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Data was reported last week by the federal government on diesel inventories that was historic in the magnitude of the change from the prior week. It could mark a shift in the weak diesel market that has benefited carriers and drivers for several months. Ultimately, the price of diesel will be set primarily by the price of crude. But the spread between crude and diesel is also an important factor in the final pump price. That spread has been trending near historic lows for months.The primary reason has been refiners making too much non-jet fuel distillate relative to demand. Diesel is a distillate; so is jet fuel. The result has been that distillate/diesel inventories in the U.S. and the world have been at historically high levels. (Other products besides diesel in the category would include heating oil.)That appears to have shifted. The most transparent and immediate numbers are the weekly Energy Information Administration statistics, released each Wednesday for the week that ended the prior Friday. And the numbers that came out last week (Thursday, actually, due to the Columbus Day holiday) were eye-popping when it comes to diesel.The most easily understood inventory number is "days cover." That number is reached by taking daily consumption, dividing it into inventories and the result is the number of days of consumption that could be covered by existing stocks.For distillate inventories that don't include jet fuel, that number tends to run in the range of 28-35 days. But earlier this year, as diesel inventories began to soar due to changes being made by refiners seeking survival — more on that later — the days cover figure broke above 50 days. In the history of the EIA series going back to 1991, the days cover figure broke above 50 only a handful of times. It was never sustained above that level.This year, the days cover figure broke through 50 days in late May and stayed above it for nine out of the next 10 weeks. The growth in inventories was unprecedented. It dropped below 50 days in early August but stayed in the 47 to 49 days' range all through September and into October. That was unprecedented.But last week, that number plummeted to 42 days, a drop of 6.1 days. It was easily the biggest one-week decline in the history of the series. It meant that in one week, six days of distillate/diesel inventory cover disappeared. That had never happened before.Why? There were two major contributors to that decline.The first is that demand for distillate/diesel soared. The fact that it had been lagging was somewhat of a mystery, given the strong trucking market. The "product supplied" figure for distillate/diesel rose to 4.175 million barrels/day in the week ending Oct. 9, the first time it had been above 4 million b/d since the second week of March. A year ago at this time, it was 4.36 million b/d.Second, refiners made a lot less of it. Since the collapse in air travel, refiners have been doing everything they can to not make too much jet fuel. They've largely succeeded; days cover for jet fuel had gotten up to more than 70 days but now is less than 40, which is even lower than distillate/diesel. But to get to that level, refiners needed to shift their distillate output away from jet and toward other distillates. Refiners have been trying through various means to not only reduce jet output but also to cut back distillate output as well. They succeeded in the first task. The second is harder. Put a barrel of crude through a refinery and you will get some level of distillate molecules. Cutting back on it can be a challenge.There was another fuel that refiners didn't want to make during the pandemic: gasoline. As a result, even during the height of the pandemic, distillate output topped 5 million b/d as every effort was made to reduce gasoline output when people weren't driving. That 5 million b/d figure for distillate is not a crazy high number normally but it is in the middle of a sharp economic contraction. However, the push to cut back on distillate output has succeeded. U.S. refiners in the week ended Oct. 9 produced 4.279 million b/d of distillates. That's the lowest number since 2013. It wasn't easy, but refiners took the steps to start making less distillate, as they already had done to make less jet fuel and less gasoline earlier. (With people driving again, refiners are back to making gasoline.)The end result: the six-day drop in U.S. days cover, created by a drop in inventories on the back of less output, and a decline in demand. But it is not just the U.S. In its latest monthly report, the International Energy Agency (IEA) said middle distillate inventories in Europe in September rose just 500,000 b/d. The five-year average is 9.3 million b/d. The result is a graph that showed that inventories are still above the five-year average but are no longer at historical highs. They've gotten down to levels closer to earlier highs, still excessive but not chart-busting.  Source: International Energy AgencyIn Asia, the IEA reported that middle distillate inventories rose with historic norms. (Autumn tends to be a time in oil markets of inventory building as the world prepares for winter.)Although the decline in distillate inventories in the U.S. may have been historic, it hasn't yet resulted in a significant price reaction. The price of crude has bounced around in the last weeks but ultimately gone nowhere. Brent crude, the world's benchmark and the more relevant marker for comparison with diesel, was $43.15/barrel on Sept. 17. Last Friday, it settled at $43.32./bDuring that time, the front-month price of ultra low sulfur diesel on CME rose to $1.1791/gallon from $1.1598/g. That increased the spread of ULSD over Brent to 14.09 cts/ga from 12.8 cts g on Sept. 17.But by point of comparison, to show how much all that diesel inventory had held down prices relative to crude, the spread a year ago was about 53 cts/gallon. The current diesel to Brent spreads aren't sustainable. Diesel has not entered a permanent, long-term realignment against crude. If the move toward normalcy is going to start anytime soon, it could be that last week's numbers were the signal that it has begun.More articles by John KingstonGood news for diesel consumers, tough news for oil patch drivers in federal reportLabor Day, Roadcheck one-offs catch diesel traders by surpriseOOIDA scoffs at high cost estimates for broker transparencySee more from Benzinga * Options Trades For This Crazy Market: Get Benzinga Options to Follow High-Conviction Trade Ideas * FreightWaves CEO Interviewed On "The Business Of Content" Podcast * News Alert: US, Canada, Mexico Border Closures Extended To Nov. 21(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Markets thrive on risk, but risk is hard to talk about. It’s easy to fall back on cliches – buy low and sell high, or the bulls and bears make money while the pigs get slaughtered – but those cliches have drifted into common parlance for a reason. They have a grain of truth.Buying low and selling high has always been known as the way to make a profit, from the earliest days of human barter. And whether the market is moving up or down, whether investors follow a bullish or a bearish strategy, it’s possible to turn that profit.So, let’s talk about buying low. While the overall market has recovered nicely from the pandemic swoon of mid-winter, many stocks are still struggling with a depressed share value. Some of them are fundamentally sound – and Wall Street’s analysts have taking note.Using TipRanks database, we pinpointed three such stocks. Each is down at least 60% so far this year, but each also has a Strong Buy consensus rating and at least 40% upside potential for the coming months.Diamondback Energy (FANG)First up is Diamondback Energy, a Texas oil company that has been part of the Permian Basin boom which put Texas once again at the forefront of the North American oil industry. Diamondback is a smaller player in its industry and its operations are entirely within the Permian, where it is producing some 170,000 barrels of oil daily. While this number is up 40,000 barrels from the springtime, Diamondback has been hit hard by low oil prices in recent months and the stock is down 68% year-to-date.The low prices on the open oil market have impacted Diamondback’s bottom line, and earnings have been falling steadily from their $1.93 per share peak in 4Q19. The 1Q20 EPS was $1.45, while Q2 earnings came in at just 15 cents. The company is set to release third quarter figures on November 3, and the outlook calls for 37 cents – an improvement, but still down. However, it’s important to note here that Diamondback has beaten the earnings forecasts in the last three quarters.On a more positive note, company management points out that despite recent low earnings, FANG was able to end Q3 without touching its revolving credit facility – and that the company has over $2 billion in liquid assets available. Combined with rising production, this gives the company a solid footing.JPMorgan analyst Arun Jayaram, looking at the Texas oil sector and Diamondback’s place in it, sees the company as well-positioned to survive in a low-price environment. “We have consistently viewed FANG as one of the top-tier operators in the industry, and given the recent weakness in oil prices, the mgmt. team has made the prudent decision to sharply reduce activity levels. Given a focus on continuous cost reduction, we believe the company has the inventory depth and balance sheet strength to be a relative outperformer through the downturn,” Jayaram wrote.Jayaram rates FANG shares an Overweight (i.e. Buy), and his $48 price target suggests a 68% upside potential by next year. (To watch Jayaram’s track record, click here)Overall, the Strong Buy consensus rating on FANG is based on 11 recent Buys against a single Hold. The stock is selling for $28.58 per share, and its $52.10 average price target is even more bullish than Jayaram’s, implying an upside of 82%. (See FANG stock analysis on TipRanks)ChampionX Corporation (CHX)Next up is ChampionX, an oilfield technology company acquired its current name this past summer, through the merger of Apergy Corporation and ChampionX Holdings. The combined company kept Apergy’s trading history, and took on the new ticker, CHX. This is a midstream company with operations in the drilling, production, pipeline, and water technology segments of the oil industry. It’s a diversified portfolio of operations that gives ChampionX plenty of room to maneuver in a bearish oil market.ChampionX may need all of that maneuvering room, as the shares are down 76% this year. As with Diamondback, the chief culprit is low oil prices cutting into profit margins. Even though, as a midstream and service company, ChampionX does not directly pull the oil out of the ground and sell it, its operations are tied to the end users’ purchase price. In 2Q20, EPS turned sharply negative with a 43-cent per share net loss. This comes even as revenues rose in Q2, to $298 million.Scotiabank analyst Vaibhav Vaishnav sees CHX in a good place after improving its positioning as a services company.“With the merger with Ecolab’s Upstream business, CHX is now among the top two players in the production chemicals business. This business is relatively very stable as it focuses on production rather than drilling and completions activity. Essentially, daily U.S. or international oil production is the primary driver," Vaishnav opined. To this end, Vaishnav rates CHX an Outperform (i.e. Buy) rating. He gives the stock a $12 price target, indicating confidence in 48% upside growth for the coming year. (To watch Vaishnav’s track record, click here)Overall, CHX has 6 Buys and 1 Hold supporting its Strong Buy consensus rating. With a bullish average price target of $14.09, Wall Street’s analysts see a 73% upside potential from the current share price of $8.11. (See CHX stock analysis on TipRanks)Gol Linhas (GOL)From the oil industry, we move to the airline industry. It should come as no surprise that an airline, even a budget carrier, would face serious difficulties in the current environment of social distancing, trade and travel restrictions and disruptions, and economic shutdowns. Gol Linhas is Brazil’s premier low-cost air carrier, and the country’s third-largest airline. The difficulties facing the airline industry are apparent in GOL’s 62% share price decline since the start of the year.The hit Gol Linhas has taken is clear from the revenues and earnings. At the top line, the 17% sequential revenue drop in Q1 deepened to 88% in Q2, when the company brought in just $357 million. Quarterly revenues for GOL were above $3.8 billion before the corona crisis.The drop in revenue brought a serious loss in earnings. The company typically sees a drop off from Q4 to Q1 in earnings, and this year was no exception. The bright spot was, Q1 beat the forecast and beat the year-ago number. Q2, however, was disastrous, with an 81-cent EPS net loss. While not as deep as the $1.10 expected, it was a serious hit for the company. The outlook for Q3 is no better, at minus 80 cents.The long-term, however, looks better for this budget carrier. Deutsche Bank analyst Michael Linenberg sees GOL with several paths forward – although he believes that real returns will not come in until after 2021. "As we believe 2020 and 2021 will not be representative of GOL’s normal earnings potential, we are basing our 12-month PT on our 2022 forecast as GOL and the global airline industry begin to recover from the effects of COVID-19," the 5-star analyst noted.In line with this long-term optimism, Linenberg sets a $10 price target, implying an upside of 40% over the next 12 months. Accordingly, he rates the stock a Buy. (To watch Linenberg’s track record, click here)Wall Street agrees with Linenberg on the long-term potential here, and GOL’s Strong Buy consensus rating is based on a unanimous 5 Buys. (See GOL stock analysis on TipRanks)To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

The recent coronavirus vaccine race has been fraught with setbacks. Both Astra Zeneca and Johnson & Johnson recently halted their respective COVID-19 vaccine programs due to a participant’s unexplained reactions.There appears to be no such trouble right now for a fellow pharma heavyweight seeking to be first to market with a viable solution.On Friday, Pfizer (PFE) said that based on interim data, by the end of October it hopes to find out whether its COVID-19 vaccine – developed in collaboration with BioNTech (BNTX) - is effective or not.Moreover, by mid-November it hopes to have enough safety and manufacturing data available to present to the FDA an Emergency Use Authorization (EUA) application.Mizuho analyst Vamil Divan calls the pace of Pfizer’s vaccine development “remarkable.”“We commend the management team for their transparency during this accelerated development program,” Divan said. “Overall, things appear very much on track and the speed in potentially getting this vaccine to market is much faster than we would have expected when the pandemic started... The speed with which Pfizer has moved to develop this vaccine candidate is encouraging to us, and suggests Pfizer may be able to meet its stated objectives of being a faster moving, more nimble biopharmaceutical company, especially once the pending sale of their Upjohn division is completed.”Divan estimates the vaccine could generate sales of $2 billion in 2020-2021 combined, before sales decrease to between $550-600 million from 2024 onwards.However, with various deals similar to the one with the US government in place with several developed countries, pending regulatory approval, sales could actually exceed $8.5 billion between 2020-2021.The additional sales, Divan notes, “would still be meaningful even to a company of Pfizer's size and would provide Pfizer with additional options in terms of investing in their business, pursuing acquisition or licensing opportunities, or returning cash to shareholders.”Overall, Divan has a Buy rating on PFE shares alongside a $43 price target. What’s in it for investors? A ~14% upside from current levels. (To watch Divan’s track record, click here)Overall, based on 3 Buys and 8 Holds, the analyst consensus rates the stock a Moderate Buy. With an average price target of $41.21, the analysts except shares to add 9% in the months ahead. (See Pfizer stock analysis on TipRanks)To find good ideas for healthcare stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

Pioneer Natural Resources (PXD) is currently in discussions to buy Parsley Energy, reports the Wall Street Journal, which cites people familiar with the matter.According to the Wall Street Journal sources, the two shale producers are considering an all-stock deal that could be completed by the end of the month if the talks don’t fall apart.Both oil-and-gas companies have operations in the Permian Basin of Texas and New Mexico- and the deal would be the latest tie-up for a rapidly consolidating industry which has been hit by a drastic fall in oil prices.For instance, earlier this month, ConocoPhillips announced a massive $9.7 billion acquisition of shale producer Concho Resources in an all-stock deal.Should Pioneer and Parsley (PE) join forces, it would create a company capable of producing about $10 billion in combined revenues and production of more than 550,000 barrels of oil equivalent a day, says The Financial Times.Shares in Pioneer dropped 3.6% in Monday’s trading, while Parsley dropped 2%. Overall, on a year-to-date basis Pioneer has plunged over 42% but the stock scores a bullish Strong Buy Street consensus. That’s with an average analyst price target of $122 (40% upside potential).RBC Capital analyst Scott Hanold recently published a buy rating on Pioneer Natural Resources with a $120 price target (38% upside potential).“A leading operator in the Permian with one of the largest, most contiguous positions in the Midland Basin provides PXD with a deep inventory of high-tier assets. We think this scale provides a strong advantage over its peers” the analyst comments.He believes that the company’s production growth profile, balance sheet, and free cash flow generation are best- in-class, and that ultimately this should enable Pioneer to outperform peers. (See PXD stock analysis on TipRanks)Related News: ConocoPhillips Snaps Up Rival Concho in $9.7B Deal; Shares Advance GM To Invest $2.2B Turning Detroit Plant Into New Electric-Vehicle Hub Ford China Sales Rise Two Quarters In A Row, Jump 25% Y/Y More recent articles from Smarter Analyst: * Zions Beats 3Q Profit; Street Says Hold * Kamada To Supply Plasma-Based Covid-19 Therapy To Israel; Shares Surge 6% * Agree Realty’s 3Q Sales Soar 33% On Property Acquisitions * PPG Slips In After-Market As 3Q Sales Volume Drops

Shares in South Korean automaker Hyundai Motor Co <005380.KS> and affiliate Kia Motors Corp <000270.KS> tumbled as much as 6% on Tuesday after warning third-quarter earnings would be hit by a further $3 billion in charges related to engine problems. Hyundai and Kia said quality-related costs of a combined 3.36 trillion won ($2.95 billion) related to the years-long quality problem that has tarnished their credibility, taking the total costs to nearly $5 billion. "The amount of provisions Hyundai and Kia are declaring is getting bigger each year passed and that is worrisome," said Kevin Yoo, an analyst at eBEST Investment & Securities.

(Bloomberg) -- Jacinda Ardern’s emphatic election victory is seen as an endorsement of an inclusive brand of leadership that may ripple beyond New Zealand’s borders.In an age of populism and confrontation, Ardern’s message of empathy and kindness married with skillful crisis management won her Labour Party its biggest share of the vote in more than 70 years. That contrasts starkly with the divisive politics in the U.S. as Donald Trump and Joe Biden face off for the presidency on Nov. 3.“Ardern’s approach could be a lesson for other leaders seeking to maximize their support base,” said Zareh Ghazarian, senior lecturer in politics and international relations at Monash University in Melbourne. “Not only has she been able to lead the nation through very challenging circumstances, but also successfully communicate an overall vision. In New Zealand it’s about the politics of inclusion.”Ardern, 40, won international plaudits for her response to the deadly shootings at two mosques in 2019, donning a headscarf as a mark of respect as she mourned with the Muslim community. This year, she’s demonstrated her steel in tackling the coronavirus pandemic, enacting one of the world’s strictest lockdowns to crush community transmission.She rode the resulting wave of adulation to secure the first outright majority in parliament since New Zealand introduced proportional representation in 1996. Labour won 49% of the vote and 64 of the 120 seats in parliament. The scale of the victory may fuel her global appeal among those who already view her as a standard-bearer for liberal values.Ardern is now in a position to lead New Zealand’s most left-leaning government in decades but has yet to decide whether to include her ally the Green Party, which wants more action on issues such as poverty and climate change.Investors appear unconcerned by the strong mandate Ardern has received. The New Zealand dollar and bond yields were little changed early Monday in Wellington.Supporters want Ardern to push harder on reforms such as tackling inequality and boosting incomes after she failed to deliver on some key promises in her first term. She ditched plans for a capital gains tax that might have addressed the widening gap between rich and poor, while a program to build tens of thousands of new homes to help fix a housing crisis fell well short of goals.Ironically, her increased mandate may prompt her to rein in her left-leaning instincts as she looks to hang on to the center-right voters who have flocked to her banner.‘Huge Dilemma’“It’s going to be a huge dilemma for her, whether to go to the left or stay in that center ground,” said Lara Greaves, a lecturer in New Zealand politics at the University of Auckland. “Does she want to try to be a four-term prime minister or does she want to make transformational policy that changes people’s lives?”Her re-election spells continuity in a nuanced foreign-policy stance toward China. Ardern has tried not to antagonize New Zealand’s largest trading partner while maintaining close ties with the U.S. and other western allies in the Five Eyes intelligence-sharing alliance.Her focus will be on the enormous economic and social challenges ahead as New Zealand charts a recovery from recession.The border is expected to remain closed well into 2021, decimating international tourism and education, while the jobless rate is projected to climb. Economists at Infometrics last week flagged the risk of another recession in 2021.The nation faces persistent budget deficits and net debt that will surge to 56% of gross domestic product by 2026 from 28% in mid-2020, according to Treasury forecasts.Labour said it will impose a 39% tax on income over NZ$180,000 ($119,000) to help pay for the Covid response and keep debt under control. It aims to stimulate investment and create jobs through major infrastructure projects and incentives for small business.Property BoomKey to the recovery may be a property boom sparked by record-low interest rates that have seen house prices climb 7.6% in the past year. That in turn has made it harder for many to enter the housing market -- something Ardern is trying to fix by removing barriers to new home construction.But she has ruled out significant tax reforms to address wealth inequality, and given no indication since her victory that she intends to be more proactive on issues like poverty and homelessness.The results of two referendums held in conjunction with the election are due on Oct. 30. New Zealanders are expected to vote in favor of euthanasia but against the legalization of cannabis.Voters rewarded Ardern for her successful response to Covid-19, which stands in stark contrast to countries like the U.K., U.S. and even neighboring Australia where authorities are still battling to contain the virus.Ardern stood out among her western peers in pursuing an explicit elimination strategy, and imposed one of the strictest nationwide lockdowns in the world. This shuttered the economy but wiped out community spread of the virus, allowing restrictions to be removed sooner than in many other countries. A second outbreak in largest city Auckland was also quickly stamped out with a regional lockdown, though one new community case was reported Sunday.“The way the prime minister has put health before the economy will be of interest, especially for other social democratic leaders around the world,” said Bryce Edwards, a political analyst at Victoria University in Wellington. “They will now see Ardern as the leader of those left parties internationally and they will want to learn from her.”Asked Sunday if she had a message for Americans as they head into their own election, Ardern said it wasn’t her place to comment.“But my hope as someone who has, of course, a strong interest in politics is that we have elections globally where we try and move beyond the divisive nature that elections can sometimes bring, because that can be damaging for democracy,” she said.(Updates with currency little changed in seventh paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

It’s a mixed bag when it comes to opinions on penny stocks. These tickers trading for less than $5 per share divide Wall Street like no other; market watchers either love them or hate them.It’s easy to understand the appeal. First and foremost, you get more bang for your buck. On top of this, with shares changing hands for bargain prices, even what seems like miniscule share price appreciation can translate to monstruous percentage gains. For some, however, the risk poses too great a threat to ignore. When you look under the hood of these low-priced names, you might find very real problems like poor fundamentals or looming headwinds.So, how are investors supposed to spot the penny stocks poised to go from rags to riches? By turning to the pros.With this in mind, we wanted to take a closer look at three penny stocks getting love from the pros, namely the analysts at investment firm Cowen. According to the firm, all three could soar in the year ahead. Using TipRanks’ database, we learned why Cowen analysts are pounding the table despite the risk involved.Neos Therapeutics (NEOS)Developing and commercializing innovative products, Neos Therapeutics wants to make a significant difference in the lives of patients with Attention Deficit Hyperactivity Disorder (ADHD) and other central nervous system (CNS) conditions. Although this name has struggled in the past, Cowen thinks that at $0.47 apiece, now is the time to snap up shares.Writing for the firm, analyst Ken Cacciatore acknowledges the momentum that was being driven by Adzenys XR-ODT, the company’s amphetamine-based treatment for ADHD, and Cotempla, its methylphenidate-based CNS stimulant also designed for ADHD, has slowed due to the pandemic. However, based on recent prescription trends, the analyst is seeing “signs of recovery ahead of the back to school (via video/classroom) acceleration in Q4.”Expounding on this, Cacciatore stated, “We continue to believe that management is taking the rights steps with the strategic improvements which seem to be benefiting from the more targeted prescriber base focus and more rapid adoption of the newco-pay assistance/fulfillment program (Rx Connect), to improve the profitability per prescription. And given what appears to be its early success of Rx Connect alongside spending reduction plan and salesforce restructuring we believe Neos could reach profitability by early 2022.”As the net revenue per pack for Adzenys and Cotempla grew 6% year-over-year to reach $128, Cacciatore argues the company’s efforts are paying off. “Again, we believe these data points appear to reflect the improved commercial approach, and the effectiveness of the company's Neos Rx Connect pharmacy program which simplifies the previously more complex prescription fulfillment and co-pay assistance,” he commented.By enabling this access with Rx Connect, physicians can write prescriptions for Cotempla and Adzenys without worrying about patient call-backs. According to management, 30% of prescriptions are currently fulfilled through this program, and after multiple large regional pharmacy chains were added, the total number of partnered pharmacies was almost 900 in June, compared to 800 at the end of Q1.What’s more, the fact that NEOS is the only company to have both a methylphenidate and amphetamine alternate dose formulation product for the treatment of ADHD is enough to make it a stand-out, in Cacciatore’s opinion. Calling Cotempla the “perfect complement to Adzenys,” he notes that each asset covers one half of the large stimulant market.The analyst added, “Adzenys XR-ODT has experienced impressive prescription growth over the course of the past year, and is now the preferred ADHD alternative dosage form taking over from Pfizer's market-leading Quillivant XR as its new-to-brand market share reached the number 1 position.”Also promising, NEOS offers Adzenys ER, which is an extended-release liquid suspension stimulant product for ADHD. The product is amphetamine-based like Adzenys XR-ODT, but is an alternative dosage form for patients who don’t prefer tablets or capsules. Cacciatore points out that success with the liquid alternative dosage form has already been demonstrated as Pfizer’s Quillivant XR generated over $100 million in annual sales in 2017.To this end, Cacciatore rates NEOS an Outperform (i.e. Buy) along with an $8 price target. Should the target be met, a twelve-month gain in the shape of a whopping 1,604% could be in store. (To watch Cacciatore’s track record, click here)Turning now to the rest of the Street, 3 Buys and no Holds or Sells have been published in the last three months. Therefore, NEOS has a Strong Buy consensus rating. At $8.33, the average price target is even more aggressive than Cacciatore’s and implies 1674% upside potential. (See NEOS stock analysis on TipRanks)Dynavax Technologies (DVAX)Bringing extensive expertise in Toll-like Receptor (TLR) biology and cutting-edge adjuvant technology to the table, Dynavax develops vaccines to protect the population. Thanks to its promising pipeline and $4.30 share price, Cowen believes investors should get in on the action.Representing the firm, 5-star analyst Phil Nadeau cites Heplisav as a key component of his bullish thesis. The product is an HBV vaccine that has been shown to be more effective than the other currently marketed HBV vaccines in a number of Phase 3 trials. Based on commentary from the firm’s consultants, he argues the asset could capture a significant portion of the $500 million-plus worldwide market for adult HBV vaccines.Also contributing to Nadeau’s optimistic stance, DVAX has agreed to several partnerships to further explore if CpG 1018, the adjuvant in Heplisav, can improve the efficacy of other vaccines.In September, DVAX announced its supply agreement with Valneva to produce up to 190 million doses over five years of Valneva's COVID-19 vaccine candidate, VLA2001. This vaccine is an inactivated whole virus vaccine against the SARS-CoV-2 virus, and will incorporate DVAX's CpG 1018 adjuvant. Clinical trials are expected to kick off by YE, with approval potentially coming in 2H21. In addition, the UK government has secured a supply of 60 million doses for €470 million, and there is an option for another 130 million doses for approximately €900 million.DVAX has already conveyed that it wants to make CpG 1018 a broadly used adjuvant, and has been making “rapid progress in implementing it,” says Nadeau. He notes that this deal is consistent with this strategy, and “in some ways represents a next step.” He added, “The supply agreement is notable as it helps demonstrate the economics that successful development of partnered vaccines could bring.”According to the company’s guidance, CpG 1018 could capture 15-30% of the economics when used in partnered vaccines. “Though management has not disclosed the exact economics in the Valneva collaboration, we believe they are consistent with DVAX's guidance and suspect they are toward the middle of the range,” Nadeau commented.“In our opinion DVAX is significantly undervalued for the potential of Heplisav and the CpG 1018 adjuvant,” Nadeau concluded.It should come as no surprise, then, that Nadeau sides with the bulls. Along with an Outperform (i.e. Buy) rating, he puts a $20 price target on the stock, indicating 370% upside potential. (To watch Nadeau’s track record, click here)Other analysts echo Nadeau’s sentiment. 3 Buys and no Holds or Sells add up to a Strong Buy consensus rating. With an average price target of $16, the upside potential comes in at 276%. (See DVAX stock analysis on TipRanks)La Jolla Pharmaceutical (LJPC)Last but not least we have La Jolla Pharmaceutical, which develops innovative therapies for life-threatening diseases with significant unmet need. Given its impressive technology, Cowen sees its $4 share price as presenting an attractive entry point.Analyst Phil Nadeau, who also covers DVAX for the firm, highlights LJPC’s first commercial product, Giapreza, a patented formulation of the naturally occurring hormone peptide, angiotensin II, as a point of strength. Angiotensin II is a potent vasoconstrictor and a key regulator of blood pressure.The launch has been rocky, with the pandemic hitting the acute care in-hospital segment hard. That said, Nadeau remains optimistic. “...our consultants think there is a need for new vasopressors in CRH, and therefore we remain hopeful that Giapreza can ramp to become a meaningful product over time,” he explained.On top of this, in July, LJPC acquired Tetraphase, giving it the rights to Xerava, a novel fluorocycline antibacterial designed for the treatment of complicated intra-abdominal infections. Even though the therapy’s utilization was most likely impacted by COVID-19, Nadeau has high hopes for the product.Nadeau argues LJPC will be able to leverage its existing infrastructure to market and promote Xerava, with only minimal additional spend expected.“Though Xerava has many competitors, the market for antibiotics used to treat intra-abdominal infections is large -- patients with appendicitis alone contribute to over 1 million hospital days each year in the U.S. Thus, with promotion, Xerava should continue to grow,” the analyst said. To this end, Nadeau projects $15 million in Xerava revenue in 2021, with this figure ramping to $60 million in 2024.Summing it all up, Nadeau stated, “Trading with a modest enterprise value, La Jolla is undervalued should Giapreza and Xerava be successfully commercialized.”Taking the above into consideration, Nadeau rates LJPC an Outperform (i.e. Buy) rating along with a $20 price target. This target conveys his confidence in LJPC’s ability to climb 402% higher in the next year.What does the rest of the Street have to say? When it comes to other analyst activity, it has been relatively quiet. 2 Buys and no Holds or Sells have been issued in the last three months. Therefore, LJPC gets a Moderate Buy consensus rating. Based on the $14 average price target, shares could skyrocket 251% in the next year. (See LJPC stock analysis on TipRanks)To find good ideas for penny stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

On Monday, IBM reported third-quarter revenue and EPS that were in-line with Wall Street estimates, with $17.6 billion in revenue and $2.58 in EPS. Emily McCormick breaks down the company's results on The Final Round.

Many tech companies have posted massive share gains since the COVID-inflicted March slump. Few, though, have generated as much upside as Nio Limited (NIO). Catching a ride on the EV trend, since March lows, shares of the Chinese EV maker are up by an incredible 1070%.While Deutsche Bank analyst Edison Yu points out there hasn’t been a specific catalyst to send shares higher, the analyst counts several developments that have helped keep up momentum.First of all, in a recent interview, CEO William Li said that he expects Nio will be able to manufacture 150,000 vehicles annually by the end of next year, compared to the 60,000 it can currently produce. In the long term, Nio hopes to boost the figure up to 300,000 a year.Furthermore, the China market is “inflecting faster” than the analyst anticipated, as evidenced by September’s strong sales; Passenger BEV sales were up 70% year-over-year to 100,000 units. This amounts to the highest monthly volume since June 2019, which was the cut-off month for government subsidies.Additionally, Yu believes the fact customers have been waiting several months for deliveries due to excess orders, has caused growing excitement among buyers, whilst the meteoric rise of the homemade brand has resulted in “patriotic buying.” Add a surge in call option volume into the mix and it all results in a “stock on fire.”Still, Yu also points out how sentiment might change. It is the EV maker giant that Nio needs to keep an eye on.“We do see some risk that Tesla could materially cut the price of its locally made (MIC) Model Y from 488k RMB ($73k) to something in the mid-high 300k range ($56-58k). This could potentially hurt near-term sentiment and slow down NIO’s order book momentum considering it would be a direct competitor to NIO’s EC6 and ES6,” the analyst said.Overall, Yu maintains a Buy rating on Nio shares. Yu intends to revisit his valuation "after the company reports quarterly numbers." (To watch Yu’s track record, click here)Overall, based on 7 Buys, 2 Holds and 1 Sell, the stock has a Moderate Buy consensus rating. However, the analysts think the surge needs to pause for a breather, as the $21.72 average price target implies shares will drop by 22% over the coming months. (See Nio stock analysis on TipRanks)To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

Legendary fund manager Li Lu (who Charlie Munger backed) once said, 'The biggest investment risk is not the volatility...

The oil giant distances itself from the President's "hypothetical" funds-for-contracts claim.

After charging off the starting line and posting huge market gains in 2020, recent events have put a halt to DraftKings’s (DKNG) spectacular debut as a publicly traded company.A recent share dilution, reports of new coronavirus infections in the NFL and in college football and this week’s lockup expiration (i.e. the end of the period when early investors and insiders are not allowed to sell shares into the market) – have all played their part in the stock declining by 30% since early October’s highs.But it has not all been bad news. Last week DraftKings announced it had inked a new deal with Warner Media's Turner Sports. Specifically, DraftKings will get the exclusive rights to provide fantasy sports content and sports betting on select television broadcasts of Turner Sports and Bleacher Report.It is on this side of the equation that Rosenblatt analyst Bernie McTernan believes investors should focus on. McTernan counts 3 reasons why the deal is a positive catalyst.For one, the analyst believes “Bleacher Report is an underrated sports media asset.” It is currently second only to ESPN in Instagram and Twitter followers and is the 22nd most used sports app in the iOS app store.Secondly, Turner “has strategic sports rights.” The analyst explained, "While the deal excludes NBA content given their existing partnership with FanDuel, Turner owns a portion of the rights for NCAA tournament games through 2032 and the MLB which Turner recently renewed through 2028."Lastly, media companies’ increasing acceptance of sports betting should “help grow market adoption and potentially legislation.” For example, TNT recently used TNT Bets in a simulcast of the NBA's Western Conference Finals playoff coverage, incorporating betting odds and analysis in its live stream.Now, following DraftKings’ latest announcement, the 5-star analyst notes, “All major sports media companies have a sports betting partnership.”Overall, there’s no change to McTernan’s rating which stays a Buy, while the $65 price target stays put, too. Investors could be pocketing gains of 46%, should his thesis play out over the coming months. (To watch McTernan’s track record, click here)DraftKings has decent support from the rest of the Street. The stock has a Moderate Buy consensus rating based on 12 Buys and 6 Holds. The forecast is for 28% upside in the year ahead, given the average price target clocks in at $57.35. (See DraftKings stock analysis on TipRanks)To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

P&G's latest earnings underscore the ongoing impact of the COVID-19 pandemic.

Yahoo Finance's On the Move panel discuss today's Stocks on the Move: Nikola, American Airlines and Southwest Airlines.

General Motors Company (NYSE: GM) is planning to announce major investments that will lead to an expansion in the production of electric vehicles at its plant at Spring Hill, Tennessee plant and elsewhere, Reuters reported Monday.What Happened: The investment announcements will come on Tuesday at a virtual event that commences at 11 a.m. ET, according to the automaker. The Mary Barra-led company plans to build its Cadillac Lyriq electric SUVs at the Tennessee plant, the Detroit News reported Monday, as per Reuters.The Lyriq is expected to be brought into production beginning late 2022 and the company could move manufacturing to other plants, resulting in an inflow of investments in other locations, AutoForecast Solutions, a provider of production forecasting information, told Reuters.Why It Matters: Barra has made public plans to invest $20 billion by 2025 in EVs as well as electric vehicle battery technology, noted Reuters.The Michigan-based automaker reportedly has plans to spend $2.5 billion in overhauling and retooling its Detroit-Hamtramck plant to build a GMC Hummer EV pickup truck, a robotaxi as well as other vehicles.The company already manufactures its Chevrolet Bolt vehicles in Detroit, as per Reuters.Rival Volkswagen AG (OTC: VWAGY) has plans to commence production of its ID.4 EV SUVs in Tennessee, as per CNN.Elon Musk-led Tesla Inc (NASDAQ: TSLA) is building its latest Gigafactory in Austin, Texas, which will produce the company's all-electric pickup vehicle, the Cybertruck.GM and embattled EV startup Nikola Corporation (NASDAQ: NKLA) failed to close a manufacturing partnership last month.The two companies have until December to finalize the deal. Price Action: GM shares traded 1.2% higher to $33.75 in after-hours trading on Monday after closing 0.3% lower.Photo Courtesy of WikimediaSee more from Benzinga * Options Trades For This Crazy Market: Get Benzinga Options to Follow High-Conviction Trade Ideas * Tesla Accounts For Majority Of EV Sales In South Korea This Year: Report * Tesla Battery Supplier LG Chem Says Exploring Joint Ventures With 'Couple' Of Automakers(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Eastman Kodak Co (NYSE: KODK) CEO Jim Continenza said Monday that the company would push ahead with making generic drug ingredients, irrespective of whether it receives government assistance or not, the Wall Street Journal reports.What Happened: "It was put on hold but we are still going forward and we are cooperating in every way," Continenza said at the WSJ Tech Live conference on the stalled $765 million loan deal with the United States government.The executive defended the speed at which the deal was put together, pointing towards the U.S. dependence on foreign countries for drugs. "It came together quickly, but I think it also needs to," said Continenza. He attributed Kodak's handling of the deal to understaffing caused by the pandemic. "About two to three days into it, it started running amok," the Kodak CEO said at the WSJ event.Why It Matters: Kodak is facing an investigation from the Securities and Exchange Commission on how it disclosed the federal loan for making generic drugs, which led to a spike in its share in late July.In August, the U.S. International Development Finance Corporation, which was due to extend the loan, decided to not "proceed any further" until the company was cleared of allegations.Last month, a special committee appointed by the company's board concluded there were no violations of the law but flagged concerns related to corporate governance.Kodak executives, including Continenza, received 1.75 million stock options a day before it was disclosed to the public, the Journal reported earlier.When asked at the conference about the grant of the options, Continenza maintained that he had not sold any shares and that the grants "shouldn't be the focus."Price Action: Kodak shares gained almost 2% in the after-hours trading at $9.06 on Monday after closing 1% lower at $8.88.Photo courtesy: El Grafo via WikimediaSee more from Benzinga * Options Trades For This Crazy Market: Get Benzinga Options to Follow High-Conviction Trade Ideas * Kodak 5M Loan Deal Under Scanner Of Federal Agency That Put It Together(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

Stock futures traded higher as the overnight session kicked off Monday, with investors hoping that lawmakers might succeed in coming to an agreement for more stimulus ahead of the November election.

Nvidia is still a day from a handle, but Monday's retreat provided more of a shakeout. The chip giant really hadn't fallen much until today. So that could be good.

The report released on Monday showed registrations in California, a bellwether for the electric-car maker and its largest U.S. market, recovered from a second-quarter low of roughly 9,800 vehicles to around 16,200 vehicles in the three months ended September. California registration for Tesla's Model 3 mass-market sedan, which in the past accounted for more than half of total registrations, fell 60% on a yearly basis to 6,500.

(Bloomberg) -- International Business Machines Corp. reported third-quarter revenue that beat analysts’ forecasts, driven by gains in its cloud offerings, an area the company will focus on exclusively after spinning off legacy business units.The company, which had pulled its full-year forecast in April citing uncertainty from the coronavirus pandemic, declined to provide any specific guidance on Monday, sending shares down about 2.8% in extended trading. Earlier this month IBM announced plans to shed its division that manages corporate computer systems and go all-in on internet-based services and artificial intelligence to help revive fortunes at the 109-year-old company.After two years of declining or flat revenue, IBM is hiving off the unit that handles day-to-day infrastructure service operations and accounts for about a quarter of the company’s total sales. But that business has shrunk in recent years as customers have moved more of their operations to the cloud, where IBM competes with rivals such as Microsoft Corp. and Amazon.com Inc. Meanwhile, demand for cloud computing services has boomed as companies have shifted to remote work.Chief Executive Officer Arvind Krishna took over from Ginni Rometty in April and has moved quickly to cut thousands of jobs as many of IBM’s customers have pared investments and held off on big software deals during the pandemic. The splitting off of the services unit, which won’t be completed until next year, will let the company target hybrid-cloud software and services. In 2018, IBM spent $34 billion to buy Red Hat to further those efforts. Hybrid cloud refers to companies using a combination of their own servers and renting storage and computing power from large providers such as Amazon and Microsoft.“As we look forward, the case for hybrid cloud is clear,” Krishna said on a conference call with analysts. “It’s a tremendous opportunity valued at $1 trillion with most of the enterprise opportunity ahead of us.”Sales fell 2.6% to $17.6 billion for the three months ending Sept. 30, the Armonk, New York-based company said Monday in a statement. That was slightly better than the $17.5 billion analysts had forecast, on average. The revenue decline was driven by tech support units Global Business Services and Global Technology Services, where the business that will be spun off is housed, which reported decreases of 4.7% and 3.6%, respectively. Meanwhile total cloud revenue increased 19% to $6.0 billion, led by Red Hat, which saw a 17% bump in sales. IBM released preliminary results earlier this month when it announced the spinoff.“This is one of the last quarters where IBM’s lagging legacy infrastructure business will drag down performance, as those operations will be spun out to NewCo in 2021, with IBM instead focusing its attention and investment behind cloud and AI, its strongest performing areas,” said Nucleus Research analyst Daniel Elman, in a note before the results were released.Chief Financial Officer Jim Kavanaugh said the pandemic’s affects on the economy continue to damp demand. “The rate and pace of recovery remains uncertain and as a consequence, we have not seen a fundamental shift in overall demand levels,” he said on the call, adding that IBM has “healthy pipelines in cloud and data platforms” in the current quarter.Third-quarter earnings excluding some costs were $2.58 a share, beating the average analyst estimate of $2.55. Shares closed little changed at $125.52 Monday in New York and have declined 6.4% this year, compared with a 6% gain in the S&P 500 Index.(Updates with CEO comments in the fifth paragraph and CFO comments in the eighth.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

What are the early trends we should look for to identify a stock that could multiply in value over the long term...

Although Americans typically assume they will retire when they want, and on their own terms, many are in for a surprise

Overall net sales in the unit which houses brands like Mr Clean and Tide rose 14% in the first quarter, as consumers stocked up on anything they could get their hands on to clean their homes and potentially slow the spread of the virus. The company said "personal cleansing" grew 30% with double digit sales in every region, while its Home Care organic sales were up more than 30%. The outlook raise followed that of rival Reckitt Benckiser, on a jump in demand for its Lysol and Dettol cleaning products.

Third quarter earnings season kicks off, and Wall Street is tuning in. Anxiously awaiting the quarterly numbers, investors will get more clarity on the extent of COVID-19's impact on fundamentals.While the U.S. Presidential election and the next pandemic stimulus package have stolen some of the spotlight from the upcoming quarterly reports, analysts have taken a deep dive into the data to gain insights on what might be in store.According to estimates, S&P 500-listed companies are expected to report earnings of $32.97 per share, down 22% from the prior-year quarter. That said, Refinitiv data indicates that about three-fourths of S&P 500 companies surpassed earnings forecasts during the past four quarters.Against this backdrop, investor focus has landed squarely on the well-known players gearing up to release earnings results on Tuesday, October 20, namely Netflix and Snap. With the pros from Wall Street outlining how both could fare, we used TipRanks’ database to find out even more. Here is the lowdown.Netflix (NFLX)Streaming giant Netflix has been one of the key beneficiaries of the COVID-19 crisis. However, with the entertainment industry as a whole suffering at the hands of the virus, what does this mean for NFLX’s Q3 earnings release?Representing Monness, 5-star analyst Brian White told clients, “In our view, Netflix already represented a compelling secular story as more consumers opted for streaming video services and then the COVID-19 crisis disrupted our lives. This crisis has clearly accelerated a natural secular trend that was already playing out.”As a result, White thinks NFLX will at least meet his Q3 revenue estimate of $6.33 billion, which would reflect 21% year-over-year growth (versus $6.38 billion consensus estimate), and slightly exceed his EPS forecast of $2.09 (compared to the Street’s $2.13 call). Management guided for revenue of $6.327 billion and EPS of $2.09.When it comes to new subscriber additions, White estimates that the streaming company will see global streaming paid net additions of 2.5 million in Q3, bringing the total to 195.4 million. This is in line with the company’s expectations.However, going forward, headwinds could be approaching, given that live film production has largely been paused. Therefore, he argues we are “now watching important pillars of an American entertainment institution starting to wobble, the movie theater experience.”The analyst notes the timing of this “destruction” couldn’t be worse, as the company has established a solid standing in the original content space. “Sitting inside a dark, indoor movie theater with strangers during a pandemic is not most people’s idea of a good time. Moreover, this experience is more expensive and time consuming. As a result, studios are increasingly opting to hold back the release of new, blockbuster films,” White explained.To this end, the analyst expects Q3 sales to gain 3% year-over-year, but to also land below the four-year average of 6% for past September quarters. For Q4, he is projecting sales of $6.45 billion, an 18% year-over-year increase (versus Street’s forecast of $6.58 billion), and EPS of $1.17 (versus $0.95 consensus estimate).In line with his optimistic approach, White stayed with the bulls, reiterating a Buy rating and $600 price target. Investors could be pocketing a gain of 13%, should this target be met in the twelve months ahead. (To watch White’s track record, click here)Most other analysts echo White’s sentiment. 19 Buys, 4 Holds and 3 Sells add up to a Moderate Buy consensus rating. Given the average price target of $564.83, the upside potential comes in at 6%. (See Netflix stock analysis on TipRanks)Snap (SNAP)Going into its Q3 earnings release, expectations for Snap are high out on Wall Street. That said, one analyst thinks the social media company is up to the challenge.Five-star analyst John Egbert, of Stifel, noted, “The setup for Snap in Q3 appears favorable as the advertising market has meaningfully recovered from its trough in April; while large segments of the ad market (e.g. travel, retail) are still operating well below pre-COVID ad spend levels, digital media channels like Snap are benefiting from robust demand from eCommerce advertisers and gradually improving trends among brand advertisers following the return of live sports and entertainment in recent months.”Based on positive signals from third-party advertisers and agencies since August, the revenue growth rate implied by Snap's investment plans for Q3 (20% year-over-year) could prove conservative, in Egbert’s opinion.To this end, Egbert projects revenue growth of 23% year-over-year in Q3, putting the figure at $550 million. This is in line with the consensus estimate and represents an acceleration from Q2’s 17% year-over-year gain. In Q2, SNAP was hampered by severely suppressed ad demand during the early months of COVID-19.As for DAUs, SNAP faces a tough year-over-year comparison for net additions this quarter. In Q3 2019, the launch of Snap Games and the next-generation AR lenses helped the company add over 7 million DAUs. “We expect Snap to add 6 million-plus net DAUs in Q3 2020, at the high-end of the company's 4-6 million outlook, driven largely by the fast-growing Rest of World segment (which likely benefited from the shutdown of TikTok in India). Insights from Snap’s Ad Manager and various third-party analytics firms appear to support our forecasts,” Egbert mentioned.On the advertising front, Egbert is optimistic even though there has been a “thin” feature film slate in recent months. Based on data from large agencies and advertisers, directional trends in the ad market have been largely positive since August.The analyst added, “We believe Snap should be a major beneficiary of growing demand from direct response advertisers during the holiday shopping season, while the company's audience growth, product innovation, and long runway for above-market ad growth should fuel robust levels of growth in FY21 and beyond.”Everything that SNAP has going for it convinced Egbert to reiterate his Buy rating. In addition to the call, he lifted the price target, with it now clocking in at $32. This target suggests 11% upside potential. (To watch Egbert’s track record, click here)What does the rest of the Street have to say? SNAP’s Moderate Buy consensus rating breaks down into 22 Buys, 6 Holds and 1 Sell. Given the $29.09 average price target, shares could rise 1% in the next year. (See Snap stock analysis on TipRanks)To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

VANCOUVER, BC, Oct. 20, 2020 /CNW/ - Reconnaissance Energy Africa, Ltd.

Yahoo Finance's Emily McCormick joins The First Trade with Brian Sozzi and Alexis Christoforous to discuss what we can expect from earnings reports this week including Tesla, IBM and Netflix.

(Bloomberg) -- Piedmont Lithium Ltd., which recently struck a five-year raw-materials pact with Tesla to develop a lithium project in North Carolina, is issuing shares in the U.S. as attention in the battery materials space grows.The Perth, Australia-based company said it will offer 1.5 million American Depositary Shares, with each representing 100 of its ordinary shares, according to a regulatory filing. “Proceeds from the offering will be used to continue development of the Company’s Piedmont Lithium Project, including a definitive feasibility study, testwork, permitting, further exploration drilling and ongoing land consolidation, and for general corporate purposes,” the company said in the filing.Piedmont said in September that it will supply spodumene concentrate, a lithium raw material, to Tesla equating to about one-third of the miner’s planned supply for an initial five years. The announcement came after Tesla’s so-called battery day, during which the electric-car producer laid out plans to ramp up battery production as it churns out more automobiles to meet a coming surge in demand.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

(Bloomberg) -- Sweden has banned Huawei Technologies Co. and ZTE Corp. from gaining access to its fifth-generation wireless network, adding to the increasing number of European governments forcing local telecom companies to shift away from Chinese suppliers.The Swedish Post and Telecom Authority said in a statement Tuesday that the “influence of China’s one-party state over the country’s private sector brings with it strong incentives for privately owned companies to act in accordance with state goals and the communist party’s national strategies.”It went on to say that the two Chinese technology giants must be blocked from existing infrastructure by January 2025.The U.S. has described Huawei as the “backbone” of surveillance efforts by the Chinese communist party, and is pressuring European governments to block the technology company from gaining access to 5G networks. The U.K. has already imposed an outright ban on Huawei’s 5G equipment, while German Chancellor Angela Merkel has so far hesitated to follow suit.A spokesman for Huawei didn’t immediately respond to a request for comment. Sweden should provide open and nondiscriminatory business conditions for Chinese companies based on market rules, the Chinese embassy in Sweden said in a statement. Huawei has previously denied being a security threat, and Chinese officials have labeled the bans by European governments as “gross interference.”Finland’s Nokia Oyj and Sweden’s Ericsson AB have been the major beneficiaries of the ban on using Huawei equipment, with the two companies forming an effective duopoly on 5G gear. In the U.K., many carriers now need to swap out some of their Huawei 4G technology for Nokia and Ericsson equipment before installing 5G.The hostility from the U.S. and its allies has damaged the meteoric rise of Huawei, China’s biggest tech firm, which has helped build 5G networks in more than 10 countries and was expected to do the same in another 20 this year. Customers have now begun to shift to other suppliers. Last month, Nokia extended its relationship with BT Group Plc to supply the British phone company with 5G gear.ZTE, Huawei’s much smaller rival, almost collapsed after the U.S. Commerce Department banned it from buying American technology for three months in 2018. Both ZTE and Huawei are set to be shut out of India’s plans to roll out its 5G networks.Tele2 AB, Sweden’s second largest telecom company, has used Huawei for its 4G equipment, and noted on its earnings call Tuesday that the Chinese company was “doing a great job” but they had planned for the possibility of a ban.PTS granted access to new 5G installations to Hi3G Access, Net4Mobility, Telia Sverige and Teracom. The approval means the companies can participate in Sweden’s 3.5 GHz and 2.3 GHz auctions, which are key to its 5G build-out.(Updated with comment from Chinese embassy in Sweden.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

(Bloomberg) -- Mike Wilson, whose August call for an equity pullback proved prescient, is urging investors to prepare for another bout of turbulence.The chief U.S. equity strategist at Morgan Stanley says that the S&P 500 is at risk of falling 10% from its high reached a week ago. The benchmark gauge just failed for a second time in as many months to break out a long-term trend line that had marked the market’s peaks over the past four decades.Adding to the chart’s hurdle, Wilson says, is a long list of macro headwinds ranging from stalled fiscal talks, rising Covid-19 cases and the looming presidential election. All are bound to whip up market volatility, making investors less willing to pay up for stocks.“With so many uncertainties over the next month, we think another 10% correction from Monday’s highs is the most likely outcome in the near term before this bull market can resume, at least at the index level,” Wilson wrote in a note to clients.A decline of that size would take the S&P 500 to 3,172, a level that’s also close to the index’s average over the past 200 days. The gauge erased earlier gains Monday, sliding 0.4% as of 12:30 p.m. in New York.Read more: S&P 500 Is Running Low on Buyers in Middle of Earnings SeasonIn August, Wilson warned that the S&P 500’s record-setting rally was vulnerable to shocks, particularly rising rates, when so few stocks were buttressing the advance. The benchmark hit an all-time high of 3,580.84 on Sept. 2, before tumbling almost 10% over the following three weeks.It’s not coincident that the highs in early September and last Monday both came close to 3,550, a level that Wilson says represents a “very strong” resistance for the market. Going by his study, that’s the point where a line plotting market peaks in 1987 and 2000 meets the one that connects various tops since 2009.“We noticed this second attempt also occurred on less momentum, suggesting the correction that began in September is likely not complete,” Wilson said.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

(Bloomberg) -- WeWork and its primary backer, SoftBank Group Corp., paid Adam Neumann only a portion of the $185 million fee that was part of his controversial exit package as chief executive officer, a person familiar with the transaction said.The fee was tied to a noncompete agreement for Neumann, said the person, who asked not to be identified because the details are private. A portion of the payment depended on the completion of a deal to acquire WeWork stock from Neumann and other shareholders, the person said. SoftBank backed out of that stock transaction, a move that is the subject of a lawsuit involving Neumann.The status of Neumann’s exit package came into focus on Monday when Marcelo Claure, a SoftBank executive and WeWork executive chairman, was asked about it at the Wall Street Journal’s technology conference. He said the arrangement was no longer in effect and declined to elaborate, citing the legal dispute. It’s unclear how much Neumann was paid.Representatives for SoftBank and WeWork declined to comment. A spokesman for Neumann didn’t immediately respond to a request for comment.Neumann's promised $185 million fee was part of a larger deal on his way out of WeWork that included the chance to sell $1 billion in stock and a $500 million loan. The package, which was part of SoftBank's bailout of the co-working startup last fall, felt like salt in the wound for many WeWork employees, who had just watched their company's initial public offering plans crumble. Weeks after Neumann walked away, thousands of WeWork jobs were eliminated.Since then, though, Neumann's generous compensation hasn't all come through. Notably, SoftBank reneged at the last minute from the tender offer in which Neumann would have been able to sell his shares. That prompted a lawsuit from both WeWork and Neumann, claiming SoftBank broke its agreement to buy $3 billion in shares from Neumann, investors and employees. That lawsuit is still ongoing.(Adds context starting in the fifth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

Shares of the tech giant Apple Inc (NASDAQ: AAPL) have been able to outpace the broader markets for over two decades. While the S&P 500 index has gained close to 136% since the start of 2000, Apple has returned over 1,200% in the same period. Even in the face of the COVID-19 pandemic, Apple surfed record heights this year to become the first company to touch $2 trillion in valuation.Apple stock has gained 58% year-to-date. Apple Successfully Diversifying Away From iPhone: Apple is one of the premium consumer brands in the world. It has managed to tap into consumer emotions, generating a high degree of loyalty that results in repeat purchases.The company has released several iconic and revolutionary products including the iPod, iPhone, iPad, MacBook and, more recently, the AirPods and Apple Watch. The first iPhone, introduced way back in June 2007, was quick to disrupt the smartphone segment.The iPhone accounted for 5% of the global smartphone market at the end of 2007, and this rose to an enviable 20% in the fourth quarter of 2019, according to Statista. It was not long before the iPhone became Apple's flagship product, translating to 54.7% of total sales in fiscal 2019. This figure touched a peak of 66% in 2015 and stood at 44% in the June quarter of 2020. Apple has successfully managed to diversify its revenue base over the years and now has a lower level of dependency on the smartphone segment.At the same time, 44% of sales is still sizable, and the upcoming lineup of 5G-enabled iPhones should continue to be a critical driver of Apple's sales. Services, Wearables Key To Apple's Long-Term Growth: In 2014, Apple's Services business raked in $18 billion in sales and accounted for less than 10% of company revenue.By 2019, the Services business had more than doubled to $46 billion, accounting for 18% of total sales. In the first nine months of fiscal 2020, the Services business has already generated $40 billion in revenue. In 2014, Apple's wearables business was virtually non-existent. In 2019, it was Cupertino's fastest-growing segment, with a 9.4% share of total sales. Revenues from Apple's Services comprise sales from its digital content stores and streaming services as well as Apple Care, licensing and other subscription services like Apple TV+ and Apple Arcade. The Wearables segment consists of AirPods, Apple Watch, Beats products, HomePod and iPod Touch.Growth in the high-margin Services business has enabled Apple to increase its earnings at an annual rate of 8.4% in the last five years. Wall Street analysts expect earnings to grow by 12.5% annually between fiscal 2019 and 2024. Apple's Potential In Emerging Markets: The iPhone ended 2019 with a 13.9% market share in the global smartphone space.It is the largest smartphone player in the U.S., but is struggling to gain a foothold in emerging economies such as India, Latin America and Southeast Asia.The iPhone is still viewed as a luxury product on the Indian subcontinent, where the average smartphone costs less than $200. Yet the increase in the purchasing power of the middle class in emerging markets could help Apple sustain its revenue growth in the coming decade.The company continues to pump billions of dollars into research and development, giving it an edge over market peers, disruptive products, brand loyalty and a recurring customer base. Apple's diversified business, huge market presence and strong balance sheet are some of the reasons why analysts continue to remain bullish on the stock. According to the 38 analysts polled by Yahoo Finance, 32 have a "buy" recommendation on Apple shares and six have a "hold" recommendation. Photo courtesy of Apple. Latest Ratings for AAPL DateFirmActionFromTo Oct 2020Credit SuisseMaintainsNeutral Oct 2020Morgan StanleyMaintainsOverweight Oct 2020RBC CapitalMaintainsOutperform View More Analyst Ratings for AAPL View the Latest Analyst Ratings See more from Benzinga * Options Trades For This Crazy Market: Get Benzinga Options to Follow High-Conviction Trade Ideas * Snapchat Adds TikTok-Like Music Feature For iPhone Users * After Regal, COVID-19 Forces AMC Theater Chain To Consider Bankruptcy: Report(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

E-commerce has become more dominant than ever as consumers are cautious about shopping in stores due to the COVID-19 pandemic. It is not just groceries and home merchandise that are being increasingly purchased online. More US consumers are buying cars on digital platforms since the pandemic. Notably, the demand for used cars has increased considerably as many people are avoiding public transportation due to COVID fears. Also, high unemployment and challenging macro conditions are driving the demand for used cars in comparison to new cars.There are two categories of companies involved in online car sales. Companies like Cars.com and CarGurus provide an online marketplace that connects buyers and sellers of new and used cars. On the other hand, Carvana and Vroom remove the dealer from the picture and deal directly with the customer.Against this backdrop of the growing demand for the online car market, we will use the TipRanks Stock Comparison tool to place Cars.com and Carvana alongside each other and see which online car stock offers a better investment opportunity.Cars.com (CARS)Cars.com is a digital marketplace and solutions platform that connects car shoppers with sellers. The company also has other platforms including DealerRater (car dealer review and reputation management platform) and Fuel (a digital video solution for dealers that helps them target Cars.com's in-market car shoppers).CARS is benefiting from the consumers’ growing need to connect with dealers digitally amid the pandemic. Last week, the company announced better-than-expected preliminary numbers for 3Q, projecting revenue between $142 million and $144 million, Y/Y growth in adjusted EBITDA and an adjusted EBITDA margin between 33% and 34%.Currently, CARS expects net loss between $10 and $12 million in 3Q, primarily reflecting a non-cash charge of $31 million for the correction of an error related to the calculation of the valuation allowance for income taxes in connection with an impairment recorded in 1Q.Meanwhile, the midpoint of the company’s revenue guidance reflects top-line growth of 40% in 3Q compared to the second quarter but a Y/Y decline of 6%. The company also disclosed that it is working on reducing its leverage and had $598 million in outstanding debt at the end of 3Q after paying down $48 million in the quarter.In 2Q, CARS’ revenue declined 31% Y/Y to $102 million and monthly average revenue per dealer or ARPD fell 33% to $1,442 due to the financial relief given to dealer customers as a result of COVID-19. Adjusted EBITDA fell about 47% to $23.2 million. (See CARS stock analysis on TipRanks)In reaction to the 3Q preliminary numbers, B. Riley Securities analyst Lee Krowl increased the price target on Cars.com stock to $11 from $9 and upgraded it to Buy from Hold due to better-than-expected net dealer growth and proactive debt repayments.Craig-Hallum analyst Steven Dyer also upgraded the stock to Buy from Hold and raised the price target to $14 from $12. The analyst noted that the company reported EBITDA growth for the first time since 2016 and added about 100 net dealers in 3Q giving him more confidence in the forward business fundamentals. Dyer also feels that the valuation is attractive.Looking ahead, the company intends to ramp up it's marketing efforts to capture the growing demand. It also expects its FUEL platform to positively contribute to revenue and profitability with ARPD rates that are multiples higher than the company’s overall ARPD.The Street is cautiously optimistic about Cars.com with 4 Buys and 2 Holds adding to a Moderate Buy consensus. Shares have declined 30% so far but could rise about 37% in the coming months as indicated by the average analyst price target of $11.67.Carvana (CVNA)Leading used-car online seller Carvana is witnessing robust growth due to strong demand for used cars during the pandemic and the growing adoption of online shopping for cars. It struggled in mid-March when the pandemic started spreading rapidly and faced inventory issues as well. However, the top-line began to rebound in late April and the company’s 2Q revenue grew 13% Y/Y to $1.12 billion. Carvana sold 55,098 retail units in 2Q, reflecting a 25% Y/Y increase.However, the company’s EBITDA loss widened to $69 million in 2Q20 from $35.9 million in 2Q19. Meanwhile, Carvana expanded to 100 new markets in the quarter, thus increasing the total percentage of the US population it serves in its 261 markets to 73.2% from 68.7% at the end of 1Q20.Carvana buys, reconditions and sells used cars. The company recently launched its ninth Inspection and Reconditioning Center or IRC near Columbus, Ohio. This facility increases the company’s annual production capacity to nearly 500,000. Carvana expects to open two more IRCs by the end of this year, which will boost its capacity by 100,000. Over the long-term, the company aims to have an annual production capacity of over 2 million.In June, the company launched CarvanaACCESS, a direct-purchase platform that gives wholesale buyers access to Carvana’s inventory.Last month, Carvana provided a business update and stated that it expects to deliver record performance in 3Q in key metrics, including retail units sold, total revenue, total gross profit per unit, and EBITDA margin. Moreover, the company expects to generate breakeven EBITDA in 3Q.Recently, Robert W. Baird analyst Colin Sebastian reiterated a Buy rating for Carvana with a price target of $240. The analyst said the recent debt offering and the company’s expanded inventory facility provide a further runway for growth. Sebastian continues to believe that the company is well positioned to drive further share gains within the growing online used auto market.However, the analyst feels that the near-term upside for Carvana may be limited despite strong demand trends. (See CVNA stock analysis on TipRanks)The Street also has a Moderate Buy consensus for Carvana based on 12 Buys versus 6 Holds and no Sell ratings. With shares rising a whopping 132% year-to-date, the average analyst price target of $234.35 implies an upside potential of 9.7% in the months ahead.Bottom lineCarvana and Cars.com will continue to benefit from the growing adoption of digital platforms for buying and selling cars. Coming to the recent operational results, Carvana outperformed Cars.com and is poised to deliver robust numbers for 3Q. Also, year-to-date, Carvana stock has delivered impressive returns, unlike Cars.com stock. However, the higher upside potential in Cars.com stock could make it a better pick than Carvana right now.To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment More recent articles from Smarter Analyst: * Agree Realty’s 3Q Sales Soar 33% On Property Acquisitions * PPG Slips In After-Market As 3Q Sales Volume Drops * Tesla 3Q California Car Registrations Slip 13% - Report * Juniper Snaps Up 128 Technology For $450M To Bolster AI-Portfolio

President Donald Trump’s recovery from COVID-19—and his aggressive advocacy of antibody cocktails as a “cure”—offer few reasons of encouragement for the general public given their relative scarcity, costs and mostly unproven nature, according to several experts who spoke to Yahoo Finance.

The world’s first human challenge trial for the coronavirus will launch in January in the United Kingdom, spearheaded by established challenge trial company hVivo, a subsidiary of Irish pharmaceutical company Open Orphan.

Yahoo Finance’s Emily McCormick joins Akiko Fujita to discuss Tesla announcing that will start exporting China-made Model 3 cars to Europe.

(Bloomberg) -- During a town hall meeting Thursday, Democratic presidential nominee Joe Biden again assured shale producers that he wouldn’t ban fracking if elected. Then, in virtually the same breath, he touted his $2 trillion clean-energy plan, which aims to edge natural gas out of the power mix within 15 years.The former vice president’s efforts to walk a tightrope on gas reflect the fossil fuel’s precarious place in the economy. For now, it’s an essential part of American life. Biden has been careful not to make an enemy of the industry, especially in the key battleground state of Pennsylvania, home to the largest U.S. shale-gas field. His policies may even, in the short-term, support the gas market.But in the long run, the fuel may prove economically and environmentally untenable within the power sector, a key market for producers. Biden’s climate plan would only accelerate that outcome, with massive investments in wind, solar and battery storage giving those energy sources a leg up. And his goal of a carbon-neutral grid would severely curb, if not destroy, gas’s share of the pie in favor of cheaper, cleaner renewables.“Decarbonization isn’t a debate -- it’s a fossil-fuel death sentence,” said Kevin Book, managing director of ClearView Energy Partners. “It means a resource is going off the grid. That is the inevitable implication.”Gas, like coal a decade ago, is facing economic headwinds. While it’s still the nation’s dominant fuel source, it’s less competitive against renewables than it used to be. Solar and wind are now cheaper than gas-fired power in two-thirds of the world, according to a BloombergNEF report. In the U.S., solar and wind are already less expensive than even the most efficient type of new gas-fired turbine, Lazard Ltd. said Monday.The right combination of federal policies could easily push gas out of the power mix by 2035 or earlier.“This transition is going to happen more quickly than people thought, just as the coal transition has happened faster than people thought it would,” said John Coequyt, the climate policy director at the Sierra Club.To be sure, gas may reap some benefits from a Biden presidency in the near-term. Though his proposal to limit drilling on federal lands could trim production, tighter supplies could lift prices, potentially making gas exports more profitable. Similarly, a thaw in U.S.-China relations could give exporters greater access to a major world market.But higher prices would have the opposite effect in the power sector, where cost is key. Gas-fired electricity generation is already expected to fall 5.7% this winter compared to last year simply because gas prices are higher this season, according to Energy Information Administration projections. And that’s despite forecasts for a colder winter, which would increase electricity demand.The economics put gas in a roughly similar position as coal in the years before President Barack Obama took office.In coal’s case, Obama hastened its decline by imposing new environmental regulations that made coal plants more costly to operate – notably the 2012 Mercury and Air Toxics Standards that limited toxic emissions from plants, and the 2015 Clean Power Plan that curbed carbon emissions.A Biden administration could take a similar tack, imposing new -- and more stringent -- limits on greenhouse gas emissions from power plants. He could also reinstate and possibly strengthen Obama-era rules curbing methane leaks from gas infrastructure, which were repealed by President Donald Trump. Both have the potential to drive up the cost of gas-fired electricity, without banning the fuel.Most analysts agree that Biden wouldn’t explicitly go after the gas industry in the same way that Obama attacked the coal sector. Instead, Biden’s clean-energy policies would make it harder for gas to compete with wind, solar and other renewables.“You might be able to adopt policies that at least give them a theoretical chance to survive, even if they’re going to make it much harder for them to survive,” said David Spence, a professor at the University of Texas School of Law.For now, there isn’t much pressure to close the gas plants already in service. “Existing gas plants will have a role to play for a while,” said Mark Dyson, a principal at the Rocky Mountain Institute. “They’re keeping the lights on while we build as much wind and solar as we can.”And Biden’s proposal leaves the door open for utilities to continue using gas plants that are fitted with carbon-capture systems that trap emissions, said Jonathan Elkind, senior research scholar at Columbia University’s Center on Global Energy Policy.In Thursday’s town hall, Biden stressed the importance of embracing “new technologies,” including carbon capture, as a way to achieve a carbon-free electricity sector while still using some natural gas.Still, utilities might not want to make that kind of investment when the price of renewables continues to fall.“A lot of the path to net-zero by 2035 for power will come from energy efficiency gains, a lot from renewables, and that will squeeze out fossil fuels eventually,” said Katie Bays, an analyst with Sandhill Strategy in Washington.Already, local jurisdictions are moving away from gas in pursuit of their own climate goals. Cities across California have moved to ban natural gas use in homes, while New York blocked a proposed $1 billion pipeline that Governor Andrew Cuomo. Opposition by environmental groups even drove Dominion Energy Inc. to cancel a major pipeline project before selling most of its gas operations in July.Utilities are also preparing for a gas-less future. Besides building renewables, power giants NextEra Energy Inc. and Entergy Corp. are among companies investing in gas turbines that can transition to running on 100% renewable hydrogen.Still, many doubt whether it’s even possible to achieve a carbon-free power grid in 15 years, which is a more ambitious goal than California and New York have set for themselves. Transforming the electric grid would be both costly and complicated and analysts caution against taking the plan too literally.To pay for it, Biden has proposed an increase in the corporate income tax rate to 28% from 21% as well as using stimulus money. But that would require congressional approval, a tall order if Republicans retain control of the Senate.Nevertheless, the push for decarbonization reflected in the Biden plan presents a real, long-term threat to natural gas as a source of electricity.“There would be a huge downside risk for gas demand,” said Carlos Torres Diaz, head of gas and power market research at Rystad Energy AS, in Oslo. “Even if we don’t get to zero.”(Adds Lazard analysis in fifth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

U.S. Senate Republicans are preparing to bring up legislation on Tuesday to replenish a program that helps small businesses slammed by the coronavirus, as House Speaker Nancy Pelosi and Treasury Secretary Steve Mnuchin discuss a larger stimulus package. Pelosi and Mnuchin, who have been negotiating intermittently since August on a fresh coronavirus aid plan, plan to speak again on Tuesday after they "continued to narrow their differences" in a nearly hour-long call Monday, Pelosi's spokesman, Drew Hammill, wrote on Twitter. Pelosi, the top elected U.S. Democrat, has set the end of the day Tuesday as a deadline for agreement with the White House, if a comprehensive coronavirus relief bill is to get through both chambers of Congress before Election Day on Nov. 3.

Top news and what to watch in the markets on Tuesday, October 20, 2020.

(Bloomberg) -- BlackRock Inc. says that the scale of restructuring needs globally could exceed the previous peak that followed the 2008 global financial crisis.“One big reason is the significant growth in sub-investment grade debt,” the company’s research arm, BlackRock Investment Institute, said in a note dated Oct. 19. The amount of outstanding debt with ratings below investment grade, including loans and private credit, has more than doubled to $5.3 trillion since 2007, according to the asset manager.As the overall cost of borrowing fell, companies loaded up on debt. This has left many vulnerable as their revenues came under pressure from Covid-19 related disruptions.BlackRock isn’t the only one warning of the risks of company failures. Despite low rates, U.S. corporate bankruptcies posted their worst third quarter ever.Read more: Father of the Z-Score Predicts Surge in ‘Mega’ Bankruptcies (2)While supportive fiscal and monetary policies have helped companies raise capital and lower borrowing costs, “not all borrowers have benefited equally” and smaller firms have lacked access to the public markets, BlackRock said in the note.Many companies may need to turn to private credit to restructure post Covid-19, according to the asset manager, and this offers potential return diversification for investors. Since 2007, private credit has been especially fast-growing, expanding to $850 billion by financing companies that would previously have looked to banks or the public high-yield market, it added.Firms will likely have to evolve their business models amid the pandemic, and BlackRock sees a “wave of restructurings” and room for private credit to cater to smaller borrowers. (Adds further details on BlackRock’s views in seventh paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

(Bloomberg) -- There is no more dramatic sign of the U.S. shale industry’s fall from grace than one of the best in the business being sold off for less than a third of its peak value.Concho Resources Inc., an early explorer of the Permian Basin’s once-coveted oil riches that was worth $32 billion just two years ago, is selling for $9.7 billion in stock. ConocoPhillips is paying a meager 15% premium over Concho’s closing price on Oct. 13, the last trading session before Bloomberg News first reported the companies were in talks.Concho is not alone: More than half of the shale deals this year came with a premium of less than 10% over stock prices that had already plunged in the past couple of years, according to data compiled by Bloomberg.Shale explorers have rapidly lost favor with Wall Street after years of high debt, poor shareholder returns and value-destroying deals. The devastating impact of the Covid-19 pandemic on oil demand made matters worse, pushing many into bankruptcy. Private equity firm Kimmeridge Energy is among investors urging the highly fragmented industry to seek low-premium deals, gain scale and cut costs.“To sell out at a 15% premium I think sends the message that it’s going to be a lot harder to be a stand-alone” oil company, Jennifer Rowland, an analyst at Edward Jones, said Monday in a phone interview.In just the last few weeks, Chevron Corp. concluded the purchase of Noble Energy Inc. for a modest 12% premium, while WPX Energy Inc. agreed to merge with Devon Energy Corp. for a benefit of just 4.2% above its pre-deal share price, according to data combined by Bloomberg. Both deals, like Conoco-Concho, were all-stock transactions, meaning there’s no golden parachute for investors.Pioneer Natural Resources Co. is in talks to buy rival U.S. shale driller Parsley Energy Inc. in an all-stock deal that could be finalized by the end of the month, a person familiar with the matter said Monday. Dow Jones earlier reported the talks.The more down-to-earth deals of late are in stark contrast to Occidental Petroleum Corp.’s $37 billion acquisition of Anadarko Petroleum Corp. last year. The purchase raised the ire of billionaire investor Carl Icahn and left Occidental, which is now worth little more than $9 billion, saddled with about $40 billion of debt.“We looked at the way the world was changing and the need for size and scale,” Concho Chief Executive Officer Tim Leach said in an interview. “The fact that this transaction is 100% stock -- on a relative basis all our shareholders are still exposed to all the upside of the combined company.”While executives like Leach point to the value of being able to participate in an oil-price rally with an all-stock deal, it’s also a sign that buyers are not willing to fund purchases with cash, which would often mean taking on debt. And tapping shareholders for funds is out of the question. Energy has slumped to less than 2% of the S&P 500 Index, down from more than 11% a decade ago, even as the wider market rose to record levels.U.S. oil production has tumbled to around 10.5 million barrels a day from a record 13 million earlier this year. That’s the equivalent of removing more than the current production of OPEC member Kuwait.The industry is unlikely to make that back anytime soon, and more declines may be on the way next year. Occidental Petroleum Corp. CEO Vicki Hollub last week said the U.S. may never again reach those record production levels.READ: U.S. Oil Production Has Already Passed Its Peak, Occidental SaysThis is in part due to shale wells’ rapid decline rate -- as much as 70% within the first year -- and the need for new wells, and money to drill them, to offset the production drop-off.“With the underlying decline rate that approaches 40%, it’s hard to distribute cash back to the shareholders as rapidly as we can in this new model,” Concho’s Leach said.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

(Bloomberg Opinion) -- Remember seven months ago, when a three-way supply war between Saudi Arabia, Russia and the U.S. was about to deal a mortal blow to America’s shale oil industry? Whatever happened with that?All the evidence of late is that there’s life in the oil patch yet. Production from Texas’s Permian Basin in September was 4.49 million barrels a day. That’s down from a peak of 4.9 million in March, to be sure, but higher than in any month prior to September 2019 — and the cut is considerably smaller than those enacted by Saudi Arabia and Russia since they struck an agreement to bring the oil market back from the dead in April.Capital markets are taking notice. ConocoPhillips announced Monday that it would buy Concho Resources Inc. for about $9.7 billion in stock, helping consolidate the two companies’ acreage in the Permian. Just three weeks ago, Devon Energy Corp. spent $2.56 billion in shares buying WPX Energy Inc., building its position in one of the lower-cost districts of the Permian. Parsley Energy Inc., one of the remaining minnows in the basin, is in talks about a takeover by Pioneer Natural Resources Co., the Wall Street Journal reported late Monday.As we’ve argued, life is much more manageable in the range of $40 a barrel than many would have expected a few months ago.For exploration and production companies, the size of your balance sheet is probably as important as the size of your reserve base at the moment.Thanks to the slump in interest rates this year, investment-grade energy companies can borrow as cheaply as at any point since before the last oil price crash in 2015, based on the pricing of option-adjusted spreads. Meanwhile, junk-rated energy debt has settled at far higher rates, increasing the advantage for the big end of town. In both the ConocoPhillips-Concho and Pioneer-Parsley deals, we’re seeing companies with relatively comfortable investment-grade ratings buying smaller rivals on the verge of relegation to junk.Once borrowing costs are brought under control, it’s not nearly such a challenge to keep pumping out barrels. The so-called fracklog — drilled but uncompleted wells that could be put into action the moment prices rise far enough to cover their operating costs — remains at elevated levels, with July seeing a record number in the Permian basin. Working through that overhang will be enough to sustain output for some time, even in the absence of aggressive drilling activity. Around 80% of the fracklog is able to break even at prices below $25 a barrel, consultants Rystad Energy estimated in March.That won’t be enough to keep the oil flowing forever, and earlier-stage activity to develop new wells is still relatively subdued. The number of land-based exploration rigs in operation across the U.S. has risen in six of the past nine weeks, but it’s still running at about a third of the levels seen before March’s price crash. Drillers need prices above $50 a barrel before exploration activity picks up substantially, based on the predominant views expressed in a survey of the industry by the Federal Reserve of Dallas last month.Still, that should be cold comfort to oil producers elsewhere in the world. Most members of the Organization of the Petroleum Exporting Countries  need prices north of $60 a barrel to balance their budgets. If $50 is sufficient to kick off a new flood of supply from U.S. shale basins, OPEC members are going to need to force through spending cuts even more radical than the ones they’re already planning. Meanwhile, the consolidation of the U.S. upstream industry from the current wave of deal-making may further reduce its cost structure into the $40s, or even below that.The Hail Mary pass made by the world’s oil exporters in March was that a flood of output would be sufficient to squash the U.S. oil patch for good. That would give OPEC members a chance to build their market share, helping them prop up prices through the inevitable decline of oil demand as the world decarbonizes. It’s not working out that way. Instead, an informal price cap imposed by U.S. shale appears to have grown tighter, from around $60 a barrel between 2015 and 2019 to $50 or less now. Contrary to false statements by President Donald Trump, a Joe Biden presidency won’t ban fracking, either — indeed, as my colleagues Liam Denning and Julian Lee have argued, a more even-handed government may ultimately help the oil industry by pointing a clear path through the transition away from fossil fuels.That may not be a bad thing for the global climate, either. From the perspective of a planet eking out the last of its carbon budget, an industry skewed toward shale wells that exhaust themselves in a few years may well be preferable to one where large companies are still signing off on major conventional fields that can keep producing for decades. This year’s glimpse into the abyss of an oil glut didn’t kill the shale industry. Instead, it may have only made it stronger. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

Here comes more coronavirus stimulus if a blue wave takes place on Nov. 3, Goldman Sachs says.

Schlumberger shares tanked 8.8% on Oct. 16 as the company’s third-quarter revenue missed analysts’ estimates. The oil-field services company posted revenue of $5.26 billion, which declined 38% Y/Y and missed analysts' forecast of $5.40 billion.The decline in oil prices and demand due to the pandemic have been impacting Schlumberger (SLB) and its peers significantly. The company’s 3Q adjusted EPS of $0.16 came ahead of analysts’ estimate of $0.13 but was down 63% Y/Y. North America business fell 59% while the international revenue was down 27%.In the wake of the current crisis, Schlumberger is undergoing a transition. It is divesting certain businesses as it intends to rationalize its portfolio with a focus on reduced earnings volatility and less capital-intensive businesses.Last month, the company announced the sale of its North American shale fracking business to smaller rival Liberty Oilfield Services. It is also targeting $1.5 billion of structural cost cuts on an annual basis under its cost reduction program.Speaking about the 4Q outlook, CEO Olivier Le Peuch commented, “In North America, the conditions are set for continued momentum, with improving DUC [drilled but uncompleted] well completion activity in US land and a modest drilling resumption in the US and Canada.”“International activity is steady following the budget resets completed in the third quarter and activity will be affected by the seasonal decline in the Northern Hemisphere, partly offset by muted year-end product and multiclient license sales.”Following the results, Northland Securities analyst Douglas Becker reiterated a Buy rating for Schlumberger with a price target of $24 as he believes that management commentary indicates a modest upside to the 4Q consensus EBITDA estimate of $996 million.The analyst stated “SLB beat consensus EBITDA by 4% and effectively called a trough in international activity over the next two quarters. Commentary supports modest upside to consensus EBITDA estimates.” (See SLB stock analysis on TipRanks)With Schlumberger shares plunging about 63% so far in 2020, the average analyst price target of $23.33 implies upside potential of 56% over the coming months. A Moderate Buy consensus for the stock is based on 11 Buys versus 4 Holds and no Sells.Related News: GM To Invest $2.2B Turning Detroit Plant Into New Electric-Vehicle Hub Ford China Sales Rise Two Quarters In A Row, Jump 25% Y/Y Boeing On Cusp Of EU Approval For Grounded 737-MAX Jet – Report More recent articles from Smarter Analyst: * Nokia Picked By NASA For Moon’s First-Ever Cellular Network * CVS To Add 15,000 Workers To Meet Covid-19 Test Demand; Tigress Says Buy * VF Tops 2Q Estimates; Shares Decline * Uber Seeks ‘Strategic Alternatives’ For Elevate Biz- Report

The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put...

Transocean (NYSE: RIG) has received a formal notice from the New York Stock Exchange of non-compliance with NYSE continued listing standards.