Author Archives: Scalper1

Netflix, Delta Air Follow Apple In Undercutting This Key Support Area

Netflix ( NFLX ) and Delta Air Lines ( DAL ) are among the big-name companies that undercut their 200-day moving averages Monday, following on the heels of  Apple ( AAPL ). Los Gatos, Calif.-based Netflix fell 2.8% to 108.40 on the stock market today , closing above its 200-day line after falling as low as 106.02 intraday. Netflix moved above the support/resistance level last week. But shares crashed late Monday after Netflix beat Q1 earnings estimates but gave weak Q2 subscriber growth targets. The streaming video giant  faces stepped-up competition with Amazon.com ( AMZN ), which is now offering its Amazon Prime Video as a stand-alone service for $8.99 per month, $1 cheaper than Netflix’s standard streaming plan. Amazon, which reports Q1 results on April 28, broke out of a cup-with-handle formation last week, rising more than 6% in the process. Amazon rose 1.5% Monday. Delta Air Lines fell below its 50- and 200-day moving lines Monday, losing 2%, while most other carriers’ stocks were little changed. The Atlanta-based airline last week reported strong Q1 earnings, boosted by cheaper jet fuel, but revenue slipped 1% as passengers paid slightly less for each mile they flew. Meanwhile, Apple stock fell 2.2%, falling further below its 200-day line after falling below that area on Friday. A research note from Pacific Crest Securities found that consumers prefer data-collecting gadgets such as Fitbit ( FIT ) opposed to more complex wearables such as the Apple Watch. Fitbit sold 21 million units last year compared to the 10 million Apple Watches sold, Pacific Crest Securities said. IBD’s Take: How does Apple stock rate? Objective analysis at IBD Stock Checkup Finally, keep an eye on social networking giant Facebook ( FB ). Facebook stock rose fractionally Monday as continues to find support at its 50-day moving average. Facebook is well above its 200-day line but has lost sight of a buy point at 117.09.

Netflix Seen Posting Worst Earnings In Over 3 Years

With Netflix ( NFLX ) investing heavily in its global expansion, Wall Street is expecting the Internet TV service to report its lowest earnings per share in over three years when it posts first-quarter results after the close Monday. Analysts polled by Thomson Reuters expect Netflix to earn 3 cents a share in Q1, down 40% from the year-earlier quarter. That would be the company’s lowest EPS total since the fourth quarter of 2012, when it reported 2 cents in earnings per share. Netflix sales are seen rising 25% to $1.965 billion in the March quarter when it completed its international expansion, excluding China. Analysts don’t see EPS growth returning at Netflix until the fourth quarter. For the next several quarters, the focus of investors will be on subscriber growth and whether Netflix can continue to add new customers at a quick pace. In the December quarter, Netflix added 5.59 million new streaming subscribers, bringing its total to 74.76 million subscribers worldwide. Netflix added 1.56 million U.S. streaming subscribers and 4.04 million international subscribers in Q4. For the March quarter, Netflix forecast 6.1 million new streaming subscribers for a global total of 80.86 million. The Los Gatos, Calif.-based company is targeting 1.75 million new U.S. streaming subscribers and 4.35 million new international subscribers. RBC Capital Markets analyst Mark Mahaney on Friday reiterated his outperform rating on Netflix stock with a price target of 140. “Based on intra-quarter data points, our proprietary survey work, and our model sensitivity work, we believe Street revenue/EPS estimates for Q1 are reasonable,” Mahaney said in a research report. “For the Q2 guide, we believe the Street’s outlook for roughly 600,000 domestic subscriber adds may be slightly aggressive, given uncertainty over pending price increases. But we view the Street’s international subscriber adds outlook of 2.9 million for Q2 as realistic.” Netflix stock tumbled to as low as 106.02 on the stock market today , briefly undercutting its 200-day moving average . Ahead of the closing bell shares were down more than 2% near 109. On Sunday, Amazon ( AMZN ) began offering Amazon Prime Video as a standalone service, for $8.99 a month, a dollar less than Netflix’s basic streaming offering. Amazon stock rose 1.5%, extending its recent breakout. Some Analysts Skeptical Of Netflix’s Prospects Other analysts are more cautious ahead of Netflix’s Q1 earnings release. In a report Friday, Mizuho Securities analyst Neil Doshi maintained his neutral rating on Netflix with price target of 120. While expectations are generally positive ahead of Netflix’s Q1 report, Doshi is concerned about the company’s continued free cash flow losses and whether it can successfully scale local original content in new international markets. FBR analyst Barton Crockett maintained his market perform rating and price target of 100. Netflix’s Q1 report “is likely to feature healthy but decelerating subscriber growth in the U.S. and a record level of growth internationally, powered by new country launches and very robust growth in Latin America,” Crockett said in a report Friday. However, Netflix’s growth appears to be plateauing in developed markets where Netflix has been available for some time, such as the U.S., U.K. and Canada, he said. “We suspect that similar maturity will arrive over the next couple of years in other developed country markets,” Crockett said. “We also believe that some investors may be overly optimistic about the degree of flow-through in second-half 2016 from U.S. price hikes.” RELATED: Netflix Stock Surges Ahead Of Q1 Earnings Report Next Week Netflix Rate Hike To Be Key Test Of Its Pricing Power

Intel Layoff Rumors Circle Amid PC Slump, Data Center Grapple

No. 1 chipmaker Intel ( INTC ) may cut thousands of jobs to buffer its bottom line amid continued PC malaise, according to a report from Oregon Live . The report came as a second analyst in a week cut his price target on Intel stock Sunday in reaction to industry reports of Q1 PC shipment declines and a “dreadful” January for Taiwanese ODMs. Intel is slated to announce its Q1 results late Tuesday. In afternoon trading on the stock market today , Intel stock was up a fraction, trading near 32. Shares dipped severely in January but began to recover by mid-February. As of Friday’s close, Intel stock was down 9% for the year. Summit Research analyst Srini Sundararajan cut his price target on Intel stock to 37 from 38 but reiterated a buy rating. He cited recent reports from industry trackers IDC and Gartner which projected 9.5% and 11.5% year-over-year declines in Q1 PC shipments, respectively. Taiwanese PC makers noted respective 15% and 30% declines in notebook/desktop and motherboard shipments in Q1, Sundararajan wrote in a research report. “We think there will be some effect on Intel in Q1 and Q2 possibly,” he wrote. Pre-announcements from Super Micro Computer ( SMCI ) and Seagate Technology ( STX ) — slated to report earnings April 28 and 29, respectively — show soft demand for the data center and hard disk drive businesses, he wrote. Hard disk drives declined 18% sequentially, Seagate said. That softness will affect Intel, which hangs 60% of its revenue on PC sales. And the data center struggles are particularly concerning. Intel is pushing big into the data center and cloud spaces to diversify from its weakening PC unit. Super Micro Computer guided to $530 million to $533 million in fiscal Q3 sales, well below the midpoint of earlier views for $530 million to $580 million. “Given that a tight correlation exists between Intel’s DCG (data center group) revenues and Super Micro Computer revenues, if we do not see any effect in Q1, we should expect some effect in Q2,” Sundararajan wrote. Intel will likely guide 2016 sales and capital expenditures down, he wrote. Three months ago, Intel modeled mid- to high-single-digit growth for 2016. Sundararajan cut his estimate to $57.1 billion in sales and $2.30 earnings per share, up 3% and down 1%. The consensus models $58.2 billion and $2.36 a share. So far, Intel hasn’t officially announced layoffs internally, according to the Oregon Live report that cited inside sources. The cutbacks could reduce employment in some units by double-digit percentages.