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Markets are high again

Last week, the broad S&P 500 index gained 0.7% and ended the week at historic levels of 4,468 points. The Nasdaq 100 tech index added 0.2%, remaining slightly below the historic high, but the capitalization of the Dow Jones Industrial Average rose 0.9%, and the indicator itself conquered historic highs at around 35,515 points. Investors were encouraged by the news that the US Senate has approved an infrastructure bill with over $ 1 trillion in funding. Now it must be considered by the House of Representatives. In addition, a new $ 3.5 billion stimulus package was proposed that will fund social goals and fight poverty.

Snap doubled its quarterly revenue

Snap, the owner of the Snapchat app, posted excellent quarterly results. The company reduced its net loss in the second quarter of 2021 and more than doubled its revenue as the advertising market continues to recover. The company’s revenue in the second quarter was $ 982 million, compared with $ 454 million a year earlier. The indicator exceeded the consensus forecast of analysts at $ 846 million. Snap’s net loss in April-June decreased by 53% – to $ 151.6 million compared to $ 326 million in the same period last year. Loss on a per share basis declined to $ 0.1 from $ 0.23 on the average market forecast of $ 0.21.

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.

Buying Afterpay is the key to future success

Square posted good results for the second quarter. The company’s revenue reached $ 4.68 billion, compared with $ 1.92 billion a year earlier. The consensus forecast of analysts provided for the figure at the level of $ 5.03 billion. Net income in April-June was $ 204 million, or 40 cents per share, compared with a loss of $ 11.5 million, or 3 cents per share in the same period a year earlier. Adjusted earnings were 66 cents per share, up from 18 cents per share a year earlier. Analysts on average had forecast an indicator of 31 cents per share.

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.

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.

Activision will continue to make money from major franchises

Activision Blizzard increased its net profit by 51% in the second quarter of 2021, with results that exceeded market expectations. Revenue rose 19% to $ 2.296 billion from $ 1.932 billion a year earlier. Net income in April-June was $ 876 million, or $ 1.12 per share, compared with $ 580 million, or 75 cents per share, in the same period last year. At the same time, profit excluding one-time factors increased to $ 1.20 per share from 81 cents. The market consensus assumed the company would have net income of 80 cents per share, adjusted earnings of 76 cents, and revenues of $ 1.89 billion.

A bet on the hydrogen economy

Air Products and Chemicals (APD) posted marginally gains following positive management communication. The press release states that the Jazan and Lu’An projects have returned to normal operating rhythm. This is a positive signal, which should lead to a positive revision of the forecast for the company’s financial indicators and an increase in capitalization. We believe that the comments regarding Lu’An were not understood by all market participants, therefore the news was not taken into account by the market in full. However, the fact that the Jazan project has been relaunched and is likely to be operational by the end of this year is great news that has yet to be played out. We raise our target price for the stock from $ 340 to $ 360.

McDonald’s increased its quarterly profit almost 5 times

McDonald’s, the world’s largest fast food restaurant chain, saw its second-quarter net profit quadrupled, with revenue McDonald’s, the world’s largest fast food restaurant chain, saw its second-quarter net profit nearly fivefold, with revenue growing 57% and beating both market forecasts and the same pre-pandemic period of 2019. Revenue rose to $ 5.888 billion from $ 3.762 billion a year earlier. Excluding changes in currency exchange rates, the indicator increased by 49%. Net income in April-June was $ 2.219 billion, or $ 2.95 per share, compared to $ 483.8 million, or $ 0.65 per share, in the same period last year. Adjusted earnings rose to $ 2.37 per share from $ 0.66 from the market forecast of $ 2.11 per share on revenue of $ 5.584 billion.

Probably the world’s best diesel engine manufacturer

Cummins is a well-managed company with a positive track record and promising long-term growth prospects. The company has a unique business profile and a well-recognized brand, which is why many market participants consider Cummins to be the best diesel engine manufacturer in the world. Thanks to its strong market position, the company has significant potential to grow its market share in truck diesel engines as OEMs exit the market. The downward trend in emissions as the global economy moves towards green energy, innovative technologies and the growth of the aftermarket segment are important triggers that will support Cummins’ business in the long term.