Early Look

Friday, February 11, 2022

Futures	Up/Down	%	Last
Dow	-154.00	0.44%	34,985
S&P 500	-25.25	0.56%	4,472
Nasdaq	-118.50	0.80%	14,583

 

 

U.S. stocks are looking lower, adding to the late day swoon that saw stocks finish sharply lower (more than 1.5%) as U.S. inflation data raised bets on quicker interest rate hikes by the Federal Reserve. Treasury yields are pulling back this morning after a record surge on Thursday that saw the 10-year rise over 15 bps to highs above 2.04% and the 2-year lift-off over 25 bps to levels around 1.6%. Following the CPI data on Thursday and the hawkish comments by the Fed’s Bullard on faster rate hikes (which exacerbated the market sell off early afternoon), Goldman Sachs increased its forecast for Fed rate hikes to seven this year, while Fed fund futures are now pricing in at least five hikes for 2022. Bloomberg News reported that the U.S. central bank doesn’t yet favor a half-point hike or an emergency move, which Bullard noted yesterday was something to consider. The CME Group’s FedWatch tool now suggests an 88% chance of a 50-basis point rate hike when the Fed meets next month, up from just 33% last week. St. Louis Fed President James Bullard has also said he wants the Fed’s base lending rate to be 1% higher by June, a move that would require three consecutive 25 basis point increases. Despite yesterday’s broad based market pullback, stocks remain on track for weekly advances. In Asian markets, The Nikkei Index gained 116 points to end the week at 27,696. the Shanghai Index dropped -0.66% to 3,462 and the Hang Seng Index edged lower -17 points to 24,906. In Europe, the German DAX is down -0.4% to 15,425, while the FTSE 100 is down -0.8% to 7,610. In the oil sector, the International Energy Agency warned that global oil prices could push higher because of the OPEC+ supply shortfall. Bitcoin prices slip about -0,6% to $43,500.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -83.10 points, or 1.81%, to 4,504.08

·     The Dow Jones Industrial Average fell -526.47 points, or 1.47%, to 35,241.59

·     The Nasdaq Composite tumbled -304.73 points, or 2.10%, to 14,185.64

·     The Russell 2000 Index declined -32.34 points, or 1.55% to 2,051.16

 

Events Calendar for Today

·     10:00 AM ET       University of Michigan Confidence, Feb-P…est. 67.5

·     1:00 PM EST       Baker Hughes Weekly rig count data

 

Earnings Calendar:

·     Earnings Before the Open: AB, APO, ARES, AXL, BRKR, CLF, COOP, D, ESNT, G, GPRE, GT, IAA, NBIX, NWL, PRLB, SXT, UAA

 

 

Macro	Up/Down	Last
Nymex	0.67	90.55
Brent	0.67	92.07
Gold	-10.30	1,827.10
EUR/USD	-0.0036	1.1394
JPY/USD	0.01	116.01
10-Year Note	-0.026	2.003%

 

 

World News

·     The International Energy Agency (IEA) warned that global oil prices could push higher because of the OPEC+ supply shortfall

 

Sector News Breakdown

Consumer

·     Bark Inc. (BARK) 3Q adj EPS ($0.12) vs est. ($0.13) on revs $140.8Mm vs est. $139.9Mm; guides 4Q revs about $126Mm vs est. $138.3Mm, announces new partnership with $WMT, say products now available in nearly 2,800 WMT stores and Walmart.com

·     Calloway (ELY) 4Q adj EPS ($0.19) vs est. ($0.28) on adj revs $712Mm vs est. $703Mm, top golf comps +6% vs 2019; guides FY22 revs $3.78-3.82B vs est. $3.7B and adj EBITDA $490-515Mm vs est. $480Mm

·     Expedia (EXPE) 4Q adj EPS $1.06 vs est. $0.69 on revs $2.3B vs est. $2.3B, says impact from covid was less severe and shorter duration than previous waves, qtrly total gross bookings $17.5B; says continue to expect solid overall recovery in 2022 barring change in trajectory of virus

·     Flowers Foods (FLO) Q4 adj EPS $0.20 vs. est. $0.21; Q4 revenue fell -1.3% to $983.5M vs. est. $991.1M; Adjusted EBITDA decreased 5.9% to $490.9 million, representing 11.3% of sales, a 60-basis point decrease

·     Mohawk Industries (MHK) Q4 adj EPS $2.95 vs. est. $2.87; Q4 revs $2.76B vs. est. $2.72B; sees Q1 adjusted EPS $2.90-$3.00 vs. est. $3.08; European ceramic business has been impacted by accelerating energy costs, see $40-$45 mln headwind, net of price increases, in q1; announces new $500M buyback program

·     Tencent (TCEHY) said it had not increased its stake in Didi (DIDI) since its IPO, a day after a filing suggesting a rise in stake sent its shares soaring

·     Urban Outfitters (URBN) Q4 revs rose 13.9% to $1.33B, in-line with ests; comp Retail segment net sales increased 14%, driven by strong double-digit growth in digital channel sales, partially offset by low double-digit negative retail store sales primarily due to reduced store traffic. By brand, comparable Retail segment net sales increased 49% at the Free People Group, 14% at the Anthropologie Group and 3% at Urban Outfitters. Total Retail segment net sales increased 15%

·     Zillow Group (ZG) Q4 EPS ($1.03) vs est. $(1.07) on total revenue $3.9B vs est. $2.98B as all three reportable segments posted revenue that exceeded prior guidance driven by higher-than-anticipated mgns in IMT segment and lower-than-expected inventory losses in Homes segment; estimated they generated revenue on 3% of total customer transactions in FY21; now expect the net impact of iBuying operations wind-down in aggregate to be cash-flow positive; midpoint of Q1 revenue guidance $3.3B vs est. $3.26B, expects efforts to translate to $5B in annual revs

 

Energy

·     A U.S. Senate committee is expected to hold a hearing around the nation’s biofuel blending laws next week, as the Biden administration works to finalize controversial proposals around blending requirements and exemptions for oil refiners, according to three sources familiar with the matter. – Reuters (watch shares of DAR, RREGI, GEVO)

·     Bloom Energy (BE) Q4 adj EPS loss (-$0.05) vs. est. loss ($0.04); Q4 revs $342.5M vs. est. $307.3M; sees FY22 revs $1.1B-$1.15B vs. est. $1.21B; sees FY22 adjusted gross margin roughly 24%; Record ending backlog of 6,549 systems in Q4 of 2021, compared to 1,994 in 2020

·     First Energy (FE) Q4 adj EPS $0.51 vs est. $0.52 on revenue $2.7B vs est. $2.71B; sees Q1 adj EPS $0.55-$0.65 vs est. $0.62 and reaffirmed FY adj EPS view for $2.30-$2.50 vs est. $2.43; also agreed on terms to resolve shareholder derivative litigation that stipulates 6 board members who have served on board for a minimum of 5 years will not stand for re-election, a special committee of at least 3 recently appointed independent directors should initiate a review of the executive team and could oversee third-party audits of board-approved action plans

 

Financials

·     Brighthouse Financial (BHF) Q4 EPS $4.02 vs. est. $3.61; Q4 revs $2.02B; Life sales increased 133% over the fourth quarter of 2020 and 98% year-over-year; Estimated combined risk-based capital ratio of approximately 500%; holding company liquid assets of $1.6 billion

·     Equitable Holdings (EQH) Q4 adj EPS $1.54) vs est. $1.51 on revenue $3.32B vs est. $3.57B; for the year, net inflows were $25B and AUM +12% YoY to $908B

·     Forrester Research, Inc. (FORR) 4Q adj EPS $0.59 vs est. $0.56 on revs $133.7Mm vs est. $133.8Mm; sees 1Q adj EPS $0.28-0.34 vs est. $0.43 and revs $119-123Mm vs est. $122.7Mm; guides FY adj EPS $2.25-2.35 vs est. $2.41 and revs $550-560Mm vs est. $537.2Mm

·     Insperity, Inc. (NSP) shares tumble; 4Q adj EPS $0.34 vs est. $0.74 on revs $1.3B vs est. $1.24B; guides 1Q adj EPS $1.56-2.12 vs est. $1.93, sees FY adj EPS $3.74-4.86 vs est. $4.82

·     Western Union (WU) approves new $1B share repurchase authorization; Q4 adj EPS $0.64 vs. est. $0.52; Q4 revenue $1.3B vs. est. $1.29B; sees FY22 adj EPS $1.90-$2.00 vs. est. $2.24; sees FY2 GAAP revenue down in the mid-single digits, with adj revenue flat to up low single digits

 

Healthcare

·     23andMe Holding Co. (ME) Q3 EPS (21c) vs est. (16c) on revs $57M vs est. $54.3M; raised its full-year guidance for sales to $268M-$278M from $250M-$260M primarily due to the addition of telehealth services to its consumer business/net loss ($225M)-($210M) to ($220M)-($205M)

·     Bio-Rad (BIO) Q4 adj EPS $3.21 vs. est. $2.85; Q4 revs fell -7.2% to $732.8M vs. est. $731.98M; sees FY22 currency neutral revenue growth 1%-2%

·     DaVita (DVA) Q4 adj EPS $2.02 vs est. $1.80 on revenue $2.944B vs est. $2.91B; averaged 94,374 dialysis treatments per day; sees FY22 adj EPS $7.50-$8.50 vs est. $8.38

·     Dexcom (DXCM) Q4 EPS $0.68 vs. est. $0.85; Q4 revs rose 23% to $698.2M vs. est. $695.6M; reiterates FY22 rev guidance of about $2.82B-$2.94B vs. est. $2.96B; sees FY22 gross margin of about 65% and operating margin of about 16%

·     Illumina (ILMN) Q4 adj EPS $0.75 vs. est. $0.49; Q4 revenue $1.2B vs. est. $1.13B; sees FY22 adj EPS $4.00-$4.20 vs. est. $4.20; sees FY22 revenue growth 14%-16%, consensus $5.01B; said GRAIL revenue is expected to be in the range of $70M-$90M

·     Mettler-Toledo (MTD) Q4 adj EPS $10.53 vs. est. $10.08; Q4 revs $1.037B vs. est. $1.02B; anticipates local currency sales growth in 2022 will be approximately 7%; raises FY22 adjusted EPS view to $38.15-$38.50 vs. est. $37.36

·     Novavax (NVAX) said its COVID-19 vaccine was 80% effective in a late-stage trial testing it in teens aged 12 to 17 years; expects to submit applications to global regulators for vaccine’s use in adolescents during Q1

·     Ultragenyx Pharmaceutical Inc (RARE) Q4 EPS ($1.79) vs est. ($1.34) on sales $83.4M vs est. $83.8M; sees FY22 revs for Crysvita in Ultragenyx territories $250M-$270M (from $192.6M in FY21) and Dojolvi revenue $55M-$65M (from $39.6M in FY21)

·     Twist Bioscience (TWST) 4.5M share Spot Secondary priced at $55.00

·     OraSure (OSUR) files $300M mixed securities shelf

 

Industrials & Materials

·     Chemours Company (CC) Q4 EPS $0.81 vs. est. $0.92; Q4 revs rose 18% to $1.60B vs. est. $1.57B; Q4 adjusted EBITDA up 25% y/y at $307M; sees FY 2022 adjusted eps between about $4.07-$4.70 vs. est. $4.54; anticipate completing remainder of share repurchase authorization in mid-2022

·     Republic Service Group (RSG) 4Q adj ESP $1.02 vs est. $1.01 on revs $2.95B vs est. $2.87B; guides FY22 adj EPS $4.58-4.65 vs est. $4.63 and FCF $1.625-1.675B

·     Terex Cor. (TEX) 4Q EPS $0.82 vs est. $0.55 on revs $990.1Mm vs est. $953Mm; guides FY22 sales $4.1-4.3B vs est. $4.4B and EPS $3.55-4.05 vs est. $4.14; announces dividend increase of 8.3%

·     Textainer Group Holdings (TGH) Q4 adj EPS $1.46 vs. est. $1.39; Q4 revs $198.22M vs. est. $200.03M; said for FY21, lease rental income increased 25% to $751M, driven by organic fleet growth in a strong demand environment; adjusted EBITDA increased by 47% to $698M

·     Vale SA (VALE) said sales of iron ore and iron ore pellets jumped in Q4 from Q3 as the company turned to inventories to meet demand, while iron ore production declined in the same period; iron ore output fell 7.8% q/q to 82.5 million metric tons, a decline of 2.4% y/y

 

Media & Telecom

·     Eventbrite (EB) Q4 EPS loss (-$0.18) vs. est. loss (-$0.13); Q4 revs rose 124% to $59.6M vs. est. $55.99M; guides Q1 revs $47M-$50M vs. est. $50M; Paid ticket volume of 22.1 million doubles year over year driven by stronger demand for live events; positive adjusted EBITDA for the year reflects strong execution

·     LiveOne, Inc. (LVO) Q3 adj EPS ($0.15) vs est. ($0.17) on revenue $32.9M vs est. $26.6M; revenue for first 9-months of the FY is +112% YoY; paid subscribers +37% YoY to over 1.369M; says they are positioned for their first positive adj EBITDA qtr in the upcoming quarter ending June 30 expects to post positive adj EBITDA in FY23 (est. $3.96M); raised lower-end of its FY23 revenue forecast, now seeing $125M-$140M from $120M-$140M

·     Vocera Comm (VCRA) 4Q adj EPS $0.29 vs est. $0.19 on revs $65.8Mm vs est. $64Mm

 

Technology

·     Avalara (AVLR) 4Q adj EPS ($0.06) vs est. ($0.08) on revs $195.1Mm vs est. $184.4Mm; sees 1Q revs $197-199Mm vs est. $192.4Mm and FY revs $854-859Mm vs est. $846.5Mm

·     Blackline (BL) 4Q adj EPS $0.08 vs est. $0.10 on revs $115.3Mm vs est. $113.6Mm; sees 1Q adj EPS loss $0.07-0.10 vs est. $0.13 and revs $119-120Mm vs est. $118.9Mm; sees FY adj EPS $0.08-0.11 vs est. $0.71

·     Cloudflare (NET) Q4 adj EPS 0c, in-line; Q4 revs rose 54% y/y to $193.6M vs. est. $184.9M; acquires Vectrix to help businesses gain visibility and control of their applications; Record dollar-based net retention of 125%, representing an increase of 600 basis points year-over-year; sees FY22 adj EPS 3c-4c vs. est. 2c; sees FY22 revs $927M-$931M vs. est. $888.44M

·     Cohu Inc. (COHU) Q4 adj EPS $0.72 vs est. $0.54 on revenue $191.9M vs est. $189.1M; sees Q1 sales $188M-$202M vs est. $203M

·     Go Daddy (GDDY) 4Q EPS $0.52 vs est. $0.41 on revs $1.019B vs est. $970.7Mm; guides 1Q revs $985-990Mm vs est. $994.7Mm and FY revs $4.14-4.16B vs est. $4.17B

·     HubSpot (HUBS) Q4 EPS $0.58 vs. est. $0.53; Q4 revs $369.3M vs. est. $357.47M; sees Q1 revs $381M-$383M vs. est. $377.23M; sees Q1 Non-GAAP operating income is expected to be in the range of $30M-$31M; Q4 subscription revenue was $358.7M, up 47% compared y/y; Professional services and other revenue was $10.7 million, up 38% y/y

·     JFrog ltd. (FROG) Q4 adj EPS (1c) vs est. 0c on revenue $59.2M vs est. $58.1M; sees Q1 adj EPS (1c)-1c vs est. (1c) on revenue $60.8M-$61.8M vs est. $60.9M, FY adj EPS (1c)-1c est. 3c on revs $273M-$275M vs est. $268.5M

·     Monolithic Power (MPWR) 4Q adj EPS $2.12 vs est. $1.88 on revs $336.5Mm vs est. $321.3Mm; guides 1Q revs $354-366Mm vs est. $322Mm

·     Qualys Inc. (QLYS) 4Q adj EPS $0.84 vs est. $0.80 on revs $109.8Mm vs est. $108.4Mm; guides 1Q revs $112.5-113.1Mm vs est. $109.7Mm and FY revs $482-485Mm vs est. $464.3Mm

·     SS&C Technologies Holdings (SSNC) 4Q adj EPS $1.28 vs est. $1.23 on revs $1.294B vs est. $1.26B; guides FY22 adj revs $5.13-5.33B vs est. $5.23B and adj EPS $5.10-5.40 vs est. $5.24, sees FY22 CAPEX 2.6-3.0% of revs

·     Upwork Inc. (UPWK) 4Q revs $136.9Mm vs est. $132Mm and adj EBITDA -3.3B vs est. -2.74B; guides 1Q revs $139-141Mm vs est. $139.1Mm and FY revs $620-630Mm vs est. $621Mm

·     Verisign (VRSN) 4Q adj EPS $1.46 vs est. $1.41 on revs $340Mm vs est. $340Mm; approved additional share repurchase authorization of $705Mm

·     Yelp inc. (YELP) Q4 EPS $0.30 vs. est. $0.14; Q4 revs $273.4M vs. est. $272.11; sees FY22 revenue $1.16B-$1.18B vs. est. $1.16B; sees FY22 adjusted EBITDA $260M-$280M; Q4 Ad clicks increased by 24% year over year and Average CPC declined by 5%

·     Zendesk (ZEN) confirmed that its Board of Directors received, thoroughly reviewed and rejected an unsolicited, non-binding proposal from a consortium of private equity firms to acquire all of Zendesk’s outstanding shares in an all-cash transaction valued at $127-$132 per share