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Puck News | May 3rd, 2024

Puck News | May 3rd, 2024

Today's insights are courtesy of Puck, they are a membership-driven digital media company that reveals the inside conversations taking place at the nexus of Wall Street, Washington, Hollywood, Silicon Valley, media, sports, fashion, and more.

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GOOD MORNING

Index/Asset	Day	Month	Year
Dow	▲0.85%	▼3.45%	▲12.38%
S&P	▲0.91%	▼3.57%	▲21.74%
Nasdaq	▲1.51%	▼3.67%	▲29.00%
Bitcoin	▼3.89%	▼11.00%	▲100.65%
10-Year	▼0.52%	▲5.03%	▲34.44%

Here's everything you need to know today: Apple announced an unprecedented $110 billion share repurchase plan, the largest in its history, signaling a bullish stance despite a 10% drop in iPhone sales and a 4% dip in overall revenue. This move, which pushed shares up 7% in extended trading, reflects Apple's resilience and a proactive approach to boosting shareholder value during uncertain times. Meanwhile, Rivian Automotive secured a significant $827M incentive from Illinois, promising extensive upgrades at its manufacturing facility and bolstering its production capabilities for the new R2 SUV, which aligns with broader EV market growth strategies.

In other news, Carvana shocked the market with a dramatic swing to profitability in the first quarter, with its stock surging over 30%. This turnaround is underpinned by a strong earnings report and bullish analyst upgrades, highlighting a recovery in the auto market and strategic operational efficiencies. On a different note, Moderna reported a significant drop in its quarterly earnings, with revenues plummeting from $1.9 billion to $167 million, as the company navigates a transition from pandemic-driven vaccine demand to a more stabilized market.

Let’s dive into more detail below.

CARVANA

Analysts Upgrade Carvana Following Q1 Profit Leap

JPMorgan, Baird, and Wells Fargo adjust their outlooks favorably as Carvana showcases a $235 million EBITDA, marking a strategic financial rebound

BREAKING NEWS
Carvana, the online auto retailer, shocked the market late Wednesday by reporting a significant swing in profitability in the first quarter, with its stock surging over 30% in early Thursday trading.

This turnaround was highlighted by a net income of $49 million, starkly contrasting the $286 million loss recorded in the same period last year.

Analysts from JPMorgan, Baird, and Wells Fargo have subsequently upgraded their price targets on Carvana stock, citing the company's rapid margin expansion and robust earnings before interest, taxes, depreciation, and amortization (EBITDA), which reached $235 million from a loss last year.

WHAT HAPPENED
JPMorgan upgraded Carvana to 'overweight' from 'neutral' and significantly raised its price target to $130 from $70, driven by its Q1 earnings beat and effective debt management strategies. Similarly, Baird analyst Colin Sebastian adjusted his price target to $110, maintaining a neutral stance but acknowledging the quarterly solid performance and forward-looking guidance. Wells Fargo's Zachary Fadem also increased his target for Carvana to $77, reflecting renewed confidence in the company's financial trajectory.

Carvana reported first-quarter revenues of $3.06 billion, marking a 17% increase year-over-year and surpassing analyst projections of $2.67 billion. Vehicle sales rose to 91,878 units, up 16% from last year, with gross profit per vehicle nearly doubling to $6,432. Looking ahead, CEO Ernie Garcia III emphasized Carvana's shift towards sustainable, profitable growth and its ambition to become the leading auto retailer nationally.

The positive earnings report and bullish analyst upgrades contributed to a significant rise in Carvana's stock price, reaching its highest level since April 2022 and underscoring a potential reversal of fortune for the online car seller previously beleaguered by high inventory costs and declining used auto prices.

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RIVIAN

Rivian Secures $827M from Illinois for Facility Expansion

This major financial endorsement from Illinois will facilitate Rivian's production of the R2 model, integrating significant community and infrastructural improvements

BREAKING NEWS
Rivian Automotive, Inc. has secured a substantial $827M incentive package from the State of Illinois, earmarking this investment for extensive upgrades and expansions at its Normal, IL manufacturing facility. This financial boost is set to propel the production of Rivian's new midsize SUV, the R2, enhancing the plant's capabilities and integrating substantial community infrastructure improvements. With this move, Rivian strengthens its production capacity and reaffirms its commitment to the Illinois economy and workforce through planned city improvement projects and job training initiatives.

WHAT HAPPENED
Today's announcement by Rivian outlines the deployment of the $827 million towards expanding the existing facilities in Normal, IL, and advancing public infrastructure and workforce training programs. This initiative aligns with the impending launch of Rivian's R2 model, a midsized SUV designed to balance daily utility with robust adventure capabilities. The state's backing, highlighted by support from crucial Illinois political figures, including Governor JB Pritzker, underscores a significant vote of confidence in Rivian's potential to drive the local economy and the broader electric vehicle (EV) market forward. Governor Pritzker emphasized the role of this partnership in bolstering Illinois as a leader in the EV sector, poised to revitalize communities and push towards ambitious climate goals.

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APPLE

Apple Announces Historic $110 Billion Buyback

With the largest buyback in its history, Apple aims to reassure investors of its resilience and strategic foresight despite current revenue challenges

BREAKING NEWS
On Thursday, Apple unveiled a record-setting $110 billion share repurchase plan, the largest in the company's history.

Despite a 10% drop in iPhone sales and a 4% dip in overall revenue in the fiscal second quarter, Apple's strategic decision highlights a confident outlook, pushing shares up 7% in extended trading. This maneuver reflects Apple's resilience and proactive stance in leveraging corporate finance to bolster shareholder value during uncertain times.

WHAT HAPPENED
During the fiscal second quarter, Apple faced a challenging market environment with a notable decline in iPhone sales and overall revenue. However, the company slightly exceeded Wall Street expectations, with earnings per share reaching $1.53 against a consensus estimate of $1.50 and total revenue reporting at $90.75 billion. The announcement of a $110 billion share buyback program represents a 22% increase from last year's $90 billion, underscoring Apple's robust financial position and commitment to returning value to shareholders. Despite the downturn in iPhone and Other Products revenue, Apple's Services segment emerged as a strong performer, achieving a 14.2% increase to $23.9 billion, highlighting the growing importance of recurring revenue streams in the company's revenue mix. The announcement came alongside cautious optimism from CEO Tim Cook, who projected low single-digit growth in the upcoming June quarter, signaling a steady, though slow, recovery trajectory for the tech giant.

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MODERNA

Moderna Reports Massive Revenue Drop to $167 Million in Q1 2024

Amid a strategic shift, Moderna's earnings plummet as it navigates away from its COVID-19 vaccine dependence

BREAKING NEWS
Amid shifting market conditions and a strategic pivot away from its COVID-19 vaccine, Moderna Inc. (NASDAQ: MRNA) reported a significant decline in its first-quarter earnings for 2024. The company revealed a drastic reduction in revenue, down from $1.9 billion in the same quarter of the previous year to just $167 million, surpassing the analyst's revenue forecast of $97.5 million. Despite this, the financial landscape is rough, with a net loss of $1.2 billion, starkly contrasting the net income of $79 million reported last year.

WHAT HAPPENED
On Thursday, Moderna disclosed some negative figures in its 8-K filing, emphasizing a dramatic shift from robust earnings to significant losses.

The company reported a diluted earnings per share (EPS) of $(3.07), which was slightly more favorable than the anticipated $(3.58). This quarter's figures clearly indicate the declining demand for its primary product, Spikevax, which is transitioning to a seasonal market model.

Regarding operational efficiencies, the company has cut its costs, with research and development expenses decreasing by 6% to $1.1 billion, reflecting more focused clinical development and manufacturing efforts. Selling, General, and Administrative Expenses also saw a reduction by 10% to $274 million due to streamlined operations and reduced external consultant use. Despite the cost-saving measures, the total cash reserves have diminished, ending the quarter at $12.2 billion compared to $13.3 billion at the end of the previous quarter.

This fiscal retrenchment comes as Moderna repositions itself in the vaccine market, preparing to launch new vaccines for RSV and an updated Spikevax formula.

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YESTERDAY

Here’s what you missed

1. Dow's Upward Surge

Dow jumps 322 points, marking a vibrant market day.

2. Qualcomm's Earnings Leap

Qualcomm climbs 9.8% on strong future revenue forecasts.

3. Carvana's Record Earnings

Carvana soars 33.6% after reporting unprecedented profits.

4. Moderna Beats Expectations

Shares rise 12.7% on smaller-than-expected losses.

5. Apple Awaits Earnings