Wednesday’s Market Insights: Apple Inc. (AAPL), Twitter Inc (TWTR), Intercept Pharmaceuticals Inc (ICPT), Yelp Inc (YELP)

Apple Inc. (NASDAQ:AAPL) shares are up 1.82% in pre-market trading to $116.63 after the company posted earnings yesterday after market close, leaving investors optimistic for this holiday quarter. The company posted earnings of $1.96 on revenue of $51.5 billion, ahead of estimates of $1.88 and $51.1 billion, respectively. iPhone sales came in at 48.04 million, slightly missing estimates of 48.5 million but up from the 39 million sold in the same quarter of last year, and up from the 47.5 million sold in the previous quarter. Analysts are eager to weigh in on tech giant with Andy Hargreaves of Pacific Crest upgrading the company from Sector Weight to Overweight. The analyst added a $142 price target to his thesis, noting that Apple’s long-term value as the dominant smartphone provider overrides near-term risk as March is always a slow quarter. Hargreaves has rated AAPL 50 times since 2009, earning a 67% success rate recommending the stock with a +28.3% average return per Apple rating. According to the 36 analysts polled by TipRanks in the last 3 months, 28 are bullish on the company, 1 is bearish, and 7 are staying on the sidelines.

Hargreaves stats

Twitter Inc (NYSE:TWTR) shares fell more than 10% in pre-market trading down to $28.08 after the company released earnings yesterday after market close, substantiating revenue and user growth concerns. The social media platform posted revenue of $569.2 million, marking a 57% year-over-year growth but continuing the trend of decelerating figures. Looking forward, Twitter expects to post revenue between $695 million and $710 million for the fourth quarter; well below the analyst consensus of $739.7 million. Another reason for concern is slowing user growth. For the third quarter, Twitter posted 320 MAUs, up from 316 million in the previous quarter but below the analyst estimate of 324 million. This is the slowest publicly reported increase in user growth for the company.  Newly permanent CEO Dorsey warned that it would take time for Twitter to report significant user growth. Analyst Ben Schachter weighed in this morning, reiterating a Neutral rating on the company and lowering his price target from $32 to $25, conveying his uncertainty of Twitter’s ability to achieve mass market penetration. According to the 32 analysts polled by TipRanks in the last 3 months, 18 are bullish on Twitter, 2 are bearish, and 12 are hanging on the sidelines. The average 12-month price target for the stock is $38.65, marking a 23% potential upside from where shares last closed.

Schacter stats

Intercept Pharmaceuticals Inc (NASDAQ:ICPT) slipped 15% in pre-market trading down to $142.34 after the company announced Phase 2 results for OCA in NASH in which the effects of the medication did not meaningfully help the patients. NASH is a liver disease for which there are currently no therapies and OCA is Intercept’s lead product candidate, which had been granted breakthrough therapy designation. Essentially, there was no outcome difference in fibrosis improvement between the OCA groups and the placebo groups, deeming the drug effectively useless. However the drug seemed to be safe and well tolerated. Analysts have yet to weigh in following this news, but according to TipRanks, 3 analysts are bullish on ICPT and 1 is bearish. The average 12-month price target for the stock is $392.50, marking a 134% potential upside from where the stock last closed.

ICPT consensus

Yelp Inc (NYSE:YELP) fell 3.49% in pre-market trading down to $22.10 ahead of its earnings release this afternoon due to Grubhub’s disappointing earnings, which were released yesterday after market close. Yelp purchased the food delivery service earlier this year for approximately $134 million. Grubhub posted flat EPS of $0.08 and only a 6% year-over-year increase in revenue. Darren Aftahi of Roth Capital initiated coverage of Yelp this morning, starting the company at a Sell with a $17.50 price target. The analyst notes that Facebook and Google have low barriers to entry into local searches, serving as a threat to Yelp’s core business. Furthermore, Aftahi notes that Yelp will have to increase spending on marketing and acquiring new users, straining its margins. Aftahi has a 50% success rate recommending stocks with an average loss of -1.1% per rating. According to the 22 analysts polled by TipRanks in the last 3 months, 6 are bullish on Yelp, 2 are bearish, and 14 are neutral. The average 12-month price target for the stock is $28.63, marking a 25% potential upside on the stock.

Aftahi stats

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