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Thursday Morning’s Market Insights: Seadrill Ltd (SDRL), Facebook Inc (FB), QUALCOMM, Inc. (QCOM), FireEye Inc (FEYE)

By Kate George 

Seadrill Ltd (NYSE:SDRL) fell 1.85% in pre-market trading down to $6.89 as oil prices slid 3% yesterday afternoon on news that oil inventories have been increasing for 6 consecutive weeks, thus adding to the glut. Furthermore, the continuing strength of the US dollar continues to make it difficult for oil prices to increase. Similarly, Reuters published a memo from OPEC indicating falling oil demand for the next few years. The oil industry has been battling falling prices and over-supply for more than one year, causing oil companies to suffer as oil rigs sit idly. According to the 3 analysts polled by TipRanks in the last 3 months, 1 analysts is neutral on Seadrill and 2 are bearish. The average 12-month price target between these analysts is $9, marking a 28% potential upside from where shares last closed.

 

Facebook Inc (NASDAQ:FB) is up 3.96% in pre-market trading to $4.12 after the social media giant reported impressive quarterly earnings yesterday after market close. Facebook’s stock hit an all-time high yesterday after the company posted earnings per share of $0.57 on revenue of $4.5 billion, easily topping analysts’ expectations of $0.52 and $4.37 billion, respectively. The company also posted 1.55 billion monthly active users, beating expectations of 1.52 billion, and marking an impressive 14% year-over-year increase. Facebook reported higher expenses than usual, but this did not come as a surprise since the company recently invested in new endeavors, such as virtual reality. In light of impressive earnings, Gene Munster of Piper Jaffray reiterated an Overweight rating on the company and raised his price target from $146 to $155. Munster comments, “Thematically, the story remains strong with solid growth from its core News Feed offering, the coming ramp of Instagram, and ultimately the optionality in Instant Articles, WhatsApp and Oculus.” According to TipRanks, all 27 analysts who have weighed in on Facebook in the last 3 months are bullish on the company. None are bearish or neutral. The average 12-month price target between these 27 analysts is $121.04, marking about a 16% potential upside from where shares last closed.

Click here to see Gene Munster’s past ratings and performance history.

 

QUALCOMM, Inc. (NASDAQ:QCOM) slipped 6.62% in pre-market trading down to $56.27 after the company posted fiscal fourth quarter earnings yesterday after market close. Although the company beat revenue and EPS estimates, the semiconductor company posted disappointing guidance. The company posted earnings of 91 cents per share on revenue of $5.46 billion, beating estimates of 86 cents and $5.21 million, respectively. However, looking forward to the current quarter, Qualcomm expects earnings per share between 80 cents and 90 cents, falling short of the analyst estimate of $1.08. Furthermore, Qualcomm expects to post revenue for the current quarter between $5.2 billion and $6 billion, compared to the analyst estimate of $5.74 billion. According to the 7 analysts polled by TipRanks in the last 3 months, 5 are bullish on QCOM and 2 are neutral. The average 12-month price target for the stock is $68.07, marking a nearly 13% potential upside from where shares last closed.

 

FireEye Inc (NASDAQ:FEYE) shares dropped 18% to $23.81, nearly half of its $55.33 high in June, in pre-market trading this morning due to yesterday’s Q3 earnings release. The cyber security company posted $165.5 million in revenue and a loss of ($0.37) per share, missing analysts’ estimates of $167.1 million in revenue but beating their ($0.45) EPS prediction. This plunge comes after the company changed its full-year revenue forecast range down to $620-$628 million, from $630-$645 million, way below analysts’ expectations of $640 million. This major cut, combined with disappointing earnings and resignations from higher-ups, is a sign of trouble for the company. Analysts were quick to weigh in on the recent activity. Analyst Gray Powell of Wells Fargo downgraded FireEye to a Hold because of disappointing Q3 earnings and uncertain growth predictions for Q4. He adds that the company missed its billing estimates by 7% this quarter, the first directional change in billing estimates in the past 6 quarters. According to 15 analysts polled by TipRanks in the last 3 months, 4 rated FireEye as Buy while 11 remain on the sidelines. The 12 month average price target for FireEye is $34.92, marking a 19.92% upside from where shares last closed.

Click here to see Gray Powell’s past ratings and performance history.