Equity research roundup: Tesla, Philips, Pfizer and Doordash

News Report for the week of December 14, 2020

TESLA debuts in the S&P500 Index

  • On Friday, December 18th, Tesla marked its grand entrance into the benchmark S&P 500 index, making it the most valuable company to ever be admitted to Wall Street’s main benchmark
  • The Company will account for over 1% of the index
  • Its shares are up 700% YTD, giving it a market value of $600bn+ and making it the sixth most valuable publicly listed U.S. company
  • Tesla is also the most traded stock by value on Wall Street, with $18bn shares traded daily.
  • Analyst Ratings: Buy rating – 13; Hold rating – 11; Sell rating – 11

    Philips acquires BioTelemetry in $2.8bn deal

  • Dutch health technology company Philips announced the acquisition of U.S. cardiac diagnostics and monitoring firm BioTelemetry
  • The $2.8bn deal ($72 per share) deal will strengthen its offering of remote care products. The acquisition price represents a 16.5% premium over the previous day’s closing price
  • BioTelemetry has ~1,900 employees and primarily focuses on the diagnosis and remote monitoring of heart rhythm disorders, a business that represented 85% of its $439mn in sales in 2019
  • It will become part of Philips ' connected care business, which offers a range of platforms and devices that allow patients to stay at home while being monitored. COVID-19 has led to a surge in demand for remote monitoring solutions
  • Analyst Ratings: Buy rating – 18; Hold rating – 7; Sell rating – Nil

    Hyundai Motors buys Controlling Stake in U.S. Robot Firm

  • Hyundai Motor Group announced its plan to purchase a controlling stake in Boston Dynamics from SoftBank Group Corp in a deal that values the U.S.-based robot maker at $1.1bn
  • The purchase would help Hyundai expand automation in its vehicle factories and design autonomous cars, drones, and robots, as it seeks to turn itself from a manufacturer into a broader mobility service provider
  • Hyundai’s new Group Chairman, Euisun Chung has pledged to reduce reliance on traditional car manufacturing and stated that robotics would account for 20% of the firm's future business, while car-making would account for 50% and urban air transport would make up the remaining 30%
  • Boston Dynamics was spun out from the Massachusetts Institute of Technology in 1992 and bought by Alphabet in 2013 and sold to SoftBank in 2017
  • Analyst Ratings: Buy rating – 28; Hold rating – Nil; Sell rating – 1

    Pfizer receives 1st approval in Asia for its COVID vaccine

  • Singapore became the first Asian country to approve Pfizer-BioNTech's coronavirus vaccine and it expects to start receiving shots by the end of the year
  • The government expects to have secured enough vaccines for everyone by the third quarter of 2021
  • Singapore has also signed advanced purchase agreements and made early down-payments on promising vaccine candidates including those being developed by Moderna and Sinovac, setting aside more than S$1bn for vaccine shots
  • The United States, Canada and a handful of other countries have approved the Pfizer and BioNTech SE 22UAy.DE vaccine, with a mass inoculation programme also underway in Britain
  • Worldwide, more than 70mn people have been infected with the virus, with 1.61mn deaths
  • Analyst Ratings: Buy rating – 6; Hold rating – 15; Sell rating – Nil

    Doordash makes spectacular IPO debut

  • DoorDash shares jumped over 80% on listing day, valuing the food delivery company at $71.3bn, or 4x its last private fundraise valuation six months ago
  • Founded in 2013, DoorDash is backed by the Vision Fund managed by Japanese tech giant SoftBank Group, venture capital firm Sequoia Capital and sovereign wealth fund Government of Singapore Investment Corp
  • It rivals include Uber Eats, Grubhub and Postmates, all of whom have benefited from a surge in demand for food delivery services due to COVID-19 restrictions
  • DoorDash revenue for the third quarter ended September reached $879mn, up from $239mn compared with the same period last year
  • Analyst Ratings: Buy rating – Nil; Hold rating – 3; Sell rating – Nil

    AirBNB marks its debut on the Stock Exchange

  • Shares of Airbnb more than doubled in their stock market debut valuing the home rental firm at just over $100bn. This This marks the biggest U.S. IPO of 2020
  • As lockdowns eased around the World, more travellers opted to book homes instead of hotels, helping Airbnb post a surprise profit for the third quarter of 2020
  • Founded in 2008 as a website to take bookings for rooms during conferences, Airbnb's listing was one of the most anticipated U.S. IPOs of 2020
  • Analyst Ratings: Buy rating – 2; Hold rating – 1; Sell rating – 1

    Sinopec receives approval from Russian Govt. to participate in a large-scale Petrochemical Project

  • The Russian government has approved participation of China's Sinopec in a large-scale petrochemical project, in line with Moscow's plans to forge closer ties with Beijing
  • Russia's privately held Sibur petrochemical company is looking to build one of the world's largest polymer-producing plants in the country's far east, targeting the Chinese and broader Asian markets
  • The proposed Amur Gas Chemical Complex will see investments of up to $11bn and is set to start producing 2.3mn tonnes of polyethylene and 400,000 tonnes of polypropylene per year beginning in 2024-2025
  • Sinopec is set to take a 40% stake in the complex
  • Chinese companies have been actively participating in Russia's projects, including in production of oil and gas, amid Moscow's pivot to Asia in times of strained relations with the West over number of issues such as Ukrainian crisis
  • Analyst Ratings: Buy rating – 11; Hold rating – 4; Sell rating – 4

    Moderna set to receive FDA clearance for its COVID vaccine

  • Moderna's COVID vaccine candidate won support from a Food and Drug Administration advisory committee, paving the way for the second vaccine to combat the Covid-19 pandemic to receive full FDA clearance
  • The committee voted 20-0 with one abstention to recommend that the FDA grant Moderna’s emergency use authorization
  • Formal approval from the FDA is expected anytime now and meaning that close to 6mn doses of the Moderna vaccine would be shipped around the country starting from the coming week.
  • Moderna has seen its shares rally more than 635% in 2020.
  • A vaccine from Pfizer & BioNTech won emergency use authorization from the FDA last week
  • Analyst Ratings: Buy rating – 8; Hold rating – 7; Sell rating – 2

    Tencent Group acquires additional 10% stake in Universal Music Group

  • A Tencent led consortium will acquire an additional 10% of Universal Music Group, in a deal that values the world’s biggest music company at $36.8bn
  • The purchase will bring Tencent’s holding in the music group to 20% following a deal last year for a stake at the same valuation
  • For Tencent, the increased stake will help it continue to diversify a business that’s heavily focused on gaming and the Chinese market. Universal Music has been boosted by a surge in streaming that has dragged the industry out of a decade-long slump
  • Earlier in the year, Tencent helped orchestrate the combination of Huya Inc. and DouYu International Holdings, creating a Chinese game-streaming giant with a market value of more than $11bn
  • Analyst Ratings: Buy rating – 47; Hold rating – 3; Sell rating – Nil

    AstraZeneca acquires Alexion Pharmaceuticals in largest biopharma deal of 2020

  • AstraZeneca is shelling out $39bn to buy Alexion Pharmaceuticals in a cash-and-stock deal. The deal values Alexion at $175 per share, a 45% premium to the Boston biotech’s closing price a day earlier
  • Under the terms of the agreement, $60 will go to Alexion shareholders in cash for each Alexion share, with the rest paid in AstraZeneca shares
  • The deal is driven by AstraZeneca’s desire to build a stronger presence in immunology—and to give its top line an immediate boost
  • AstraZeneca, with Alexion's R&D team, will work to build on Alexion's pipeline of 11 molecules across more than 20 clinical-development programmes across the spectrum of indications, in rare diseases and beyond
  • The combined companies will bring together two rapidly converging, patient-centric models of care delivery with combined strengths in immunology, biologics, genomics and oligonucleotides to drive future medicine innovation
  • Analyst Ratings: Buy rating – 19; Hold rating – 4; Sell rating – 3