Mid-Morning Look: December 08, 2021

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Mid-Morning Look

Wednesday, December 08, 2021






DJ Industrials




S&P 500








Russell 2000






U.S. stocks trading sideways for a change, with the S&P 500 and Nasdaq little changed in the first hour of trading as investors focus on news from vaccine maker Pfizer (PFE) who said that three vaccine doses neutralize Omicron variant (which boosted futures higher this morning), but at the same time dealing with some technical resistance levels following a 2-day surge on dip buying. Treasury yields rise for a 3rd day, with the 10-yr yield topping 1.5% (though follows a 2-week plunge that saw more than a 35-bps roll in 2-weeks) ahead of key inflation data (CPI) expected later this week which could shake up markets as well as the final FOMC meeting of the year next week (expected hawkish tone following Powell reversal last week). Reopen stocks/sectors such as theme parks, cruise lines, travel, and hotels among early gainers on the vaccine news from PFE. No major U.S. economic data this morning outside of JOLTs data which showed 4.2 million Americans quit their jobs in October as workers continued to search for better opportunities and jobs available rose.







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10-Year Note





Sector Movers Today

·     Housing & Building Products; homebuilder TOL reported F4Q’21 EPS of $3.02 vs. Street of $2.44 driven by upside to margins and ASPs, with deliveries roughly in-line/orders also came in better at -13% YoY vs. Street -17%, consistent with mgmt.’s expectations for “down y/y”; in home furnishings, LOVE reported Q3 EPS $0.17 topping the est. for loss (-$0.41) on better sales of $116.7M vs. est. $112.3M as comp sales jumped 47.1%; in home improvement retail, UBS said data suggests that HD same-store-sales growth (SSSG) remains strong in November, similar to October, and above Q3; in tools, SWK unveiled plans to sell the bulk of its security business assets to Securitas AB for $3.2B in cash and to buy back $4B in stock next year.

·     MedTech Equipment; PHG announces that its Philips Patient Monitors MX750 and MX850 have received 510(k) clearance from the FDA; n research, BDX downgraded to neutral from Overweight at Piper citing lack of catalysts (revenue, margin, or otherwise) that they see for shares over at least the next six months combined with nagging uncertainty regarding the achievability of consensus margin targets later this year; LUNG upgraded to Overweight from Neutral at Piper as fully acknowledge may be early in upgrade with limited visibility into improvements in procedure cadence due to still-elevated COVID hospitalizations and near-term unknowns with ICU staffing levels and the Omicron variant; BRKR to raise $500M in senior notes for supporting strategic growth objectives

·     Bank movers; Wells upgraded SIVB to OW as they see the bank being positioned to be the largest beneficiary in their group once rated begin to rise and they benefit from a technology and innovation sector that remains at its strongest with benign credit losses; Morgan Stanley downgraded EVR to Equal-Weight as they focus on large deal activity, which is likely to face headwinds in 2022 on increased antitrust scrutiny; BX has authorized the repurchase of up to $2B of the company’s common stock and Blackstone Holdings Partnership Units, replacing the company’s prior authorization of $1B; PZN reports prelim assets under management of $49.8B for November 2021 compared to $40.7B in year ago month and $53B in October 2021; Stephens raised their PT on FSBC to $35 from $32 and reiterated their OW rating even with shares +55% vs their $20 IPO pricing in May as they believe its profitability profile warrants above-peer TBV valuation and continues to believe it remains a standout in the small-cap growth space; BLK said it is pulling ~$2T in assets out of STT’s safekeeping as it entered into custodian agreements for its $2.3T iShares ETFs with Citi (C) to now manage 40%, JPM 30%, BK 15%, and STT keep 15%.

·     Consumer Staples; Guggenheim downgraded KHC to Neutral with a price target of $33 from $46 on lack of pricing power; UNFI Q1 adj EPS $0.97 vs est. $0.56 on revs $7B vs est. $6.8B; CPB Q1 adj EPS 89c vs est. 81c on re sales $2.24B vs est. $2.27B and reaffirmed its FY22 guidance but said the current quarter is facing margin pressures from higher labor, raw material, and shipping costs; BFQ2 missed with EPS 49c vs est. 53c on sales $994M vs est. $1.05B, but raised FY sales outlook to high-single digit growth from mid-single digits given confidence in its growth momentum despite persistent volatility and uncertainty from the Covid-19 pandemic and supply chain disruptions, as well as a modest positive impact from the suspension of tariffs on American whiskey to the EU on Jan. 1; Benchmark initiated Buy ratings on JJSF with a $171 PT and LANC with a $181 PT due to its above-average revenue growth profile in packaged food; Cowen started TTCF at Outperform with a $24 PT even with their cautious forecast as the stock’s recent sell-off created an opportunity against tempered expectations; Jefferies continues to see TAP as a favored value idea as they say BUD’s shift an organic-driven value creation model at its Investor Meeting is a positive for the US beer industry; BYND announced it hired TSN executives to serve as its COO and newly created Chief Supply Chain Officer



·     GT +6%; upgraded from Hold to Buy at Deutsche Bank and raise tgt to $32 as believe the company is well positioned for considerable additional earnings growth in 2022 and beyond, driven by favorable market dynamics, and very favorable mix impact from electric vehicles

·     LOVE +8%; reported Q3 EPS $0.17 topping the est. for loss (-$0.41) on better sales of $116.7M vs. est. $112.3M as comp sales jumped 47.1%

·     PD +6%; delivered a strong quarter highlighted by accelerating revenue and billings growth of +34%/+40% that topped expectations of +30%/+32% and a 124% DBNRR/Enterprise and mid-market remained strong with +35% growth in customers with +$100K in ARR

·     PFE +1%; said that three vaccine doses neutralize Omicron variant – says data indicate that third dose of BNT162b2 increases neutralizing antibody titers by 25-fold compared to two doses against omicron variant

·     PLAB +14%; beats estimates for Q4 revenue, profit, helped by demand for design-driven products accelerating while guides Q1 revs $178M-$186M vs. est. $170.7M

·     ROKU +9%; after signing a multi-year extension with GOOGL for YouTube on its service

·     SWK +5%; as unveiled plans to sell the bulk of its security business assets to Securitas AB for $3.2B in cash and to buy back $4B in stock next year



·     CASY -6%; as Q2 EPS $2.59 missed the est. $2.89; Q3 revs $3.26B vs. est. $3.2B; Inside same-store sales increased 6.0% compared to prior year with a margin of 40.7%. Fuel gallons increased 2.5% on a same-store basis

·     CHPT -5%; reported revenue in the latest quarter at the high end of its guidance and raised its full year outlook but posted a wider Q3 loss ($69M vs. $40.9M loss a year ago) while it had roughly 163,000 ports as of Oct. 31, compared with more than 118,000 as of July 31

·     CORT -22%; after revealing gets U.S. Attorney subpoena on Korlym

·     NXPI -6%; was initiated a new Sell rating at UBS with $170 tgt saying while they believe the co will remain a leader in its product categories with a solid business, they expect the automotive division’s growth (50% of revenues) to underperform the automotive semis market

·     RDUS -36%; after saying WearABLe study didn’t meet primary endpoint of NI for Abalo-TDS 300 micrograms (UG) vs. TYMLOS 80 Ug in % change from baseline in lumbar spine bone mineral density

·     S 9%; after Q3 results top expectations, and Q4 revenue forecasts above estimates; shares slip due to deceleration in new customer adds as well as pressure due to the impending lock-up expiration on Dec. 9, in which 200 mln shares will be freely tradable

·     SFIX -22%; provided weaker-than-expected 2Q22 revenue guidance, as near-term customer growth is negatively impacted by a promotion from last year with low retention, and lowered its FY22 revenue and profitability outlook as supply chain disruptions are leading to a 1-4 week delay

·     SOL -6%; slides on Q3 miss as Q3 adj EPS $0.02 was below est. $0.04; Q3 revs $15.5M vs. est. $20.24M; sees Q4 revenue $21M-$27M vs. est. $30.73M on weaker year rev outlook as well

·     STT -1% after news overnight BLK is pulling some $2 trillion of assets out of State Street Corp.’s safekeeping, a move that will reduce the investing firm’s reliance on a small number of parties and lower the fees it pays for back-office work

·     VRA -20%; reported Q3 adj EPS 18c vs est. 26c on revs $134.7M vs est. $138M, lowered FY21 EPS outlook to 65-70c from 80-95c, sees Q4 EPS 24-29c below est. 40c on revs $155-160M also below est. $165.6M

·     VRRM -4%; 8.2M share offering prices at $14.85 (Platinum Equity divests remaining 5.3% stake)


Market commentary provided by Hammerstone Markets, Inc, a firm separate from and not affiliated with Regal Securities. Regal Securities has not participated in the creation of the content, and does not explicitly or implicitly endorse the content.

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