Top US stocks to watch: Banks, Facebook and FactSet
Joshua Warner June 29, 2021 8:29 AM
US banks are in play after bumping-up their payouts, Facebook joins the $1 trillion club, FactSet and Herman Miller both disappoint with their outlook, United Airlines orders 270 new planes, and Didi’s blockbuster IPO is expected to take place tomorrow.
US banks are in focus today, with the likes of Morgan Stanley, JPMorgan Chase and Goldman Sachs all trading higher in pre-market trading after raising their dividends yesterday.
It comes after they raised their dividends after the Federal Reserve gave them a clean bill of health and loosened restrictions on payouts to shareholders. This saw Morgan Stanley announce it would double its quarterly payout to 70 cents per share and raise its buyback to as much as $12 billion from $10 billion.
Meanwhile, Goldman Sachs raised its dividend to $2 from $1.25, JPMorgan upped its payout to $1 from $0.90, and Bank of America raised its dividend to $0.21 from $0.18. In total, 13 banks increased their payouts and buybacks yesterday, which should funnel an extra $2 billion into shareholder hands in the third quarter of 2021.
Consumer confidence, due to be released at 1000 ET, will also be closely watched. It is expected to rise to 119 this month after steadying in May.
There was positive news for Facebook today after the company joined the $1 trillion club as shares hit a new all-time high on Monday.
A US judge has dismissed two antitrust lawsuits filed by the Federal Trade Commission and a coalition of states. The judge dismissed one because it was ‘legally insufficient’ and failed to prove Facebook has a monopoly in the social media market, and the other because the allegations were about incidents that took place too long ago.
Meanwhile, EU antitrust regulators will make a decision on whether to approve Facebook’s acquisition of Kustomer by August 2, filings have revealed. It was reported that Facebook had agreed to buy Kustomer last November for around $1 billion. Kustomer is a customer service unit that tries to bring all customer interaction under one platform. The EU has been closely watching acquisitions being made by Big Tech following allegations that they use them as a way to squash potential rivals.
Financial information provider FactSet reported third-quarter results broadly in-line with expectations earlier today.
FactSet reported EPS of $2.72 per share in the third quarter, just below what analysts had expected, while revenue hit targets. FactSet said it expects EPS to come in between $10.75 to $11.15 for the full year, which was raised from its previous target of $10.05 to $10.45 but disappointing considering Wall Street had forecast $11.14.
FactSet raised its quarterly dividend by 6.5% to $0.82, marking the 22nd consecutive quarter of dividend growth.
Furniture maker Herman Miller yesterday said it beat expectations in the final quarter of its financial year as orders for its retail segment more than doubled and its contract business started to recover.
Sales in the three months to May 29 rose to $621.5 million from $475.7 million the year before. Net earnings of $7.4 million compared favourably to the $173.7 million loss booked the year before. Adjusted EPS jumped to $0.56 from $0.11, which was well ahead of the $0.39 forecast by Wall Street.
Herman Miller said it is expecting to report 4.5% revenue growth in the first quarter of its new financial year and plans to deliver adjusted EPS of between $0.52 to $0.58.
United Airlines and Boeing
United Airlines confirmed reports that surfaced yesterday by confirming it has made an order for 270 new aircraft from Boeing and Airbus to replace older and smaller regional jets and larger aircraft.
The airline has ordered 200 Boeing 737 MAX planes and 70 Airbus A321neos. It also announced plans to refit all of its other narrow-body fleet to introduce a new ‘signature interior’ and other features such as better Wi-Fi and more storage for baggage. Combined with other orders, it means United Airlines will be introducing 500 new aircraft going forward – 40 in 2022, 138 in 2023, and as many as 350 in 2024 and beyond.
The new aircraft will be 11% more fuel efficient than its existing fleet and have 17% to 20% fewer carbon emissions. The main attraction is that these new planes are larger and should boost domestic capacity, which has traditionally lagged its rivals, by around 30%.
Walmart has launched a new version of analog insulin that will be significantly cheaper than existing options on the market as it looks to build momentum in its healthcare business.
ReliOn NovoLog will be used to help people control high blood sugar levels in those with diabetes, which around 10% of the US population is thought to have. It is expected to be priced at around $73 a vial and $86 for a package including insulin pens. Branded vials can cost well over $100 and some insulin pens can cost as much as $250.
Johnson & Johnson
Johnson & Johnson is reported to have cancelled plans to conduct local trials of its coronavirus vaccine in India after the government said they were no longer necessary for jabs that have already been approved in other countries.
The news was reported by the Economic Times but has not been confirmed by J&J. The reports also suggested J&J was in talks with the government about how its single-shot jab can be delivered quicker.
Uber is expected to announce plans to allow its office staff to work up to half their hours remotely, according to reports from Reuters.
The announcement is expected to be made today. The new rule will be based on hours and not the number of days in the office, meaning they will be able to work a solid week in the office and then not come in at all the following week.
Chinese ride-hailing giant Didi is expected to price its upcoming blockbuster IPO at the top end of its price range, according to reports.
Reuters, citing unnamed sources, said Didi is to sell 288 million American Depositary Receipts at the top end of the $13 to $14 price range, suggesting it could raise up to $4.0 billion and earn an initial valuation of around $67.2 billion.
The final price is expected to be declared after US markets close today and shares should start trading this Wednesday.
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