Tag: KeyBanc

Posted in technology

Shopify Gets Target Boost From KeyBanc on Fulfillment Network

Shopify’s  (SHOP) – Get Report Fulfillment Network is “a full-fledged, tightly integrated fulfillment solution,” according to a KeyBanc Capital Markets analyst, who raised his price target on shares of the e-commerce software-and-services provider to $1,250 from $1,150.

Shares of the Ottawa-based company were off 1.1% to $1,054.

Analyst Josh Beck, who has an overweight rating on the stock, said the Shopify Fulfillment Network, which was launched last year, “is a full-fledged, tightly integrated fulfillment solution for Shopify merchants and includes order/inventory management solutions, branding and data controls, and access to scalable, flexible warehousing space to sell across multiple channels.”

“Following our SFN deep dive, we walk away more constructive on Shopify’s opportunity to build a new software ‘brain’ to orchestrate the fulfillment value chain,” Beck said.

Beck noted that a broad array of robotic systems has been developed to automate and optimize fulfillment across of variety of functions, such as picking, moving, and sorting, leveraging both hybrid human/robot and purely robotic operations.

Warehouse-fulfillment automation has attracted significant venture capital and corporate investment, Beck said, “leading to an impressive array of robotic systems that are automating and optimizing the fulfillment across a variety of functions.”

The analyst said that, assuming fulfillment costs represent about 15% of gross market value, he estimated that the fulfillment TAM (total addressable market) “could approach half a trillion dollars of spend in the coming years excluding China.”

Goldman Sachs on Monday initiated coverage of Shopify with an equal-weight rating and a $970 price target.

“We see Shopify continuing to expand and capitalizing on the attractive eCommerce tailwinds,” analyst Keith Weiss wrote, “and highlight a $25B ‘serviceable’ opportunity for the company driven by international expansion, continued Payments penetration, and growth within Shopify Fulfillment Network.”

Posted in technology

KeyBanc Downgrades AT&T (T) to Underweight

On Sunday, Analysts at KeyBanc downgraded shares of AT&T (T) to Underweight from Sector Weight, with a Price Target of $25. The $25 price target represents downside from the stock’s current price and is based on 6.2x analysts 2021 adjusted EBITDA estimates. The analysts see a tough road ahead for the company, as the struggles continue to grow for T and the business growth has slowed. Analysts revenue and adj. EBITDA estimates are 1.5% and 5.9% lower than consensus in 3Q, respectively, due to a variety of factors, most notably in Warner Media where analysts expect the combination of return to sports and added expense associated with HBO Max to impact profitability.

The analysts point to a variety of factors expected to impact profitability, including Mobility revenue, Entertainment revenue, and the aforementioned WarnerMedia operation. New competition from cable company MVNOs and T-Mobile are expected to hurt T’s mobility segment with subscriber growth having slowed. Analysts see T as also being a share donor in the competition for 5G to the company’s detriment, which suggests wireless service revenues are unlikely to recover in the near term. COVID-19 is also impacting cellular roaming revenue and should continue to until customers return to traveling.

In the Entertainment segment, cord-cutting is pressuring subscribers, and programming costs continue to rise, both of which are pressuring profitability. While T is expecting the Entertainment segment’s margins to stabilize in 2020, analysts believe continued pressure will occur given the shift of high-margin DIRECTV customers toward low-margin AT&T TV Now and general loss of subscribers.

Anecdotally, I have friends who have not paid a penny for PPV or specialized streaming events, due to cord cutting, so the concerns are real.

WarnerMedia especially has a difficult road ahead with analysts suggesting advertising likely to be weak