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ANALYST DIRECT

Investment Grade

-	Autos: Carol Levenson
-	Basic Industries: Carol Levenson
-	Brokers: Kathy Shanley
-	Capital Goods: Carol Levenson
-	Consumer: Carol Levenson
-	Energy: Phil Adams
-	Finance (F.I.R.E.): Kathy Shanley
-	Food: Dave Novosel
-	Healthcare: Carol Levenson
-	Retailing, Leisure: Carol Levenson
-	T.M.T.: Dave Novosel
-	Transportation: Phil Adams
-	Utilities: Phil Adams

High Yield

-	Aerospace & Defense: Evan Mann
-	Airlines: Vicki Bryan
-	Autos, Auto Suppliers: Evan Mann
-	Broadcasting & Cable: Kim Noland
-	Building Products: Vicki Bryan
-	Consumer: Kim Noland
-	Food: Vicki Bryan
-	Retail, Gaming, Leisure: Kim Noland
-	Healthcare: Vicki Bryan
-	Homebuilding: Vicki Bryan
-	Industrials: Vicki Bryan
-	Media: Kim Noland
-	Metals & Industrial Services: Evan Mann
-	Paper & Forest: Kim Noland
-	Telecom: Kim Noland
-	T.M.T. Dave Novosel
-	Transportation: Vicki Bryan

Emerging Markets

-	Cedric Rimaud
-	Alexandre Dray
-	Nuj Chiaranussati

General

-	Research@GimmeCredit.com


Top Ten 01-22 03:47 GMT (Report) The high yield market generated a negative 2% return in 2018, but consensus estimates already predict a much better return in 2019 ranging from positive 6-8%. The...
Top Ten by Gimme Credit


Bank of America 01-22 03:36 GMT (Report with Analyst's Data Sheet) After cratering in December, bank stocks staged a strong rebound in the first half of January. Bank of America (BAC) helped turn the tide in sentiment,...
Sentiment Shift by Kathleen Shanley, CFA


OJSC Novolipetsk Steel 01-22 03:24 GMT (Report with Analyst's Data Sheet) OJSC Novolipetsk Steel (NLMK, NLMKRU) reported its trading update for 4Q18. After the release of strong financial results in the first nine...
Losing Impetus by Alexandre Dray


Netflix Inc. 01-18 15:00 GMT (Comment) Netflix added 8.8 million paid streaming subscribers in the fourth quarter, of which 1.5 million...
Earnings by Dave Novosel, CFA Netflix added 8.8 million paid streaming subscribers in the fourth quarter, of which 1.5 million were domestic and 7.3 million were international. Combined with a 3% increase in average selling prices, revenue increased 27% versus last year. Operating margins dropped 200 basis points, reflecting the additional costs of launching several new titles in the period. Management provided guidance for the addition of 8.9 million paid subs in the first quarter, which would mark its best performance over the last six quarters. Revenue is forecast to increase 21%, aided by the recent price increase. The price increase will be effective immediately for new members, but will be phased in over the next 12 months for existing members. However, operating margins are expected to decline roughly 300 basis points in Q1, partly attributable to foreign currency fluctuations. For the full year, operating margins are expected to rise 300 basis points. As we outlined in our report last week, the bigger issue is free cash flow. Netflix burned through nearly $3 billion in 2018, and management expects FCF to be similar this year. Consequently, we expect another huge debt offering this year. But management is hopeful that FCF will improve beginning in 2020.


Telecom Italia S.p.A. 01-18 14:58 GMT (Comment) Telecom Italia issued a press release yesterday in which it warned that according to...
New Guidance by Dave Novosel, CFA Telecom Italia issued a press release yesterday in which it warned that according to preliminary results, 2018 EBITDA for its domestic operations would decline at a mid-single digit pace versus 2017. That suggests that Q4 margins will be down substantially compared to the previous three quarters, and more in line with the weak margins generated in last year's fourth quarter. The domestic operations are particularly important here, as they produce roughly 80% of total EBITDA, and traditionally have been significantly higher than the margins generated by the Brazil unit. Its performance in Italy has been constrained by the entrance of Iliad to the market with its extensive discount pricing. This will affect 2019 results as well. Actual results for 2018 will be published on February 21st. Not surprisingly, at one point the stock plunged almost 10% on the news. Meanwhile, Vivendi and Elliot Management continue to vie for control of the Board and management.


Kinder Morgan 01-18 02:11 GMT (Report with Analyst's Data Sheet) Kinder Morgan's fourth quarter performance was not quite as good as in previous quarters, but the overall results confirm its effective capital allocation...
Accomodating Higher Dividends by Dave Novosel, CFA


Delphi Technologies 01-18 02:05 GMT (Report with Analyst's Data Sheet) Leaving your parent isn't always easy, and this was especially the case for Delphi Technologies (DLPH), the former Powertrain Systems segment of...
Facing Headwinds by Evan Mann, CFA


Embraer S.A. 01-18 01:52 GMT (Report with Analyst's Data Sheet) Yesterday, Embraer S.A. (EMBRBZ) organized a day for investors in New York City, where management provided an update on the ongoing transaction with Boeing...
Good Or Bad Deal by Cedric Rimaud, CFA


First Data 01-16 13:36 GMT (Comment) First Data is entering into another transaction, which really should not come as a surprise. Except...
Acquisition by Dave Novosel, CFA First Data is entering into another transaction, which really should not come as a surprise. Except for the fact that this time the company is the acquiree, not the acquirer. First Data and Fiserv announced a deal whereby Fiserv will acquire First Data in an all-stock transaction worth $22 billion. FDC shareholders will receive Fiserv shares worth $22.74 per share, which equates to a premium of 29% versus the closing price of FDC on Tuesday. The companies expect to achieve $500 million of revenue synergies and $900 million of cost synergies. They also anticipate free cash flow of $4 billion by the third year after closing. Fiserv intends to refinance the $17 billion of debt carried by FDC. Fiserv management expects to retain its Baa2/BBB ratings, and will suspend share repurchases until the close of the transaction, which is slated for the second half of 2019. This should be quite a boon for FDC bondholders. We are pleased that we have moved to a buy recommendation on FDC, although admittedly, the change was not based on expectations for a transaction of this nature.

For Clients Only: New High Yield Top Ten is here!

Gimme Credit will not publish on Monday, January 21st, 2019 - Martin Luther King Day

Gimme Credit High Yield has just initiated coverage of Delphi Technologies.

Michaels 01-18
Elementia 01-09
Bristol-Myers 01-03


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Jan 10, 2019 | Bloomberg

CL on PG&E's Downgrade to Junk -Q- "The other shoe has dropped" for PG&E...which might be the tipping point in favor of a bankruptcy decision."

Dec 20, 2018 | Bloomberg

DN on Frontier Communications -Q- "GimmeCredit wonders how Frontier can meet obligations in 2021-22. Fundamental pressures include erosion of voice, video and broadband revenue."

Nov 19, 2018 | Barron's

CL on CA Wildfires - Q- "The utility conceivably could have embraced Plan B-meaning bankruptcy-...Levenson warned that the potential liability warrants a junk rating, and she recommends selling the bonds."

Nov 14, 2018 | Bloomberg

CL on PG&E's Financial Crisis-Q-"It's not unusual for downgrades to come fast and furiously in situations like this, so a downgrade to below investment grade is certainly a real possibility,"

Nov 1, 2018 | CNN

CL on GE's Debt Headaches-Q-"Nobody leaves" commercial paper "voluntarily"..."This is a sign of reduced financial flexibility"