Twitter’s stock price target cut as industry challenges remain despite new CEO hire

Twitter Inc.’s stock price target was cut by 23% to $40 by analyst Evan Wilson at Pacific Crest Securities on Tuesday, given concerns over industry challenges, but he kept his rating at overweight because he believes the naming of co-founder Jack Dorsey as its new CEO on Monday could boost investor sentiment over the near term. Twitter’s stock slumped 1.3% in premarket trade, after climbing 7% on Monday. Wilson said that although he believed Twitter’s best option for a CEO was an outsider, his analysis showed that the shares of seven of the eight technology companies covered by Pacific Crest that underwent lengthy CEO searches rose an average of 18% in the 90 days following the new hire. “The quality of the hire (and whether it was an internal or external hire) matters most, but the ‘hope trade’ is clear,” Wilson wrote in a note to clients. He said he’s “much less optimistic” about Twitter’s success with direct advertisers, and is mixed about the opportunities for a fundamental turnaround, but he believes Dorsey is a good fit and the near-term lift to sentiment could give investors a free look at potential big changes. The stock has slumped 22% year to date, while the S&P 500 has slipped 3.5%.

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U.S. home prices climbed 1.2% in August, CoreLogic says

WASHINGTON (Marketwatch) — U.S. home prices rose 1.2% in August to extend the 12-month gain to 6.9%, CoreLogic reported Tuesday. “Home price appreciation in cities like New York, Los Angeles, Dallas, Atlanta and San Francisco remain very strong reflecting higher demand and constrained supplies,” said Anand Nallathambi, president and CEO of CoreLogic. Colorado and Washington state saw the fastest home-price growth, at 10.3%, while Mississippi was the only state where prices fell, down 0.9% in the 12 months to August. CoreLogic forecasts home price growth to slow to 4.3% in the 12 months through Aug. 2016, due to higher mortgage rates and more housing starts.

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Brink’s lowers 2015 outlook on weak U.S., slow Brazil economy

The Brink’s Co. said Tuesday it is lowering its 2015 outlook and adjusting its 2016 outlook to the lower end of the range, hurt by weak operating results in the U.S., the slow economy in Brazil and continued pain being wrought by the strong dollar. The security and cash management services company is now expecting 2015 adjusted per-share earnings to range from $1.40 to $1.50, down from a prior range of $1.55 to $1.75. For 2016, it expects adjusted EPS to come at the low end of its $2.00 to $2.40 range. Revenue is expected to total $3.0 billion for 2016, down from earlier guidance of $3.4 billion. “We are continuing to execute on our strategy to differentiate our service offerings, reduce costs, exit unprofitable markets, and drive a change in our culture,” Chief Executive Tom Schievelbein said in a statement. The company will discuss its strategy at an investor day scheduled for later Tuesday. The guidance comes a day after hedge fund Starboard Value L.P. increased its stake in Brink’s to 12.4%. Starboard sent a letter to Brink’s senior management and board of directors, highlighting the company’s “long track record of poor performance and shareholder frustration,” and proposed ways to create value for shareholders. Shares were not yet active in premarket trade, but are up 22% in the year so far, while the S&P 500 has lost 3.5%.

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AmerisourceBergen to buy sterile preparations provider PharMedium for $2.58 billion

AmerisourceBergen Corp. said on Tuesday it was buying PharMedium Healthcare Holdings for $2.58 billion from private equity investor Clayton, Dubilier & Rice. The pharmaceutical company expects the acquisition of the provider of compound sterile preparations (CSPs) to hospitals to be completed during the first quarter of 2016, and to increase fiscal 2016 earnings per share by 22 cents to 26 cents. AmerisourceBergen expects the deal to generate synergies of $30 million by fiscal 2018. “PharMedium’s impressive track record of growth and proven ability to consistently deliver high quality CSPs in key therapeutic areas make them the undisputed leader in an important growth area of the U.S. healthcare market,” said AmerisourceBergen Chief Executive Steven Collis. AmerisourceBergen’s stock, which edged up 0.6% in premarket trade, had lost 12% over the past three months, while the S&P 500 has slipped 4%.

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PepsiCo. shares rise 2.9% after earnings beat forecasts

PepsiCo Inc. said on Tuesday third-quarter earnings dropped to $533 million, or 36 cents a share, from $2 billion, or $1.32 a share, in the year-ago period. On an adjusted basis, the drinks maker earned $1.35 in the quarter, beating analyst forecasts of earnings of $1.26 a share. The adjusted number excludes 92 cents per share of Venezuela charges as well as other smaller charges, the company said. Revenue for the period fell 5% to $16.33 billion from $17.22 billion last year, exceeding forecasts. For the full year, PepsiCo said it expects foreign-exchange translation to negatively impact core EPS by 11 percentage points. Shares rose 2.9% ahead of the bell.

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SABMiller said to have rejected informal InBev takeover offer: Bloomberg

Brewing major SABMiller PLC is said to have turned down an informal takeover bid from rival Anheuser-Busch InBev NV , Bloomberg reported on Tuesday. Citing people familiar with the matter, the news organization said SABMiller found InBev’s proposal of slightly over 40 pounds ($60.67) a share too low and instead were regarding closer to £45 as a fair deal. SABMiller shares currently trade around £36.77 a share, down 2.3% on Tuesday. News of a potential merger of the two beer giants surfaced in mid-September when SABMiller’s board confirmed press speculation about a takeover.

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Safe Harbor ruling hits U.S. companies transferring EU data

The EU’s top court has struck down a 15-year-old agreement that allowed technology companies such as Facebook and Apple to move customer data from Europe to the U.S. In a decision released Tuesday, the European Court of Justice ruled that the Safe Harbor arrangement, which allows U.S. companies to work around EU data security laws by certifying their own protections, is invalid. It does not remove or reduce the need for authorities in member states to check on the protection given to that data, the court found. The case was heard after a complaint by an Austrian citizen, Maximillian Schrems, to the Irish data watchdog, in which he said the activities of the National Security Agency mean his Facebook data was not adequately shielded from surveillance. The ECJ ruling means customer data should not be transferred to the U.S. on the basis of companies’ self-certification, which could impact the thousands of U.S. businesses making use of the Safe Harbor system.

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Safe Harbor ruling threatens U.S. transfer of EU customer data

The EU’s top court has struck down a 15-year-old agreement that allowed technology companies such as Facebook and Apple to move customer data from Europe to the U.S. In a decision released Tuesday, the European Court of Justice ruled that the Safe Harbor arrangement, which allows U.S. companies to work around EU data security laws by certifying their own protections, is invalid. It does not remove or reduce the need for authorities in member states to check on the protection given to that data, the court found. The case was heard after a complaint by an Austrian citizen, Maximillian Schrems, to the Irish data watchdog, in which he said the activities of the National Security Agency mean his Facebook data was not adequately shielded from surveillance. The ECJ ruling means customer data should not be transferred to the U.S. on the basis of companies’ self-certification, which could impact the thousands of U.S. businesses making use of the Safe Harbor system.

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