Author Archives: Scalper1

Will Apple Ad-Blocking, China Expansion Worries Curb Criteo?

How ad tech firm Criteo ( CRTO ) fares in Wall Street’s eyes after reporting Q4 earnings on Wednesday morning hinges on the company’s outlook for 2016 after the Paris-based firm transitions to reporting in U.S. dollars, an analyst says. “The key issue into earnings is the 2016 guidance,” wrote Cowen and Co. analyst John Blackledge in a research note on Monday. He said Paris-based Criteo will cease reporting in euros after Q4. The company is transitioning to a U.S. domestic issuer and will be adhering to GAAP reporting in U.S. dollars. Blackledge said he is looking for 2016 revenue guidance ex-TAC at 20-25% year over year, assuming a “5% foreign exchange headwind.” For Q4, he also expects Criteo’s customer additions to rise a “strong” 10% year over year to 10,000. Criteo embeds browser cookies — tiny text files that let websites recognize users and their preferences when they return to a site — for about half of the 100 largest retail and travel websites in the U.S. Criteo gets paid for serving ads only if a user clicks on them and collects a bigger cut if the user goes on to buy a product from or otherwise engage with that advertiser. Wall Street is also keen to get an update on how an Apple ( AAPL )‘s decision to allow browser ad blocking on iPhones for the first time is impacting Criteo, said Blackledge. Apple began letting users install apps that prevent ads from appearing in its Safari mobile browser last year. Apple’s action is seen as a potential blow to Criteo. which gets paid for serving ads only if a user clicks on them, and it collects a bigger cut if the user goes on to buy a product from or otherwise engage with that advertiser. Analysts have said reducing the ad supply could impact Criteo’s growth. However, Jefferies analyst Brian Pitz wrote in a note on Oct. 2 that he doubted “the enabling of ad blockers for Apple iOS 9 will meaningfully impact” Criteo, which “has stated that a majority of their mobile revenue is driven through Alphabet ( GOOGL )-owned Google Android products rather than Apple.” Criteo is “creating one of the largest cross-device advertising mousetraps, which will complement advertisers’ ability to measure performance outside of Facebook ( FB ) and Google,” said another analyst, RBC Capital Markets’ Rohit Kulkarni, in a November research note. Another major point of interest for investors this week is Criteo’s strategy in China and whether Alibaba Group ( BABA ) emerges as a major client in 2016. Blackledge said he also wants an update on how the company is faring with the mobile Dynamic Product Ad inventory on Facebook as well as what new search products may be ahead. In Q3, Criteo posted revenue minus traffic acquisition costs — what it must pay other websites to carry ads — of 120.3 million euros, about $134 million at current exchange rates, up 55% year over year in local currency. That beat the 117.9 million euros analysts polled by Thomson Reuters had been expecting. For Q4, the company guided revenue minus traffic acquisition costs of between 134 million euros and 139 million euros, up 39% to 44% year over year in local currency, equal to about $153 million at the midpoint at current exchange rates. That Q4 revenue guidance was short of the 141.63 million euros that analysts had wanted to see. Analysts polled by Thomson Reuters are expecting Criteo to report Q4 revenue minus TAC — traffic acquisition costs, or what the company pays other sites to carry its ads — of 138.2 million euros, up 43% year over year in euros. Analysts are modeling Q4 EPS ex items of 0.40 euros, up 8% year over year in euros. Criteo stock was down 8% in midday trading in the stock market today , near 25.50. Criteo stock is 35% below where it was trading this time last year and is off 58% from its all-time high of 60.95 touched in early March 2014.

Pfizer To Reorganize After Allergan Buyout, With Saunders President

Big pharma Pfizer ( PFE ) announced Monday that after it closes its acquisition of Allergan ( AGN ) it plans to reorganize its three units into two, pending a possible split-up. Back in 2013, Pfizer reorganized its operations into three business units: Innovative Products; Established Products and Vaccines; and Oncology and Consumer Healthcare (VOC). This was widely viewed as a preparation for a split-up of the company. With its pending $160 billion buyout of Allergan, Pfizer will be adding a large number of drugs, including the wrinkle treatment Botox and a variety of eye-care and skin-care products. On Monday, Pfizer said it plans to combine the innovative products and VOC businesses into one, but that will include a new subdivision called Global Specialty and Consumer Brands that will include most of Allergan’s products. The larger Innovative Products business will be headed by current VOC head Albert Bourla, replacing Geno Germano who will leave the company. The new Global Specialty and Consumer Brands division will be headed by Allergan executive Bill Meury. The Established Products business will continue to be led by John Young. Allergan’s current CEO Brenton Saunders, meanwhile, is set to become the next president and chief operating officer of Pfizer. It was generally expected on Wall Street that he would land a high-ranking position so that he could be ready to succeed present Pfizer CEO Ian Read. When Pfizer announced the Allergan buyout last year, it said that a decision on a split-up will not be made until 2018, which was a couple of years later than previously expected. Read reiterated this in Monday’s announcement. “We are designing the combined company to preserve and enhance our option to potentially separate the innovative and established businesses into separate companies in the future, and continue to expect to make a decision about any potential separation by no later than the end of 2018,” Read said in a statement. Pfizer stock was down about 1.8% in midday trading on the stock market today , near 28.50. Allergan was down about 3.6% near 264.

Apple Stock Could Struggle Until Second Half Of 2016

With iPhone production data continuing to show weakness, Apple ( AAPL ) stock isn’t likely to perk up until the second half of the year, Mizuho Securities analyst Abhey Lamba said in a report Monday. Mizuho’s Japan team on Monday lowered its iPhone production forecast after checking with various component suppliers. It now expects iPhone unit production to fall 30% year over year in the first half of the year, followed by a 9% increase in the second half. “Supply chain data points could start inflecting in (the second half of calendar 2016), helping the stock perform,” Lamba said in a report. The ramp up of the supply chain would be timed with the production of the iPhone 7, expected to launch in September. Lamba reiterated his buy rating on Apple stock with a price target of 120. Apple was up fractionally in early-afternoon trading near 94 on the stock market today . “We continue to think Apple is undervalued at the current level as investors are likely extrapolating supply chain information indefinitely while the macro environment is not helping,” he said. “However, we expect the stock to work in (the second half of calendar 2016) as data points from the supply chain start to inflect upwards.” The biggest question facing Apple this year is whether the iPhone 7 can jump-start handset sales growth, which has stalled with the iPhone 6S. Mizuho’s survey data indicate that people are holding onto their iPhones for longer periods before replacing them. “Our survey indicated elongation of life of iPhones from about 20 months to about 27 months, but we think it is tough to expect average life of phones to go beyond 2.5 to 3 years,” Lamba said. “Apple still has a significant installed base on pre-iPhone 6 versions and many iPhone 6 users will likely be ready for normal upgrades by 2016-end. We have modest growth assumptions for iPhone 7 over iPhone 6S cycle, while we agree that success of iPhone 6 cycle will be tough to repeat.” RELATED: Morgan Stanley Says Apple Stock Ripe For Picking .