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The major averages hover in the red at midday with the Nasdaq Composite (-0.5%) trading behind the S&P 500 (-0.2%). Equity indices hover near their opening levels after failing to hold a slim late-morning gain. The S&P 500 opened with a two-point loss, but was able to make a brief appearance in the green during late-morning action. However, the index hit resistance in the neighborhood of its 100-day moving average (2,039) around 10:45 ET, returning into negative territory shortly thereafter. Deutsche Bank downgrades Enphase Energy Inc(NASDAQ:ENPH) to Sell from Hold and lowers their tgt to $3 from $6. While they expect LT margins to remain in the 35-40% range, firm believes margins could come under pressure in the near term and decline to the high 20s as ENPH focuses on top line growth and share gains. They have generally maintained the view that co remains at risk of share loss against SEDG despite benefitting from strong growth of the US market and believe increasing pricing pressure could mitigate the rapid growth in some of the smaller customer segments, in firm’s view. Until co releases new lower cost Gen 5 products (version 2) in late 2016, they expect downside risk to margins and ests. UBS lowers their Morgan Stanley(NYSE:MS) tgt to $39 from $43. Expectations were high for MS, as solid Equities results at most other bulge bracket firms drove MS shares higher last week and contributed to a difficult set-up. Therefore, while MS results were clearly disappointing, firm believes many of the disappointing components of results were one-time in nature and should not translate into MS shares underperforming nearly 5% today (vs the S&P roughly flat). To that end, they are only lowering their ests by 2%, to $3.20 in 2016 and to $3.55 in 2017, as a result of a more modest expansion of the PT margin in WM coupled with a moderately weaker outlook for the FICC business. UBS lowers their QUALCOMM, Inc.(NASDAQ:QCOM) tgt to $64 from $71 as they believe there are still many unknowns right now in estimating future QCT sales to Samsung and Apple, rate of QTL collections in China and a possible decision on a strategic alignment by the end of the year. They keep their Sep-15 and Dec-15 quarterly ests slightly below consensus as their checks find price pressure continues in QCT. They believe its QCT can take share from Marvell’s recent restructuring of its mobile business especially for low end smartphones. But, LT share at Samsung and Apple could be dependent on customer’s internal development success and also Intel’s push into 4G/LTE modem chips which both could take a few more quarters to determine. They would view a split of the QCT and QTL businesses positively given the dominant position in QTL IP but are not sure co will do this as it has considered this in the past and has chosen not to do so.
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