Monday had the potential to be an ugly day, with the major indices plunging at the open. However, after a broad recovery, the S&P 500 Index managed to salvage a mere 0.1% slip, the Dow Jones Industrial Average lost 0.2% — though it extended its losing streak to eight days — and the Nasdaq Composite actually finished 0.2% higher.
Making news late Monday were Darden Restaurants, Inc. (NYSE:DRI) and Red Hat Inc (NYSE:RHT) on earnings announcements, while Amazon.com, Inc. (NASDAQ:AMZN) is the center of a bundle of news items this morning.
Here’s what you need to know:
Amazon.com, Inc. (AMZN)
AMZN is slightly higher this morning amid a mishmash of headlines.
The “big” one is a price-target raise from analysts at Stifel Nicolaus. Stifel, which already had a “Buy” rating on AMZN shares, raised the price target from $912 to $1,025, implying 21% upside from Monday’s closing prices.
That actually reverses a number of analyst price-target downgrades from February, including RBC Capital Markets, Benchmark Company and Morgan Stanley — all of whom still kept their buy-equivalent ratings on Amazon.
Amazon also won a bidding war with Emaar Malls PJSC for Souq.com, an online retailer based in Dubai that serves Egypt, Saudi Arabia and the United Arab Emirates. While terms of the agreement were not announced, AMZN did beat out an $800 million offer from the shopping center operator. This is a marked push by Amazon into developing markets, whereas the e-commerce operator typically has kept its business ventures in developed markets.
It’s also one of Amazon’s largest acquisitions of late.
Reports out yesterday also say that Amazon will begin collection sales tax in all but five states starting April 1. The only five places it won’t collect sales tax are Alaska, Delaware, Montana, New Hampshire and Oregon — the five states that don’t collect sales taxes.
And lastly, the Wall Street Journal has reported that “people familiar with the matter” have said that Amazon will put a public launch of Amazon Go on the backburner for now, thanks to issues with technology related to its “Just Walk Out Shopping” feature. Amazon Go was expected to be a revolutionary step in retail shopping.
AMZN shares are up marginally this morning.
Darden Restaurants, Inc. (DRI)
DRI shares are up solidly Tuesday morning after announcing fiscal third-quarter earnings and a chain acquisition.
For its fiscal Q3, the company posted a top line of $1.88 billion, which just edged out expectations for $1.86 billion. Meanwhile, earnings of $1.32 per share were 5 cents better than the consensus estimate. That represented increases of 1.7% and 9.1%, respectively.
The performance was led by a 2.1% gain in LongHorn SteakHouse sales and 1.5% at its Olive Garden restaurants. Overall, comparable-store sales were up 0.9% year-over-year.
Darden also upped its earnings guidance for the fiscal year to a range of $3.95 to $4 per share, from $3.87 to $3.97 per share, with comps expected to improve 1.5%.
DRI also announced the acquisition of Cheddar’s Scratch Kitchen.
Cheddar’s is a casual chain that currently boasts 165 locations in 28 states currently owned in part by L Catterton and Oak Investment Partners. The deal is an all-cash transaction for $780 million, and should be accretive to 2018 earnings by 12 cents per share.
DRI shares are up nearly 5% in Tuesday’s morning trade.
Red Hat Inc (RHT)
Lastly, RHT stock is also up on its latest quarterly earnings data.
The open-source software company brought in 61 cents per share in its fourth quarter — right in line with analyst expectations. Meanwhile, revenues of $629 million easily surpassed the $619 million bar set by Wall Street.
Subscription revenue for the quarter was $560 million, which made up roughly 89% of those figures. The company also closed its first deal north of $100 million over the period, which is expected to improve margins.
Red Hat also had sunny expectations for fiscal 2017, with earnings slated in a range of $2.60 to $2.64 per share, ahead of the $2.59 per share that Wall Street expected.
RHT stock is up 5% this morning.