Snap Inc
SNAP Details
Rolling out self-serve Ad platform: Snap Inc (NYSE: SNAP) announced that it is rolling out a self-service ad buying platform dubbed SnapChat Ad manager. Moreover, the group is launching over 20 brands including Atom, Tickets, movie ticket app and Hollar. These new buying tools would be available in the US, UK, France, Germany, Australia and other countries by next month. With the service, marketers can purchase Snapchat video ads, (Snap Ads) to either drive more installations of their apps, enhance branded video view or get users to click through to their ecommerce websites. The new platform is currently under private beta phase but would become broadly available in June. Meanwhile, Snapchat is also rolling out a mobile dashboard. This dashboard would enable marketers to view their ads as if they were Snapchat users, as well as access analytics and get update about the campaign from the Snapchat app. The new tool would be playing important role for the company as Snapchat is becoming more important to marketers because of its user base made up of desirable millennial. Snap is also putting together an impressive lineup for its new television-like platform for Snapchat and the new idea will feature three to five minute shows made exclusively for the app.
Made deals with Media Company:The Company has made deals with major media companies to deliver content for its new live TV concept. According to the leading newspaper, Snap has inked deals with Comcast’s CMCSA NBCUniversal, Disney’s DIS ABC, A&E, Discovery, and the NFL. It is also in news that the company is in talks with CBS and FOX and would announce an official deal with Scripps Network Interactive.
Stock performance: Snap Inc tapped market with IPO in March and skyrocketed to nearly $30 two days after its IPO. On the other hand, the stock fell back below $20 in just two weeks later and now dropped over 5% since its listing (as at May 05, 2017). SNAP has also been facing allegations from Pompliano’s, which said that SNAP has been providing false numbers about performance including user growth and engagement to investors ahead of its initial public offering. The company was reported to have around $150 million of cash on books. The competitive strength and outcome of quarterly result which would be out by May 10, 2017 would be the driving force for the stock in near future. The stock is again on momentous track based on recent developments and improved sentiments. We expect more growth potential to be witnessed when SNAP’s new Ad platform becomes successful and recommend a “Buy” on the stock at the current price of US$ 23.13
SNAP Daily Chart (Source: Thomson Reuters)
JPMorgan Chase & Co
JPM Details
Better than expected lending margins:JP Morgan Chase & Co (NYSE: JPM) delivered a strong Q1FY17 result with net income of $6.4 billion, an increase of 17%. The result was primarily driven by strong trading results and higher-than-expected lending margins. The trading income was higher by improved market conditions with FICC (fixed income, commodities and currency) being a particular strength. Good FICC performance was due to the uncertainty around by global central banks, accelerating inflation expectations and higher client activity. NIM increased by 11 bps on a quarter on quarter (QoQ) basis to 2.33 bps against consensus estimates of 2.29 bps. The bank maintained its #1 ranking for Global Investment Fees with 8.5% wallet share in Q1FY17. The net income was at $6.4 billion and has managed revenues of $25.6 billion and adjusted expenses of $14.8 billion. The company paid dividend of $0.50 per share and repurchases shares worth $2.8 billion. Meanwhile, the CET1 ratio was at 12.4% against its required ratio of 11%. But, average core loans were up by 9% year on year (YoY) and 1% QoQ. CCB’s (Consumer & Community Banking) net income was down by 20% YoY to $2 billion and revenues were down by 1% YoY to $10.97 billion. Asset and Wealth management reported revenues of $3.1 billion and net income of $385, down 34% YoY and down 34% QoQ. Expenses have risen by 5% to $6.4 billion. However, average deposits were up by 11% YoY and average loans were up by 5% YoY and core loans were up by 11%. Corporate and Investment Bank (CIB) reported net income of $3.2 billion on revenues of $9.5 billion and RoE of 18%.
First quarter of 2017 performance (Source: Company Reports)
Moving staff post Brexit and exits blockchain consortium vR3: JPM is planning to move hundreds of London-based bankers to expanded offices in Dublin, Frankfurt and Luxembourg to preserve easy access to the European Union’s single market after Brexit. JP Morgan will initially move between 500 and 1000 staff to the three cities and others in the region. On the other side, JP Morgan Chase & Co has left the bank block chain consortium led by New York based start up R3 CEV. R3 has 80 financial institutions as members and is planning to raise $150 million from its members and strategic investors and give them a 60% stake in R3.
Stock performance: The management guided that it expects Q2FY17 net interest income to be up ~$400 million QoQ and 2017 net interest income to be up ~$4.5 billion. The adjusted expense would be around ~58 billion for FY17 and net charge off to be $5 billion plus minus. The management has kept its payout target unchanged at 55%-75% leaving an upside risks to buybacks and dividends with JMP’s strong capital position. The prevailing economic conditions in the U.S. are expected to drive better performance for the sector going forward and JPM is expected to be buoyed by the movement at the back of strong fundamentals. JPM stock generated over 24.5% (as of May 05, 2017)in the last six months and we give a “Buy” recommendation on the stock at the current price of US$ 86.98
JPM Daily Chart (Source: Thomson Reuters)
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