Wednesday Morning Pre-Market Insights: Alibaba Group Holding Ltd (BABA), Seadrill Ltd (SDRL), Skyworks Solutions Inc (SWKS), Forward Industries, Inc. (FORD)

Alibaba Group Holding Ltd (NYSE:BABA) shares dropped -6.22% in pre-market trading down to $72.53 after the Chinese e-commerce company released earnings this morning, before market open. Alibaba posted quarterly revenue on $3.265 billion, missing the Street’s estimate of $3.4 billion. Although this is a 28% year-over-year increase, it is the slowest growth rate the company has posted. The company also posted slower growth rates in Gross Merchandise Volume, which grew only 34% year-over-year. Earnings per share came in a $0.59, narrowly beating the analyst consensus estimate of $0.58. Furthermore as a result of the struggling Chinese economy, Alibaba announced a share buyback program for as much as $4 billion to take place over the next 2 years. As of this writing, TipRanks has polled 9 analysts who have rated BABA in the last 3 months. All of the 9 analysts are bullish on the stock with an average 12-month price target of $107, marking a 39% upside from where shares last closed.

Seadrill Ltd (NYSE:SDRL) increased 1.97% in pre-market trading to $8.81 as oil prices increased. The International Energy Agency released a positive report that countered the negative impact of the faltering Chinese economy and consequently, China’s slowing industrial output. China’s economy is flailing as the yuan hit a four-year low last week. Since China is the second –biggest oil consumer behind the U.S., there is a strong chance that a weak yuan has the potential to decrease the demand for fuel. However, the IEA stated that oil demand is increasing in the other parts of the world, which will offset China’s slowing demand. The report noted that although the supply and demand is beginning to rebalance, there is likely to be an oversupply through 2016. According to the 3 analysts polled by TipRanks in the last 3 months, 2 are bearish on SDRL and 1 is neutral. The average 12-month price target on the stock is $10.00, marking a 16% potential upside from where the stock last closed.

Skyworks Solutions Inc (NASDAQ:SWKS) fell -2.96% in pre-market trading to $86.34 as a result of China’s faltering economy. The Chinese yuan hit a new four year low last week, which has deeply impacted several American companies, including Skyworks Solutions. The semiconductor company is one of companies most vulnerable to the Chinese slowdown, as about 83% of its revenue comes from China. In Skyworks Solutions most recent earnings report, the company highlighted revenue potential from the increased demand of smartphones in China, especially opportunities with Xiaomi, the smartphone leader in China. According to 10 analysts polled by TipRanks in the last 3 months, all 10 are bullish on the company. The average 12-month price target for SWKS is $122.70, marking a 38% potential upside from where shares last closed.

Forward Industries, Inc. (NASDAQ:FORD) shares soared 32% in pre-market trading up to $2.25 after the company released third quarter earnings yesterday after market close, despite posting decreasing revenues. The company posted quarterly revenue of $7.2 million, down from $9.0 million in the same quarter of last year. Forward posted earnings per share of $0.06, up from an EPS of ($0.00) in the same quarter of last year. Gross profit increased 18.6% and income operations also increased, jumping from $494,100 compared to $32,700 in the same quarter of last year. CEO Terry Wise commented, “Over the last two quarters we’ve cleaned up all the legacy legal issues, right sized the company and are clearly focused on rebuilding the business to success… Going forward, our focus is now to expand our customer base and broaden our product offering to both new and existing customers.”

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