Amazon.com Inc. (AMZN) is planning to create another 1,000 jobs in Ireland amid a surge in demand for cloud services and in an effort to help propel the country’s economic recovery following the COVID-19 pandemic.
The new, highly skilled roles will be based in locations across the company’s Cork and Dublin sites in Blanchardstown, Tallaght, the city centre, and north County Dublin. The new hires will bring Amazon’s total permanent workforce in the country to 5,000 people.
Among the new jobs created are software development engineers, network development engineers, Dev Ops engineers, and support engineers, as well as data center technicians and security specialists, and big data specialists. The positions will be deployed in a range of technical management and senior leadership levels at both Amazon and Amazon Web Services (AWS).
“Amazon has been investing and growing in Ireland for over 15 years, and today, we are increasing that commitment with the creation of these highly skilled roles,” said Mike Beary, AWS Ireland Country Manager. “We have seen a surge in demand for cloud services in Ireland and globally, and we are excited to add 1,000 highly skilled roles so we can continue to help our customers, especially in this difficult time, and work towards building a robust digital economy for the future.”
In addition to the new jobs, Amazon is investing in a new 170,000 square foot Dublin campus in Charlemont Square. The campus will be home to AWS’s growing cloud computing workforce, and is expected to open in 2022. In September 2020, the first of Amazon’s wind farm projects in Ireland will come online.
Shares in Amazon have been on a steady winning streak jumping 63% so far this year, with analysts maintaining a bullish outlook on the stock. The Strong Buy consensus boasts 37 Buys versus 2 Holds. In view of this year's rally, the $3,185.47 average analyst price target implies a modest 5.9% upside potential in the stock in the coming 12 months. (See Amazon stock analysis on TipRanks).
Ahead of Amazon’s earnings release on July 30, Wedbush analyst Michael Pachter raised the stock’s price target to $3,500 (16% upside potential) from $3,050 and reiterated a Buy rating, saying that he expects significant top-line upside for Q2, but near- and long-term profitability remains difficult to predict.
“COVID-19 and the stay-at-home response for many consumers should result in substantial revenue upside in Q2, with the company’s burgeoning grocery business likely a key driver,” Pachter wrote in a note to investors.
Pachter forecasts Q2 revenue of $81 billion and operating income of $1.83 billion vs. consensus at $81.3 billion and $0.93 billion respectively.
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Amazon.com Inc. (AMZN) has been accused of investing in startups to steal their ideas to create competing products, according to July 23 report from the Wall Street Journal.
Numerous startups outline a process that usually started with Amazon expressing interest in their company. In some cases, companies agreed to share proprietary information about their products and provide the product's strategy with the understanding that Amazon was interested in investing. Some of the startups received initial investments through Amazon.com Inc. or Amazon's Alexa Fund, while others were offered exploratory meetings to discuss their products.
The Journal stated that it spoke with "two dozen entrepreneurs, investors and deal advisers who said Amazon appeared to use the investment and deal-making process to help develop competing products."
Within a short period, usually of 6 months to a year following the meetings with potential startups, Amazon would then unveil its own competing product that emulated the initial product showcased by the startup.
Alfred Fabricant, a lawyer representing startup Vocalife, said, "They find technology they think is extremely valuable and seduce people to engage with them, and then cut off all communication after initial sessions with an inventor or company." He added, "Years later, lo and behold, the technology is in an Amazon device."
The Journal report highlights stories from numerous startups like DefinedCrowd Corp, Nucleus, LivingSocial, Vocalife LLC, Novel Effect Inc., and Vivint Smart Home Inc.
In a July 23 statement to Business Insider, an Amazon spokesperson said, "For 26 years, we've pioneered many features, products, and even whole new categories. From amazon.com itself to Kindle to Echo to AWS, few companies can claim a track record for innovation that rivals Amazon's." The spokesperson added, "Unfortunately, there will always be self-interested parties who complain rather than build. Any legitimate disputes about intellectual property ownership are rightly resolved in the courts."
DA Davidson analyst Tom Forte notes on July 21 that Amazon is not behaving in an anti-competitive manner in regards to its own private-label brands. After comparing 100 products across Amazon and its competitors, he says that it is consistent with the best practices of other retailers. He maintains a Buy rating on the stock but is withholding his price target until Amazon’s earnings are reported on July 30.
Amazon's stock is up 63% year-to-date with a Strong Buy analyst consensus that breaks down into 37 Buy ratings versus 2 Hold ratings and no Sell ratings. The $3185.47 average price target implies 6% upside potential for the shares in the coming 12 months. (See Amazon's stock analysis on TipRanks).
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2 “Strong Buy” FAANG Stocks to Watch Into Earnings
First, the good news: companies are beating the expectations more often than not this earnings season. After some 25% of the S&P listed companies have reported Q2 results, the ‘beat rate’ is over 80%. That compares well to the 65% beat rate last quarter. And with another 184 companies reporting this week, about one third off S&P index, we’ll know by Friday if this trend is solid or not.
Either way, however, the high beat rate is an artifact of a low bar, which brings us to the bad news. The COVID-19 epidemic has so reduced expectations that even though stocks are coming in better than forecast, they are still showing serious year-over-year declines in sales and profits. The markets have been forgiving, that is all; the bottom line, however, has been grim in the aftermath of the Q1 economic shutdowns and the unstable recovery in Q2.
With this in mind, investors should be more selective in their stock picks, which lead us to look more closely at the ‘Strong Buy’ stocks from the TipRanks database. Specifically, we’ve pulled up the details on three that are releasing earnings after the markets close today. Let’s find out why they are compelling, and get a hint of what to expect after hours.
NXP Semiconductors (NXPI)
We’ll start in the tech sector. NXP is an international semiconductor manufacturer, with headquarters located in both Texas and the Netherlands. The company reported $8.9 billion in revenues for 2019, and despite a hit to sales in 1H20 the Q1 numbers came in above expectations.
NXP benefits from its position as a supplier of advanced chips for automation and IoT applications. A large portion of the company’s business – nearly half – is with the automobile industry, and the company’s products are integral to radar systems and battery monitors. This sets up NXP to take advantage of automotive’s moves toward self-driving and/or electric cars. Another 21% of NXP’s business is with IoT applications.
Looking ahead, the forecasts for the company’s Q2 numbers exemplify both the good and bad of the coronavirus era. Wall Street expects to see about 86 cents per share tonight, a sharp drop from the $1.90 reported in Q2 2019, and down sequentially form Q1. At the same time, remember that NXP beat the Q1 forecast by 48%, so don’t be surprised if the forecast now is a lowball that NXP will easily clear.
Deutsche Bank’s 5-star analyst Ross Seymore is one of the bulls on NXPI. He rates the stock a Buy, and his $135 price target implies a potential upside of 13%. (To watch Seymore’s track record, click here)
Backing his stance, Seymore writes, “[We] would not be surprised to see NXPI slightly beat its 2Q guidance mid-point as demand largely appeared to be better than feared as the quarter progressed. While NXPI’s Auto-heavy exposure (40-50% of revs) may limit the upside in 2Q… we nonetheless expect the company’s results and likely its 3Q guidance to reflect a solid recovery… we remain impressed by NXPI’s ability to tightly manage its business throughout the cyclical downturn in 2019 and the COVID pandemic this year, with the resulting lean inventory yielding the potential for meaningful improvement in NXPI’s revenues, GM and EPS as demand normalizes.”
Overall, NXPI's Strong Buy consensus rating is based on 17 reviews, including 13 Buys and only 4 Holds. Meanwhile, at $125.94, the average price target suggests a modest upside of 6% from the current trading price of $118.86. (See NXPI stock analysis on TipRanks)
Alexandria Real Estate Equities (ARE)
Next on our list is a real estate investment trust with a unique niche. Alexandria Real Estate Equities is heavily involved in the life-sciences industry, owning and leasing office and laboratory space used by research companies. The company boasts a market cap of $24 billion, along with more than 41 million square feet of leasable space. Alexandria has a presence in several major US research hubs, including New York and Boston, and San Diego and Seattle.
The value of Alexandria’s niche is clear from the long-term earnings trend. ARE has reported consistently rising quarterly earnings for the last two years, a trend that was enhanced by the COVID-19 epidemic, which put a premium on health and life sciences services. ARE, which had just missed the earnings forecast in Q4, matched it in Q1 at $1.82 per share. Looking ahead, the stock is expected to show a 55% year-over-year earnings gain, based on $253 million in revenue.
A measure of Alexandria’s strength can be seen in its stock and dividend actions taken during Q2. The company put 6.9 million shares of common stock on the market, at a price of $160 per share, during June, with the proceeds of the sale funding forward sale agreements and construction on highly leased development projects. In addition, the company raised its dividend by 3 cents, to $1.06 per share. The new dividend gives a yield of 2.5%, and has a ‘safe’ payout ratio of 49%.
JMP Securities analyst Aaron Hecht notes, “Since the COVID-19 lockdown began, we have seen material demand shifts across real property types as the pandemic/social unrest has changed consumer behavior. Demand is increasing across real estate sectors that provide superior safety from COVID-19…”
Turning to Alexandria, Hecht says, specifically, “[The] company owns a premier portfolio of Life Science properties, with tenants that work in the Biotech and Technology industries. Many ARE tenants are developing COVID-19 therapeutics and the portfolio is trophy-level quality…”
In line with his comments, Hecht rates ARE shares a Buy. His $185 price target suggests the stock has room for 10% growth in the coming 12 months. (To watch Hecht’s track record, click here)
The analyst consensus on Alexandria Real Estate is unanimous; the company has 4 Buy ratings, making the consensus rating a Strong Buy. Shares are selling for $168, and the average price target of $178.75 implies room for a 7% upside. (See Alexandria’s stock analysis on TipRanks)
Universal Health Services (UHS)
Last up is Universal Health Services, a Pennsylvania-based company providing hospital and healthcare services. UHS operates 400 facilities – including hospitals, acute care centers, and surgeries – across the continental US, as well as in Puerto Rico and the UK. The company saw more than $11 billion in revenues last year, and has a market cap of $9.2 billion.
While medical facilities have been in high demand during the pandemic, the social lockdown policies put a damper on elective procedures. UHS saw a decline in earnings in Q1 of 37%, to $1.73 per share. UHS has suspended its profit sharing programs – dividends and stock buybacks – to conserve capital during the pandemic period. Looking ahead, it’s expected that sharp declines in the Acute Care and Behavioral Health segments will drive a 16% sequential reduction in revenues for the quarter.
Covering the stock for Deutsche Bank, analyst Pito Chickering notes several points that favor UHS shares turning around in the near future: “Revenue trends were healthy pre-coronavirus through February, with hospital same-store revenue trends tracking in-line with expectations through mid/late March… Hospital and provider volumes have recovered more quickly than market expectations with admissions within 10% of pre-COVID-19 levels; occupancy rates across the country are elevated… We believe there will be pent-up demand for finite OR capacity with prioritization to urgent / emergent procedures, e.g., cardiac procedures vs hips, knees, etc.”
Chickering’s view is contingent on a further gradual opening of local and state level economies. In the even of an increase in coronavirus cases, however, the analyst does grant, “We also believe the country and hospitals are better equipped to handle a spike in COVID-19 cases at the local level and national, state and local policy measures will continue to adapt.”
Chickering rates UHS a Buy, with a $135 price target that implies a 23% one-year upside potential. (To watch Chickering’s track record, click here)
United Health Services has 8 Buys and 1 Hold, making the analyst consensus rating a Strong Buy. Share are selling for $109.58 heading into earnings, and the average price target of $135 matches Chickering’s. (See United Health’s stock-price forecast TipRanks)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Solid Biosciences (SLDB) has announced that it has been notified by the U.S. Food and Drug Administration (FDA) that the company’s IGNITE DMD Phase I/II clinical trial remains on clinical hold.
In November 2019, the FDA placed IGNITE DMD on clinical hold as the result of a serious adverse event (SAE) that occurred in the sixth patient dosed in the trial; as previously reported the SAE has fully resolved.
In April 2020, Solid provided the FDA with information and measures intended to improve patient safety and in May 2020, Solid received written communication from the FDA that the trial remained on hold.
In June 2020, the company submitted a response to the FDA that provided data related to manufacturing process improvements. However the FDA has now responded by maintaining the clinical hold and requesting further manufacturing information, updated safety and efficacy data for all patients dosed, and providing direction on total viral load to be administered per patient.
Solid is evaluating next steps and will provide an update as appropriate.
“Patient safety is our highest priority and we plan to continue our dialogue with the FDA to determine the appropriate path for SGT-001,” said Ilan Ganot, CEO of Solid Biosciences. “We are disappointed with the outcome today, however, we will continue to work with the FDA as we believe the clinical development of SGT-001 could offer meaningful benefits to patients with this devastating disease.”
Solid’s SGT-001 is a novel adeno-associated viral (AAV) vector-mediated gene transfer therapy designed to address the underlying genetic cause of Duchenne muscular dystrophy (Duchenne). Duchenne is caused by mutations in the dystrophin gene that result in the absence or near absence of dystrophin protein.
SGT-001 is a systemically administered candidate that delivers a synthetic dystrophin gene, called microdystrophin, to the body. This microdystrophin encodes for a functional protein surrogate that is expressed in muscles and stabilizes essential associated proteins, including neuronal nitric oxide synthase (nNOS).
Data from Solid’s preclinical program suggests that SGT-001 has the potential to slow or stop the progression of Duchenne, regardless of genetic mutation or disease stage.
Shares in Solid Biosciences have plunged 36% year-to-date, and analysts have a cautiously optimistic Moderate Buy take on the stock's outlook. That's with a $5.50 average analyst price target for upside potential of over 90%. (See SLDB stock analysis on TipRanks).
"We view SLDB as among the riskiest names our analyst covers, as it is a company we believe is more likely to fail to get its product to market than to succeed" comments Chardan Capital analyst Gbola Amusa.
"However, increases in the market's and our view of the potential for SGT-001 to succeed could lead to >5x or even >10x share price upside, e.g. if SLDB returns to even half its peak highs of >$50/sh, thus exposing positive risk-reward dynamics that merit our Buy rating for investors with the appropriate risk appetite" he explained. Amusa has a buy rating on the stock with a $5 price target.
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