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Wall Street JournalThe Zacks Analyst Blog Target, CF Industries, Twilio and Paramount
For Immediate Releases
Chicago, IL – November 26, 2024 – Zacks.com announces the list of stocks and featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include including Target TGT, CF Industries CF, Twilio TWLO and Paramount Global PARAA.
Here are highlights from Tuesday’s Analyst Blog:
Black Friday: Global Week Ahead
In the Global Week Ahead?
- The world’s markets continue to assess what a Donald Trump administration will bring, as attention turns to an escalation of the war in Ukraine
- The U.S. Thanksgiving holiday will usher in a key shopping period
- Inflation is in focus in Japan and Europe
Next are Reuters’ five world market themes, reordered for equity traders—
(1) The “Trump” Election Trades Continues to Fascinate.
"Trump trades" will likely continue dominating market action.
Anyone with "buy crypto and the U.S. dollar, sell anything foreign, or green" on their markets' bingo card would still be in the money, even if momentum has softened.
Bitcoin is within a hair's breadth of $100,000, up around +50% from early October, when online betting markets pointed to a Trump election win.
The U.S. dollar index is up +3.6%.
Clean energy, a Trump bug-bear, is the biggest loser, with:
- iShares' clean energy exchange-traded fund (ICLN) down almost -14%
- Mexico's peso has shed just over -4%, and
- European equities (STOXX) are down around -3%
With a few more Trump cabinet appointees to be announced, and a little over 60 days before his inauguration, there's still room for surprises.
Resistance to Trump trades could grow, from a realization that stocks are expensive, or from geopolitics providing a reality check, on the risk assets' rally.
(2) What Will “Black Friday” Shoppers Do? Given Inflation Concerns.
Thanksgiving week in the United States ends with Black Friday, which traditionally marks the start of the holiday shopping period.
Investors are watching the extent to which inflation will weigh on buying habits, with consumer spending accounting for more than two-thirds of U.S. economic activity.
In one worrisome sign, Target shares tumbled this week after the retailer forecast holiday-quarter comparable sales and profit below estimates.
Inflation trends are also in focus with Wednesday's release of the Personal Consumption Expenditures (PCE) Price index, the Federal Reserve's preferred gauge.
The PCE index, which is expected to have climbed +0.2% for October, is one main data point before the Fed's Dec. 17th-18th meeting.
Markets indicate investors are split over whether the Fed will hold rates steady or deliver another quarter-point cut, which would be another boost to consumers.
(3) Russia’s Invasion of Ukraine Keeps the World’s Foreign Ministers Meeting.
Group of Seven (G7) foreign ministers meet next week as Russia's Ukraine invasion just passed the grim milestone of 1,000 days of war and risks a major escalation.
Russia fired a hypersonic intermediate-range ballistic missile at the Ukrainian city of Dnipro on Thursday after the U.S. and U.K. allowed Kyiv to strike Russia with advanced Western weapons, a further escalation of the 33-month-old war.
Safe-haven bonds have rallied in a sign of investor unease.
But markets will struggle to assess the significance of fresh G7 communiques, until Trump's policy on Ukraine becomes clearer.
Trump regularly clashed with G7 allies during his first presidency, and has pledged to end the war.
Investors expect Europe to pay more of Ukraine's support bill and raise overall defense spending, which may require big changes like lifting Germany's constitutional spending cap.
(4) Friday Will Be a Big Day for Fresh Inflation Data.
It's a jam-packed Friday for the Eurozone, kicking off with inflation data watched closely by traders betting on the European Central Bank (ECB) outlook.
Inflation rebounded to +2.0% in October after falling below target a month. Pay growth, meanwhile, accelerated in Q3, though policymakers may look through that.
Traders see just under a 20% chance of a 50 bps ECB rate cut in December, versus 40% a month earlier.
Next up, S&P reviews France's credit rating — Fitch and Moody downgraded their outlooks to negative recently.
Uncertainty remains high as Michel Barnier's government seeks to pass a belt-tightening budget, with far-right leader Marine Le Pen threatening to topple the fragile ruling coalition.
And Ireland holds an election, where ambitious spending plans banking on a sustained boom in multinational corporate tax revenues could be threatened by Trump's presidency.
(5) On Friday, What Will the Bank of Japan (BoJ) Do: Hike or No Hike?
Also on Friday, Tokyo inflation numbers will be watched by investors and Bank of Japan policymakers gauging whether interest rates should rise in December.
While officials have kept markets guessing on when they will hike next, a sliding yen could spark a hawkish BOJ shift sooner rather than later.
The market odds of a 25-bps December hike are now up to about 54% from negligible levels a month ago.
The yen, down more than -7% since the end of September to trade around 155 per dollar, has entered territory that previously triggered intervention by Japan to shore up the currency.
Officials are back to jawboning about yen weakness, while politics complicates matters.
The Liberal Democratic Party is looking to regain public support after a poor showing in recent election, and a rate hike is unlikely to sit well with voters.
Zacks #1 Rank (STRONG BUY) Stocks
This week, I picked a fertilizer stock, a cloud stock and a media conglomerate.
(1) CF Industries: This is a $91 a share stock, in the Fertilizer industry. It has a market cap of $15.6B. I see a Zacks Value score of A, a Zacks Growth score of C and a Zacks Momentum score of D.
CF Industries Holdings, Inc., headquartered in Deerfield, IL, is one of the largest manufacturers and distributors of nitrogenous fertilizer and other nitrogen products globally.
The company’s principal nitrogenous fertilizer products are ammonia, granular urea, urea ammonium nitrate solution (UAN) and ammonium nitrate (AN).
CF Industries is a leading nitrogen fertilizer producer in North America. The company operates two of the largest fertilizer complexes in North America, one in Donaldsonville, Louisiana, U.S. and the other in Medicine Hat, Alberta, Canada.
Roughly 31%, 27%, 25% and 8% of its total sales in 2023 came from its UAN, Granular Urea, Ammonia and AN segments, respectively, while the “Other” segment accounted for the balance. The company completed the divestment of its phosphate unit to The Mosaic Company in March 2014.
The company became the global leader in the nitrogen fertilizer industry and expanded geographically with the acquisition of rival Terra Industries in April 2010.
CF Industries, in October 2013, signed a definitive agreement to sell its phosphate mining and manufacturing business to fertilizer producer Mosaic for $1.4 billion in cash (including $200 million to fund CF Industries’ asset retirement obligation escrow). The transaction was closed in March 2014.
Under the deal, CF Industries disposed of the Hardee County phosphate rock mine, the Plant City phosphate complex, an ammonia terminal, phosphate warehouse and dock at the Port of Tampa and the site of the former Bartow phosphate complex to Mosaic.
CF Industries and Mosaic also entered into a long-term ammonia supply agreement, under which, the former agreed to supply ammonia to Mosaic from its Donaldsonville, LA, nitrogen complex and its 50% owned Point Lisas Nitrogen Ltd. (PLNL) facility in the Republic of Trinidad and Tobago.
(2) Twilio: This is a $102 a share stock, in the Internet Software industry. It has a market cap of $15.1B. I see a Zacks Value score of F, a Zacks Growth score of C and a Zacks Momentum score of B.
Headquartered in San Francisco, Twilio Inc. was founded in 2007 and got listed on the NYSE in Jun 2016.
Twilio provides Cloud Communications Platform-as-a-Service. The company enables developers to build, scale and operate real-time communications within software applications.
The company’s platform consists of three layers: Engagement Cloud, Programmable Communications Cloud and Super Network.
Twilio’s Programmable Communications Cloud software allows developers to embed voice, messaging, video and authentication capabilities.
The company runs a cloud-based Application Programming Interfaces or API, which allows software developers to programmatically make and receive phone calls, text messages and video chats. The advantage of this is that now small app developers can add rich communications features to their apps at a very low cost.
By using Twilio’s software, companies can develop such embed communication applications and websites that will help them better connect with end customers. The Super Network is a software layer which enables its customers' software to communicate with connected devices globally.
The company operates globally, with 22 data centers across nine regions. Twilio uses Amazon Web Service (AWS) to host its platform. Notably, Amazon had invested during Twilio’s Series E round funding in 2015.
The company boasts a strong clientele which includes the likes of Uber, Facebook, Home Depot, Nordstrom, Netflix, Salesforce and Twitter among others. The company ended 2023 with more than 305,000 active customers.
Twilio delivered revenues of $4.15 billion in 2023, up approximately 9% from full-year 2022. The company generates the majority of its revenues from customers located in the U.S. In 2022, these customers accounted for approximately 66% of Twilio’s total revenue, while the remaining 34% was contributed by customers located outside the country.
Its 10 largest customers generated approximately 10% of 2023 total revenue. In 2023, revenue from Active Customer Accounts represented over 99% of total revenue.
(3) Paramount Global: This is a $23 a share stock, in the Media Conglomerate industry. It has a market cap of $14.7B. I see a Zacks Value score of A, a Zacks Growth score of A and a Zacks Momentum score of A.
Paramount Global is a media and entertainment company which creates premium content and experiences for audiences.
The company's portfolio of consumer brands includes CBS, Showtime Networks, Paramount Pictures, Nickelodeon, MTV, Comedy Central, BET, Paramount, Pluto TV and Simon & Schuster, among others.
Paramount Global, formerly known as ViacomCBS Inc., is based in New York City.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Target Corporation (TGT): Free Stock Analysis Report
CF Industries Holdings, Inc. (CF): Free Stock Analysis Report
Twilio Inc. (TWLO): Free Stock Analysis Report
Paramount Global (PARAA): Free Stock Analysis Report