ANALYST NOTES December 4th, 2015

BAML
Railroads:

We are downgrading 4 railroads, leaving CNI as our current rail Buy.

Volumes have accelerated to the downside and our estimates are well below Street targets,
trends that look to continue into early 2016.
We downgrade CSX (CSX) and Union Pacific (UNP) to Neutral from Buy as we increasingly avoid
rails with significant coal exposure.
We lower Kansas City Southern (KSU) and Genesse & Wyoming (GWR) to Underperform from
Neutral given KSUs growth premium and slowing growth and Genesees commodity exposure.
However, we reiterate our Buy on Canadian National (CNI), which has significantly lower coal
exposure, robust Intermodal share gains, and attractive risk/reward returns.

Citigroup
Paper & Packaging:

Following years of NA food & bev vol declines we heard some signs of improvement heading
into 2016.
BERY indicated it was seeing modest but meaningful improvement in Consumer packaging
vols, citing strength in categories like dairy & personal care. Given BERYs broad reach across
Nielsen categories and conservative 2016 guidance (flat company-wide vols & negative
Consumer vols) we view the commentary as incrementally positive.
CCK indicated it was sold out in NA bev, and confirmed its interest in building a greenfield facility
in upstate NY to produce specialty cans. Other products showing strength include tapes, which is
a focus for AVY & BERY.
A number of our mgmt teams further mentioned tightness in regional labor markets, w
heightened wage inflation & competition for workers. While were not calling an inflection in US
consumer strength, the comments were nonetheless positive.
BERY remains our top pick in packaging given an attractive '16 FCF yield (~10.4%), conservative
guidance going into 2016 (flat volumes), and potential upside to M&A synergies from the
AVINTIV acquisition. We view mgmt's guidance of $50mm in synergies (~2.3% of AVINTIV sales)
as highly conservative.

Credit Suisse
Airlines:

The 3rd Annual Credit Suisse Industrials Conference included attendance from the Southwest
Pilots Association (SWAPA) and 7 airlines, including AAL, UAL, JBLU, SAVE, ALGT, VA, & AC.
Airline outlooks were a bright spot at the conference across sub-sectors as managements
reaffirmed a healthy demand environment, stable pricing, and easing competitive capacity
trends.
Carriers affirmed that demand is healthy, and legacies indicated the impact to Transatlantic
travel following the Paris attacks has been more benign than the market feared, with core EU
bookings flattish ex Paris & Brussels.
Mgmt teams were optimistic that unit revenue declines will sequentially improve throughout
2016 as headwinds anniversary and comps ease, and US industry capacity growth moderates
(albeit modestly). DAL's Nov PRASM result of +1.5% also helped fuel investor optimism during
the event.

Waste:

We continue to recommend WCN given its differentiated strategy and favorable (and very
realistic) preliminary 2016 guide (provided at Q3). WCN is anticipating above average top line
growth next year (guided up ~5-7%) with at least 4% coming from M&A tuck-in's where the
company continues to allocate capital.
Volumes continue to show strength, particularly along the West Coast (40% of sales), largely
driven by housing. Pricing in franchise markets continues to be hampered by low CPI and
remains in the 1.5-2% range while open market pricing is robust at 3.5-4% (averaging 2-2.5%
overall). We believe WCN has taken a prudent approach with lower oil baked into its E&P
estimate for 2016 (~$180M, or down ~25% y/y) with any improvement in oil being upside. We
like WCN on a FCF-per-share basis where the company is set to churn out $350M in FCF this year
(~17% of sales) while buying back 2-3% of shares per year.
RSG continues to impress with the investments it's making in fleets (automation, maintenance)
and its focus on improving customer service (especially with its subtle, but effective investments
in technology and focus on priority based selling) which should translate into the ability to push
pricing.
Open market pricing remains strong (4.7% in Q3), helping offset weakness in CPI-based
restricted contracts (50% of sales) which was 1.8% in Q3. RSG's volumes have a 91% correlation
to housing (lagged one year) which remains one of the few bright spots in broader Industrials
(we note RSG's volumes will face tougher comps next year).
CVA's FCF story remains intact which we believe provide some support for the stock. CVA will
see improved working capital next year (related to employee bonuses) while Durham-York
issues (payment delays) will be over.
Newly acquired profiled waste acquisitions will also have a full year to run. CVA maintained its
dividend of $0.25/share yesterday (~6.1% yield) which should instill some confidence with those
investors concerned about a cut. While a repo is not off the table, CVA's top priorities remain
growing its dividend over time and growth investments (particularly in profiled waste).
Overall, we continue to take a cautious with CVA as commodity-driven segments look for
stabilization.

Day 3 Tech Conference Yelp (YELP) CFO Rob Krolik and SVP Vince Sollitto:

Reiterated 2017 $1b revenue goal

Salesforce: (1) Chicago sales force helped grow hiring. (2) o Shifted commission curve for rookies
(<1year) to start earning commissions in months 4-5 up from months 6-9 to improve retention.
(3) Also reconfigured veterans (>1 year) commission structure. (3) Now sales force leads with
CPC product rather than CPC and CPM which gave them a bump in productivity initially.
Local Advertising Accounts: (1) Not seeing local businesses spend more than the typical $300$400 budget yet. (2) 52% of local ad revenue from CPC up from 23% a year ago. (3) Rolling out
new product to show accounts the difference between paid and unpaid clicks.
Marketing spend: Seen over 50% of non-yelpers inclined to try the product based on their
television advertising
SeatMe: (1) Does not hold a portion of tables in inventory for a night as Open Table does, and
has free and paid product. (2) Gave example of restaurant in San Francisco which previously
used a different platform that cost them 100k per year and switched to SeatMe which was
$1,200 dollars, and the restaurant saw an increase in traffic.
Mobile: (1) MAUs 20m growing 40% YoY in 3Q15. (2) Meaningful uptick since they began
prompting user to download the app when they visited yelp on the mobile web. (3) Adding a lot
of other features like calling, checking in, and adding photos in the app.
Longer-term outlook: (1) Still using the hunter vs. gatherer model for their sales force and no
change in contribution margin from new customers. (2) Still see 35-40% long term EBITDA
margins.

FBR & Co.

Nielsen Holdings (NLSN):

Nielsens ability to sustain and extend its gold standard position in TV measurement is the
subject of much debate. In our view, Nielsens competitive position is likely to prove more
resilient than appreciated.
In Nielsen, we see a solid, asymmetrical, double-digit return profile driven by low-teens EPS
growthand with good potential for multiple expansion on total audience measurement
growth lift.
We view Nielsen as a high-quality, natural monopolist/duopolist with increasingly important big
data assets. At 15.5x 2016E EPS, less than a market multiple, we believe the shares are
mispriced.
Maintaining Outperform with a $54 PT

Jefferies
Consumer Products: Mattel (MAT) and Hasbro (HAS)

We are initiating on MAT (BUY) and HAS (HOLD) as top players in the $85bn toy industry.
MAT is an early turnaround story and '16 headwinds persist, but we see revenue stabilizing in
'17 and 200bps+ L-T margin opportunity.
HAS is best-in-class with a robust 2020 pipeline, but pot. margin headwinds and val. keep us on
the sidelines. S-T volatility a risk as our '15 holiday survey points to a modest decline in
traditional toy purchasing intentions vs. last year.

KeyBanc
Qualcomm (QCOM):

Initiating Coverage of QCOM at Overweight: We would be buyers of QCOM because:

1) valuation appears to discount the midpoint of QTL guidance for FY16 with no value ascribed
for QCT
2) catch-up QTL sales could add $0.32 in EPS
3) QCT sales and margin seem likely to trough in F2Q16
4) optionality on its ongoing structural/financial review is favorable.

Wells Fargo
bluebird bio (BLUE):

We have initiated coverage of bluebird bio (BLUE) with an Outperform rating and a valuation
range of $134-156.
Our 2015/2016E EPS are -$4.28/-$4.33. We view BLUE as a highly differentiated gene therapy
company with its lentivirus vector platform and the broadest proof-of-concept established to
date within the space.
Clinical proof-of-concept in beta thalassemia (BT), Sickle Cell Disease (SCD) and CCALD should
support multiple product opportunities with sales potential up to $4B.
While concern regarding lack of persistence of effect in BT has weighed on BLUE shares heading
into its ASH update, we believe that concerns are overblown and unlikely to extend to a broader
patient population in BT/SCD.