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Needham cuts its revenue and EPS estimates for Facebook (NASDAQ:FB), citing the coronavirus-related consumer spending slowdown that could impact the largest ad markets.
Analyst Laura Martin says the firm’s channel checks show lower spending in travel, retail, packaged goods, and entertainment, which together represent 30-45% of Facebook’s revenue.
Martin cuts FB’s 2020 revenue estimate from $85.14B to $83.39B. She expects the coronavirus impact to resolve by mid-June.
Facebook shares are down 3.5% pre-market to $178.70.
Deutsche Bank cuts its Apple (NASDAQ:AAPL) target from $305 to $295, citing the “considerable uncertainty” surrounding the coronavirus outbreak.
The firm lowers its March quarter estimate due to Foxconn’s “incremental production-related disclosures” this week.
Deutsche notes that the valuation has become more attractive since the virus-related selloff, but the stock is still trading at a premium to the S&P 500 and tailwinds like AirPods demand and Services don’t justify the difference.
Deutsche maintains a Hold rating on Apple. The company has a Bullish average Sell Side rating.
Apple shares are down 3% pre-market to $283.71.
Facebook (NASDAQ:FB) told employees in the Bay Area to stay home and cancel any trips, while Gap (NYSE:GPS) shuttered its New York City headquarters after a worker tested positive for the coronavirus.
Microsoft (NASDAQ:MSFT) also confirmed that two employees have been diagnosed in Washington’s Puget Sound region, the area that includes its Redmond headquarters.
More bad new for the travel sector… Southwest Airlines (NYSE:LUV) is expecting a hit of up to $300M for first-quarter operating revenue, prompting the carrier to cut its outlook.
Amazon’s (NASDAQ:AMZN) secretive “Project Gesundheit” is working on a cure for the common cold, according to CNBC sources.
The small group of scientists and technologists in the project are working under the umbrella of the Grand Challenge, Amazon’s R&D group within AWS.
The team wants to develop a vaccine but is exploring other approaches.
Project Gesundheit would be Amazon’s latest push into healthcare, which has also included the PillPack acquisition and launch of the employee-focused Amazon Care clinics.
Canaccord Genuity advises investors to consider Salesforce (NYSE:CRM) as the equities markets “meltdown” creates opportunities in the software space.
Analyst Richard Davis says Salesforce “rarely drops out of our top 5 best pick slots for the simple reason the company continues to execute well, and the valuation is attractive.”
The analyst also names Twilio (TWLO -5.5%), Elastic (ESTC -10.7%), Slack (WORK -10.3%), and Avalara (AVLR -6.9%) as worth consideration.
The firm maintains Buy ratings on Salesforce and the other four. Salesforce has a Very Bullish average Sell Side rating.
Salesforce shares are down 5.6% to $160.15.
