On april 25 buy rated twtr closed at 2975 down 072

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On April 25, BUY-rated TWTR closed at $29.75, down $0.72. (Jim Kelleher, CFA, 4/25/18)
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M ARKET D IGEST - 21 - BAKER HUGHES, A GE COMPANY (NYSE: BHGE, $35.11) .................................................. BUY BHGE: Reaffirming BUY with $43 target * On April 20, BHGE reported 1Q18 adjusted net income of $38 million or $0.09 per diluted share. EPS missed our estimate of $0.15 but topped the consensus of $0.07. * The company reported $5.24 billion in new orders, down 8% sequentially but up 9% year-over-year on a combined- company pro forma basis. * We are lowering our 2018 EPS estimate to $0.96 from $1.02 to reflect the 1Q miss relative to our forecast. However, our revised estimate remains above the consensus of $0.80, as we expect the company to benefit from stronger industry fundamentals. * We are maintaining our 2019 EPS estimate of $1.66, implying growth from of 73% from our 2018 forecast. This estimate assumes further improvement in industry fundamentals, as well as greater merger cost synergies. Our estimate is above the 2019 consensus of $1.55. ANALYSIS INVESTMENT THESIS We are reiterating our BUY rating on Baker Hughes, a GE company (NYSE: BHGE) with a price target of $43. The company was formed in early July 2017 from the merger of the former Baker Hughes Inc. and General Electric’s oil and gas business. We expect GE’s strength in digital technology to complement Baker Hughes’ traditional energy services and equipment offerings, and look for the combined company to compete more effectively with close rivals Halliburton and Schlumberger. In addition, despite subpar 1Q18 results, we expect the company to benefit from cost synergies and increased E&P capital spending. Our target of $43 implies a potential total return, including the dividend, of 24% from current levels. RECENT DEVELOPMENTS BHGE shares have outperformed thus far in 2018, rising 11.9%, while the S&P 500 Energy index has climbed 1.0%. * On April 20, BHGE reported 1Q18 adjusted net income of $38 million or $0.09 per diluted share. (There is no prior-year comparison as the company began operation on July 5, 2017.) EPS missed our estimate of $0.15 but topped the consensus estimate of $0.07. In 1Q18, BHGE reported $5.24 billion in new orders, down 8% sequentially but up 9% year-over-year on a combined- company pro forma basis. The sequential decrease reflected lower orders in the long-cycle offshore and international business, while the year-over-year increase was driven by strong demand in the shorter-cycle North American land business. First-quarter revenue, on a combined basis, totaled $5.399 billion, down 7% from the prior quarter but up 1% from the prior year. The new BHGE has four business segments. First-quarter results by segment are summarized below: Oilfield Services (OFS). Pro forma revenue rose 12% from the prior year to $2.678 billion, reflecting increased drilling activity in North America, Latin America, and the Middle East. This was partially offset by lower activity in Europe. Segment pretax operating income came to $141 million, up from $76 million a year earlier, driven by an improved product mix, increased productivity, and merger synergies.
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  • Spring '12
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