Early Look

Wednesday, February 24, 2021

Futures	Up/Down	%	Last
Dow	9.00	0.03%	31,501
S&P 500	1.25	0.03%	3,879
Nasdaq	-19.00	0.14%	13,173

 

 

Following a remarkable rally yesterday, pushing the S&P and Dow higher after sharp declines initially, U.S. futures are looking at a modestly higher open as Fed Chairman Powell returns back to Capitol Hill (speaking to House Financial Services Committee) for a second day of testimony after telling the Senate Banking Committee on Tuesday that the central bank would keep its foot on the gas pedal as the pandemic recovery path remains “highly uncertain,” though he forecast a return to more normal and improved economic activity later in the year. Powell told lawmakers that interest rates would remain low as he noted the economic recovery “remains uneven and far from complete.” Powell signaled the central bank won’t soon begin tapering the $120 billion of bonds it has been buying per month until “substantial further progress” was achieved. Stocks reversed earlier losses on Tuesday in a monumental rebound off morning lows as the S&P 500 and Dow close higher (S&P 500 snapped its five-day losing streak after falling as much as 1.75% initially). The Dow erased losses of as many as 360 points, or more than 1%, to push into positive territory Tuesday afternoon. The bigger rebound came in the Nasdaq, jumping as much as 500 points off the morning lows of 13,003 before settling down about -0.5% at 13,463 as investors swooped in to buy mega cap tech names after the Nasdaq breached its 50-day moving average of 13,240 earlier. A combination of rising inflation expectations and higher Treasury yields along with soaring stock valuations has weighed on sentiment, but took a back seat to buying momentum. In Asian markets, The Nikkei Index fell -484 points to 29,671, the Shanghai Index dropped -72 points to 3,564 and the Hang Seng Index plunged -914 points (3%) to 29,718. In Europe, the German DAX is up around 100 points to 13,960, while the FTSE 100 is little changed to 6,625. Another busy day of earnings again this morning, but light economic calendar.

 

Market Closing Prices Yesterday

·     The S&P 500 Index gained 4.87 points, or 0.13%, to 3,881.37

·     The Dow Jones Industrial Average rose 15.66 points, or 0.05%, to 31,537.35

·     The Nasdaq Composite dropped -67.85 points, or 0.50%, to 13,465.20

·     The Russell 2000 Index declined -19.76 points, or 0.88% to 2,231.31

 

Events Calendar for Today

·     7:00 AM ET         MBA Mortgage Applications Data

·     10:00 AM EST    New Home Sales MoM January

·     10:30 AM ET      Weekly DOE Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: BGCP, BHC, CLDT, CLH, CNST, CSPR, ELAN, ETM, ETR, EXC, FDP, HFC, HZNP, IBP, IONS, IRM, ITRI, KOP, KURA, LMRK, LNG, LOW, NEO, ODP, OMI, OSTK, PGTI, PLAB, PNW, RGEN, SAGE, SITE, SIX, TCP, TEN, TJX, TRN, USCR, UTHR, VIAC, VRT, WEX, XTNT

·     Earnings After the Close: ACAD, ADPT, AMED, ANSS, APA, BKNG, CCRN, CDNA, CHDM CHRS, CNXN, CPE, CW, DDD, DOOR, DRH, EPR, ESI, ESTC, FNF, FRTA, FVE, GBT, GEF, GH, GNK, HCC, KRA, KW, LB, MAXR, MGNI, MMSI, NOVA, NTAP, NTNX, NVDA, NVRO, NYMT, OAS, OII, PDCE, PING, PRTK, PSA, RCKY, RDFN, RDN, RVLV, RYAM, SCKT, SGMO, SPTN, STAA, TDOC, TNDM, TRUE, TVTY, TWNK, UPLD, VAC, WLL

 

Other Key Events:

·     Baird Sustainability Conference (virtual), 2/23-2/24

·     Credit Suisse Financial Services Forum (virtual), 2/24-2/26

·     KBW Inc. Payments FinTech Conference (virtual), 2/23-2/25

·     Oppenheimer Cloud Infrastructure & Software (virtual) 2/24-2/25

·     SVB Leerink Global Healthcare Conference (virtual), 2/22-2/26

·     Wells Fargo Real Estate Securities Conference (virtual), 2/24-2/25

·     Wolfe Research Global Auto, Auto Tech and Mobility Conference (virtual), 2/24-2/25

 

 

Macro	Up/Down	Last
Nymex	0.41	62.08
Brent	0.53	65.90
Gold	1.70	1,807.45
EUR/USD	0.001	1.2160
JPY/USD	0.59	105.84
10-Year Note	+0.003	1.367%

 

 

World News

·     Germany’s economy grew in the fourth quarter by more than reported in the first release, the German statistics office Destatis said Wednesday. GDP for the fourth quarter increased by an adjusted 0.3% from the previous quarter, above the preliminary estimate of 0.1% growth and beat economists’ expectations of a 0.1% expansion

·     Japan Fin Min Aso says Govt not considering fresh stimulus measures beyond what is already in place , is in no doubt that Q1 GDP will below Q4’s result; Japan needs to continue issuing deficit-covering bonds until at least 2025’

 

Sector News Breakdown

Consumer

·     Lowe’s (LOW) reports Q4 adjusted EPS $1.33 vs. est. $1.21; Q4 revenue $20.31B vs. est. $19.48B; Q4 comp sales for the U.S. home improvement business increased 28.6% in Q4 beating analysts’ estimates of a 21.2%; said it was planning $9 billion in share buybacks and $2 billion in capital expenditures in 2021

·     GameStop (GME) announced that Jim Bell, Executive Vice President and CFO, will be resigning from his roles on March 26, 2021

·     Toll Brothers (TOL) Q1 EPS 76c vs. est. 47c; Q1 revs $1.56B vs. est. $1.34B; Q1 backlog $7.47 billion, +37% YoY; Q1 cancellation rate 1.4% and adj. home sales gross margin 22.9%; sees FY 2021 deliveries of between 10,000 and 10,400 homes with an average price of between $790,000 and $810,000

·     RR Donnelley (RRD) shares jump over 50% as posts both Q4 revenue and adj. profit above analysts’ expectations, helped by sequential improvement in net sales and execution of cost reduction plans; sees Q1 sales $1.09B-$1.15B vs. est. $1.11B

 

Energy

·     The American Petroleum Institute (API) reported weekly crude inventories rose +1.026MM barrels, gasoline with a build of +0.066MM barrels, distillate a -4.489MM barrel draw and Cushing weekly inventories with a build of +2.783MM barrels

·     Cabot Oil & Gas (COG) Q4 adj EPS 26c vs. est. 21c; Q4 revenue $456.78M vs. est. $417.46M; Q4 2020 daily production was 2,375 mln cubic feet equivalent; reaffirmed its recently announced guidance for 2021; targets FY21 capital program of $530M-$540M

·     Delek Holdings (DK) Q4 adj EPS loss ($2.77) vs. est. loss ($1.87); Q4 revenue $1.88B vs. est. $1.38B; refining contribution margin decreased to $(82.0) mln in q4 2020 from $127.8 mln in q4 2019; underlying cost improvements and capital reductions across portfolio position company well for 2021

·     Pioneer Natural Resources (PXD) Q4 adj EPS $1.07 vs. est. 68c; Q4 revenue $1.86B; Delivered strong fourth quarter and full year 2020 free cash flow1 of $294 million and $689 million, respectively; Averaged Q4 oil production of 204 MBOPD, in the upper half of guidance; averaged Q4 production of 364 thousand barrels of oil equivalent per day (MBOEPD), in the upper half of guidance

·     Range Resources (RRC) Q4 adjusted EPS 2c vs. est. 6c; Q4 adjusted revenue $531M vs. est. $497.57M; Production for full-year 2021 is expected to average approximately 2.15 Bcfe per day, with ~30% attributed to liquids production; sees 2021 all-in capital budget $425M

 

Financials

·     Hackett Group (HCKT) 4Q pro forma EPS $0.23 vs. est. $0.21 on revs $59.2Mm vs. est. $56.8Mm; guides 1Q21 pro forma EPS $0.24-0.26 vs. est. $0.22, sees 1Q net revs $61-63Mm vs. est. $59.4Mm

·     Intuit (INTU) 2Q adj EPS $0.68 vs. est. $0.91 on revs $1.6B vs. est. $1.75B; guides 3Q revs approx +53-55% vs. est. +45%, sees 3Q adj EPS $6.75-6.85 vs. est. $6.47; guides FY21 revs $8.81-8.995B vs. est. $8.9B, sees FY21 adj EPS $8.20-8.40 vs. est. $8.36

·     MGIC Investment (MTG) 4Q adj EPS $0.43 vs. est. $0.40 on total revs $302.3Mm vs. est. $301.1Mm, qtrly new insurance written $33.2Mm, qtrly net premiums written $233.4Mm vs. est. $254.4Mm

·     Square Inc. (SQ) said it buys 3,318 bitcoins at an average price of $51,236; Q4 adj EPS 32c vs. est. 24c; Q4 revenue $3.16B vs. est. $3.09B; IN q1 2021, we expect transaction and loan loss expense to increase by $20 million to $30 million compared to the fourth quarter of 2020; in Jan, cash app achieved its highest monthly totals of new transacting active customers for its bitcoin, stock brokerage, cash card products

 

Healthcare

·     Icon (ICLR) Q4 adjusted EPS $1.90 vs. est. $1.83; Q4 revenue $760.2M vs. est. $751.01M; sees FY21 adj EPS $8.10-$8.50 vs. est. $7.94; sees FY21 $3.2B-$3.3B vs. est. $3.16B to acquire PRA Health in $12B deal https://on.mktw.net/2ZRCk69

·     PRA Health (PRAH) to be acquired by Icon (ICLR) in a cash-and-stock transaction valued at about $12 billion; consideration consisting of $80 in cash and 0.4125 shares of ICON stock and represents an approximately 30% premium to PRA’s closing price as of February 23rd.

·     AtriCure (ATRC) 4Q adj EPS ($0.18) vs. est. ($0.28) on revs $57.7Mm vs. est. $58.1Mm; guides 1Q revs $55-57Mm vs. est. $59.3Mm; sees FY revs about $250Mm vs. est. $257.1Mm, sees FY adj EPS about ($1.15) vs. est. ($0.83)

·     Castlight Health (CSLT) Q4 adj EPS 2c vs. est. 0c; Q4 revenue $37.1M vs. est. $33.06M; sees FY21 adjusted EPS (6c)-(2c) vs. est. 0c; sees FY21 revenue $130M-$135M vs. est. $138.17M; Q4 Non-GAAP gross margin of 68.0%, compared to 57.8%

·     Halozyme (HALO) Q4 EPS 50c vs. est. 53c; Q4 revenue $121.7M vs. est. $120.16M; plans to repurchase up to $125 mln in common stock during 2021 as part of $550 mln three-year share repurchase plan; sees year revs $375M-$395M vs. est. $400.2M; announces $500m convertible note offering

·     Insulet Corp. (PODD) Q4 EPS loss (26c) vs. est. loss (4c); Q4 revenue $246.1M vs. est. $232.89M; sees Q1 revenue up 20%-24% and 2021 revs up 15%-20%

·     Jazz Pharmaceuticals (JAZZ) Q4 EPS $4.00 vs. est. $4.20; Q4 revenue $665.52M vs. est. $639.55M; Xyrem net product sales increased 6% to $1,741.8 million in 2020 and increased 1% to $439.3 million in the fourth quarter of 2020 compared to the same periods in 2019; sees 2021 adj eps $15.65 to $16.85 vs. est. $16.61

·     Masimo Corp. (MASI) 4Q adj EPS $0.98 vs. est. $0.86 on revs $291.5Mm vs. est. $287.45Mm; guides FY21 revs $1.2B vs. est. $1.194B, sees FY adj EPS $3.80 vs. est. $3.84

·     Myriad Genetics (MYGN) Q2 EPS loss (12c) in-line with estimates; Q2 revenue $154.6M vs. est. $150.39M; delivers 6% sequential revenue growth; company continues to execute strategic transformation plan; not providing year guidance

·     Penumbra (PEN) Q4 EPS 10c vs. est. loss (7c); Q4 revenue $166.9M vs. est. $151.88M; sees year revs $675M-$685M vs. est. $654.5M; Total operating expenses were $96.1 million, or 57.6% of total revenue for the fourth quarter of 2020

·     Pfizer (PFE) said the U.S. FDA has granted a priority review status to the company’s Biologics License Application (BLA) for TicoVac, its tick-borne encephalitis (TBE) vaccine for active immunization to prevent TBE in individuals 1 year of age and older

·     Tactile Systems (TCMD) 4Q EPS $0.61 vs. est. $0.24 on revs $59.2Mm vs. est. $58.2Mm; guides FY21 revs $215.3-224.5Mm vs. est. $230Mm; Gross margin 71% vs. 72% y/y, estimate 71.6%; cash and cash equivalents $47.9 million vs. $22.8 million y/y

 

Industrials & Materials

·     Flowserve Corp. (FLS) Q4 adj EPS 53c vs. est. 53c; Q4 revenue $985.31M vs. est. $958.49M; sees FY21 adjusted EPS $1.30-$1.55 vs. est. $1.64; sees FY21 revenues down 4.0% to 7.0% vs. est. $3.57B

·     O-I Glass (OI) sees lower shipment, production levels & higher energy and transportation costs in affected markets compared to original q1 expectations; now sees q1 global shipments will be down slightly from 2020 levels, adj earnings below previous guidance range of $0.32 to $0.37/share (est. $0.34); has not changed its full year business outlook at this stage

·     Summit Materials (SUM) 4q eps $0.31 vs. est. $0.17 on revs $571.9mm vs. est. $513.4mm; guides fy21 adj Ebitda approx $490-520mm vs. est. $474.2mm, sees fy21 capex $200-220mm

 

Technology, Media & Telecom

·     Arlo Technologies (ARLO) 4Q adj EPS ($0.08) vs. est. ($0.18) on revs $113.8Mm vs. est. $111.6Mm, end qtr cash & equiv and s-t investments of $206.1Mm with no debt; guides 1Q revs $70-80Mm vs. est. $77.3Mm, sees 1Q adj net loss/shr $0.23-0.17 vs. est. loss/shr $0.22

·     Infinera (INFN) 4Q adj EPS $0.13 vs. est. $0.02 on revs $354.4Mm vs. est. $356.8Mm; guides 1Q revs $329Mm vs. est. $332.15Mm

·     McAfee Corp. (MCFE) 4Q adj EPS $0.38 vs. est. $0.31 on revs $777Mm vs. est. $738.8Mm, qtrly core direct to consumer subs increased to 18Mm, qtrly enterprise revs +5% yr/yr; guides 1Q net revs $725-735Mm vs. est. $724.4Mm, sees 1Q adj EBITDA $275-285Mm vs. est. $274.4Mm

·     OneSpan Inc. (OSPN) 4Q adj EPS $0.03 vs. est. $0.01 on revs $52.9Mm vs. est. $42.4Mm, ARR +29% to $103.8Mm; guides FY21 revs $215-225Mm vs. est. $225.1Mm, sees FY21 ARR growth +22-26%

·     PPD Inc. (PPD) Q4 adj EPS 39c vs. est. 36c; Q4 revenue $1.36B vs. est. $1.28B; Q4 ending backlog of $8.,19B, an increase of 15.9% YoY; sees Q1 adjusted EPS 30c-32c vs. est. 32c and sees Q1 revenue $1.277B-$1.302B vs. est. $1.23B; sees 2021 adj EPS $1.37-$1.45 vs. est. $1.39; sees 2021 revenue $5.145B-$5.304B vs. est. $5.06B

·     Sierra Wireless (SWIR) Q4 EPS loss (31c) vs. est. loss (26c); Q4 revenue $120.5M vs. est. $116.23M; said overall gross margins improving to 36%; sees q1 revs about $109.9M vs. est. $110.9M; Revenue from IoT Solutions decreased 3.6% to $87.6M primarily due to lower hardware sales in Enterprise gateway products and Integrated IoT Solutions modules

·     Sprout Social (SPT) Q4 EPS loss (6c) vs. est. loss (11c); Q4 revenue $37.3M vs. est. $35.97M; Q4 total ARR was $158.3M, up 34%; sees Q1 EPS (11c)-(10c) vs. est. (12c); sees Q1 revenue $39.6M-$39.7M vs. est. $38.23M; sees year revs $172M-$173M vs. est. $167.5M

·     Upwork Inc. (UPWK) 4Q adj EPS $0.06 vs. est. ($0.05) on revs $106.2Mm vs. est. $97.9Mm, qtrly GSV rose 33% yr/yr to $727.7Mm; guides 1Q revs $107-109Mm vs. est. $102Mm, sees FY21 revs $460-470Mm vs. est. $436.7Mm

·     Verisk Analytics (VRSK) 4Q adj EPS $1.27 vs. est. $1.30 on revs $713Mm vs. est. $716.8Mm