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Interpublic Group 03-20 11:58 GMT  
(Report with Analyst's Data Sheet) 
In our report last week we noted that Omnicom Group expects organic revenue growth of roughly 4% this year. The outlook at Interpublic Group is not...
Slowing But Growing by Dave Novosel, CFA
AbbVie 03-20 11:58 GMT  
(Report with Analyst's Data Sheet) 
AbbVie could not postpone the inevitable any longer, and last month it faced its first biosimilar competitor for its best-selling RA drug, Humira. Recent...
Day Of Reckoning by Carol Levenson, CFA
Endeavour Mining PLC 03-20 11:57 GMT  
(Report with Analyst's Data Sheet) 
Endeavour Mining PLC (EDVLN)released its financial results for 4Q22. Results came in line with our expectations. The company ended the yield with...
On Good Footing by Alexandre Dray
Range Resources Corp. 03-17 06:42 GMT  
(Report with Analyst's Data Sheet) 
Range Resources (RRC) ended 2022 on a high note as fourth quarter adjusted EBITDA and cash flow from operations both posted year over year gains,...
Nearing Debt Reduction Target by Evan Mann, CFA
Banking 03-17 06:41 GMT  (Report)
Regulators announced yesterday that a group of the 11 largest U.S. banks, including all of the banks deemed systemically important, plus the three largest regional...
Show Of Support by Kathleen Shanley, CFA
Pfizer 03-13 14:54 GMT
(Comment)
As rumored, Pfizer announced today the purchase of biotech company Seagen for $43 billion in cash. This...
Acquisition by Carol Levenson, CFA
As rumored, Pfizer announced today the purchase of biotech company Seagen for $43 billion in cash. This represents a 42% to the unaffected share price. Although in the long term this acquisition is expected to boost Pfizer's oncology presence and growth rate, Seagen currently generates negative cash flow and EBITDA, and its revenues are less than $2 billion. On the plus side, Pfizer has plenty of financial flexibility to execute this acquisition without material harm to its credit profile. At the end of 2022, Pfizer had cash and investments of $23 billion (after spending $23 billion on acquisitions last year) and generated $17 billion of free cash flow. Our quick pro forma analysis shows debt/EBITDA increasing from 0.7x to 1.6x, assuming the entire amount is funded with debt (Pfizer will likely use some of its cash, which would reduce the amount borrowed). Acquisition debt could be paid down rapidly with free cash flow. Pfizer has said it wants to maintain Tier 1 commercial paper ratings, which implies bond ratings would either be affirmed or downgraded one notch to mid single 'A.' We are somewhat taken aback by the price being paid, but Pfizer essentially is funding diversification and longer term growth with its COVID-19 cash, and we see the transaction as only modestly credit negative. We will have more in an upcoming full report.
Dell Technologies Inc. 03-06 15:10 GMT
(Comment)
It was a mixed fiscal fourth quarter (ended February 3) for Dell Technologies...
Earnings by Dave Novosel, CFA
It was a mixed fiscal fourth quarter (ended February 3) for Dell Technologies. Infrastructure Solutions revenue rose 7%, including a 10% gain for storage and a 5% increase in servers and networking. However, Client Solutions revenue plunged 23%, leaving total revenue down 11%. Within this segment Commercial fell 17% while Consumer plummeted 40%. Average selling prices rose slightly but PC shipments fell sharply. Infrastructure Solutions margins surged 360 basis points because of cost favorability, pricing discipline, and a favorable mix. But Client Solutions margins were down 170 bps, attributable to the deleveraging caused by the weaker revenue. Higher corporate expenses pushed overall margins down by 100 bps. The outlook is not so sanguine. Management issued Q1 guidance for a sequential decline in revenue of 19% at the midpoint, including a 25% sequential decrease in ISG. For the full year, revenue is forecast to drop 15% at the midpoint. Management indicated that inventories remain elevated but should be pared down over the course of the year. We expect lower margins in both segments for fiscal 2024. Dell generated $1.7 billion of free cash flow in Q4, but FCF for the full year was a negative $400 million. That was mostly a function of a hefty use of working capital during fiscal 2023. The addition of debt in Q4 took core leverage to more than 2x, which is still reasonable. But leverage is likely to rise significantly in fiscal 2024 because of lower revenue and weaker margins.
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