Early Look

Thursday, April 27, 2023

Futures	Up/Down	%	Last
Dow	188.00	0.56%	33,611
S&P 500	19.25	0.48%	4,095
Nasdaq	92.50	0.72%	12,980

 

 

U.S. futures looking stronger on Thursday, with strong earnings results thus far from likes of CAT, HON in industrials, MRK in healthcare, and META, KLAC, ROKU, EBAY in tech to name a few ahead of a very busy morning of economic data. At 8:30 AM ET, 1Q actual GDP estimate data due with estimate at +2%, personal consumption est. +4.1% (prior was +1%), and inflation data points: GDP Price Deflator est. +3.7% (vs. prior 3.95) and Core PCE prices to rise +4.7% (up from prior +4.4%). This comes ahead of key inflation data tomorrow and then the FOMC policy meeting next week. Prices were mixed yesterday as a jump in Microsoft shares helped keep the Nasdaq afloat, but major averages finished near session lows as regional bank and recession worries continue to weigh. The technology sector posted a 1.7% gain on the session as the only one of the 11 major S&P sectors to end in positive territory. First Republic (FRC) shares tumbled to new lows as investors waited to see if it would be able to find buyers for assets and engineer a turnaround without government support. The Dow Transports slumped more than 3.5% for a second straight session, giving the index its biggest two-day percentage drop in 11 months (over 7%), led by UPS and several truckers after weaker earnings results. Oil prices are flat after tumbling yesterday to around $74 a barrel for WTI, now giving up all the gains put on after OPEC+ blindsided markets with news of a surprise cut to output at the start of this month. In Asian markets, The Nikkei Index rose 41 points to 28,457, the Shanghai Index gained 21 points to 3,285, and the Hang Seng Index rises 83 points to 19,840. In Europe, the German DAX is up slightly at 15,800, while the FTSE 100 is down only a few points at 7,850.

 

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -15.64 points, or 0.38%, to 4,055.90.

·     The Dow Jones Industrial Average fell -229.16 points, or 0.68%, to 33,301.87.

·     The Nasdaq Composite gained 55.19 points, or 0.47%, to 11,854.35.

·     The Russell 2000 Index declined -18.92 points, or 1.08% to 1,727.00.

 

Economic Calendar for Today

·     8:30 AM ET            Weekly Jobless Claims…est. 248K

·     8:30 AM ET            Continuing Claims…est. 1.86M

·     8:30 AM ET            Gross Domestic Product (GDP) for Q1…est. +2.0%

·     8:30 AM ET            Consumer Spending for Q1…est. +4.1% (prior 1.0%)

·     8:30 AM ET            GDP Price Deflator for Q1…est. +3.7% (prior 3.9%)

·     8:30 AM ET            Core PCE Prices Advance for Q1…est. +4.7% (prior 4.4%)

·     10:00 AM ET          Pending Home Sales M/M for March…est. +0.7%

·     10:30 AM ET          Weekly EIA Natural Gas Inventory Data

·     11:00 AM ET          Kansas City Fed Manufacturing for April…est. (-2)

·     1:00 PM ET             U.S. Treasury to sell $35B in 7-year notes.

 

Earnings Calendar:

·     Earnings Before the Open: AAL ABBV AMAL AOS ARCH B BAX BC BMY BTU CARR CAT CBRE CBZ CFR CHD CMCSA CMS CNP CNX CROX CRS CTS CWT DGX DPZ DTE EME EXLS FAF FCFS FCN FIS GWW HAS HOG HON HSY HTZ ICPT IP IPG IQV ITGR KDP KEG KIM LEA LECO LII LIN LKQ LLY LUV MA MO MRK NEM NOC OSIS OSK OSTK PATK ROK ROP RS SAH SAM SIRI SNDR SO SRCL SWI TPH TSCO TW TXT TZOO VC VLO WEX WST XEL

·     Earnings After the Close: ACA ACCD AJG ALSN AMGN AMZN APPF ATVI AX AXT AYX BJRI BY BZH CAMP CC CINF COF COLM COUR CPT CSL CTO CUBE CUZ CWST DLR DXCM EHC EMN ESS EXPO FE FICO FSLR GILD GLPI HIG HUBG INTC JAKK KN KNSL LHX LLPA MATW MDLZ MHK MTX NATI NET OIS OLN PEAK PFG PINS RMD ROG RSG SBCF SGEN SKT SKX SKYW SM SNAP SSNC SWN TBBK TMUS VRSN WY X ZYXI

 

Other Key Events:

·     American Academy of Neurology, 4/24-4/27, in Boston, MA

·     Ladenburg Technology Expo 2023, 4/27 in New York

·     RSA Conference 2023, 4/24-4/27, in San Francisco, CA

 

 

Macro	Up/Down	Last
Nymex	0.00	74.30
Brent	0.17	77.86
Gold	13.80	2,009.80
EUR/USD	-0.0005	1.1035
JPY/USD	0.04	133.70
10-Year Note	+0.022	3.452%

 

 

World News

·     The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was -14.4 vs -7.9 last week. Bulls fall to 24.1% from 27.2%, Neutrals fall to 37.4% from 37.7%, Bears rise to 38.5% from 35.1%.

 

Sector News Breakdown

Consumer

·     eBay Inc. (EBAY) Q1 adj EPS $1.11 vs. est. $1.07; Q1 revs $2.5B vs. est. $2.48B; Q1 GMV $18.4B, down 5% on as-reported basis; sees Q2 adjusted EPS 96c-$1.01 vs. est. $0.99; sees Q2 revenue $2.47B-$2.54B, above consensus $2.43B.

·     Fortune Brands (FBIN) Q1 EPS $0.66 vs. est. $0.60; Q1 revs $1.04B vs. est. $1.01B; increasing the midpoint of full-year EPS before charges / gains guidance by $0.05 to a range of $3.65 to $3.85; continues to expect full-year net sales down in range of 5%-7%.

·     Helen of Troy (HELE) announced that Julien R. Mininberg, the company’s Chief Executive Officer, intends to retire on February 29, 2024; Q4 adj EPS $2.01 vs. est. $1.88; Q4 revs $484.6M, vs. consensus $457.71M; sees FY24 adjusted EPS $8.50-$9.00 vs. est. $8.46.

·     Mattel Inc. (MAT) Q1 adj EPS loss (-$0.24) vs. est. loss (-$0.19); Q1 revs $814.6M vs. est. $740.73M; affirms 2023 adjusted EPS $1.10-$1.20 vs. est. $1.21; Q1 gross margins 40%.

·     Meritage Homes (MTH) 1Q EPS $3.54 vs est. $2.64 on adj revs $1.28B vs est. $1.05B.

·     O’Reilly Automotive (ORLY) 1Q EPS $8.28 vs est. $8.00 on revs $3.71B vs est. $3.58B, comps +10.8%; guides FY comps +4-6%, revs $15.2-15.5B vs est. $15.44B, gr mgn 50.8-51.3%, EPS $36.50-37.00 vs est. $36.92, FCF $1.8-2.1B.

·     Pilgrim’s Pride (PPC) 1Q EPS $0.02 vs est. $0.06 on sales $4.17B vs est. $4.09B, adj EBITDA $151.9Mm vs est. $152.7Mm.

·     Sleep Number (SNBR) Q1 EPS $0.51 vs. est. $0.30; Q1 revs $526.5M vs. est. $533.1M; Reiterates full-year 2023 earnings outlook of $1.25 to $2.00 per diluted share.

·     Wyndham Hotels & Resorts (WH) Q1 EPS $0.77 vs. est. $0.80; Q1 revs $313M vs. est. $326.54M; Q1 global RevPAR grew 12% in constant currency; U.S. RevPAR grew 4% compared to first quarter 2022; system-wide rooms grew 4% y/y; raises year EPS view.

 

Energy

·     Pioneer Natural Resources (PXD) Q1 adj EPS $5.21 vs. est. $4.92; Q1 revs $3.166B vs. est. $3.7B; sees 2023 drilling, completions, facilities, and water infrastructure capital budget to range between $4.45B-$4.75B and capex for E&P, environmental and other between $150M-$200M; announces that Scott d. Sheffield to retire at year-end; Richard p. Dealy named next CEO.

·     Antero Resources (AR) Q adj EBITDAX $414Mm vs est. $462.9Mm, adj FCF $174Mm; net production avg 3.3Bcfe/d +3% y/y.

·     Enovix Corp. (ENVX) reported Q1 EPS loss (-$0.20) vs. est. loss (-$0.22)

·     EQT Corp. (EQT) Q1 EPS $1.70 vs. est. $1.30; Capital expenditures, excluding noncontrolling interests, of $464 million, 2% below the low-end of guidance range; Q1 sales volumes of 459 Bcfe, two percent above the mid-point of guidance range.

·     Helmerich & Payne (HP) Q2 adj EPS $1.26 vs. est. $1.06; Q2 revs rose 65% y/y to $769.2M vs. est. $746.3M; sees FY capex $400M-$450M.

·     NOV Inc. (NOV) Q1 EPS $0.32 vs. est. $0.22; Q1 revs $1.96B was in-line; said expect rising demand in offshore and international markets to underpin steadily rising results for our organization as 2023 progresses.

 

Financials

·     Aflac (AFL) Q1 adj EPS $1.55 vs. est. $1.40; Q1 revs $4.8B vs. est. $4.61B; average yen/dollar exchange rate in Q1 was 132.30, or 12.2% weaker than the average rate of 116.18 y/y; total investments and cash at the end of March 2023 were $120.5B vs. $132.6B y/y.

·     AvalonBay (AVB) Q1 core FFO $2.57 vs. est. $2.54; sees Q2 FFO $2.54-$2.64 vs. est. $2.58; uncollectible lease revenue as a percentage of total Residential rental revenue decreased to 3.0% in Q1 2023 from 4.7% in Q1 2022.

·     Lending Club (LC) Q1 EPS $0.13 vs. est. $0.11; Q1 revs $245.7M vs. est. $238.36M; tangible book value per common share of $10.23, up 1.7% from $10.06 at December 31, 2022; Q1 loss provisions $70.6M.

·     Raymond James (RJF) Q2 EPS $2.03 vs. est. $2.23; Q2 revs rose 7% y/y to $2.9B vs. est. $2.9B; Q2 NII and Raymond James bank deposit program fees from third-party banks of $731 million, up 226%; said are well positioned with strong capital ratios and a flexible balance sheet.

·     SLM Corp. (SLM) Q1 EPS $0.47 vs. est. $0.35; Q1 NII $405M vs. $375M y/y; provision for credit losses $114M vs. $98M y/y; Q1 NIM 5.70%, up 41bps; backs year EPS view.

·     Vornado (VNO) postponed its common share dividends until year-end and authorization of $200 million share repurchase program (downgraded to Neutral at Piper).

·     WillScot Mobile Mini (WSC) Q1 EPS $1.00 vs. est. $0.29; Q1 revs $565M vs. est. $533.72M; Q1 Adjusted EBITDA Margin from continuing operations of 43.7% expanded 650 basis points year-over-year; sees 2023 revs $2.35B-$2.45B vs. est. $2.38B.

 

Healthcare

·     Merck & CO (MRK) Q1 adj EPS $1.40 vs consensus $1.32; Q1 sales $14.49B tops est. $13.79B; said KEYTRUDA sales grew 20% to $5.8B; narrows FY23 revenue view to $57.7B-$58.9B from $57.2B-$58.7B (est. $58.28B).

·     Align Technologies (ALGN) 1Q adj EPS $1.82 vs est. $1.68 on revs $943.1Mm vs est. $903.2Mm, adj op mgn 18.5%; guides 2Q Clear Aligner volume and ASP up sequentially, Systems and Services revs up sequentially, revs $980Mm – 1B vs est. $951.3Mm, adj op mgn up 1 point sequentially; reit FY adj op mgn slightly above 20%.

·     BioMarin (BMRN) 1Q adj EPS $0.60; reported EPS $0.27 vs est. $0.18 on revs $596.4Mm vs est. $570.6Mm; guides FY revs $2.375-2.50B vs est. $2.46B, gr mgn 77.5-79%, reported EPS $0.78-1.03 vs est. $0.95; adj EPS 1.80-2.05.

·     Bristol-Myers Squibb Co (BMY) CEO Giovanni Caforio, who has been in the role since 2015, has decided to step down from his position. COO Christopher Boerner will take up the role Nov. 1.

·     Edwards LifeSciences (EW) 1Q adj EPS $0.62 vs est. $0.61 on revs $1.46B vs est. $1.393B; guides 2Q adj EPS $0.62-0.68 vs est. $0.63 and sales $1.48-1.56B vs est. $1.46B; sees FY adj EPS $2.48-2.60 vs est. $2.52 and sales $5.6-6.0B vs est. $5.86B.

·     Molina Healthcare (MOH) 1Q adj EPS $5.81 vs est. $5.12 on revs $7.8B vs est. $8.33B; raised FY adj EPS guide to at least $20.25 vs est. $19.70 and prior at least $19.75.

·     Seres Therapeutics (MCRB) received FDA approval for its therapeutics Vowst to prevent the recurrence of C. difficile Infection (CDI) in adults.

·     Teladoc (TDOC) 1Q adj EBITDA $52.77Mm vs est. $46.1Mm on revs $629.24Mm vs est. $618.3Mm, adj gr mgn 69.8%; guides 2Q revs $635-660Mm vs est. $642.8Mm, adj EBITDA $60-68Mm vs est. $63.5Mm, EPS ($0.55)-($0.45) vs est. ($0.41); sees FY revs $2.575-2.675B vs est. $2.603B, adj EBITDA $285-325Mm, EPS ($1.70)-(1.25) vs est.($1.43).

 

Industrials & Materials

·     Caterpillar (CAT) Q1 adjusted EPS $4.91 vs. est. $3.82; Q1 sales rose 17% y/y to $15.86B vs. est. $15.32B; Machinery, Energy & Transportation segment revenue $15.10 billion, +17% y/y.

·     CH Robinson Worldwide (CHRW) Q1 EPS $0.96 vs. est. $0.99; Q1 revs $4.6B vs. est. $4.82B; Q1 adj operating margin 23.5%, expenses $524.6M; said plan to continue investing in initiatives that co expect to provide innovative solutions and generate profitable growth; lowering 2023 personnel expense by $100M at mid-point of our guidance.

·     Graco (GGG) 1Q adj EPS $0.74 vs est. $0.62 on sales $529.6Mm vs est. $501.9Mm; confirms FY revs guide for +LSD vs est. +2% organic; remains cautious given current macro uncertainty.

·     Honeywell (HON) Q1 adj EPS $2.07 vs. est. $1.93; Q1 revs $8.86B vs. est. $8.52B; raises FY23 adjusted EPS view to $9.55-$9.80 from $9.35-$9.75 (est. $9.05); boosts FY23 revenue view to $36.5B-$37.3B from $36B-$37B (est. $36.75B); sees FY23 free cash flow $3.9B-$4.3B.

·     Idex Corp. (IEX) Q1 adj EPS $2.09 vs. est. $2.02; Q1 revs $845M vs. est. $818.55M; sees Q2 adjusted EPS $2.10-$2.13 vs. est. $2.22 and Q2 revs growth roughly 3% vs. est. $860.37M.

·     United Rentals (URI) 1Q adj EPS $7.95 vs est. $7.92 on revs $3.29B vs est. $3.15B, adj EBITDA $1.5B vs est. $1.47B; reaffirms FY guide revs $13.7-14.2B vs est. $14.1B, adj EBITDA $6.6-6.85B vs est. $6.76B, FCF 2.1-2.35B.

 

Technology, Media & Telecom

·     Meta Platforms (META) shares rise 9%; 1Q EPS $2.20 vs est. $2.03 on revs $28.645B vs est. $27.655B, op mgn 25%, Facebook DAUS 2.04B avg for March +4% y/y, Facebook MAUS 2.99B +2%, expect FY CAPEX $30-33B, no change from prior; guides 2Q revs $29.5-32B vs est. $28.8B.

·     Aspen Technology (AZPN) 3Q adj EPS $1.06 vs est. $1.74 on revs $229.9Mm vs est. $285.6Mm; guides FY revs $1.04-1.06B vs est. $1.17B and adj EPS $5.63-5.83 vs est. $7.06.

·     Impinj (PI) Q1 EPS $0.30 vs. est. $0.33; Q1 revs $85.9M vs. est. $83.6M; guides Q2 EPS $0.28-$0.33 vs. est. $0.41 and revs $84M-$87M below consensus $88.3M.

·     KLA-Tencor (KLAC) Q3 adj EPS $5.49 vs. est. $5.32; Q3 revs $2.43B vs. est. $2.37B; sees Q4 adj EPS $4.23-$5.43 vs. est. $4.43; sees Q4 revenue $2.125B-$2.375B vs. est. $2.17B and sees non-GAAP gross margin is expected to be in a range of 59.75%-61.75%.

·     NetGear (NTGR) 1Q adj EPS ($0.19) vs est. ($0.10) on revs $180.91Mm vs est. $193.9Mm, gr mgn 33.4%; guides 2Q revs $150-165Mm vs est. $206.7Mm, adj op mgn (9)%-(6)%.

·     Roku inc. (ROKU) 1Q adj EBITDA ($69.1M) vs est. ($106.1M) on revs $741Mm vs est. $708.5Mm, active accounts 71.6Mm +1.6Mm sequentially, ARPU $40.67 (trailing 12-mo) -5% y/y; guides 2Q adj EBITDA ($75)mm vs est. ($88.2)Mm and revs $770Mm vs est. $767.6Mm; announces partnership with Instacart.

·     ServiceNow (NOW) Q1 adj EPS $2.37 vs. est. $2.04; Q1 revs rose 22% y/y to $2.096B vs. est. $2.08B; sees Q2 subscription revs $2.04B-$2.045B and FY23 subscription revs $8.47B-$8.52B.

·     Wolfspeed (WOLF) 3Q adj EPS ($0.13) vs est. ($0.15) on revs $228.7Mm vs est. $220.1Mm, adj gr mgn 32.3%; guides 4Q revs $212-232Mm vs est. $234.6Mm, adj EPS ($0.23)-($0.17) vs est. ($0.12); sees FY revs $1.0-1.1B vs est. $915.9Mm.