Maxim’s Stephen Anderson expects Chipotle Mexican Grill (CMG) to release its May same-store sales soon, and he expects them to disappoint. Oh, and he also cut his price target on Chipotle to $285. He explains why:
We expect May same-restaurant sales results to be released in the next week or so, and believe these results will disappoint. Based on our channel checks, the slow recovery in traffic which was boosted earlier this quarter (2Q16) by a free burrito promotion seems to have lost momentum in the past few weeks. More recently,Chipotle Mexican Grill has targeted “buy one, get one free” promotions to teachers and nurses, but we do not believe this has led to a broad-based, sustainable turnaround in traffic. As we contend that sales trends remain disappointing into June, we now believe that management will consider broader promotional activity possibly including another free burrito promotion in 2H16E.
In our view, Chipotle Mexican Grills outsized exposure to California, New York State, and now Washington, DC, will limit margin expansion in 2017E and beyond. Yesterday, the District of Columbia Council voted unanimously to raise the minimum wage to $15/hour by 2020.Chipotle Mexican Grill has 22 units in Washington, DC, that will be subject to the new mandate. When combined with earlier legislation mandating $15/hour (in the next four to five years) passed in California and New York State,Chipotle Mexican Grill will be subject to accelerated wage increases in 25% of the companys U.S. restaurants. We estimate thatChipotle Mexican Grill will need to implement menu price increases of as much as 150 bps per year just to cover mandated wage increases, assuming average mandated increases of $1.00/hour in California, New York State, and Washington, DC, and about $0.25/hour elsewhere in the United States. As we contend thatChipotle Mexican Grill is finding it more di fficult to generate non-promotional traffic in the wake of recent food safety scares, we are concerned that the company may not be able to pass along these price increases.
Hot Defense Companies To Own For 2016: H&R Block, Inc.(HRB)
H&R Block, Inc., through its subsidiaries, provides tax preparation, banking, and other services to the general public primarily in the United States, Canada, and Australia. The company offers assisted income tax return preparation and related services through a system of retail offices operated directly by the company or by franchisees; and online tax services, such as tax advice, professional and do-it-yourself (DIY) tax return preparation, and electronic filing services through its Website hrblock.com. It also develops and markets DIY desktop income tax preparation software; and develops and provides applications for mobile devices, which offer tax and related services. In addition, the company provides refund anticipation checks, H&R Block Emerald Advance lines of credit and Prepaid MasterCard, and Peace of Mind Extended Service Plan, Tax Identity Shield, and Cash Back refund discount programs. Further, it offers tradition al retail banking services primarily to its assisted and DIY tax clients. The company was founded in 1946 and is headquartered in Kansas City, Missouri.
- [By Ben Levisohn]
H&R Block (HRB) has climbed 3.1% to $22.20 after beating earnings forecasts by a penny and hiking its dividend.
Cliffs Natural Resources (CLF) has gained 1.2% to $5.16 after getting upgraded to Outperform from Market Perform at Macquarie.
- [By Lisa Levin]
H & R Block Inc (NYSE: HRB) was down, falling around 14 percent to $20.42 as the company reported a disappointing tax season. The company announced plans to lower 13 percent of its workforce. Oppenheimer downgraded H&R Block from Outperform to Perform.
- [By Monica Gerson]
Shares of H & R Block Inc (NYSE: HRB) surged over 12 percent on Friday as the company reported better-than-expected results for its fourth quarter and lifted its quarterly dividend to $0.22 per share. H & R Block shares gained 0.29 percent to $24.30 in the after-hours trading session.
Hot Defense Companies To Own For 2016: Becton, Dickinson and Company(BDX)
Becton, Dickinson and Company develops, manufactures, and sells medical devices, instrument systems, and reagents worldwide. The companys BD Medical segment offers syringes and pen needles for diabetes; needles, syringes, and intravenous catheters for medication delivery; prefilled IV flush syringes; regional anesthesia needles and trays; sharps disposal containers; closed-system transfer devices; skin antiseptic products; surgical and laproscopic instrumentations; generic prefilled injectables; intravenous medication safety and infusion therapy delivery, and automated medication dispensing and supply management systems; prefillable drug delivery systems; respiratory ventilation, and diagnostics equipment and consumables; and consumables for patient monitoring and anesthesia delivery. Its Life Sciences segment provides integrated systems for specimen collection; safety-engineered blood collection, automated blood culturing a nd tuberculosis culturing, and microorganism identification and drug susceptibility systems; molecular testing systems for infectious diseases and womens health; liquid-based cytology systems for cervical cancer screening; rapid diagnostic assays; microbiology laboratory automation, and plated media products; fluorescence-activated cell sorters and analyzers; monoclonal antibodies and kits for performing cell analysis; reagent systems for life science research; molecular indexing and next-generation sequencing sample preparation for genomics research; clinical oncology, immunological, and transplantation diagnostic/monitoring reagents and analyzers; and cell culture media supplements for biopharmaceutical manufacturing. The company markets its products through independent distribution channels and sales representatives to healthcare institutions, life science researchers, clinical laboratories, pharmaceutical industry, and general public. Becton, Dickinson and Company was founded in 1897 and is headquartered in Franklin Lakes, New ! Jersey.
- [By Ben Levisohn]
Becton Dickinson (BDX) has gained 1.2% to $101.97 this morning afterPiper Jaffrayraised the stock to Overweight from Neutral. AnalystsWilliam Quirk andDavid Clairexplain why they’re optimistic about the medical technology company:
Observations from multiple diagnostic conferences all suggest significant interest inmicrobiology investment. This interest spans track systems (Kiestra), new identificationtechnologies (Maldi/BioTyper) and Molecular (gram +/- assays). When consideringAST (antimicrobial susceptibility testing) recall from Siemens, we believe BD’smicrobiology business is poised to accelerate its performance over the next several years.Combined with a delayed JNJ/Ypsomed pen needle launch and incremental Europeansafety adoption, we believe numbers for BD will continue to climb…
They also raised their price target to $117 from $91.
While Becton has gained today,Johnson & Johnson(JNJ) has dropped 0.6% to $88.50,Medtronic(MDT) has fallen 1%to $53.43,Boston Scientific(BSX) has declined 0.9% to $11.79 and Edwards Lifesciences (EW) is off 1.2% at $70.90.
Hot Airline Companies To Buy Right Now: Portola Pharmaceuticals, Inc.(PTLA)
Portola Pharmaceuticals, Inc., a biopharmaceutical company, develops and commercializes therapeutics for patients in the areas of thrombosis, other hematologic disorders, and inflammation. Its lead compound, Betrixaban, is an oral, once-daily Factor Xa inhibitor in Phase III clinical trial for venous thromboembolism prophylaxis in acute medically ill patients in-hospital and post discharge. The companys other lead development candidate, Andexanet alfa, a recombinant protein that is in Phase III registration studies designed to reverse the anticoagulant activity in patients treated with a Factor Xa inhibitor who suffer an uncontrolled bleeding episode or undergo emergency surgery. It has collaboration agreements with Biogen Idec Inc.; Bristol-Myers Squibb Company; Pfizer Inc.; Bayer Pharma, AG; Janssen Pharmaceuticals, Inc.; Daiichi Sankyo, Inc.; and Lees Pharmaceutical (HK) Ltd. The company is also developing Cerdulatinib, which is in Phase I/IIa proof-of-concept study, an orally available kinase inhibitor that inhibits spleen tyrosine kinase and janus kinases enzymes, which regulate signaling pathways, as well as for hematologic, or blood, cancers, and inflammatory disorders. In addition, it is involved in the development of PRT2607, a selective Syk inhibitor. Portola Pharmaceuticals, Inc. has a collaboration with Bristol-Myers Squibb and Pfizer Inc. to develop and commercialize apixaban, an oral anticoagulant. The company was founded in 2003 and is headquartered in South San Francisco, California.
- [By Lisa Levin]
Portola Pharmaceuticals Inc (NASDAQ: PTLA) shares dropped 30 percent to $20.08 after announcing Phase III Betrixaban results.
Shares of Spark Energy Inc (NASDAQ: SPKE) were down 14 percent to $20.96. Spark Energy reported Q4 GAAP EPS of $(0.01) and adjusted EBITDA of $16.3 million.
- [By Lisa Levin]
Portola Pharmaceuticals Inc (NASDAQ: PTLA) shares dropped 23 percent to $21.92 after announcing Phase III Betrixaban results.
Shares of Spark Energy Inc (NASDAQ: SPKE) were down 16 percent to $20.43. Spark Energy reported Q4 GAAP EPS of $(0.01) and adjusted EBITDA of $16.3 million.