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Fly News Breaks for May 19, 2017
SBPH, TMO, CNDT, NVDA, IBM
May 19, 2017 | 10:23 EDT
Catch up on today's top five analyst initiations with this list compiled by The Fly: 1. Bernstein initiated Nvidia (NVDA) with an Outperform and a $165 price target. 2. Cantor Fitzgerald initiated Thermo Fisher (TMO) with an Overweight rating and $194 price target. 3. Pacific Crest initiated IBM (IBM) with a Sector Weight rating. 4. Conduent (CNDT) initiated with a Market Perform rating and $18 price target at Cowen. 5. JMP Securities started coverage of Spring Bank Pharmaceuticals (SBPH) with a $20 price target and an Outperform rating. This list is just a portion of The Fly's full analyst coverage. To see The Fly's full Street Research coverage, click here.
News For NVDA;TMO;IBM;CNDT;SBPH From the Last 2 Days
TMO
Nov 21, 2017 | 16:32 EDT
Thermo Fisher announced that it received notice of an unsolicited "mini-tender" offer by TRC Capital to purchase up to 1M shares of Thermo Fisher's common stock at a price of $181.75 per share in cash. TRC's offer price is approximately 4.43% lower than the $190.17 closing price of Thermo Fisher's common stock on November 17, 2017, the last closing price prior to commencement of the offer. The offer is for approximately 0.249% of Thermo Fisher's outstanding shares of common stock as of the offer date. Thermo Fisher does not endorse TRC's unsolicited mini-tender offer and recommends that shareholders not tender their shares because the offer is at a price below the current market price of Thermo Fisher's shares and is subject to numerous conditions. Thermo Fisher is not affiliated or associated in any way with TRC, its mini-tender offer or the mini-tender offer documentation.
NVDA
Nov 20, 2017 | 14:35 EDT
Google Cloud (GOOGL) announced in a blog post that it is cutting the price of NVIDIA (NVDA) Tesla GPUs attached to on-demand Google Compute Engine virtual machines by up to 36%. In US regions, each K80 GPU attached to a VM is priced at $0.45 per hour while each P100 costs $1.46 per hour. "As an added bonus, we're also lowering the price of preemptible Local SSDs by almost 40% compared to on-demand Local SSDs. In the US this means $0.048 per GB-month. We hope that the price reduction on NVIDIA Tesla GPUs and preemptible Local SSDs unlocks new opportunities and helps you solve more interesting business, engineering and scientific problems," Google's post added. Other cloud computing services providers that compete with Google include Amazon Web Services (AMZN) and Microsoft (MSFT). Reference Link
TMO
Nov 20, 2017 | 11:44 EDT
Shares of Cardinal Health (CAH) are sliding after Morgan Stanley analyst Ricky Goldwasser downgraded the stock to Underweight, a sell-equivalent rating, as he believes Amazon (AMZN) is looking to scale its medical supply distribution efforts and Cardinal's potential earnings risk from the e-commerce giant's effort is larger than its peers. Patterson (PDCO) and Henry Schein (HSIC) are also lower following Morgan Stanley's comments on Amazon's entry into healthcare. SELL CARDINAL HEALTH: In a research note to investors, Morgan Stanley's Goldwasser downgraded Cardinal Health to Underweight from Equal Weight, saying the company has an "outsized exposure" to Amazon risk compared to its peers. Recent hires and public statements make it clear that Amazon is looking to scale its medical supply distribution efforts by deepening existing infrastructure and relationships with hospitals, the analyst contended, adding that it is only a matter of time until it competes head-to-head with primary source distributors such as Cardinal. Further, Goldwasser believes that Cardinal's potential earnings risk is still underappreciated despite the recent selloff. The analyst also lowered his price target on the shares to $51 from $72. AMAZON DISRUPTION OF HEALTHCARE: Meanwhile, Morgan Stanley's U.S. Internet and Healthcare teams collaborated on a report exploring Amazon's entry into healthcare, stating that it will likely take time but that the e-commerce giant's "disruption of healthcare is a foregone conclusion." Healthcare distribution, encompassing medical, dental and drug distributors, drug retailers, and pharmacy benefit managers, has the best fit with the Amazon playbook, the firm contended, adding that manufacturing and specialty players look insulated but may invite Amazon to disintermediate distribution. While retail plays to Amazon's strengths with the highest profits and lowest barriers to entry, retailers like CVS (CVS) and Walgreens (WBA) have the most opportunities to adjust their business models and lower costs to defend against Amazon, the teams told investors. Medical supply and Life Sciences distribution are "less rich" targets, but look like "low-hanging fruit," the analysts added. Morgan Stanley noted that Cardinal Health has the most exposure via its medical supply distribution segment, while McKesson (MCK) also has some, but less, risk. AmerisourceBergen (ABC), which does not distribute medical supplies, remains immune in the near-term, the firm concluded. Others in healthcare distribution facing the most share and/or margin risk from Amazon include Thermo Fisher (TMO), Henry Schein and Patterson, the team of analysts pointed out. Overall, Morgan Stanley envisions Amazon entering the supply chain in four phases, namely opening a retail pharmacy and establishing an infrastructure, contracting with generic manufacturers, building relationships with branded manufacturers, and building out claims processing capabilities. In this scenario, the e-commerce giant could transform the drug supply chain, unlocking savings for patients and plan sponsors while putting drug retailer, distributor, and PBM profit pools at risk over time, the analysts added. PRICE ACTION: In morning trading, shares of Cardinal Health have dropped 3.5% to $55.53, while Patterson has slipped about 3% and Henry Schein has slid more than 2%.
TMO
Nov 20, 2017 | 08:25 EDT
Morgan Stanley's U.S. Internet and Healthcare teams collaborated on a report exploring Amazon's (AMZN) entry into healthcare, stating that it will likely take time but that the e-commerce giant's "disruption of healthcare is a foregone conclusion." While retail plays to Amazon's strengths with the highest profits and lowest barriers to entry, retailers like CVS (CVS) and Walgreens (WBA) have the most opportunities to adjust their business models and lower costs to defend against Amazon, the teams tell investors. Medical supply and Life Sciences distribution are "less rich" targets, but look like "low-hanging fruit," the analysts added. Cardinal Health (CAH) has the most exposure via its medical supply distribution segment, said the firm, which downgraded Cardinal to Underweight from Equal Weight, as previously reported. McKesson (MCK) also has some, but less, risk and AmerisourceBergen (ABC), which doesn't distribute medical supplies, remains immune in the near-term, the firm concluded. Others in healthcare distribution facing the most share and/or margin risk from Amazon include Thermo Fisher (TMO), Henry Schein (HSIC) and Patterson (PDCO), the firm added.
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