The fourth-quarter earnings slate will give its last significant gasp this week, with stocks including Nike Inc (NYSE:NKE) and FedEx Corporation (NYSE:FDX) reporting their most recent results. However, the biggest news on Monday is far less earnings-focused, and more on early-morning developments and weekend news.
Specifically, Advanced Micro Devices, Inc. (NASDAQ:AMD) and Shake Shack Inc (NYSE:SHAK) are up following positive notes from an analyst, and Deutsche Bank AG (USA) (NYSE:DB) is made a move to shore up its finances.
Here’s what you need to know as we head into Monday’s trade:
Advanced Micro Devices, Inc. (AMD)
AMD shares are getting some help this morning thanks to an analyst price target hike on optimism about the company’s Ryzen CPU rollout.
Jefferies analyst Mark Lipacis put out a bullish note Monday that said:
“We increase our sales estimates with better visibility into AMD’s Ryzen 7 high-performance and Ryzen 5 power-performance desktop processor launch. We think AMD’s ability to price between-the-seams while achieving competitive performance will result in meaningful share gains from INTC in the Desktop, Server, and Notebook markets starting in 2017. We raise our estimates and remain 700bps/17c ahead of sales/EPS consensus for 2017.”
Lipacis raised the firm’s price target on AMD stock from $13 to $16, which represents another 19% or so more upside from here. Jefferies also adjusted its expectations for 2017 and 2018 earnings; Jefferies took down its FY 2017 EPS estimate from 32 cents per share to 25 cents, but bumped up FY 2018 profit estimates from 41 cents per share to 44 cents.
Jefferies also maintained its “buy” rating on shares.
AMD stock is up about 2% this morning, helping cut into an 11% decline since late February.
Shake Shack Inc (SHAK)
SHAK shares are also up this morning on good news from the analyst community — in this case, an upgrade, but with a little bit of a backhand.
Wedbush’s Nick Setyan upgraded Shake Shack from “Underperform” to “Neutral” while tacking on a $33 price target — up from $30, and only slightly higher than its Friday close at $32.45. However, Wedbush did pull SHAK shares from its “Best Ideas” list.
Still, Setyan feels much better about the company’s current valuation, saying that it implies “an ultimate opportunity more in line with even our lowered base case scenario.” He goes on:
“We believe SHAK’s valuation is now more in line with its long-term opportunity. We no longer view the company’s current $1.1B enterprise value as unjustifiable due to a combination of a lower valuation reflecting a lowered terminal sales volume expectation and a higher annual unit growth rate than our original assessment. The latter results in a lower number of years (14 from 20) by which we discount the ultimate SHAK footprint of 450 units to arrive at our present value of $33 ($30 previously).”
SHAK shares are beginning to climb out of an early-year hole. While the stock still is off about 9% year-to-date, the company started to lift off by about 4%, mostly at the end of the week.
The momentum should continue this morning on the back of the upgrade.
Deutsche Bank AG (USA) (DB)
DB shares are off this morning after the company announced plans to raise 8 billion euros ($8.6 billion) from a capital increase.
The Germany-based mega-bank said the move is part of a broader plan by the company designed to improve its finances and its growth.
Deutsche Bank will issue 687.5 million shares at 11.65 euros ($12.51) apiece. This marks a 35% discount compared to the Friday closing price of $19.03. The sale will take place between March 21 and April 4, and it marks the fourth sale of this kind since 2010.
The bank has posted more than 8 billion euros in net losses over the last two years, and hopefully this move will help solidify its balance sheet.
Deutsche Bank will also sell a minority stake of its asset management unit as an initial public offering over the coming two years.
The news likely will eat into DB’s 5% year-to-date gains. Shares are off more than 2% this morning in premarket action.