Tag Archives: technology

FIS Upgraded As New Strategy Fuels Bullish Guidance, Notches High

Financial technology firm Fidelity National Information Services ( FIS ) (FIS) got an upgrade Wednesday in the wake of its investor day Tuesday, sending the stock briefly to a new high. Analyst Moshe Katri of Sterne Agee CRT lifted his rating to buy from neutral and set his price target at 85, writing that FIS is shifting away from project-based IT to more stable, higher-margin business lines. “In our view, one of the major reasons for the downward rerating of FIS’s valuation which in the past was at par with peers Fiserv ( FISV ) and Jack Henry & Associates ( JKHY ) (both with sticky/high-recurring revenue models) has been the company’s lackluster performance last year, triggered by its weak IT Services business,” Katri wrote in his upgrade note. “We believe the CEO’s message, pointing to exercising more stringent controls over (the) consulting arm, Capco, reflects management’s realization that cross-selling IT services or project-based business has been a major deviation from the company’s traditional model.” Credit Suisse analyst Paul Condra also noted that FIS had issued 2018 guidance above expectations, implying 14% EPS growth each of the next two years. He raised his price target to 76 from 71, though maintained his neutral rating. FIS’s stock hit an all-time high of 74.19 in early trading on the stock market today , though by early afternoon it was down a fraction, near 73.50. The stock broke out of a cup-with-handle base after its Q1 earnings report last week, and is now extended past its buy point. It holds a strong Composite Rating of 96, putting it in the top 4% of stocks.

Apple-Samsung Battle In China To Force Qorvo, Skyworks Volatility

Apple ( AAPL ) and Huawei will take share from Samsung and Xiaomi within the Chinese smartphone market, leading to mass volatility and an inventory work-down for chipmakers like Broadcom ( AVGO ), Qorvo ( QRVO ) and Skyworks Solutions ( SWKS ), an MKM analyst predicted Wednesday. Shares of Broadcom, Qorvo and Skyworks were up a fraction each in early afternoon trading on the stock market today , while Apple stock was down a fraction. Last month, Apple reported March-quarter sales that missed views for the first time since 2003, undercutting chip stocks, which have broadly fallen since. The Apple report bolsters concerns of a smartphone slowdown, fresh off worries that Chinese smartphone saturation would stunt further growth. But, MKM analyst Ian Ing notes, the brimming Chinese market is still buying. Of 1,000 Chinese respondents in an MKM survey, more than 60% plan to buy a new smartphone within the next three to six months vs. less than 25% of U.S. respondents, Ing wrote in a research report. Of those in China, 38% plan to switch brands. “Chinese consumers are even more gadget-friendly relative to U.S. consumers,” Ing wrote. “Ownership is higher across smartphones, PCs and tablets in rank order.” Nearly 97% of Chinese consumers own a smartphone vs. 84% of Americans, but 25% of Chinese respondents plan to add another smartphone account — likely expanding to children and the elderly — vs. only 7.5% of Americans, Ing wrote, suggesting that Chinese users refresh their smartphones annually. Advances in wireless charging and fingerprint sensing will drive further adoption, he wrote. In smartphones, Apple, Huawei and LeTV look likely to take share from Xiaomi, Samsung and Lenovo, Ing wrote. Chinese consumers are more driven by brand (68% vs. 43% of Americans) and less by cost (33% vs. 61% of Americans). Those dramatic swings in share could affect chipmakers like Qorvo and Skyworks, which are 32% and 20% exposed to China, respectively. Ing estimates 40% of Qorvo’s mobile sales stem from China. Fellow Apple suppliers Qualcomm ( QCOM ) and Broadcom are less exposed — mid-teens and less than 10%, respectively, Ing said. “That said, Qorvo is favorably exposed to Huawei as a 10% customer,” he noted.