🤖📈 40% Returns on a Barbie Doll Stock

Microsoft's first three-quarters of FY2023 showed mixed results, with Server Products growing the most but still below forecasts, and Azure growth weaker than expected. Windows and Devices revenues declined, while Gaming also saw a drop. Despite these challenges, Microsoft has been focusing on AI-related product developments, integrating AI into Bing, Microsoft365, and Azure OpenAI service. AI-related developments increased by 140% between December 2022 and March 2023. Khaveen Investments forecasts a growth slowdown in FY2023 but maintains a Strong Buy rating with a 74% upside and a price target of $513.86.

American Airlines reported strong Q1 results with robust travel demand. The company and other U.S.-based airlines have improved their business models through consolidation and partnerships with banks on frequent-flier programs. However, increased fuel costs may require American Airlines to raise ticket prices, potentially hampering the travel recovery. The airline also has significant financial leverage and faces an uncertain demand environment, particularly in business travel, which tends to recover slower than the overall economy. Although American Airlines lacks a moat, it has managed to improve its business model along with other U.S.-based airlines. Airlines generally operate in highly competitive markets, making durable cost advantages challenging. American Airlines has a mixed shareholder distribution record, and changes in leadership do not signal significant strategic shifts. The company's new CFO, Devon May, is expected to prioritize profit margin expansion and debt reduction.

Mattel has faced retail clearance issues in the short term, but its long-term brand positioning remains strong. The company has achieved above break-even operating margins since 2019 and is expected to see further adjusted operating margin expansion in 2023. With a shift to a capital-light strategy, Mattel can support profit growth while investing in product innovation. The company aims to elevate core brands, win licenses, and decrease time to market, bolstering sales and market share growth.

A digital plan should enhance brand visibility, and Mattel's top position in toy marketing allows it to maintain key license relationships. Its market share and scale support a narrow moat rating, with continuous innovation being crucial. Mattel's size enables it to fund new products, expand into emerging markets, and make acquisitions. The traditional toy industry is expected to remain stable, with global demand growing. Mattel's licensing tie-ups and its Optimizing for Growth initiative should drive moderate growth and improve operating margins. However, the company faces risks from customer concentration and potential litigation related to product recalls or poor manufacturing. The author has a bullish view on the investment with a price target of $25 (+40%), given Mattel's current strategic direction and efforts to stabilize struggling brands.

Amazon reported above-consensus revenue and EPS for 1Q23 and positive guidance for 2Q23; however, the stock weakened due to concerns about AWS. The company's retail demand reflects the post-pandemic environment and global macroeconomic softening caused by inflation and rising interest rates. Despite AWS deceleration, it remains a growth driver and profit center for Amazon. The company has retained market share gained during the pandemic and is expected to face challenging quarters ahead but continues to possess a strong portfolio of assets. In retail, the increasing contribution from third-party merchants should reduce Amazon's need for aggressive investment in its fulfillment network. The company has cut costs, including headcount reduction and project shutdowns, and focuses on optimizing free cash flow. Although Amazon is likely to face fierce competition in the coming years, it has managed to stay ahead of rivals through innovations like Prime and expanded third-party sales. Amazon has a price target of $165.

Argus maintains a BUY rating for Intel despite the company posting sharp YoY declines in sales and profits for 1Q23, due to weak PC sales, competitive share loss, and supply chain issues. Intel is implementing a "five nodes in four years" strategy through 2025 to regain market leadership and combat AMD's aggressive growth. With valuable franchises in client, data center, and niche markets, Intel plans for long-term capacity expansion. CEO Pat Gelsinger has taken steps to refocus operations, cutting personnel, reducing costs, and selling non-core assets. Intel's divisions, such as Mobileye, show promising growth, but the company faces a challenging 2023 due to weak demand and competition from AMD. Despite uncertainties in the PC and server markets, Intel has a Medium-High financial strength rating and maintains market leadership in microprocessors. Factoring in various valuation inputs, Argus sets a 12-month target price of $42 for Intel, reflecting a risk-adjusted return consistent with a BUY rating.

Altia Consultores S.A. is a Spanish IT company that offers high-value IT services and digital transformation consulting under a B2A and B2B model business. The company has a positive trend for the IT industry and a strong financial position. Altia's activities are divided into seven business areas, and its competitive advantage lies in its ability to provide essential services in operating processes. Altia has acquired three companies to expand into new markets and gain expertise in various industries. The article discusses various financial aspects of Altia, including earnings, capital structure analysis, profitability, solvency, and valuation. The FCF for FY 2022 is negative due to investment in acquisitions, and the integration of Bilbomatica and Wairbut has increased capital employed, eroding ROCE. The article provides a base scenario for valuation, assuming a 10% CAGR in revenues and 10% EBITDA margin, with a projected value per share of EUR 4.54 in 2027 and an upside of 44%.

The article discusses the author's positive view on investing in established restaurant brands that offer a franchise model with a set of standards for success, such as A&W, Pizza Pizza, Keg Royalties Fund, and Boston Pizza Royalties Fund. The author is particularly bullish on Boston Pizza, a Canadian fast casual dining chain that operates under a royalty structure. Despite facing challenges such as a weak local economy and minimum wage hikes, Boston Pizza has performed relatively well, with 2022 sales increasing to $855M. The author sees Boston Pizza as a high-quality bond with potential for 1-3% annual upside from increasing same-store sales, and the current dividend yield is 8.2%. The author acknowledges that Boston Pizza may have periodic dividend cuts as it pays out virtually all of its earnings to shareholders, but the company has a history of increasing dividends and has paid more than $25 per share in dividends since its IPO. The author sees limited downside and a little upside potential in Boston Pizza, making it a good option for predictable income and potential compounding effects.

NatWest, a UK bank, reported stable operational performance and a 19.8% ROTE in Q1 2023. Core deposits declined by 2.6% sequentially, while loan growth was healthy and credit losses remained benign. Management reiterated full-year guidance, including a 14-16% ROTE. NatWest's shares are cheap, with potential for a re-rating to generate a 30-60% gain. The bank's loan book is more than 90% UK, with mortgages accounting for 54%. The UK macroeconomic environment will be a key determinant of returns.

Exxon Mobil has had a successful quarter and remains a strong company, outperforming other oil majors and surpassing Apple's revenue on a TTM basis. With a focus on efficiency, the company has reduced its carbon footprint while increasing production, and its downstream segment is poised to benefit from the "Golden Age" of oil refining. Exxon's disciplined approach to CAPEX and consolidation, along with its commitment to the energy transition, make it a reliable investment choice for those seeking a company that will be around for decades and continue paying dividends.

As a fully integrated oil major with a premium valuation, Exxon's downside is more protected due to its ability to maintain double-digit returns on many projects at $35 per barrel. The stock is currently undervalued, and it is recommended to own the stock directly and enroll in the dividend reinvestment program for long-term investment. The company's financial risks are low, and its clean energy efforts are genuine. Overall, Exxon has consistently delivered to shareholders and continues to drive efficiency, making its dividend safe for the foreseeable future, and it is considered a good buy and hold investment.

Snap Inc.'s stock has plunged after reporting negative revenue growth and a decline in adjusted EBITDA, trading around all-time lows. The company reported a 7% YoY decline in revenue, with a 19% decline in ARPU as the main factor, while competitor Meta Platforms Inc. achieved a 2.7% YoY increase. Snap's gross margins deteriorated due to growth in infrastructure costs. Despite this, management remains optimistic about an eventual acceleration in revenue growth, citing the launch of the augmented reality SaaS offering, Shopping Suite. The stock's valuation is now cheaper, but the narrative has shifted from Snap being a secular grower to a turnaround story. While growth may remain in the mid-single-digits, management's claims of acceleration could imply significant upside potential. Macro and competition factors pose risks, with strong competitors like TikTok and Meta. The author rates Snap a buy but cautions on the high-risk profile of the stock. If management's claims of an acceleration in growth are true, fair value could surge to around 8.3x sales, implying deep triple-digit upside