We believe that growth in corporate capital expenditure in the core industries in which Flowserve operates may accelerate significantly, which could place the company in the early stages of a new growth cycle. Notably, this trend correlates with management efforts to improve operational efficiency to increase cash flow generation. In the first quarter, Flowserve orders rose 15% qoq and management is fairly optimistic that this trend will continue.
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Where is my Uber?
Our research indicates positive dynamics of the e-commerce market in 2Q21. For Uber Eats, this translates into an increase in MAU and purchase frequency on a quarterly and yearly basis, a potential indicator of sustained growth in delivery orders. Our assessment of Uber Technologies is based on a differentiated approach, thanks to the company’s global reach and market leadership in various transportation and logistics segments, coordinated by applications. We maintain positive sentiment on the companies business.
We appreciate the Enphase strategy
Enphase is an American company that manufactures micro-inverters and power electrical modules for residential and commercial PV systems. The key to the company’s success is the development of an ASIC that addresses the issues of cost savings and increased integration. We believe that semiconductor shortages could put pressure on Enphase Energy’s business through the end of 2021. However, we see high upside potential for the company’s stock, suggesting that supply chains will begin to recover in 2022. We believe the company’s strategic goals for 2022-2023 are feasible, especially given the move to GaN-based architecture, which can have a profound impact on cost and performance. However, we assume as the main risk that SolarEdge will be able to recapture some of the market share that Enphase Energy has grown in the US in 2020.
Nike Doubles Quarterly Revenue
Nike has published excellent financials for its fourth fiscal quarter. Revenue for the quarter ended May 31, 2021 jumped 96% to $ 12.3 billion, up from $ 6.3 billion in the same period a year earlier, when the company’s sales fell sharply amid the spread of the coronavirus pandemic. The company posted net income of $ 1.5 billion, or $ 0.93 per share, versus a net loss of $ 790 million, or $ 0.51 per share, a year earlier. The market consensus assumed the growth of the indicator to the level of $ 0.51 per share on revenue of $ 11.03 billion.
FedEx Reports Record Profit
FedEx Corp. received a record net profit for the fourth quarter of fiscal year 2021. The company’s March-May net income was $ 1.87 billion, or $ 6.88 per share, compared with a net loss of $ 334 million, or $ 1.28 per share, for the comparable period last year. Earnings excluding one-off factors rose to $ 5.01 per share from $ 2.53. Revenue rose to $ 22.6 billion from $ 17.4 billion a year earlier. Market analysts had forecast FedEx’s adjusted earnings of $ 5.02 per share on $ 21.5 billion in revenue.
Markets Are Positive
Major US stock indexes closed the week with growth. The S&P 500 added just under 3% and closed the trading session on Friday at an all-time high of 4,280.7 points. The Nasdaq 100 tech index rose 2.1% over the week and hit its all-time highs, ending trading at 14,345 points. The improvement in investor sentiment was facilitated by the statements of the head of the US Federal Reserve, Jerome Powell, who on Tuesday confirmed his opinion that the rise in inflation in the country is temporary. He also noted that the Fed will continue to support the economy. At the same time, Powell acknowledged the existence of significant uncertainty amid the opening of the economy after the restrictive measures introduced due to the COVID-19 pandemic. However, Powell considers it unlikely that the rate of growth in consumer prices in the country will reach the level of the 1970s, when inflation was in double digits.
DraftKings Will Maintain Its Leadership Position
Following the release of the quarterly results, we have raised our estimate of the company’s revenues for fiscal 2021, reflecting strong first quarter financial results and higher management forecasts. With a conservative outlook for estimated 2H21 earnings, continued legalization of sports betting in individual states and the takeover of betting technology provider SBTech.
Luxury Goes Digital
We’re highlighting Farfetch because we focus on the fast-growing online luxury goods market. The company operates a leading platform connecting luxury brands and boutiques. The global luxury goods market is undergoing a structural shift towards digitalization and we believe that Farfetch will be the main beneficiary of the $ 300 billion market transformation. The company’s management predicts revenue growth of an average of 16% per year over the next ten years, primarily due to growth demand from China and other emerging markets.
Fortinet. Strong Quarterly Results
We believe Fortinet will pleasantly surprise investors in the second quarter. We expect to see strong quarterly earnings that exceed market expectations. Strong demand for network security products and cloud solutions is having a positive effect on the company’s business. Fortinet records high demand in all regions of its presence. The company plans to publish its financial statements on August 6. We raise our target valuation for the company’s shares from $ 250 to $ 270.
The week ended with insignificant growth
The market capitalization of the major American indices S&P 500, Dow Jones and NASDAQ 100 over the past week increased by 0.5%, 0.6% and 0.7%, respectively. On Wednesday, following the publication of the Beige Book, major indicators closed the session near record levels. The document says that economic activity in the United States from early April to late May grew at a moderate pace, slightly higher than earlier this year. However, the next day, the market corrected on positive data on initial claims for unemployment, which continue to decline and update the minimum levels before the pandemic. On Friday, an important package of May data on the US labor market was released. The statistics turned out to be worse than expected, which was greeted with optimism by market participants. Weak numbers indicate that the labor market is far from ideal, so the Fed should not tighten monetary policy prematurely.