New data show that booster vaccinations with Johnson & Johnson provide enhanced protection after two months, while new single dose data show consistent vaccine efficacy. The Johnson & Johnson Covid-19 booster shot is reportedly 94% effective when given two months after the first dose, while the drug remains well tolerated with comparable side effects. The new data allows the company to ask the FDA to allow re-injections of the roughly 14.8 million Americans who have so far received only the first component of the company’s vaccine. Johnson & Johnson predicts COVID-19 vaccine sales in 2021 will be approximately $ 2.5 billion, and approval of a booster dose could lead to higher vaccine revenues in 2022.
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Microsoft made its shareholders happy
Microsoft will increase its quarterly dividend by 11% and launch a new $ 60 billion share buyback program. The dividend will be $ 0.62 per share, up $ 0.06 from the previous quarter. Dividends will be paid on December 9 to shareholders from the register as of November 18. The share buyback program approved by Microsoft’s board of directors does not have a specific expiry date and may be terminated at any time. The company has set the AGM for November 30th. It will be held online. The indicative dividend yield on Microsoft shares is 0.85% per annum. The company began paying dividends in 2003, while the annual shareholder payments are constantly growing. Thus, Microsoft’s first dividend was only 8 cents per quarter. The company has paid its shareholders 56 cents a share for the past four quarters and is now starting to pay 62 cents a share, which is not bad for a tech sector.
Investor Day May Support Booz Allen Stock
Weak Q2 growth makes our FY2022 outlook rather aggressive. We project organic revenue growth of 4-7%. However, we see the company aggressively recruiting staff amid strong demand for cybersecurity services and artificial intelligence solutions. Therefore, we have improved our estimate for revenue growth for fiscal 2023 to 9-10%. On the eve of Investor Day, which will take place on October 5, we are improving our estimate of the fair value of the company’s shares from $ 93 to $ 100.
Forbes
At the end of August it became known that the world famous financial publication Forbes, founded in 1917, is preparing to go public. It is noteworthy that the company, which has existed for the second century, is owned by the founding family by only 5%. Hong Kong-based Integrated Whale Media Investments (IWMI) acquired a majority stake in Forbes in 2014. As a result of the transaction, Forbes was valued at $ 414 million. Currently, IWMI has increased its stake to 95% of the shares. Forbes is well known for its rankings of the richest people in the world. For example, the company annually prepares lists of business leaders in various categories, such as Forbes Billionaires, Forbes Global 500, Forbes 30 Under 30, and Forbes Celebrity 100.
Forbes’ main business is focused on selling more than 40 periodicals, among the most famous are ForbesWomen, Forbes Travel Guide, Forbes Asia and about fifteen regional publications. The company also makes money by providing investment and financial advisory services such as Fox and various radio stations. At the moment, according to Forbes, the company reaches an audience of 150 million people around the world through various media channels. In order to keep up with modern trends, Forbes is actively developing digital channels. The company says more than 80 million customers visit online platforms every month. Forbes is diversifying its business by expanding its coverage in other areas such as real estate or education. Forbes also hosts over 100 ForbesLive conferences a year.
The first news of Forbes going public appeared last year, but it turned out to be just rumors. In May of this year, it became known that the company was in talks with GSV Asset Management on a $ 650 million deal, but later it turned out that Forbes still intends to go public through the IPO mechanism. At the end of August, it became known that Forbes was preparing to go public through SPAC, a merger with Magnum Opus Acquisition Limited, which was listed in March this year at an estimate of $ 200 million under the ticker OPA.U. During the deal, Forbes is to receive a private investment in public equity (PIPE) in the amount of $ 400 million, and the indicative valuation of the new company after the merger will be $ 630 million.
The deal is likely to close at the end of Q4 or early Q1 2022. Following the completion of the merger, Forbes’ new ticker will be FRBS. We are positive about the impact of the deal on the company’s business profile, since after the merger, Forbes will raise capital to further develop its business under the iconic brand. The implementation of a differentiated content generation strategy and the development of a digital media space will help the company scale its business on the global stage.
Fiscal Note
FiscalNote is an American company developing an information and analytical platform for communication between business and government. The company provides solutions for tracking and forecasting political trends, informing about recent changes in legislation, assessing the likelihood of getting a lawsuit and monitoring active litigation processes. Moreover, on the platform, clients can prepare analytics for all the company’s invoices, schedule payments and assess the risks of violation of one or another obligation. For analytical functions, the platform uses artificial intelligence technologies.
FiscalNote was founded in 2013 in Washington DC. The company now also operates subsidiaries in Korea, India and Belgium. The company provides customers with software on a subscription basis (SaaS), which generates the main revenue. FiscalNote’s client portfolio consists of approximately 5,000 companies. Among the most famous are AstraZeneca, Lyft, Coinbase, NewBalance, Salesforce. During the period of legislative and political uncertainty during the pandemic, the demand for FiscalNote services grew by an impressive 1,894%, the average cost of a client contract increased by 18%, and the share of customers who chose FiscalNote for the long term increased from 48% to 65%.
Over 13 investment rounds, FiscalNote raised $ 258 million. A total of 57 investors invested in the company, among the most famous are Arrowroot Capital Managemen, New Enterprise Ventures (invested in Uber, Cloudfalre, Snap), Plug and Play (PayPal, Google, DropBox) and CBC Group. Now, the company’s valuation is $ 1.4 billion. According to management plans, at the time of the IPO, the company can be valued at $ 3-4 billion.
As of the end of 2019, the global LegalTech and RegTech market was valued at $ 23 billion. According to analytical estimates, by 2025 the market volume could almost double, reaching $ 41 billion, which corresponds to an average annual growth rate (CAGR) of 10%. The main competitive advantage of FiscalNote is a unique platform that integrates modern technologies for solving legal and tax problems. Moreover, we welcome the company’s desire to enter new markets, including developing ones, where amendments to legislation are made much more often compared to developed countries.
Circle
Circle is a technology company founded in 2013 as a payment platform for settlements in cryptocurrencies. The company was founded on the belief that blockchain and digital currency will reshape the global economic system, effectively making it more open, efficient and integrated. In 2018, Circle created its own stablecoin called USDC. Stablecoin is a cryptocurrency that is usually backed by either fiat currency or another crypto asset. The USDC is backed by the US dollar at a 1: 1 ratio, therefore, in order to ensure the circulation of the stablecoin, Circle must maintain its US currency reserves in a timely manner and in full. Circle publishes a monthly report confirming that the USDC outstanding is fully backed by hard currency reserves. USDC is a popular coin among crypto investors, so the demand for it is quite high. In the Coinmarketcap rating, USDC ranks 10th with a capitalization of $ 29.3 billion. In March 2021, Visa announced that it would allow USDC to be used for settlements on transactions in its payment network.
Supporting the USDC issuance is not Circle’s only business. In 2018, the company acquired the SeedInvest platform, which helps startups raise funds. Circle also operated the Circle Trade OTC trading platform and the Circle Invest investment app. However, both platforms were sold in 2019 and 2020 as the company made decisions to focus on its stablecoin. In 2018, Circle acquired the Poloniex cryptocurrency exchange for $ 400 million in an effort to become a one-stop cryptocurrency marketplace. According to the press release, one of the reasons Circle chose to go public is to increase transparency comparable to banking institutions. Circle has also applied to become a national commercial bank with the aim of bridging the gap between traditional assets and the world of cryptoassets. The company’s management believes that classical banking based on digital currency and blockchain technology can lead not only to a more efficient, but also a more secure and stable financial system.
The company managed to raise $ 711 million in 9 investment rounds. In May 2021, Circle raised $ 440 million from 11 investors, including Fidelity and FTX. Following the deal, it became known that the company intends to go public through the SPAC deal with Concord Acquisition Corp, which is due to close at the end of the fourth quarter of 2021. Circle announced regulatory filings with the Securities and Exchange Commission in August. The company will be listed on the New York Stock Exchange under the symbol CRCL. Circle’s main investors are Fidelity Management & Research Co., Third Point LLC, Marshall Wace and Adage Capital Management. In the last investment round in May, Cirle was valued at $ 4.5 billion.
We believe that, if successful in obtaining a banking license, Circle will have a unique opportunity to scale up its activities. It is possible that the USDC stablecoin can be recognized at the national level. Thus, the coin will become a direct competitor to the US dollar. Among the main risks, regulation can be distinguished, since until now cryptocurrencies have not received a certain status, enshrined in law. A positive moment for the development of the crypto market in the United States may be the appointment of financier Gary Gensler to the post of head of the US Securities and Exchange Commission, who spoke positively about blockchain, bitcoin and cryptocurrencies. We doubt that crypto currencies will be recognized as a means of payment in developed countries, but we fully admit that they can be assigned the status of an alternative investment instrument, which will be a historically positive moment in the development of the crypto market.
Oracle will maintain its leading position
Oracle revenues for the quarter ended August 31 were $ 9.73 billion, up from $ 9.37 billion in the same period last year and a market consensus of $ 9.76 billion. by 6%, to $ 7.4 billion. Oracle increased its net profit by 9.3%, to $ 2.46 billion, or $ 0.86 per share. In the first quarter of the last fiscal year, the company posted net income of $ 2.25 billion, or $ 0.72 per share. Adjusted earnings were $ 1.03 per share, up from $ 0.72 last year, better than the market consensus of $ 0.97. Management said the company expects revenues to rise 3-5% in the next fiscal quarter. Adjusted earnings are forecast at $ 1.09-1.13 per share, slightly above market expectations. In the past quarter, Oracle bought back its own shares for $ 8 billion, while the number of its shares over the past 10 years has decreased by 46%.
All focus on the Fed
The previous week was quite volatile. The broad S&P 500 as the Nasdaq 100 continued to correct for the second week in a row. This time their capitalization decreased by 0.6-0.7%. Earlier, we noted that September is a historically weak month for US indices. However, if in September the S&P 500 at least once reached a historical maximum, then by the end of the month the indices closed with positive dynamics. At the very beginning of the month, the S&P 500 tested its all-time high at 4,540 points. Thus, according to statistics from 1950, the S&P 500 has every chance to move to growth in the second half of September.
Aviation Market Recovery Will Support Raytheon Technologies Business
Despite the short-term negative impact of the new Delta coronavirus strain, the aviation recovery will provide significant support to Collins and Pratt’s business in 2022 with the potential to increase EPS to $ 4.8. Raytheon Technologies is competing with General Electric and Rolls-Royce to retool the B-52 fleet as part of a $ 11 billion 608 engine program. We think Pratt has an advantage as the company offers a derivative of the proven PW800 and supplies all of the previous generation engines for the B-52, which enhances the company’s integration expertise. The air travel market began to grow, albeit at a slower pace than previously expected, as the positive momentum in Europe is partially offset by weaker demand for air services in China and the United States. As a result, we cut our estimate of Raytheon Technologies’ 2021 revenue by $ 0.2bn to $ 64.65bn. However, we expect to see EPS at $ 4.02 against the market consensus of $ 4.07.
Markets Peak Again Despite Delta Strain
Last week, the main indices completely won back the correction of the week before last and again reached their absolute historical values. The capitalization of the S&P 500 increased by 2%, and the index itself rose to the level of 4,412 points. The Nasdaq 100 rose 3% and finally broke through the 15,000 mark, consolidating at 15,112. Investors started buying tech stocks again amid optimism about the sector’s growth ahead of reports from some of the industry’s biggest names. We previously noted that we expect the technology sector to outperform the broad market.