting started. It has been an absolute privilege to lead Vanguard and help advance the company’s mission of giving clients the best chance for investment success.” 

During his tenure, Vanguard experienced exceptional momentum, expanding its client base globally to over 50 million investors and growing assets under management by over 80% to $9 trillion.

Bloomberg notes that Vanguard has thrived over the past decade due to the widespread popularity of index investing, particularly in the United States. 

Clients have increasingly favored low-cost passive funds, a trend significantly benefiting Vanguard. 

The shift from actively managed funds, where portfolio managers make individual investment decisions, has gained momentum, particularly in Exchange-Traded Funds (ETFs). 

Vanguard has strategically entered the ETF market and is now the second-largest issuer in the United States, trailing only behind BlackRock Inc (NYSE:BLK).

The Wall Street Journal writes that Buckley navigated Vanguard through a challenging political landscape for asset managers, where criticism from both the left and right has been directed at how they leverage their growing influence in shareholder votes. 

Despite this, Vanguard sidestepped much of the controversy surrounding environmental, social, and governance (ESG investing that affected its major rivals. 

Buckley specifically distanced the company from ESG, asserting that Vanguard’s research indicated no significant advantage of ESG over more comprehensive investment strategies.

Photo via Shutterstock

Atlantica Sustainable Infrastructure Clocks Mixed Q4 Results, Sets Optimistic FY24 EBITDA And Cash Goals

Atlantica Sustainable Infrastructure plc (NASDAQ:AY) shares are trading lower after it reported fourth-quarter FY23 results.

Revenue of $241.3 million, missing the consensus of $245.8 million. Operating profit declined to $50.5 million from $58.7 million a year ago.

Adjusted EBITDA increased to $167.6 million from $166.5 million the prior year. EPS of $0.02, beating the consensus loss of $(0.23)

Operating cash flow stood at $388.0 million in 2023 vs. $586.3 million in 2022. Cash Available for distribution (CAFD) for the quarter fell to $51.6 million from $58.9 million the prior year.

In 2023, the company had renewable energy of 2,171MW in operation and produced 5,458GWh and Efficient natural gas & heat of 398MW in operation and produced 2,549GWh.

Dividend: The Board of Directors approved a dividend per share of $0.445, payable on March 22, 2024, to shareholders of record as of March 12, 2024.

As of December 31, 2023, cash at Atlantica’s corporate level was $33.0 million, and net project debt stood at $3.9 billion.

FY24 Outlook: Atlantica expects adjusted EBITDA of $800 million-$850 million and CAFD of $220 million-$270 million.

Price Action: AY shares are trading lower by 1.17% at $17.75 on the last check Friday.

Deal On Cards? Boeing Explores Reacquiring Spirit AeroSystems Amidst Quality Concerns, Production Challenges

Boeing Co (NYSE:BA) is reportedly discussing acquiring Spirit AeroSystems Holdings Inc (NYSE:SPR), the former jet-fuselage supplier it spun off two decades ago

The troubled aerospace company, with a current market valuation of approximately $3.3 billion, has been plagued by manufacturing issues, significantly impacting production at Boeing. 

Spirit’s strategic options are being explored as it faces scrutiny over quality problems affecting Boeing’s 737 MAX jets. 

Talks with Spirit involve the possibility of reacquisition, but a deal is not guaranteed. Additionally, Spirit is exploring the potential sale of its operations in Ireland, which manufactures components for Boeing’s rival, Airbus SE (OTC:EADSF) (OTC:EADSY).

The company, formed in 2005 when Boeing divested some factories, relies heavily on Boeing for nearly two-thirds of its sales, with Airbus and defense firms contributing to the remainder, the Wall Street Journal notes. 

The recent Alaska Airlines door-plug incident involving a fuselage made by Spirit has intensified the focus on quality issues at both Boeing and Spirit, prompting discussions about the possibility of Boeing’s acquisition.

Boeing CEO Dave Calhoun, who initially dismissed acquisition suggestions amid Spirit’s problems, has recently adopted a more open stance. 

Spirit’s financial struggles have persisted, leading to a $100 million cash infusion from Boeing last year. 

Ongoing negotiations with Airbus for a commercial agreement have yet to yield results. 

Acquiring Spirit would present Boeing with the dual challenge of improving its operations and addressing quality-control concerns within a 90-day timeframe set by the Federal Aviation Administration

Boeing’s efforts to exert influence over Spirit have been extensive, but resolving issues at the supplier remains a complex task.

Price Action: BA stock is down 1.28% at $203.02, and SPR shares are up 16.1% at $33.20 on the last check Friday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo via Company

Microsoft's Move in Telecom – 5G Partnership with Etisalat and AI Innovations Reshape Industry

Microsoft Corp (NASDAQ:MSFT) is intensifying its efforts to become a significant player in the telecom equipment market, traditionally dominated by giants like Huawei Technologies

The software behemoth has inked a deal with Etisalat (e&), headquartered in Abu Dhabi, to construct a 5G standalone network across the United Arab Emirates. 

This collaboration marks Microsoft’s second major telecom project, following a partnership with AT&T, leveraging its Azure Operator Nexus hybrid cloud, Nikkei Asia reports

Announced at the Mobile World Congress in Barcelona, the world’s largest telecom industry event, this move is a significant stride for Microsoft and a victory for the Open RAN initiative. 

Open RAN seeks to democratize the telecom infrastructure market, long ruled by a few key players, by promoting common standards for base stations and enhancing competition and innovation.

The launch of the AI radio access network (RAN) Alliance alongside industry leaders such as Nvidia Corp (NASDAQ:NVDA), Ericsson (NASDAQ:ERIC), Softbank, and T-Mobile US, Inc (NASDAQ:TMUS) further underscores Microsoft’s commitment to integrating AI into connectivity solutions, showcasing its potential to reshape the future of telecom infrastructure.

Meanwhile, Microsoft Corp, OpenAI, and Nvidia are backing Figure AI, a Silicon Valley startup focused on creating AI-powered humanoid robots, with a substantial investment of $675 million, elevating the company’s worth to $2.6 billion. 

This financial boost will enhance AI training, robotics manufacturing, and engineering capabilities. 

CEO Brett Adcock anticipates these robots will soon be operational commercially, potentially occupying up to 10 million job roles in the U.S. that are undesirable or hazardous. 

The funding round attracted notable investors such as Bezos Expeditions, Parkway Venture Capital, and Intel Capital.

Price Action: MSFT shares are trading lower by 0.22% at $412.71 on the last check Friday. 

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo by Volodymyr Kyrylyuk on Shutterstock

Why Is NetApp Stock Shooting Higher Today?

NetApp (NASDAQ:NTAP) shares are trading higher after the company reported third-quarter FY24 results and issued FY24 adjusted EPS guidance above estimates

Net revenue rose 5% Y/Y to $1.61 billion, beating the consensus of $1.59 billion. Billings rose 7% Y/Y to $1.69 billion in the quarter.

NetApp Public Cloud annualized revenue run rate (ARR) rose slightly to $608 million from $605 million a year ago. All-flash array ARR increased 21% Y/Y to $3.4 billion.

Adjusted EPS of $1.94, beating the consensus of $1.69.

As of third quarter FY24, cash, cash equivalents and investments stood at $2.92 billion.

The company returned $203 million to stockholders through share repurchases and cash dividends.

Dividend: The company declared a dividend of $0.50 per share, payable on April 24, 2024, to stockholders of record as of April 5, 2024.

Outlook: For the fourth quarter, the company anticipates revenue of $1.585 billion-$1.735 billion (vs. consensus of $1.65 billion) and adjusted EPS of $1.73-$1.83 (vs. street view of $1.73).

For FY24, NetApp currently sees adjusted EPS of $6.40-$6.50 vs. consensus of $6.15 (prior outlook $6.05-$6.25) and revenues of $6.185 billion-$6.335 billion vs. $6.23 billion estimate. 

Several analysts updated their coverage on NetApp following the earnings report:

  • Stifel maintained a Buy rating and raised the price target from $105 to $120.
  • Wedbush maintained a Neutral rating and increased the price target from $85 to $100.
  • TD Cowen reiterated the Outperform rating and boosted the price target from $100 to $120.
  • Evercore ISI Group kept In-Line rating and raised the price target.
  • Barclays maintained an Equal-Weight and raised the price target from $80 to $100.
  • JP Morgan analyst maintained NetApp with an Underweight and raised the price target from $87 to $95.
  • UBS analyst maintained NetApp with a Neutral and raised the price target from $93 to $96.

Price Action: NTAP shares are up 23.11% at $109.72 on the last check Friday.