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Solid operational results from achieving scale of cultivation and store footprint, provides industry leading free cash flow this quarterTALLAHASSEE, Fla., Aug.

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(Bloomberg) — A key supplier to Apple Inc. and a dozen other tech giants plans to split its supply chain between the Chinese market and the U.S., declaring that China’s time as factory to the world is finished because of the trade war.Hon Hai Precision Industry Co. Chairman Young Liu said it’s gradually adding more capacity outside of China, the main base of production for gadgets from iPhones to Dell desktops and Nintendo Switches. The proportion outside the country is now at 30%, up from 25% last June.That ratio will rise as the company — known also as Foxconn — moves more manufacturing to Southeast Asia and other regions to avoid escalating tariffs on Chinese-made goods headed to U.S. markets, Liu told reporters after his company reported financial results.“No matter if it’s India, Southeast Asia or the Americas, there will be a manufacturing ecosystem in each,” Liu said, adding that while China will still play a key role in Foxconn’s manufacturing empire, the country’s “days as the world’s factory are done.”Intensifying trade tensions between Washington and Beijing have pushed device manufacturers to diversify their production bases away from China, and Liu last year said that Apple’s most prized product, the iPhone, can be made outside China if needed. The two nations remain in trade talks, but Liu’s comments affirm a growing expectation that the China-centric electronics supply chain will fragment over the longer term.Read more: Trump Tumult Has Gadget Giants Splitting Along U.S.-China LinesThe Taiwanese company reported better-than-expected net income of NT$22.9 billion ($778 million) for the quarter ended in June, boosted by increased demand for iPads and MacBooks. Revenue was NT$1.13 trillion, but Hon Hai warned it expects its third-quarter sales will be down by double digits relative to 2019 as Apple delays its iPhone launch this year.Hon Hai is bouncing back from a record profit slump in the first quarter as production at its factories recovered and shelter-in-place orders spurred demand for home computing equipment. The pandemic likely boosted iPad and Mac sales, even as Apple store closures weighed on iPhone sales, Apple CEO Tim Cook said on July 31 after reporting quarterly revenue that crushed estimates. Apple accounts for half of Hon Hai’s sales.Read More: Apple Smashes Revenue, IPhone Estimates on Pandemic DemandEven as Apple outperformed, Hon Hai’s other customers have fared less well. Hong Kong-listed subsidiary FIH Mobile Ltd. said in its Aug. 7 earnings release that while Huawei Technologies Co.’s new phones have been popular in China, they missed expectations elsewhere following U.S. sanctions. Another key customer Xiaomi Corp. suffered a backlash in the Indian market amid growing tensions between China and the South Asian country. FIH lost $100 million in the first half.Foxconn has been shaking up its traditionally China-focused operations. Hon Hai is among Apple assembly partners that plan to expand operations in India, potentially helping the iPhone maker grow its presence in the country of 1.3 billion and shift some of the U.S. company’s supply chain outside of China as ties between Washington and Beijing fray.Chinese rivals are also posing a growing challenge. Local electronics titan Luxshare Precision Industry Co. is poised to become the first Chinese homegrown iPhone assembler after sealing a deal in July to buy an Apple handset production plant from Wistron Corp. While Hon Hai will keep assembly orders for premium iPhones, Luxshare will eat into the business for mid-to-entry-level Apple handsets, Fubon Securities analyst Arthur Liao wrote in a July 23 note.Foxconn will work on its component business to maintain tech leadership and it also benefits from its long-term relationship with Apple, Liu said in response to several analysts’ questions about Foxconn’s competitive strategy against the rising Chinese supplier.Orders could be further affected after President Donald Trump issued an executive order barring U.S. residents from doing business with Tencent Holdings Ltd.’s WeChat. Annual iPhone shipments could plunge 25%-30% if Apple is forced to remove the app from its app stores worldwide, TF International Securities analyst Kuo Ming-chi warned in an August 9 note.(Updates with comments from chairman from first paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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Top news and what to watch in the markets on Wednesday, August 12, 2020.

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Shares in Moderna (MRNA) spiked 11% in Tuesday’s after-hours trading after the company announced a $1.525 billion supply deal with the U.S. government for 100 million doses of its Covid-19 vaccine mRNA-1273.According to the statement, the award is for the manufacturing and delivery of 100 million doses of mRNA-1273 including incentive payments for timely delivery of the product.With the previous award of up to $955 million from BARDA for the development of mRNA-1273 to licensure, this latest announcement brings the U.S. government commitments for early access to mRNA-1273 to up to $2.48 billion.Plus the U.S. government, as part of Operation Warp Speed, will also have the option to purchase up to an additional 400 million doses of mRNA-1273.“We appreciate the confidence of the U.S. government in our mRNA vaccine platform and the continued support,” said Stéphane Bancel, Moderna’s CEO. “We are advancing the clinical development of mRNA-1273 with the ongoing Phase 3 study being conducted in collaboration with NIAID and BARDA. In parallel, we are scaling up our manufacturing capability with our strategic partners, Lonza, Catalent and Rovi, to address this global health emergency with a safe and effective vaccine.”mRNA-1273 is an mRNA vaccine against COVID-19 encoding for a prefusion stabilized form of the Spike (S) protein, and is being co-developed by Moderna and investigators from the National Institute of Allergy and Infectious Disease’s (NIAID) Vaccine Research Center.The Phase 3 COVE study of mRNA-1273 began on July 27; enrollment is on track to complete in September.With optimism building over mRNA-1273, shares in Moderna have exploded by over 250% year-to-date. And the stock boasts a bullish Strong Buy consensus from the Street alongside a $94 average analyst price target– indicating further upside potential lies ahead.Oppenheimer analyst Hartaj Singh writes: “While MRNA navigates vaccine supply agreements and a potential commercialization of mRNA-1273, we anticipate volatility in the shares to continue. Nonetheless, clinical updates from P2 and eventually P3, in parallel with a further clarified regulatory path to approval, position MRNA well over the coming 12-18 months, in our view.”Accordingly, Singh keeps his buy rating on the stock with a $108 price target (57% upside potential), adding that MRNA’s peak annual revenue of $5B to $10B for mRNA-1273 could be achieved in 1/2 the time required by its BioPharma peers historically, fueled by a scalable platform and strong execution. (See Moderna stock analysis on TipRanks).Related News: Pfizer Inks Deal To Manufacture Gilead’s Covid-19 Remdesivir Treatment Inovio To Start P2/3 Study Of Covid-19 Candidate In Sept.; Shares Drop 8% Novavax Rises 5% On Earnings; $2B Covid-19 Vaccine Funding More recent articles from Smarter Analyst: * J2 Global Surges 15% On Earnings Beat; RBC Upgrades To ‘Buy’ * Boeing’s Aircraft Deliveries Drop In July As More 737 MAX Cancellations Hit * MPLX Prices $3B Public Offering; RBC Capital Bullish On Outlook * Needham Raises Electronic Arts’ PT On Strong Gaming Demand

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Typically, investors consider consumer staple stocks as safe bets during economic slowdowns or recessions. The defensive nature of consumer staples and attractive dividends make them desirable during challenging times.Generally, consumer staples do not deliver spectacular sales growth rates. However, COVID-19 changed that for some companies like Clorox. Heightened focus on sanitizing and cleaning led to a major spike in Clorox’s sales. Procter & Gamble is another staples company that benefited from higher pandemic-led demand for some of its products.Using the TipRanks’ Stock Comparison tool, we lined up the two staples alongside each other to see which stock offers the most compelling investment opportunity right now.Clorox (CLX)Clorox has been experiencing an unprecedented demand for its disinfecting and cleaning products since the COVID-19 outbreak. The company finished fiscal 2020 on a strong note with consumers stocking up its namesake Clorox bleach brand and other cleaning products to fight the pandemic. Despite additional capacity, many of the company’s products went out of stock due to the elevated demand.In the fiscal fourth quarter (April to June quarter), Clorox’s sales surged 22% year-over-year to $1.98 billion. The top line was supported by double-digit growth across all the four segments – Health and Wellness, Household, Lifestyle and International. The Health and Wellness segment’s sales were up 33%, driven by strong sales of cleaning products.The stay-at-home mandates helped in driving higher sales of bags and wraps as well as grilling products and led to a 17% increase in the Household segment’s sales. The Health and Wellness and Household segments together accounted for over 71% of Clorox’s fourth-quarter sales. Impressive fourth-quarter sales led to an EPS of $2.41, reflecting a 28.2% year-over-year growth. However, higher manufacturing and logistics costs as well as advertising investments were a drag on the bottom line.Increased cleaning and hygiene needs might continue to benefit Clorox. However, the rate of sales growth might not be as strong as that in the fiscal fourth quarter. The company’s fiscal 2020 sales and EPS grew by 8.2% and 16.5%, respectively. Clorox predicts a flat to low single-digit rise in its fiscal 2021 sales and a mid-single-digit decline to mid-single-digit growth in EPS.Clorox aims to boost its sales through innovation. Also, recent strategic partnerships with United Airlines, Uber Technologies, AMC Theaters and Cleveland Clinic to maintain safety protocols amid the pandemic are expected to further enhance sales.Clorox stock has gained 52% year-to-date. Despite robust sales momentum, several analysts are on the sidelines due to valuation concerns. Following the fiscal fourth-quarter results, Credit Suisse analyst Kaumil Gajrawala raised the price target for Clorox stock to $200 from $185 while maintaining a Neutral rating.He noted, “Clorox delivered a strong quarter behind continued elevated demand across its portfolio due to COVID-19. Capacity shortage, particularly in cleaning and disinfecting products, has been met with inventory drawdowns and new co-packers. Firm is investing aggressively behind its brands and increased production. This should support high rates of growth through the remainder of 2020 as consumption shows little signs of abating and inventories (both company and channel) still need to get replenished. Valuation keeps us on the sidelines.”Overall, Clorox has a Hold analyst consensus rating from the Street based on 2 Buys, 5 Holds and 2 Sells. The average price target of $223.33 implies a possible decline of 4.3% over the next year. (See Clorox stock analysis on TipRanks)Procter & Gamble (PG)Leading staples firm Procter & Gamble is recognized worldwide through several popular brands, including Ariel, Gillette, Head & Shoulders, Pampers and Tide. Since the COVID-19 crisis, Procter & Gamble has been experiencing higher demand for categories like fabric care, home cleaning and dishwashing products, as well as baby, feminine and family care products. The company’s personal health care business also gained from pandemic-led demand.However, movement restrictions and travel disruptions to curb the virus have hurt the sales of some of the company’s beauty and grooming products. Overall, Procter & Gamble’s fiscal fourth-quarter sales of $17.7 billion were up 3.5% year-over-year. The fourth-quarter adjusted EPS grew by 5.5% to $1.16. Higher sales coupled with productivity savings drove the earnings growth.Summarizing fiscal 2020, the company’s sales and EPS rose 4.8% and 13.3%, respectively. Looking ahead, Procter & Gamble expects sales growth of 1% to 3% in fiscal 2021. It predicts fiscal 2021 adjusted EPS growth in the range of 3% to 7%. The company’s conservative guidance compared to fiscal 2020 reflects the impact of a challenging macro environment, the corona crisis and intense competition.Procter & Gamble stock has risen 7% year-to-date and several analysts raised their price target for PG following the company’s fiscal fourth-quarter results. Berenberg Bank analyst James Targett upped his price target to $136 from $123.In a research note, he explained, “We understand investors’ current attraction to P&G due to its categories, balance sheet, buyback and dividend. These factors position it well into FY21. P&G is showing encouraging market share momentum (up 50bp globally in Q4), with higher shares online, and management again reiterated that P&G’s product offer is better positioned than in the previous recession.” However, the analyst maintained his Hold rating owing to “less exciting” valuation.Procter & Gamble has a cautiously optimistic Moderate Buy analyst consensus rating based on 8 Buys and 4 Holds. The Street’s average price target of $141.08 reflects an upside potential of 5.21% over the next 12-months. (See Procter & Gamble stock analysis on TipRanks)So which stock is better?Both Clorox and Procter & Gamble might continue to enjoy strong demand for certain categories, especially cleaning products, even when the pandemic fades. However, Wall Street consensus rating, upside potential and Clorox’s comparatively lofty valuation make Procter & Gamble a more compelling investment. Procter & Gamble’s current dividend yield of 2.36% compared to Clorox’s 1.90% also acts in its favor.To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment More recent articles from Smarter Analyst: * Zoom Video Drops 8% After Salesforce Sells Off Stake * J2 Global Surges 15% On Earnings Beat; RBC Upgrades To ‘Buy’ * Boeing’s Aircraft Deliveries Drop In July As More 737 MAX Cancellations Hit * MPLX Prices $3B Public Offering; RBC Capital Bullish On Outlook

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An Eastman Kodak Co. (NYSE: KODK) board member and his wife donated nearly half their stock holding in the company, amounting to 3 million shares, to a religious charity on a day when the company's stock hit its highest valuation since 2014, the Wall Street Journal reported Tuesday. What Happened George Karfunkel and his wife Renee Karfunkel made the donation to New York-based Congregation Chemdas Yisroel on July 29, according to a filing with the United States Securities and Exchange Commission. The donation, thought to be the largest made to a religious organization based on a list maintained by the Chronicle of Philanthropy, is valued at about $116.3 million, based on the Kodak stock's average trading price of $38.75 per share on that day, with an intraday low of $17.5 and high of $60.The New York charity's registration filings indicate that the benefactor Kodak board member Karfunkel is also its president, as per the Journal. The donation has the potential to give the couple a tax break in the region of tens of millions of dollars. The company told the Journal it had retained the law firm Akin Gump Strauss Hauer & Feld to conduct an internal review and that the Karfunkels' donation was within the ambit of that probe.Why It Matters The SEC is investigating events surrounding a July 27 announcement of Kodak receiving a $765 million federal loan for its foray into pharmaceuticals.The announcement had caused the shares of the former photography giant to surge 25% on the same day.The federal government has halted the loan until the company is cleared of allegations, which also extend to Kodak CEO Jim Continenza receiving options on $1.75 million shares a day before the disclosure of the loan.Continenza backed the government's move to suspend the loan at the company's earnings call on Tuesday, the Journal reported separately.The Rochester, New York-based company said that if the loan does not materialize, it still plans to continue its expansion into pharmaceuticals. Kodak on Tuesday reported a net loss of $5 million in the second quarter compared with net income of $201 million in the same period last year.Price Action Kodak shares closed nearly 6.7% lower at $10.01 on Tuesday, but rose 4.4% in the after-hours.Photo courtesy: Michael Tomczyk via WikimediaSee more from Benzinga * Kodak 5M Federal Loan For Generic Drugs Paused Until Allegations Are Probed(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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Shares in Plug Power (PLUG) plunged 7% in Tuesday’s after-hours trading after the energy giant announced that it is launching a registered public offering of $300 million of its common stock.In connection with the offering, Plug Power also intends to grant the underwriter a 30-day option to purchase up to $45 million of additional shares of common stock.According to the statement, PLUG intends to use the net proceeds from the offering for working capital and other general corporate purposes, which may include capital expenditures, potential acquisitions, growth opportunities and strategic transactions.However, Plug Power adds that it has not designated any specific uses and has no current agreement with respect to any acquisition or strategic transaction.Shares in PLUG have exploded by over 257% year-to-date, and analysts continue to have a bullish Strong Buy consensus on the stock with 8 recent buy ratings vs 2 hold ratings. That’s alongside an average analyst price target of $12 (6% upside potential).Oppenheimer analyst Colin Rusch bumped up his price target to $13 and reiterated a buy rating on the stock after Plug Power posted a beat and raise quarter. The company also guided well ahead of the Street for 3Q20 while indicating that it was fully booked for its 2020 guidance.“We continue to believe that PLUG has the most mature motive fuel cell platform in the market coupled with the largest network of fueling infrastructure” commented Rusch, adding that he sees upside to near-term expectations due to growth in home delivery and pressure to increase through-put on warehouses. (See PLUG stock analysis on TipRanks)Related News: Plug Power Spikes A Further 19% On Major UK Supermarket Deal Tesla Rises 6% In After-Hours On 5-for-1 Stock Split US retailers are counting on Chinese consumers this earnings season More recent articles from Smarter Analyst: * Zoom Video Drops 8% After Salesforce Sells Off Stake * J2 Global Surges 15% On Earnings Beat; RBC Upgrades To ‘Buy’ * Boeing’s Aircraft Deliveries Drop In July As More 737 MAX Cancellations Hit * MPLX Prices $3B Public Offering; RBC Capital Bullish On Outlook

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