For Immediate Release
Chicago, IL – October 05, 2016 – Zacks Equity Research highlights LinkedIn (NYSE:(LNKD - Analyst Report) - Free Report) as the Bull of the Day and Credit Suisse (NYSE:(CS - Snapshot Report) - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Google (NASDAQ:(GOOGL - Analyst Report) -Free Report), Amazon (NASDAQ:(AMZN - Analyst Report) -Free Report) and Netflix (NASDAQ:(NFLX - Analyst Report) - Free Report).
Here is a synopsis of all five stocks:
Bull of the Day:
Founded in 2003 and headquartered in Mountain View, CA, LinkedIn (NYSE:(LNKD - Analyst Report) - Free Report) is a leader in online professional networking. With more than 450 million members worldwide, the company is the world's largest online professional network.
They have a diversified business model with Talent Solutions, Marketing Solutions, and Premium Subscriptions products operating segments.
Strong Q2 Results
The company reported better-than-expected results for the second quarter of 2016, with strong year-over-year growth in both the top and the bottom lines.
Revenues surged 31% to $932.7 million, from $711.7 million, driven mainly by 35% increase in revenues at Talent Solutions to $597 million. However, the loss increased to $0.89 cents per share, from $0.53 per share, on a GAAP basis, mainly due to a $101 million expense related to tax assets.
Adjusted earnings (including stock-based compensation) came in at $0.06 per share, significantly better than the Zacks Consensus Estimate for a loss of $0.06 per share and the loss of $0.30 per share recorded a year-ago .
The company did not provide any updated guidance in view of its pending merger with Microsoft.
Analysts have raised their estimates for the company after strong results. Zacks Consensus Estimates for the current and next year have surged to $1.01 per share and $1.68 per share, from $0.35 and $0.83 before the results.
Bear of the Day :
Founded in 1856 and headquartered in Zurich, Switzerland, Credit Suisse (NYSE:(CS - Snapshot Report) - Free Report) is a leading global private bank and wealth manager. The bank has operations in over 50 countries and approximately 48,200 employees worldwide. Falling estimates sent the stock to a Zacks Rank #5 (Strong Sell) recently.
Penalty for Mortgage Practices
According to WSJ, Credit Suisse is among the major European banks that have mortgage practice cases pending for settlement with the US authorities. The bank had only $1.6 billion of provisions at the end of 2015, and it hasn’t added to the reserves in the first half of 2016. And with its capital ratio of just 11.8%, the bank is among the worst positioned to absorb a high mortgage penalty.
CEO Expects a Challenging Third Quarter
Speaking at an investment conference in London, the bank CEO Tidjane Thiam said that the trend of depressed client activity seen in the previous quarter had continued into the third quarter.
Equities business’ contribution to overall results is likely to be weak while wealth management unit will continue to see outflows.
The bank expects to cut about 1,200 jobs by the end of 2016, in addition to 4,800 job cuts already made as a part of ongoing restructuring.
For many decades, Swiss banks benefitted from deposits made by non-resident clients that were not disclosed to tax authorities in their home countries. However, a new global automatic exchange of information program will be adopted by about 50 countries from next year, which will facilitate sharing of details of financial assets owned by nonresidents.
Credit Suisse expects about 5 billion Swiss francs in “regularization” outflows this year as foreign clients withdraw funds from their hidden accounts to pay taxes.
European banks’ shares were hammered after Brexit vote as it could cause a recession in the UK and increase in loan losses. These banks have a strong presence in London and their cross border trading and clearing operations could also suffer if Britain leaves the union.
The Bottom Line
After strict regulatory norms imposed on big banks, they have been finding it difficult to generate profits in their investment banking and trading businesses. Rising market volatility has also impacted their traditional businesses.
Google’s New “Home” IoT Device Challenges Amazon’s “Echo”
The home automation wars are finally underway. The consumer-level Internet of Things market finally has another in-home product after Google (NASDAQ:(GOOGL - Analyst Report) - Free Report) officially launched its new “Home” device at the company’s hardware-announcing event on Tuesday.
The Home runs on Google’s new voice assistant, which will also be built into its Pixel phones, the first ever Google smartphone. Paired with this new technology, the device will allow you to play music, get answers from Google, and control other devices.
The Home will retail for $129, and those features at that price means that Google has positioned itself to compete directly with Amazon (NASDAQ:(AMZN - Analyst Report) - Free Report) and its Echo smart speaker. The Amazon Echo, which has sold more than 3 million units, will already be two years old once the Google Home debuts on November 4.
Despite Amazon’s massive head-start, many experts believe Google’s own expertise will help the company catch up quickly. Amazon is not a search engine and does not have the hardware companionship that Google Home will have with the Pixel phone.
As of its launch, Google Home will be able to control Nest Thermostat, Samsung SmartThings, Philips, and IFTTT devices, and it will be able to stream music from Google Play Music, Spotify, Pandora, Tunein, and iHeart Radio.
Soon enough, Netflix (NASDAQ:(NFLX - Analyst Report) - Free Report) will allow for voice control capability, and Google Home users will be able to say “Ok, Google. Watch Stranger Things on my TV” and the device will launch the streaming service and start the show.
Google Home will also pair with Google Assistant and any schedule information on your Google account with a feature called “My Day.” Before you walk out the door in the morning, Google Home will tell you about the weather, local traffic, and any events you have coming up.
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About the Bull and Bear of the Day
Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.
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