Tuesday Morning’s Market Insights: Yahoo! Inc. (YHOO), Kinder Morgan Inc (KMI), Costco Wholesale Corporation (COST), Wynn Resorts, Limited (WYNN)


Yahoo! Inc. (NASDAQ:YHOO) shares are up nearly 2% in pre-market trading to $35.53 after the company announced it that will not be spinning off its stake in Alibaba. Yahoo had been planning a $30 billion spinoff of its stake in the Chinese e-commerce company until the deal came under IRS scrutiny, leading to concerns that the spinoff would be taxed at a higher rate. This morning, Yahoo announced that it is exploring other options to separate the Alibaba stake. New reports comment that Yahoo will instead look to spinoff its core business, including Yahoo! Japan. In light of this news, Gene Munster of Piper Jaffray reiterated an Overweight rating on Yahoo with a $39 price target. Munster believes the alternative plan presents a “cleaner” transaction than the Alibaba spinoff. According to TipRanks, 13 analysts are bullish on Yahoo and 12 are neutral. As of this writing, the average 12-month price target between the 25 analysts is $41.27, marking an 18% potential upside from where shares last closed.

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

YHOO consensus

 

Kinder Morgan Inc (NYSE:KMI) fell more than 6% in pre-market trading down to $14.76 following yesterday afternoon’s announcement that the oil and gas company drastically cut its dividend by 75 percent. In the beginning of the fourth quarter, investors’ dividends will drop from 51 cents a share down to 12.5 cents per share. The move will save KMI over $3.19 billion, which will allow the company to preserve its credit rating. The Board defends the move, maintaining that it is in the best long-term interest of shareholders and the company itself. In light of this news, RBC Capital analyst Elvira Scotto downgraded the company and announced a $19 price target. According to TipRanks, 3 analysts are bullish on the company and 4 are neutral. As of this writing, the average 12-month price target between these 7 analysts is $21.67, marking a 37% potential upside from current levels.

Click here to see Elvira Scotto’s past ratings and performance history

KMI consensus

 

Costco Wholesale Corporation (NASDAQ:COST) fell 3% in pre-market trading following its Q1 2016 earnings release yesterday after market close. The company posted net sales of $26.63 billion, a 1.3% y/y increase, and earnings of $1.09 per share, down from last year’s earnings of $1.12. Following the release, analyst Sean Naughton of Piper Jaffray weighed in on the stock, reiterating his Overweight rating and raising his price target to $174 from $171. The analyst expressed positive sentiment despite the EPS miss. He comments, “The [EPS] miss was largely driven by higher SG&A expenses as well as a slightly unfavorable tax rate and slightly lower MFI than forecast. That said, gross margins continued to show strength… The lighter membership fee growth looks disappointing, but we believe FX continued to have a material impact on reported results and ex-currency is going to be similar to last quarter.” According to TipRanks’ statistics, out of the 13 analysts who have rated COST in the last 3 months, 10 gave a Buy rating while 3 remain on the sidelines. The average 12-month price target is $170.75, marking a 1% upside from where shares last closed.

Click here to see Sean Naughton’s past ratings and performance history

COST consensus

 

Wynn Resorts, Limited (NASDAQ:WYNN) rose over 7% in pre-market trading this morning following yesterday’s news that CEO Stephen Wynn bought over 1 million shares of the company. Mr. Wynn is now the company’s largest shareholder, owning 11.1 million shares. The stock fell close to 60% this year due to investor concern regarding Wynn Resort’s endeavors in Macau. According to TipRanks’ statistics, out of the 6 analysts who have rated WYNN in the last 3 months, 3 gave a Buy rating while 4 remain on the sidelines. The average 12-month price target for the stock is $84.83, marking a 37% upside from where shares last closed.

WYNN consensus