Investing.com – Here’s a weekly pro recap of the biggest headlines outside of tech this week: Tesla cuts again after record rally, but gains more momentum for supercharger network. FTC accuses Amazon of deceptive consumer-facing practices; PayPal has scored a major loan deal with KKR; And MongoDB It’s riding high after a strong investor day.
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Tesla’s Superchargers Consolidate Their Dominance, Even As Shares Decline Again
Rivian (NASDAQ: ) said Tuesday it will adopt Tesla’s (NASDAQ: ) charging standard, meaning owners of its electric vehicles will have access to its already dominant Supercharger network.
That access should open by early spring next year, and Rivian says Tesla-style charging ports will be standard on EVs starting in 2025.
The announcement follows other recent deals with General Motors (NYSE: ) and Ford (NYSE: ) that appear to add more momentum to Tesla’s push to make superchargers standard for EVs in the U.S. and Canada.
Still, over the weekend Morgan Stanley downgraded Tesla shares from overweight to equal weight after their recent massive rally pushed the company to a “fair” rating.
The analyst has been a vocal Tesla bull in recent years, but is now stepping aside, in a note to clients:
I have to be up front with you all. When the group defends Tesla [Overweight] Rating the entire year, I didn’t see this 111% YTD rally coming (the S&P 500 is 14% YTD, for context). We think it’s understandable and we’re sympathetic to the changes in the market narrative around the name.
The downgrade call was largely based on its valuation, the firm added, emphasizing that Tesla “remains a ‘buy’ company in any EV portfolio, benefiting from the AI frenzy on Wall Street.” It added:
We’re seeing continued evidence that Tesla is emerging as the industry ‘standard bearer’ for one of the biggest industry changes we’ve seen in over a century – electric transportation and the renewable energy economy.
The analyst also raised his price target to $250 per share from the previous $200, with the new target a modest discount on Tesla’s $256.60 on Friday — down 3% for the week. This is the third decline for Tesla stock this month, after analysts at Barclays and CFRA downgraded shares to neutral ratings.
The FTC has accused Amazon of violating consumer protection laws.
The Federal Trade Commission on Wednesday sued Amazon (NASDAQ: NASDAQ: ) in Washington state federal court for violating consumer protection laws. The suit alleges that Amazon’s website knowingly “tricked” millions of consumers into signing up for Prime and then made it difficult for them to cancel.
Prime is Amazon’s paid subscription service that includes fast delivery and access to streaming videos, songs and other features. The service costs $139 per year.
Amazon used deceptive, coercive or deceptive user-interface designs known as “dark patterns” to trick consumers into automatically renewing Prime subscriptions, the FTC said. It then complicated the cancellation process by identifying Premier subscribers who wanted to cancel their membership.
FTC Chairwoman Lena M. Kahn said, “Amazon is not only frustrating consumers by tricking and trapping people into recurring subscriptions without their consent, it’s also costing them a lot of money.” “These scams hurt consumers and law-abiding businesses. The FTC will continue to protect Americans from ‘dark patterns’ and other unfair or deceptive practices in digital markets.
BofA reiterated its buy rating on Amazon because it believes the lawsuit is expected, saying Amazon’s stock’s reaction to the announcement shows the path is less of a threat. Noticed:
In our view, the lawsuit shows that the FTC does not have more influence to pursue, such as pricing policy, 3P payments, or 1P product competition.
Shares rose 1.25% for the week.
PayPal advances on $3.3B loan deal with KKR.
PayPal (NASDAQ: ) rose on Tuesday after a $3.3 billion buyout of a sell-now, pay-later (BNPL) loan in Europe to private equity firm KKR (NYSE: ) . KKR also agreed to buy futures loans, with a total deal value of about $43.6B.
BNPL is an increasingly popular payment method that allows customers to pay the purchase cost over time.
“Our partnership with KKR will allow us to secure free cash flow for other strategic initiatives alongside market demand in Europe to accelerate PayPal’s post-payment origination,” said Gabrielle Rabinovitch, Acting CFO of PayPal.
PayPal will set aside about $1B for additional stock buybacks in 2023, increasing the total amount from $4B to $5B after the deal closes.
Keefe, Bruyette & Woods said the news should be a “positive headline.”
PayPal shares rose 3 percent following the announcement, and are up 1.5 percent for the week. Year-to-date, the stock is down 10%, lagging broader markets.
Analysts raise MongoDB targets after positive investor day
Wall Street analysts weighed in positively on MongoDB (NASDAQ: ) at an investor event in New York on Thursday.
Analysts such as Mizuho and Stifel raised their price targets on the stock after the company unexpectedly announced a new stream processing offering.
Mizuho, which raised its price target to $240 per share, wrote: “We view this as an exciting new opportunity for the company. even though even though even though even though even though Even though MDB can extend its value proposition beyond databases, it is still in the process of becoming an independently rated inventory.
Stifel reiterated a buy rating on the stock and raised its price target to $420 per share.
“The new announcements were very well received by customers and partners we spoke to throughout the day. Overall, the pace of new product introductions accelerated Mongo, solidifying its leadership position among developer data platforms,” he said in a client note.
MongoDB shares closed up more than 4% on Thursday, and are up a fraction for the week.
Senad Karahmetovic contributed to this report.
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