Early Look

Friday, February 17, 2023

Futures	Up/Down	%	Last
Dow	-177.00	0.52%	33,562
S&P 500	-30.25	0.73%	4,069
Nasdaq	-120.50	0.96%	12,362

 

 

S&P futures are trading lower by -0.75% at 4,070 (overnight range 4,063.25 and low 4,096) on this option expiration Friday after falling -1.41% yesterday and finishing at the lows after stronger-than-expected producer prices data and a drop in weekly jobless claims fueled concern the Federal Reserve will need to stay aggressive in raising interest rates. U.S. Treasury yields rose on the news, adding to those gains this morning with the 10-year yield hitting 3.9% and the 2-yr near 4.7%, up 8-bps. Gold and oil prices are lower as the dollar extends its weekly advance on strong economic data as well as Hawkish central bank rhetoric driving price action with remarks from ECB’s Schnabel jolting markets after the Fed’s Mester and Bullard did the same on Thursday. There’s now an 18% chance of a half-point rate hike at the March 22-ending meeting, from 9% a week ago, according to the FedWatch tool from the CME. All eleven S&P 500 sectors closed lower Thursday, with the consumer discretionary index posting the biggest decline, followed by technology. In Asian markets, The Nikkei Index dropped -183 points to 27,513, the Shanghai Index fell -25 points to 3,224, and the Hang Seng Index declined -267 points to 20,719. In Europe, the German DAX is down over 150 points to 15,375, while the FTSE 100 slips -25 points to 7,986. The economic calendar includes two more Fed officials, Richmond Fed President Tom Barkin and Fed Gov. Michelle Bowman, ahead of the three-day weekend in observance of President’s Day on Monday.

 

Market Closing Prices Yesterday

·     The S&P 500 Index slumped -57.19 points, or 1.38%, to 4,090.41.

·     The Dow Jones Industrial Average fell -431.30 points, or 1.26%, to 33,696.85.

·     The Nasdaq Composite dropped -214.76 points, or 1.78%, to 11,855.83.

·     The Russell 2000 Index declined -18.76 points, or 0.96% to 1,942.21.

 

Economic Calendar for Today

·     8:30 AM ET           Import Prices M/M for January…est. (-0.2%)

·     8:30 AM ET           Export Prices M/M for January…est. (-0.2%)

·     8:30 AM ET           Fed’s Barkin Discusses the US Labor Market

·     10:00 AM ET         Leading Index Change for January…est. (-0.3%)

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

 

Earnings Calendar:

·     Earnings Before the Open: ABR AMCX AN ASIX B CNP CRBG DE LBRDA MD MMI

 

 

Macro	Up/Down	Last
Nymex	-2.08	76.41
Brent	-2.00	83.14
Gold	-18.10	1,833.70
EUR/USD	-0.0038	1.063
JPY/USD	1.08	135.02
10-Year Note	+0.061	3.904%

 

 

World News

·     Two of the Federal Reserve’s most hawkish policymakers (Bullard, Mester) signaled Thursday they may favor returning to bigger interest-rate hikes in the future, and said they saw the case for raising rates by a half-point at the central bank’s meeting earlier this month.

·     Crypto fugitive Do Kwon and the firm he founded transferred over 10,000 Bitcoin out of their doomed project and turned some of the tokens into cash via a Swiss bank, the Securities & Exchange Commission said. The allegations are in an SEC lawsuit accusing Kwon and the company, Terraform Labs Pte, of fraud – Bloomberg

 

Sector News Breakdown

Consumer

·     DoorDash (DASH) Q4 EPS loss (-$0.45) vs. est. loss (-$0.68); Q4 revs rose 40% y/y to $1.82B vs. est. $1.77B; announced authorization of a share repurchase program for up to $750M; Q4 Adjusted EBITDA was $117M, which was within the outlook range we provided. Excluding the impact of Wolt for comparison purposes, Q4 DoorDash Marketplace GOV increased 20% Y/Y to $13.4B; guides Q1 adj Ebitda and mkt place gross order value (GOV) above views.

·     DraftKings (DKNG) Q4 EPS loss (-$0.53) vs. est. loss (-$0.59); Q4 revs $855.13M vs. est. $800.23M; said monthly unique payers, or MUPs, increased to 2.6M and average revenue per MUP was $109, up 42% y/y; raising its fiscal year 2023 revenue guidance to a range of $2.85B-$3.05B, which equates to 27%-36% growth vs. est. $2.95B.

·     Texas Roadhouse (TXRH) 4Q EPS $0.89 vs est. $1.03 on revs $1.01B vs est. $1.02B, comps +7.3% company, +7.2% domestic franchise; plans menu price increase of approx +2.2% in late March; guides 1Q store week growth of at least 6% including impact of acquired franchise locations, 25-30 Texas Roadhouse and 33 Bubbas.

·     Bright Horizons (BFAM) 4Q adj EPS $0.77 vs est. $0.76 on revs $530Mm vs est. $525.4Mm, adj EBITDA $91Mm vs est. $90.6Mm; guides FY23 revs $2.3-2.4B vs est. $2.23B, adj EPS $2.80-3.00 vs est. $3.09.

 

Energy

·     PDC Energy (PDCE) board of directors approved an incremental $750M to the company’s existing $1.25B; share repurchase program, bringing the total authorization to $2B.

·     Stem Inc. (STEM) 4Q adj EBITDA ($10)Mm vs est. ($10)Mm on revs $156Mm vs est. $166.4Mm, gr mgn 8%; guides FY23 revs $550-650Mm vs est. $659.7Mm, adj gr mgn 15-20%, adj EBITDA ($35)Mm-($5)Mm vs est. ($3.3)Mm, bookings $1.4-1.6B; sees revs mix 1Q 10%, 2Q 15%, 3Q 30%, 4Q 45%.

 

Financials

·     China Renaissance shares plunge after the investment bank said it is unable to contact its Chairman and Chief Executive Bao Fan, in the latest disappearance of a top business executive https://reut.rs/3YUMmjA

·     Digital Realty (DLR) 4Q AFFO/shr $1.65 vs est. $1.68 on revs $1.23B vs est. $1.21B; guides FY core FFO/shr $6.65-6.75 vs est. $6.86, revs $5.7-5.8B vs est. $5.1B, adj EBITDA $2.675-2.725B vs est. $2.62B.

·     Redfin (RDFN) 4Q EPS ($0.57) vs est. ($1.08) on revs $479.7Mm vs est. $445.0Mm; guides 1Q revs $307-324Mm vs est. $285.4Mm, adj EBITDA ($84)Mm-($73)Mm.

·     American Equity (AEL) Q4 adj EPS $0.79 vs. est. $0.97; Q4 revs $654.45M vs. est. $565.68M; ramps private asset allocation to 22% and achieves close to $10 billion in fee-generating reinsurance balances in fourth quarter 2022.

·     Americold Realty (COLD) 4Q AFFO/shr $0.29 vs est. $0.25 on revs $721.5Mm vs est. $767Mm; guides FY23 AFFO/shr $1.14-1.24 vs est. $0.95.

·     Hannon Armstrong (HASI) 4Q adj EPS $0.47 vs est. $0.49 on revs $58.3Mm vs est. $33.9Mm; affirms guidance for distributable EPS to grow compound 10-13% from $2021-2024 vs 2020 baseline $1.55, equivalent to 2024 midpoint $2.40/shr.

·     Visa (V) announced that Vice Chair, Chief Financial Officer Vasant Prabhu will depart the Company on Sept. 30, 2023.

·     Citizens Financial Group, Inc. (CFG) announces $1.15B Increase in Share Repurchases.

 

Healthcare

·     Moderna (MRNA) announced that a study into a flu vaccine candidate failed to reach one of its goals; said that the candidate accomplished superiority in two goals and non-inferiority in another but did not reach the non-inferiority standard on the other goal of the study.

·     AMN Healthcare (AMN) 4Q adj EPS $2.48 vs est. $2.14 on revs $1.13B vs est. $1.07B, gr mgn 33.3%, adj EBITDA $174.6Mm vs est. $160.5Mm; guides 1Q revs $1.1-1.13B vs est. $1.07B, gr mgn 32.6-33.1%, op mgn 11.0-11.7%, adj EBITDA mgn 15.4-15.9%.

·     Bio Rad Labs (BIO) 4Q adj EPS $3.31 vs est. $3.45 on revs $730.3Mm vs est. $742.3Mm, gr mgn 54.9%; guides FY23 revs +6.0-7.0% currency-neutral vs est. +3.5% and adj op mgn approx 19.5%.

·     Dentsply Sirona (XRAY) approved an organizational restructuring plan intended to improve operational performance and drive shareholder value creation; plan is anticipated to achieve at least $200M in annual cost savings; cutting 10% of workforce.

·     Ginkgo Bioworks (DNA) CEO Jason Kelly has been tapped to chair a new congressional commission that will advise the U.S. government on creating policies meant to keep the biotech industry competitive and secure. But some ethics experts are concerned that Kelly’s got too many conflicts of interest. – STAT News reports

·     Nevro (NVRO) Q4 EPS loss (-$0.54) vs. est. loss (-$0.49); Q4 revs $113.8M vs. est. $113.4M; sees Q1 revenue $94M-$96M vs. est. $97.51M and 2023 revs $445M-$455M vs. est. $449.2M; Painful Diabetic Neuropathy (PDN) indication sales of approximately $17.3M, up 329% y/y.

·     Pacific Biosciences (PACB) 4Q adj EPS ($0.35) vs est. ($0.36) on revs $27.4Mm vs est. $26.2Mm, adj gross mgn 19%.

·     Shockwave Medical (SWAV) Q4 EPS $3.71 vs. est. $1.00; Q4 revs $144.03M vs. est. $142.6M; sees FY revs $660M-$680M vs. est. $658.6M; Q4 op expense $84M.

 

Industrials & Materials

·     Deere (DE) Q1 EPS $6.55 vs. est. $5.57 (and vs. $2.92 y/y); Q1 sales rose 32% y/y to $12.65B vs. est. $11.34B; sees FY23 revs to be in range $8.75B-$9.25B.

·     Air Lease (AL) Q4 adj EPS $1.42 vs. est. $1.01; Q4 revs $601.6M vs. est. $587.28M; had 417 aircraft in our owned fleet, with a net book value of $24.5 billion at end of December; says airlines are locking in our remaining 2024 and ’25 deliveries at an accelerating pace.

·     Casella Waste (CWST) Q4 EPS $0.18 vs. est. $0.23; Q4 revs $272.13M vs. est. $264.18M; sees FY23 revenue $ $1.15-$1.18B vs. est. $1.17B.

 

Technology, Media & Telecom

·     Applied Materials (AMAT) Q1 adj EPS $2.03 vs. est. $1.93; Q1 revs $6.74B vs. est. $6.23B; sees Q2 sales $6.0B-$6.8B vs. est. $6.29B and EPS $1.66-$2.02 vs. est. $1.75; GAAP operating margin 29.2% and non-GAAP operating margin 29.5%, down 2.3 points and 2.2 points y/y respectively.

·     Appian Corp. (APPN) 4Q adj EPS ($0.28) vs est. ($0.40) on revs $125.8Mm vs est. $123Mm, adj EBITDA ($24.8)Mm vs est. ($27.1)Mm; guides 1Q total revs $130-132Mm vs est. $132.2Mm, adj EBITDA ($21)Mm-($17)Mm vs est. ($20.3)Mm, adj EPS ($0.33)-($0.27) vs est. ($0.31); sees FY revs $530-535Mm vs est. $530.5Mm, adj EBITDA ($75)Mm-($70)Mm vs est. ($77.2)Mm and adj EPS ($1.14)-($1.07) vs est. ($1.23).

·     Cognex (CGNX) Q4 adj EPS $0.27 vs. est. $0.32; Q4 revs $239.43M vs. est. $245.7M; guides Q1 revenue $180M-$200M vs. est. $238.83M and sees Q1 gross margin low-70% range.

·     DropBox (DBX) 4Q adj EPS $0.40 vs est. $0.39 on revs $598.8Mm vs est. $593.7Mm, gr mgn 80.7%, ARR +11.2% y/y, paying users 17.77Mm vs 16.79Mm year ago.

·     Globant SA (GLOB) Q4 EPS $1.40 vs. est. $1.38; Q4 revs rose 29.2% y/y to $490.7M vs. est. $490.04M; sees FY23 EPS at least $5.70 vs. est. $5.99 and sees FY23 revenue at least $2.065B vs. est. $2.14B.

·     HubSpot (HUBS) Q4 EPS $1.17 vs. est. $0.82; Q4 revs $469.7M vs. est. $445.6M; sees Q1 EPS $0.82-$0.84 vs. est. $0.59 and revs $476M-$475M vs. est. $469.5M; Subscription revenue was $458.2M, up 28% y/y and professional services and other revenue was $11.5M up 8% y/y.

·     MagnaChip Semi (MX) Q4 EPS $0.07 vs. est. loss (-$0.36); Q4 revs $61M vs. est. $59.6M; guides Q1 revs $55M-$59M below est. $63.6M and margins 21%-23%.

·     Telephone & Data Systems (TDS) EPS ($0.38) vs est. ($0.36) on revs $1.36B vs est. $1.4B; guides FY US cellular revs $3.05-3.15B, adj EBITDA $875Mm-1.025B and TDS Telecom revs $1.03-1.06B, adj EBITDA $260-290Mm.