Yevgeny Prigozhin believed killed in plane crash
Russia's most powerful mercenary Yevgeny Prigozhin was on board a plane which crashed on Wednesday evening north of Moscow with no survivors, the Russian authorities said, two months to the day after he led an abortive mutiny against the army top brass.
There was no official comment from the Kremlin or the Defence Ministry on the fate of Prigozhin, head of the Wagner mercenary group and a self-declared enemy of the army's leadership over what he argued was its incompetent prosecution of Russia's war in Ukraine.
A Telegram channel linked to Wagner, Grey Zone, pronounced him dead, however, and hailed him as a hero and a patriot who it said had died at the hands of unidentified people it called "traitors to Russia."
Amid fevered speculation and an absence of verifiable facts, some of his supporters pointed the finger of blame at the Russian state, others at Ukraine which was due to mark its Independence Day on Thursday.
Others who have opposed President Vladimir Putin or his interests have also died under unclear circumstances or come close to death, including outspoken political leaders and journalists.
A building housing Wagner's offices in St Petersburg lit up its windows after dark in such a way as to display a giant cross in a mark of respect and mourning. Flowers were left and candles lit near the offices early on Thursday.
Prigozhin's death would leave the Wagner Group, which incurred Putin's wrath in June by staging an abortive armed mutiny against the army's top brass, leaderless and raise questions about its future operations in Africa and elsewhere.
Whoever or whatever was behind the crash, his death would also rid Putin of someone who had mounted the most serious challenge to the Russian leader's authority since he came to power in 1999.
The Brazilian Embraer Legacy 600 model of executive jet that crashed has only recorded one accident in over 20 years of service, according to website International Aviation HQ, and it was not due to mechanical failure.
A 2008 Brazilian air force report blamed two U.S. pilots, traffic controllers and faulty communications for the mid-air collision, while a lawyer for the pilots said individual air traffic controllers and flaws in Brazil's air traffic control system caused the accident.
Embraer said it has complied with international sanctions imposed on Russia and had not provided maintenance for the aircraft since 2019.
The plane showed no sign of a problem until a precipitous drop in its final 30 seconds, according to flight-tracking data.
WAGNER CO-FOUNDER ALSO ON PLANE
Rosaviatsia, Russia's aviation agency, published the names of all 10 people on board the downed plane, including Prigozhin and that of Dmitry Utkin, his right-hand man who helped found the mercenary group and bore the call sign "Wagner".
Russian investigators said they had opened a criminal investigation. Some unnamed sources told Russian media they believed the plane had been shot down by one or more surface-to-air missiles. Reuters could not confirm that.
The aircraft, which had been travelling from Moscow to St. Petersburg, crashed near the village of Kuzhenkino in the Tver Region, Russia's emergency situations ministry said.
Abbas Gallyamov, a former Putin speech writer turned critic whom the Russian authorities have branded a "foreign agent", suggested the Russian leader, who is expected to run for another term in office next year, was behind the crash and had strengthened his authority in the process.
"The establishment is now convinced that it will not be possible to oppose Putin," Gallyamov wrote on Telegram. "Putin is strong enough and capable of revenge."
Bill Browder, a businessman with years of experience in Russia and another Kremlin critic, agreed.
"Putin never forgives and never forgets. He looked like a humiliated weakling with Prigozhin running around without a care in the world (after the mutiny). This will cement his authority," Browder wrote on X, formerly known as Twitter.
On a visit to California, U.S. President Joe Biden told reporters he did not know what had happened.
"But I’m not surprised," Biden said. "There is not much that happens in Russia that Putin is not behind."
SECOND PLANE LINKED TO PRIGOZHIN
Flightradar24 online tracker showed that the Embraer plane (registration number RA-02795) carrying Prigozhin had dropped off the radar at 6:11 p.m. (1511 GMT). An unverified video clip posted to social media showed a plane resembling a private jet falling out of the sky.
Another unverified clip showed the burning wreckage of the plane on the ground. At least one body was visible. Rescuers had recovered seven bodies from the scene, TASS reported.
Soon after the plane crashed, a second private jet linked to Prigozhin which also appeared to be heading to St. Petersburg, Prigozhin's home base, turned back to Moscow, flight tracking data showed, and later landed.
Prigozhin, 62, spearheaded the mutiny against Russia's top army brass on June 23-24 which Putin said could have tipped Russia into civil war. Wagner fighters shot down Russian attack helicopters during the revolt, killing an unconfirmed number of pilots, infuriating the military.
He has also spent months criticising Russia's war in Ukraine, something Moscow calls a "special military operation", and had tried to topple Defence Minister Sergei Shoigu and Valery Gerasimov, the chief of the General Staff.
Many Russians had wondered how he was able to get away with such brazen criticism without consequence.
The mutiny was ended by an apparent Kremlin deal which saw Prigozhin agree to relocate to neighbouring Belarus. But in practice he had appeared to move freely inside Russia after the agreement which had reportedly guaranteed his personal safety.
Prigozhin posted a video address on Monday which he suggested was made in Africa. He turned up at a Russia-Africa summit in St Petersburg in July.
Unconfirmed Russian media reports said that Prigozhin and his associates had attended a meeting on Wednesday with officials from the Russian Defence Ministry. Reuters could not confirm that.
Other News
Here is your Pro Recap of the top takeaways from Wall Street analysts for the past week: upgrades for Dupont, Datadog and NetApp.
U.S. markets closed for Memorial Day.
Dupont
What happened? On Tuesday, Citi upgraded Dupont (NYSE:DD) to Buy with $95 price target
What’s the full story? DD shares exhibited a robust reaction in the 1.5 days following the announcement, rising approximately 3%. The feedback from investors was positive - the prospect of operating as standalone businesses should generate value through targeted growth and portfolio clarity. Additionally, Citi sees potential from an electronics recovery and the easing of destocking in more challenged markets.
The most significant source of resistance lies in valuation, particularly concerning Electronics and then New DuPont (RemainCo). Upon revisiting the Sum of the Parts in the new construct, The analysts’ views are more reflective of solid earnings from electronics over the next 18 months.
Citi sees the potential for more detail on the separation as potential positive catalysts throughout the year.
Buy at Citi means “Buy (1) ETR of 15% or more or 25% or more for High risk stocks.”
How did the stock react? Dupont opened the regular session at $82.44 and closed at
$82.08, a
gain of 1.18% from the prior day's regular close.
Mind Medicine
What happened? On Wednesday, well Tuesday after hours, Baird initiated coverage on Mind Medicine Inc (NASDAQ:MNMD) at Outperform with a $27 price target.
What’s the full story? Baird’s optimistic stance is primarily driven by the promising prospects of the company’s lead drug, MM120, a novel form of LSD designed to treat generalized anxiety disorder (GAD). In a pivotal phase 2b clinical trial, MM120 demonstrated a statistically significant improvement in GAD symptoms compared to a placebo. The results are particularly noteworthy as the observed therapeutic effect of MM120 was not only rapid in onset but also sustained over the entire 12-week duration of the study.
The brokerage house’s confidence is further bolstered by the recent decision of the FDA to award Breakthrough Therapy Designation to MM120. This designation is reserved for drugs that show substantial improvement over existing therapies for serious or life-threatening diseases. The fact that MM120’s impact was greater than that of currently approved treatments after just a single dose highlights its potential to be a game-changer in the GAD treatment landscape.
Considering the current market dynamics and the unmet medical needs within the GAD space, Baird views the market opportunity for MM120 as having blockbuster potential. The brokerage house’s analysis suggests that the drug could significantly disrupt the existing market, offering a new and potentially superior treatment option for patients suffering from GAD. This could translate into substantial financial success for the company, justifying the high expectations reflected in the $27 price target
Outperform at Baird means “Expected to outperform on a total return, risk-adjusted basis the broader U.S. equity market over the next 12 months.”
How did the stock react? Mind Medicine surged 6% after hours on Tuesday as the headlines
circulate. As of the regular session open Wednesday, Mind Medicine opened at $8.90 and
closed at $8.91, a gain of 6.64% from the prior day's regular close.
Datadog Inc
What happened? On Thursday, BofA upgraded Datadog (NASDAQ:DDOG) to Buy with a $155 price target.
What’s the full story? Datadog, a service that aids organizations in monitoring application and infrastructure performance to ensure high-quality end-user experiences, is seen by the bank as a significant opportunity, estimated to be worth $53bn. The robust platform of Datadog, which boasts 22 products, is particularly appealing to spend consolidators and those seeking cutting-edge technology.
Furthermore, BofA anticipates that Datadog will consistently deliver a Rule-of-40+ profile, which means 20%+ revenue growth plus 20%+ free cash flow margin. This expectation places Datadog well above the 30% average for the infrastructure peer group, demonstrating the bank’s confidence in Datadog’s potential for sustained growth and profitability.
Buy at BofA means “Buy stocks are expected to have a total return of at least 10% and are the most attractive stocks in the coverage cluster.”
How did the stock react? Datadog opened the regular session at $123.38 and closed at
$117.45,
a decline of 3.48% from the prior day's regular close.
NetApp
What happened? On Friday, JPMorgan upgraded NetApp (NASDAQ:NTAP) to Neutral with a $125 price target.
What’s the full story? JPMorgan’s updated perspective is driven by the company’s demonstrated capability to maintain its gross margins in the face of escalating NAND prices. This development stands in contrast to JPMorgan’s initial forecast, which anticipated a decline in margins due to the cost pressures.
In addition to the positive outlook on gross margins, JPMorgan continues to recognize NTAP’s distinct position in the market, particularly in terms of its Cloud services and its leadership in All-Flash Arrays (AFA) for on-premises solutions. However, this is tempered by a perceived lackluster macroeconomic performance when compared to its peers, who are currently experiencing a more immediate surge in demand driven by Artificial Intelligence (AI) advancements.
Neutral at JPMorgan means “over the duration of the price target indicated in this report, we expect this stock will perform in line with the average total return of the stocks in the Research Analyst’s, or the Research Analyst’s team’s, coverage universe.”
How did the stock react? NetApp opened the regular session at $119.75 and closed at $120.43, a gain of 3.73% from the prior day's regular close.
OPEC+ agreed on Sunday to extend most of its deep oil output cuts well into 2025 as the group seeks to shore up the market amid tepid demand growth, high interest rates and rising rival U.S. production.
Brent crude oil prices have been trading near $80 per barrel in recent days, below what many OPEC+ members need to balance their budgets. Worries over slow demand growth in top oil importer China have weighed on prices alongside rising oil stocks in developed economies.
The Organization of the Petroleum Exporting Countries and allies led by Russia, together known as OPEC+, have made a series of deep output cuts since late 2022.
OPEC+ members are currently cutting output by a total of 5.86 million barrels per day (bpd), or about 5.7% of global demand.
Those include 3.66 million bpd of cuts, which were due to expire at the end of 2024, and voluntary cuts by eight members of 2.2 million bpd, expiring at the end of June 2024.
On Sunday, OPEC+ agreed to extend the cuts of 3.66 million bpd by a year until the end of 2025 and prolong the cuts of 2.2 million bpd by three months until the end of September 2024.
OPEC+ will gradually phase out the cuts of 2.2 million bpd over the course of a year from October 2024 to September 2025.
"We are waiting for interest rates to come down and a better trajectory when it comes to economic growth ... not pockets of growth here and there," Saudi Energy Minister Prince Abdulaziz bin Salman told reporters.
OPEC expects demand for OPEC+ crude to average 43.65 million bpd in the second half of 2024, implying a stocks drawdown of 2.63 million bpd if the group maintains output at April's rate of 41.02 million bpd.
The drawdown will be less when OPEC+ starts phasing out the 2.2 million bpd voluntary cuts in October.
The International Energy Agency, which represents top global consumers, estimates that demand for OPEC+ oil plus stocks will average much lower levels of 41.9 million bpd in 2024.
"The deal should allay market fears of OPEC+ adding back barrels at a time when demand concerns are still rife," said Amrita Sen, co-founder of Energy Aspects think tank.
Prince Abdulaziz said OPEC+ could pause the unwinding of cuts or reverse them if demand wasn't strong enough.
QUICK DEAL
Analysts had expected OPEC+ to prolong voluntary cuts by a few months due to falling oil prices and sluggish demand.
But many analysts had also predicted the group would struggle to set targets for 2025 as it had yet to agree individual capacity targets for each member, an issue that had previously created tensions.
The United Arab Emirates, for instance, has been pushing for a higher production quota, arguing its capacity figure had been long under-estimated.
But in a surprise development on Sunday, OPEC+ postponed the discussions on capacities until November 2025 from this year.
Instead, the group agreed a new output target for the UAE which will be allowed to gradually raise production by 0.3 million bpd, up from the current level of 2.9 million.
OPEC+ agreed that it would use independently assessed capacity figures as guidance for 2026 production instead of 2025 - postponing a potentially difficult discussion by one year.
Prince Abdulaziz said one of the reasons for the delay was difficulties for independent consultants to assess Russian data amid Western sanctions on Moscow for its war on Ukraine.
The meetings on Sunday lasted less than four hours - relatively short for such a complex deal.
OPEC+ sources said Prince Abdulaziz, the most influential minister in the OPEC group, had spent days preparing the deal behind the scenes.
He invited some key ministers - mostly those who contributed to the voluntary cuts - to come to the Saudi capital Riyadh on Sunday despite meetings being largely scheduled online.
The countries which have made voluntary cuts to output are Algeria, Iraq, Kazakhstan, Kuwait, Oman, Russia, Saudi Arabia and the United Arab Emirates.
"It should be seen as a huge victory of solidarity for the group and Prince Abdulaziz," said Sen, adding the deal would ease fears of Saudi Arabia adding barrels back due to Aramco (TADAWUL:2222)'s share listing.
Saudi Arabia's government has filed papers to sell a new stake in state oil giant Aramco that could raise as much as $13.1 billion, a landmark deal to help fund Crown Prince Mohammed bin Salman's plan to diversify the economy.
OPEC+ will hold its next meeting on Dec. 1, 2024.
Here are the biggest analyst moves in the area of artificial intelligence (AI) for this week.
1. AI-enabled upgrade is coming:’ Apple reiterated as Top Pick at BofA
Bank of America reiterated Apple (NASDAQ:AAPL) stock as their Top Pick, maintaining a price target of $230.
In particular, Wall Street giant analysts are bullish about Apple's transition from smartphones to "IntelliPhones," predicting a significant multi-year upgrade cycle.
"We view the upcoming AI-enabled phones (IntelliPhones) to drive a multi-year upgrade cycle similar to the step function improvement driven by the introduction of smartphones," the note stated.
BofA’s team believes that with a vast installed base of over four billion smartphones, the adoption of AI-enabled IntelliPhones will surpass the rapid uptake seen with smartphones and 5G.
IntelliPhones are expected to leverage advanced AI and machine learning for features such as superior personal assistance, language processing, health monitoring, enhanced photography, and AR/VR experiences, among other things.
2. Needham downgrades UiPath stock
Needham analysts on Thursday downgraded UiPath (NYSE:PATH) stock from Buy to Hold citing a mix of factors, including macroeconomic headwinds and a changing go-to-market (GTM) strategy.
"We downgrade PATH shares to Hold due to a combination of macro pressure, uncertainty around near-term execution due to a CEO change and a changing GTM strategy, and Y/Y margin compression creating an unfavorable near-term financial profile,” analysts wrote.
The investment firm noted that the company's Q1F25 sales metrics were mildly disappointing, with large deals facing incremental scrutiny.
The recent CEO change back to founder Daniel Dines, following Rob Enslin's departure, and multiple GTM changes are expected to cause near-term sales disruptions.
Net new annual recurring revenue (ARR) and revenue guidance were both lowered, which Needham believes is “conservative enough, but we think it will take multiple quarters for the GTM changes to start driving meaningful upside to guidance.”
3. Northland ups C3.ai to Buy amid accelerating subscription growth
Enterprise AI firm C3.ai (NYSE:AI) saw its shares upgraded by Northland analysts during the week from Market Perform to Outperform, with a target price of $35.
Analysts highlighted the company’s rising subscription growth in Q4 2024 as a key factor behind the upward revision.
"C3.ai posted accelerating subscription growth to 41% in 4Q24, providing evidence that the headwinds from a migration to a usage-based revenue model are abating," analysts commented.
Looking forward, strong pilot expansion and demand for generative AI (genAI) signal continued high growth, they added.
4. Mizuho hikes price targets on chip stocks as AI moves to the edge
Japanese investment banking and securities firm Mizuho lifted its price targets on several chipmakers this week, including Micron Technology (NASDAQ:MU), Qualcomm (NASDAQ:QCOM), Seagate Technology PLC (NASDAQ:STX), and Western Digital (NASDAQ:WDC).
The move comes as Mizuho analysts believe the next catalyst for AI will be at the edge, as original equipment manufacturers (OEMs) push AI on-device capabilities for handsets and PCs.
The firm reiterated Buy ratings, raising price targets to $240 for Micron, $155 for Qualcomm, $90 for Seagate, and $110 for Western Digital.
Analysts highlighted Qualcomm's ramp-up with AI PCs using Snapdragon X Elite and Plus, and the expected increase in AI smartphone shipments.
Moreover, AI PCs, requiring 40% to 80% more DRAM, and handsets needing 50% to 100% more DRAM, present tailwinds for Micron. Western Digital and Micron are also expected to benefit from higher NAND content in AI devices with improved pricing.
Meanwhile, Seagate stands out with higher storage content on PCs and increasing cloud capital expenditure. Mizuho forecasts 1 billion AI smartphones shipped from 2024 to 2027, with AI PCs comprising up to 60% of the PC market by 2027.
5. Dell is a 'legit GenAI participant,' says Loop Capital
In a new note to clients, analysts at Loop Capital reiterated a Buy rating on Dell Technologies (NYSE:DELL) shares and lifted their price target from $125 to $185, emphasizing the IT company is “progressing as a legit GenAI participant.”
"Dell continues to show legitimate GenAI progression the last 90 days which seemingly could progress through CY2025," Loop analysts stated.
The investment bank pointed out Dell's well-positioned stance for long-term commercial IT budget share, noting the company's expanding capabilities across infrastructure products, services, and financing.
Dell identified a $2 to $3 attach revenue opportunity in services, networking, and storage for every $1 of GenAI server revenue.
“On storage specifically, there has been a suggestion in our work that for commercial (non-Hyperscale) Gen AI storage that after VAST Data & WEKA, DELL storage could be as well positioned as PSTG & NTAP, if not better positioned,” analysts wrote.