Early Look
Wednesday, March 1, 2023
|
Futures |
Up/Down |
% |
Last |
|
Dow |
72.00 |
0.22% |
32,754 |
|
S&P 500 |
13.25 |
0.33% |
3,988 |
|
Nasdaq |
59.50 |
0.49% |
12,131 |
U.S. futures point to a higher open, tracking both European and Asian markets higher after stronger than expected Chinese PMI manufacturing data (strongest in over 10-years) stimulated demand for stocks. That said, it will also boost the case for higher inflation fears as the China economy opens after years of Covid related lockdowns stymied growth. That will also boost the case for higher interest rates out of both the U.S. and Europe to help reign in inflation spikes. Treasury yields fall from their morning highs with the 10-year around 3.92%, but finished February higher by 38-bps and the 2-year rose 58 bps to 4.795%, the largest monthly gain since September. Data and Fed speakers are likely to keep major averages on their toes today. There is one scheduled Fed speaker today. Neel Kashkari takes part in an online moderated discussion. Heavy dose of economic data today as well. European stocks are ahead, tracking gains in Asia after Chinese manufacturing PMI rose to its highest in almost 11 years. In Asian markets, The Nikkei Index gained 70 points to 27,516, the Shanghai Index rose 32 points to 3,312, and the Hang Seng Index surged 833 points or 4.21% to settle at 20,619. In Europe, the German DAX is up 100 points to 15,467, while the FTSE 100 gains 70 points to 7,945.
Market Closing Prices Yesterday
· The S&P 500 Index dropped -12.55 points, or 0.32%, to 3,969.69.
· The Dow Jones Industrial Average slid -234.11 points, or 0.71%, to 32,654.98.
· The Nasdaq Composite slipped -11.44 points, or 0.10%, to 11,455.54.
· The Russell 2000 Index edged higher 0.73 points, or 0.04% to 1,897.00.
Economic Calendar for Today
· 7:00 AM ET MBA Mortgage Applications Data
· 9:45 AM ET S&P Global Manufacturing PMI, Feb-F…prior 47.8
· 10:00 AM ET Construction Spending M/M for January…est. +0.2%
· 10:00 AM ET ISM Manufacturing PMI for February…est. 48.0
· 10:30 AM ET Weekly DOE Inventory Data
Earnings Calendar:
· Earnings Before the Open: ACIW ANF ASTE BHG CLH DIBS DCI DIN DLTR EVRI EYE FOLD FWONA GOLD GTHX HGV HZNP ISEE ITCI JACK KSS LL LOW LSXMA MYE ODP PAR PSTG STWD TUP VST WEN WKHS YOU
· Earnings After the Close: AAN AEO AWR BBSI BOX CANO CDLX CLPT CODI CRDO CRM CWT CYTK DHC DNA DV EVLV FNKO FTDR GDEN GEF INO LPSN MDRK MLNK MRCC OKTA QRTEA RPAY SNOW SPLK TVPG WRAP ZUO
Other Key Events:
· Deutsche Bank Annual Media, Internet & Telecom Conference, 2/27-3/1, in Palm Beach, FL
· Mobile World Congress, 2/27-3/2, in Barcelona, Spain
· Piper Internet Bus Tour, 3/1-3/2, in San Francisco
· Piper Western Financial Services Conference, 3/1-3/3 in San Diego, CA
|
Macro |
Up/Down |
Last |
|
Nymex |
-0.75 |
76.30 |
|
Brent |
-0.62 |
82.83 |
|
Gold |
6.40 |
1,843.10 |
|
EUR/USD |
0.0092 |
1.0668 |
|
JPY/USD |
-0.85 |
135.34 |
|
10-Year Note |
+0.006 |
3.92% |
World News
· Chinese NBS Manufacturing PMI actual 52.6 (forecast 50.6, previous 50.1)
· Chinese NBS Non-Manufacturing PMI actual 56.3 (forecast 54.9, previous 54.4)
· Bank of Japan said will maintain easy pol while taking steps to counter side effects; important to keep supporting econ with easy pol for the time being; decision to widen yield bands had led to rise in long-term rates but has more merits by improving functioning of bond market.
Sector News Breakdown
Consumer
· Lowe’s (LOW) Q4 adj EPS $2.28 vs. est. $2.21; Q4 sales rose 5.2% y/y to $22.45B vs. est. $22.73B; forecast full-year sales below market expectations as sees FY total sales of $88B-$90B vs. est. $90.8B and EPS $13.60-$14.00 vs. est. $13.79; reported a -1.5% decline in comparable sales for Q4, worse than expectations of a 0.01% drop.
· AMC Entertainment (AMC) Q4 adj EPS loss (-$0.14) vs. est. loss (-$0.21); Q4 revs $990.9M vs. est. $977.7M; available liquidity at December 31, 2022 was $842.7M; industry-wide box office will not return to pre-pandemic norms before 2024 or 2025 at the earliest.
· B&G Foods (BGS) Q4 adj EPS $0.40 vs. est. $0.22; Q4 revs $623.3M vs. est. $583.9M; sees FY23 adjusted EPS 95c-$1.15 vs. est. $1.02 and revs $2.13B-$2.17B vs. est. $2.16B.
· Blink Charging (BLNK) Q4 EPS loss (-$0.55) on revs $22.6M vs. est. $19.3M; says operating expenses rose 67% y/y to $34.2M; sees FY23 revs $100M-$110M vs. est. $91.6M.
· CarGurus (CARG) 4Q EPS $0.20 vs est. $0.10 on revs $286.7Mm vs est. $281.4Mm; guides 1Q revs $195-215Mm vs est. $285.2Mm, adj EBITDA $19-27Mm vs est. $21.5Mm, adj EPS $0.17-0.19 vs est. $0.12.
· Grocery Outlet (GO) Q4 EPS $0.25 vs. est. $0.23; Q4 sales $930.8M vs. est. $907.5M; sees FY23 EPS 94c-99c vs. est. $1.14 and revs $3.85B-$3.9B vs. est. $3.92B; sees new store openings, net 25 to 28; Q4 comparable store sales grew 15.1% driven by a 10.0% increase in transactions.
· Monster Beverage (MNST) 4Q EPS $0.57 vs est. $0.63 on sales $1.51B vs est. $1.6B; declares 2-for-1 split.
· Rivian (RIVN) Q4 adj EPS loss ($1.73) vs. est. loss ($1.94); Q4 revs $663M vs. est. $742.39M; Q4 delivery of 8,054 vehicles and produced 10,020 vehicles during Q4; during 2023, gross margin expected to remain negative, but expect improving on dollar basis; FY total operating expenses are expected to modestly increase as compared to 2022.
· Ross Stores (ROST) Q4 EPS $1.31 vs. est. $1.24; Q4 revs $5.2B vs. est. $5.17B; Q4 comp store sales rose +1% vs. est. -1%; Operating margin 10.7%, estimate 10.4%; sees FY23 EPS $4.65-$4.95 vs. consensus $5.09.
· Urban Outfitters (URBN) Q4 EPS $0.34 vs. est. $0.38; Q4 revs $1.38B vs. est. $1.37B; By brand, comparable Retail segment net sales increased 15% at the Free People Group and 9% at the Anthropologie Group and decreased 10% at Urban Outfitters; enter spring selling season with an improved inventory position which bodes well for merchandise margin opportunity in FY2024.
Energy
· First Solar (FSLR) Q4 EPS loss (-$0.07) vs. est. loss (-$0.15); Q4 revs $1.0B vs. est. $989.3M; sees FY23 EPS $7.00-$8.00 and revs $3.4B-$3.6B vs. est. $3.34B; sees FY operating income is forecasted to be $745M-$870M; sees year capex $1.90B-$2.1B.
· Shoals Technologies (SHLS) 4Q adj EPS $0.15 vs est. $0.09 on revs $94.7Mm vs est. $86Mm, adj EBITDA $30.1Mm vs est. $22.2Mm; guides FY revs $470-510Mm vs est. $506Mm, adj EBITDA $140-155Mm vs est. $153.6Mm, adj net Inc $87-97Mm.
· The American petroleum Institute reports 10th straight weekly crude build; Crude +6.203mm (+350k exp); Cushing +483k, Gasoline -1.774mm and Distillates -341k.
· American Water (AWK) 11.0M share Spot Secondary priced at $135.50.
Financials
· FIGS Inc. (FIGS) Q4 adj EPS $0.05 vs. est. $0.01; Q4 revs $144.9M vs. est. $135.4M; sees FY23 revenue mid-single digit growth vs. est. $560.64M and guides FY23 adj EBITDA margin 11%-12%.
· Rocket Companies (RKT) 4Q adj EPS ($0.10) vs est. ($0.11) on revs $683Mm vs est. $682.7Mm; guides 1Q adj revs $700-850Mm vs est. $805.8Mm.
· Verisk Analytics (VRSK) 4Q adj EPS $1.43 vs est. $1.18 on revs $630.4Mm vs est. $616.4Mm, will provide outlook on tomorrow conf call.
· BrightSpire Capital (BRSP) 30.4M share Spot Secondary priced at $6.00.
Healthcare
· Reata Pharma (RETA) shares surge over 150% after the FDA approved its treatment for Friedreich’s ataxia. The drug, omaveloxolone, is now called Skyclarys and has been approved to treat adults 16 and older with the degenerative disease.
· Agilent (A) Q1 EPS $1.37 vs. est. $1.30; Q1 revenue $1.76B vs. est. $1.7B; sees Q2 EPS $1.24-$1.27 vs. est. $1.27 and revs $1.655B-$1.68B vs. est. $1.65B.
· Good RX (GDRX) 4Q adj EPS $0.07 vs est. $0.05 on revs $184.1Mm vs est. $178.5Mm, adj EBITDA $49.6Mm vs est. $40.7Mm; guides 1Q revs $181-183Mm vs est. $181.7Mm and adj EBITDA mgn mid-twenty % range; sees FY revs $780-790Mm vs est. $778Mm.
· Masimo Corp. (MASI) 4Q adj EPS $1.32 vs est. $1.18 on revs $617Mm vs est. $602.5Mm; guides 1Q adj revs $550-565Mm vs est. $553.4Mm, adj EPS $0.81-0.86 vs est. $0.93; sees FY adj revs $2.415-2.46B vs est. $2.365B and adj EPS $4.70-4.80 vs est. $4.40.
· Merck (MRK) announces phase 3 KEYNOTE-671 trial met primary endpoint of event-free survival (EFS) in patients with resectable stage II, IIIA or IIIB non-small cell lung cancer.
· Myriad Genetics (MYGN) Q4 EPS loss (-$0.12) vs. est. loss (-$0.16); Q4 revs $177.8M vs. est. $169.5M; sees FY23 loss (40c)-(20c) vs. est. loss (-$0.30); sees FY23 revenue $720M-$750M vs. est. $724.97M; says adjusted EPS is expected to improve through 2023, reaching positive adjusted profitability and operating cash flow in Q4.
· Natera Inc. (NTRA) Q4 EPS loss ($1.37) vs. est. loss ($1.42); Q4 revs $217.3M vs. est. $215.55M; sees FY23 revenue $980M-$1.0B vs. est. $988.88M and 2023 gross margin to be approximately 41% to 44% of revenues.
· NanoString (NSTG) 4Q adj EBITDA ($27.7M) vs est. ($19.7Mm) on adj revs $34.4Mm vs est. $33.7Mm; guides FY23 revs $170-180Mm vs est. $174.3Mm, adj EBITDA ($75)-($65)Mm vs est. ($68.7)Mm.
· Novavax (NVAX) Q4 EPS loss (-$2.28) vs. est. loss (-$0.92); Q4 revs $357M vs. est. $383.14M; Q4 cash, cash equivalents, and restricted cash were $1.3B as of December 31, 2022, compared to $1.5B as of December 31, 2021; says co has $2 bln in contracts with non-U.S. gov’ts globally, intends to “pull that business through” in 2023 and 2024.
· Revance Therapeutics (RVNC) Q EPS ($1.82) vs est. ($0.95) on revs $45.7Mm vs est. 46.6Mm; guides FY23 adj op exp $320-340Mm, adj R&D $80-90Mm.
· Sarepta (SRPT) 4Q EPS ($1.24) vs est. ($1.35) on revs $258.4Mm vs est. $248.3Mm, says mid-cycle meeting complete, FDA does not plan to hold advisory committee for SRP-9001.
· 2seventy Bio (TSVT) 10.87M share Spot Secondary priced at $11.50.
Industrials & Materials
· Axon Enterprises (AXON) 4Q adj EPS $0.70 vs est. $0.51 on revs $305.9Mm vs est. $305.9Mm; guidesFY23 revs at least $1.43B vs est. $1.38B and adj EBITDA $286Mm vs est. $279.9Mm, adj EBITDA mgn 20%.
· Dycom (DY) Q4 EPS $0.83 vs. est. $0.13; Q4 revs $917.5M vs. est. $814.2M; expects contract revenues for the quarter ending April 29, 2023, to increase mid- to high-single digit as a percentage of contract revenues as compared to the quarter ended April 30, 2022.
· Virgin Galactic (SPCE) Q4 EPS loss (-$0.55) vs. est. loss (-$0.51); says commercial service remains on track for q2 2023; forecasted free cash flow for q1 of 2023 is expected to be in range of negative $135M to negative $145M.
Technology, Media & Telecom
· Nvidia (NVDA) files for mixed shelf of up to $10 bln.
· Ambarella (AMBA) Q4 adj EPS $0.23 vs. est. $0.14; Q4 revs $83.3M vs. est. $83.01M; sees Q1 revenue $60M-$64M below consensus $77.14M and sees Q1 gross margin on a non-GAAP basis is expected to be between 62.0% and 64.0%.
· Duolingo (DUOL) 4Q EPS ($0.35) vs est. ($0.53) on revs $103.8Mm vs est. $99.9Mm, total bookings $126.4Mm, adj EBITDA $5.2Mm vs est. ($1.15)Mm; guides 1Q bookings $127.5-130.5Mm, revs $111-114Mm vs est. $106.1Mm, adj EBITDA $10.0-11.4Mm vs est. $5.37Mm, adj EBITDA mgn 9.0-10.0%; sees FY23 bookings $530-542Mm, revs $486-498Mm vs est. $464.5Mm, adj EBITDA $48.6-59.8Mm vs est. $25.4Mm, adj EBITDA mgn 10.0-12.0%.
· Hewlett Packard (HPQ) 1Q adj EPS $0.75 vs est. $0.74 on revs $13.83B vs est. $14.12B; guides 2Q adj EPS $0.73-0.83 vs est. $0.76; reaffirms FY adj EPS $3.20-3.60 vs est. $3.28, sees FY FCF $3.0-3.5B.
· Luminar Technologies (LAZR) 4Q adj EPS ($0.26) vs est. ($0.21) on revs $11.1Mm vs est. $12.5Mm; guides FY23 revs growth at least 100% vs est. >100% to $116.1Mm, gr mgn positive by 4Q23, cash, equivalent & marketable greater than $300Mm.
· PubMatic (PUBM) 4Q adj EPS $0.33 vs est. $0.26 on revs $74.3Mm vs est. $76.7Mm; guides 1Q revs $50-52Mm vs est. $54.9Mm and adj EBITDA $4-6Mm vs est. $8.4Mm; sees FY adj EBITDA mgn 30%+ and FCF similar to 2022.
· Rogers Corp. (ROG) 4Q adj EPS $1.04 vs est. $0.86 on sales $223.7Mm vs est. $235.4Mm, adj EBITDA $27.8Mm; guides 1Q net sales $230-240Mm vs est. $230.1Mm and adj EPS $0.65-0.85 vs est. $0.86.
· Vizio (VZIO) 4Q EPS $0.03 vs est. $0.02 on revs $533.5Mm vs est. $509.6Mm, adj EBITDA $19.9Mm vs est. $17Mm; sees 1Q platform+ net revs $114-119Mm, platform+ gr profit $66-70Mm, adj EBITDA $0-5Mm vs est. $10Mm.
· EngageSmart (ESMT) says public offering of 8.0 mln common shares priced at $19.00/share.
· PowerSchool (PWSC) 8.7M share Spot Secondary priced at $21.00.
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.