🪜General Electric: Pushing Ahead in Tough Days🪜

The stock was firm despite giving guidance that was less than expected. Adjusted earnings per share stood at $0.57, ahead of Wall Street’s estimate of $0.43. However, sales looked slightly weak, and the guide spoke a similar tune. The company predicted a flat year of year growth in sales.

Despite less revenue, it has maintained positive free cash flow, which is a bright note. The CEO does sound upbeat as it signals growth in orders and margins expansion. Despite a challenging operating environment, the company seems to do well with selling non-critical assets to power its turnaround story.

Pika World has not initiated any position.

🧨Intel: Entering Yet another Rough Patch🥊

Analysts aren’t that happy with Intel performance, and the recent downgrade reflects a more muted future as the company seeks to upsize its competitiveness again. In addition, under the new CEO, there has been a concrete plan to gain market share from AMD.

A key concern is the spending needed to achieve this reality. The capital expenditure is likely to hit up to $28 billion next year. Furthermore, an annual compound growth rate of 10%-12% seems a stretch for the company. In addition, the company is expected to see a prolonged period of depressed Free Cashflow while waiting for earnings to recover. This may spell weakness in dividend pay-out in the medium term.

Pika World does not have a position in Intel but has been accumulating AMD since the Sept downturn. Nevertheless, we maintain our exposure to the sector.

🌭Beyond Meat: Help “Me”🫕

A downgrade on the company isn’t uncommon, and this time around, the reason spells trouble. Credit Suisse believed that the market is near saturation.

While the alternative meat category does have room for growth, analysts do not see Beyond Meat growing its market share. Adding fuel is the warning to investors that delta variant is hurting its revenue and resulting in a weak execution in distribution which is likely to hit hard to the topline.

💻Alphabet: Blast Through Estimates🕹

A sound set of earnings results that exceeds expectations on multiple fronts. Net income and revenue all hit estimates, although stocks were down in the after-hours. There is an excellent growing vibe as the CEO focus on the company’s narrative in becoming an AI focus company.

The bright spot comes in Google Cloud, where revenue jumped 45% to hit $4.99 billion. What is exciting is the improvement in Search and the launch of Pixel 6 to create an enduring ecosystem.

Pika World had initiated a short-term position in the company and is expected to pare down the position. However, Pika World maintains a best-in-class rating for the company.

📮What’s on the Menu Today?

At 8.30 pm, we will receive Core Durable Goods Order which we expect to grow at 0.4% compared to 0.3% in the prior period. In essence, a higher reading reflects healthy manufacturing activity, which is a positive for economic growth.

Crude Oil Inventories data will be out at 10.30 pm, and we expect a positive level of 1.65M, a jump from -0.431M in the previous period.

It is Oct 27, Wednesday, 7.50 am in Singapore and 7.50 pm in New York. A roller coaster rush week indeed. Nonetheless, Pika World will be with you to ride the next wave.