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Tesla Price Target Cut On Model 3; Monsanto Hiked; Best Buy Not A Buy

RBC Capital lowered its price target on Tesla ( TSLA ), Jefferies upped its price target on Monsanto ( MON ) on views that Germany’s Bayer will sweeten its $62 billion takeover offer, and  Best Buy ( BBY ) was downgraded by Citigroup and Deutsche Bank. Tesla RBC Capital trimmed its price target on Tesla to 242 from 252. The electric automaker last week announced a $2 billion stock offering that will be used to fund a production ramp-up for the Model 3. RBC Capital forecast a fresh $1 billion equity raise in 2017 and lowered its estimate for Model 3 shipments. “We were always below Tesla’s vehicle delivery targets of 500,000 by 2018 and 1 million by 2020, but after speaking with industry contacts and reconsidering our model, we are tempering our delivery forecast to account for a slower Model 3 ramp,” said the RBC Capital report. Tesla shares rose 0.9% to 219.90 in early afternoon action on the stock market today . Monsanto Jefferies upped its price target on Monsanto to 132. “We believe a higher-than-$130-per-share transaction is highly likely, with details emerging by August,” Jefferies said in the report. Monsanto on Tuesday rejected a $122-per-share cash offer from  Bayer ( BAYRY ), but signaled it might be open to a higher price. Late Tuesday, Bayer issued a statement sounding hopeful that a deal could be reached. “To date, activist pressure has been limited. If a deal falters, we would expect (a) step-up in pressure for Monsanto to do more with its balance sheet,” said Jefferies. Monsanto stock rallied 2.5% intraday. Bayer fell fractionally. Best Buy Best Buy, which on Tuesday forecast current-quarter profit below views and said its CFO was leaving, was downgraded to neutral by Citigroup and Deutsche Bank. Citigroup cited a lack of hot new consumer electronics products. Virtual reality will not take off until 2017, said Citigroup. “Categories with no secular threats — home improvement and auto parts — are performing better and are more predictable,” Citigroup said. Best Buy shares rebounded 3.6% after tumbling 7.4% on Tuesday. Fleetmatics Pacific Crest Securities upgraded Fleetmatics ( FLTX ) to overweight with a price target of 54. Shares in the mobile fleet management software provider are down 20% in 2016 after surging 43% last year. “With plenty of solid runway for growth, rising (customer turnover) now better understood, a positively received management transition and a conservative earnings outlook for the year, we turn more positive on FLTX,” said the Pacific Crest report. Fleetmatics stock rose 2.4% intraday. In other analyst moves, Needham upgraded Workday ( WDAY ) to buy and raised its price target to 85 from 80. Workday rose 1% to 77.69 intraday.

Tesla Price Target Cut; Monsanto’s Hiked; Best Buy Downgraded

RBC Capital lowered its price target on Tesla ( TSLA ), Jefferies upped its price target on Monsanto ( MON ) on views that Germany’s Bayer will sweeten its $62 billion takeover offer, and  Best Buy ( BBY ) was downgraded by Citigroup and Deutsche Bank. Tesla RBC Capital trimmed its price target on Tesla to 242 from 252. The electric automaker last week announced a $2 billion stock offering that will be used to fund a production ramp-up for the Model 3. RBC Capital forecast a fresh $1 billion equity raise in 2017 and lowered its estimate for Model 3 shipments. “We were always below Tesla’s vehicle delivery targets of 500,000 by 2018 and 1 million by 2020, but after speaking with industry contacts and reconsidering our model, we are tempering our delivery forecast to account for a slower Model 3 ramp,” said the RBC Capital report. Tesla shares were up 0.4% in premarket trading. Monsanto Jefferies upped its price target on Monsanto to 132. “We believe a higher-than-$130-per-share transaction is highly likely, with details emerging by August,” Jefferies said in the report. Monsanto on Tuesday rejected Bayer ’s ( BAYRY ) all-cash, $122-per-share offer. “To date, activist pressure has been limited. If a deal falters, we would expect (a) step-up in pressure for Monsanto to do more with its balance sheet,” said Jefferies. Shares rallied 2.3% early. Best Buy Best Buy, which on Tuesday forecast current-quarter profit below views and said its CFO was leaving, was downgraded to neutral by Citigroup and Deutsche Bank. Citigroup cited a lack of hot new consumer electronics products. Virtual reality will not take off until 2017, said Citigroup. “Categories with no secular threats — home improvement and auto parts — are performing better and are more predictable,” Citigroup said. Best Buy shares slumped 0.8%. Fleetmatics Pacific Crest Securities upgraded Fleetmatics ( FLTX ) to overweight with a price target of 54. Shares in the mobile fleet management software provider are down 20% in 2016 after surging 43% last year. “With plenty of solid runway for growth, rising (customer turnover) now better understood, a positively received management transition and a conservative earnings outlook for the year, we turn more positive on FLTX,” said the Pacific Crest report. In other analyst moves, Needham upgraded Workday ( WDAY ) to buy and raised its price target to 85 from 80.

Oracle Cloud Should ‘More Than Offset’ Slip In New Licenses In ’17

With a chance to chat with Oracle ( ORCL ) customers during its Chicago trade show that ends Thursday, Evercore ISI analyst Kirk Materne came away more convinced that the legacy software leader has its head in the fast-growing cloud. And atop Oracle’s head is a “halo for more cloud uptake,” UBS analyst Brent Thill said in a separate research note. Not that Oracle investors necessarily agree. Oracle stock was down 1.5% in early afternoon trading in the stock market today , near 40. Rival Workday ( WDAY ) was down about 1%, but upstart enterprise software competitor ServiceNow ( NOW ) was up a fraction. Beginning with Oracle’s fiscal 2017, which starts June 1, its cloud “contribution to overall revenue growth will more than offset the declines in the new software license business (or in a more bearish scenario, essentially cancel out the license declines), which we expect to be a 2% headwind to total revenue growth,” Materne wrote in a research note Thursday. By cloud, he means software as a service (SaaS) and platform as a service (PaaS), the popular pay-a-little-as-you-go model that is supplanting large, long-term license fees for software running on-premise enterprises and databases. “And as the base of new license revenue gets smaller, in FY ’18 we project that new software license declines will negatively impact revenue growth by just 90 (basis points),” Materne said. His parsing of the numbers, customer satisfaction and co-CEO Mark Hurd’s commentary came out of the HCM World conference, where some of Oracle’s 6,000 Fusion HCM (human capital management) clients began gathering Tuesday at the Hyatt Regency Chicago to compare notes. Not that they’re all up and running with the new software. It’s a process. Materne said only about 1,000 “core” human resources customers have gone “live” with Fusion HCM. Others are gearing up. Workday Sees Oracle Lagging The lag time between landing a customer and fully implementing the software was on Workday CEO Aneel Bhusri’s mind during his last quarterly conference call when he said bluntly that Oracle has “had time to get customers into production and hasn’t been able to, (while) 75% of our customers are in production. That’s actually the real driver behind win rates.” UBS analyst Thill, in his research note Thursday, counted 600 live customers of Oracle’s latest Fusion HCM release, including Schneider Electric, BT Group ( BT ) and Siemens ( SIEGY ). He said the “pace of go-lives (is) improving as sales/post-sales motions have matured. “Cloud uptake (is) begetting more cloud (with) better attach rates of other cloud solutions,” Thill said, adding that about 50% of Oracle’s midsize HCM customers are also buying Oracle’s financial management SaaS. Besides, Oracle’s “international prowess (is) underappreciated, with some of the biggest opportunities outside the U.S.,” he said. Oracle supports seven “global payrolls” with software in 24 languages in 199 countries, Thill said. While cloud growth might “offset” legacy sale slippage, cloud products won’t outsell on-premise revenue anytime soon. In Oracle’s Q3 ended Feb. 29, total revenue fell 3% to $9 billion, due largely to currency headwinds. SaaS and PaaS sales rose 57% from a year earlier to $583 million, as legacy on-premise software slipped 1% to $7.1 billion, although the latter was up 3% in constant currency. For the current Q4 ending May 31, analysts polled by Thomson Reuters expect Oracle to report earnings per share minus items of 82 cents, up 5%, on revenue of $10.46 billion, down 2.3%.