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Google (NASDAQ:GOOGL) completed its acquisition of Fitbit (NYSE:FIT), according to Google blog post.
Earlier, Fitbit halted for news pending amid ongoing deal with Google.
Update: Reuters reported that the U.S. Justice Department says its review of the deal is ongoing and it “has not reached a final decision about whether to pursue and enforcement action.”
Also recall Dec. 22, Fitbit shares slide 5.5% after Australian regulator rejects Google’s antitrust concessions
Shopify (NYSE:SHOP) moves higher in premarket trading after Oppenheimer upgrades it to an Outperform rating from Perform.
“While the stock has been a big winner since its IPO in 2015, we believe there is still upside from here as the shift to digital Commerce is accelerating and has been catalyzed by the COVID-19 pandemic, and we believe that Shopify is a Digital Commerce category leader, disruptor, and share gainer for the long-term.”
Oppenheimer’s research suggests that the global Commerce TAM will reach ~$255B by 2025. This implies that the Commerce TAM is still lightly penetrated, which creates a long-tail growth opportunity for Shopify to grow at an above SaaS industry average.
“We believe the Shopify story is unique within the software category because the business has an opportunity to become the complete technology stack for brands from the smallest SMB to largest global brands driving potentially hundreds of billions of dollars in GMV through the Shopify Platform.”
The firm assigns a price target of $1,300, which works out to 30X the EV/revenue estimate.
SHOP +2.44% premarket to $1,228.99. It has been a strong week for Shopify with the Affirm IPO racking up a paper gain for the company.
A look ahead to 2021 in IT hardware has Barclays staying Neutral on the group, though alongside some upgrades, its ratings on the sector are growing more positive.
It was a group with mixed results in 2020, analyst Tim Long notes, with the COVID-19 pandemic benefiting some names while hurting others.
About half the companies saw revenue prospects improve after initial lockdowns, Barclays notes: Leading the way there were Ubiquiti (NYSE:UI), Apple (NASDAQ:AAPL) and Corning (NYSE:GLW), to the benefit of their stock prices. But most enterprise names saw negative impact, it notes (see Pure Storage (NYSE:PSTG) and Arista Networks (NYSE:ANET)).
And P/E multiples expanded for most of the companies, even if they’re still below three-year average relative valuations. “We think fundamentals will matter” in 2021 amid a broad lift from a macro recovery.
Three names win upgrades to Overweight and price target increases from Barclays: Corning’s target is raised to $44 from $31, implying 16% upside; it sees strength across the company’s businesses, with Display the most favorable in the near term. Juniper Networks’ (NYSE:JNPR) price target goes to $28 from $24, implying 16% more upside; Barclays is looking for that upside from WLAN, metro routing and Cloud.
And Casa Systems’ (NASDAQ:CASA) target rises to $9 from $6, implying 14% upside: “We like the diversification, execution and operating leverage.”
Moving toward its more lukewarm feelings: Apple continued a strong run in 2020, with revenue upside split pretty evenly between iPhone revenues and strong Macs/iPads on the at-home dynamics. And Barclays’ worries about valuation came alongside a year of about 50% multiple expansion, “so it is becoming more clear that traditional valuation approaches are less meaningful.”
So it’s moving to valuing Apple relative to other mega-cap techs, most of which are in software/Internet. And it’s expecting strong fundamentals for the first half before headwinds (including tough comps) pile up in the second.
Barclays is increasing that price target to $116, but that implies 10% downside this year. “We missed AAPL stock again in 2020 as we did not envision another year of massive P/E multiple expansion,” it says, but it sees less scope for further expansion from these levels.
It’s downgrading HP (NYSE:HPQ) to Underweight from Equal Weight: Though its stock and fundamentals got a lift from work-from-home dynamics, Barclays sees “secular headwinds” in the PC and printing businesses from 2021 on.
And Ubiquiti also benefited from WFH, as well as a telco rebound, but its valuation seems “extended,” and it should see market share stabilization from hotter competition in WLAN. It rates the stock Underweight with a $174 price target, suggesting some 28% downside ahead.
