Top US stocks to watch: Coinbase, AMC and Moderna

Coinbase releases results later today, AMC beats expectations as theatres reopen, Moderna shares are in play after soaring higher yesterday, Canadian Pacific ups its bid for Kansas City, Nutrien delivers record earnings, and McDonalds is being investigated in Italy.

USA (1)

Coinbase

Coinbase is set to release second quarter results later today, with some analysts expecting the cryptocurrency exchange to surprise markets as bitcoin prices rebound.  

Despite the price of Bitcoin crashing in that quarter expectations are running high for a strong quarter with revenue forecasts at $1.7 billion. EPS is expected to drop from $3.05 in the first quarter to $2.34 in the second. Growth in the subscriptions and services revenue, which made $56 million in the first quarter, will be in focus as will the firms’ user growth.  Guidance for the number of monthly transactions was upwardly revised to 7 million from 5.5 million earlier this year. Talk of regulation could be a headwind for results. 

The Coinbase share price will also be reacting to the surge in cryptocurrencies, with bitcoin surging past the $45,000 mark for the first time since May. With shares down by such a large percentage since listing, there is a chance we could see some re-engagement according to analysts at Goldman Sachs, who are expecting an upside surprise today.

Read our full preview ahead of Coinbase’s earnings.

AMC Entertainment

AMC Entertainment released second quarter results after the market closed yesterday, benefiting as all of its US theatres and the vast majority of its international cinemas have now reopened, leading to a significant improvement in results.

Revenue rose to $444.7 million from just $18.9 million the year before, coming in well ahead of the $367.4 million expected by analysts. Its loss per share narrowed more than expected to $0.71. AMC said it expected US ticket revenue to hit 45% of pre-pandemic levels in the third quarter, demonstrating there is still a long way to go before it fully recovers.

Chief executive Adam Aron said the quarter was ‘transformational’ for the business after raising $1.25 billion in equity, but warned ‘we are not yet out of the woods’. It also said it had struck a deal with Warner Brothers to return to an exclusive theatrical window of 45 days prior to being released on streaming sites, and said it would consider working with GameStop on potential merchandise opportunities.

Moderna

Moderna shares are in focus today after closing up over 23% to hit an all-time high yesterday.

That was driven by news that Australia has secured 25 million doses of its coronavirus vaccine that should start to be delivered in the second half of September, while Switzerland also approved the jab for 12 to 17-year olds.

Moderna’s vaccine is emerging as one of the world’s preferred jabs and demand is expected to remain strong as developed countries start looking at booster jabs to improve protection against the virus.

Tesla

Tesla sold 32,968 electric cars in the key growth market of China during July, slightly less than the record sales achieved in June, according to the China Passenger Car Association.

That was slightly below the record 33,155 cars sold in June. However, the number of sales of cars made in China plunged to just 8,621 cars from over 28,000 the month before, although this typically ramps-up in the last two months of each quarter.

The figures come after Tesla launches a more affordable version of the Model Y in China and cut the starting price for its Model 3 sedan. Competition remains fierce, with local producer BYD selling over 50,000 cars and General Motor’s joint venture with SAIC Motor sold over 27,000.

McDonalds

McDonalds is to be investigated by Italian antitrust authorities over the terms and conditions given to its franchisees in the country after several complaints were made, according to a document seen by Reuters.

The report said the investigation could lead to a fine as much of 10% of global revenue if it is found guilty – a potentially huge sum considering it booked $19.2 billion in revenue last year. The allegations relate to complaints that franchisees are economically dependent on McDonalds with pervasive and binding clauses relating to everything from prices and promotions to stocks and supplies.

Around 85% of McDonalds stores are franchised with the rest managed directly by the company. The document said the company has 60 days to respond and that the investigation must be completed by the end of 2022.

Canadian Pacific Railway and Kansas City Southern

Canadian Pacific Railway raised its takeover bid for Kansas City Southern to $31 billion as the battle with rival bidder Canadian National Railway heats up.

Canadian Pacific Railway said it has raised its stock and cash offer to $300 per share, marking a 34% premium to the Kansas City Southern share price at the close yesterday. That will be broken down into 2.884 shares in Canadian Pacific Railway and $90 in cash for each share. The deal would include around $3.8 billion worth of debt.

Canadian Pacific Railway said the offer is ‘substantially similar’ to the rival offer on the table from Canadian National Railway, but said it ‘offers significantly higher regulatory certainty’ than the bid from its rival. Including debt, Canadian National’s offer values Kansas City Southern at $33.6 billion.

Nutrien

Nutrien revealed it delivered record earnings in the first half, prompting it to raise its outlook for the rest of the year.

Sales jumped 16% in the second quarter to $9.76 billion and adjusted Ebitda rose 29% to $2.2 billion. Sales were up 14% in the first half to $14.42 billion and adjusted Ebitda increased 36% to a record of $3.02 billion. Free cashflow of $1.9 billion also hit a new record.

Nutrien said it expects to deliver more record results over the full year, raising its adjusted Ebitda target to $6.0 to $6.4 billion and its net earnings per share target to $4.60 to $5.10. That has been primarily driven by it boosting its expected sales of potash by an extra 1 million tonnes. Previously, it was only targeting annual Ebitda of $4.4 to $4.9 billion in 2021.

Amazon

Amazon has said it will pay compensation to customers who suffer injuries from products sold by third-party sellers, but said it will not accept liability.

Amazon has said it is willing to pay up to $1,000 to those that are injured due to defective products sold on its platform. That sum should cover around 80% of injury and damage cases, according to Reuters. This will come at no cost to the sellers but more action may be taken if sellers fail to react. The move comes after concerns that Amazon could be liable for goods that are shipped using its fulfilment service.

It also unveiled Amazon Insurance Accelerator to link sellers to insurance providers as it encourages more sellers to get product liability insurance.

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