Early Look
Tuesday, May 9, 2023
Futures |
Up/Down |
% |
Last |
Dow |
-121.00 |
0.36% |
33,564 |
S&P 500 |
-15.25 |
0.37% |
4,137 |
Nasdaq |
-56.50 |
0.42% |
13,295 |
S&P futures (Spuz) looking lower -0.37% at 4,137.50, near the low end of overnight range, but still a narrow trading band (4,153 high and 4,134.75 low) after weaker China trading data overnight and heading into tomorrow’s CPI data. China’s imports contracted sharply in April, while exports rose at a slower pace. Inbound shipments fell 7.9% y/y in April, extending the 1.4% decline seen a month earlier, while exports grew 8.5%, easing from the 14.8% surge in March, data showed. Meanwhile U.S. President Joe Biden and top Republican lawmakers are expected to meet 4:00 PM ET today at the White House face to face to discuss looking for a resolution to the $31.4 trillion U.S. debt ceiling, with a default looming in three weeks if Congress does not act. Stocks made little progress on Monday with the S&P 500 eking out a tiny gain, while the Dow Industrials ended slightly lower after the Fed’s quarterly Senior Loan Officer Opinion Survey (SLOOS) found U.S. banks tightened credit standards in the first months of 2023 and saw weakening loan demand. The first SLOOS since March, showed a broad-based tightening in loan standards “before” the failure of Silicon Valley Bank became modestly worse after the bank’s collapse as 67% of banks reported tighter standards for CRE, up from 58% in January. In Asian markets, The Nikkei Index rose 292 points to 29,242, the Shanghai Index fell -37 points to 3,357, and the Hang Seng Index dropped -429 points to 19,867. In Europe, the German DAX is down about -40 points to 15,913, while the FTSE 100 slides -30 points to 7,747.
Market Closing Prices Yesterday
· The S&P 500 Index edged higher 1.87 points, or 0.05%, to 4,138.12.
· The Dow Jones Industrial Average slid -55.69 points, or 0.17%, to 33,618.69.
· The Nasdaq Composite gained 21.50 points, or 0.18%, to 12,256.92.
· The Russell 2000 Index declined -0.31 points, or 0.31% to 1,754.47.
Economic Calendar for Today
· 6:00 AM ET NFIB Small Business Optimism for April
· 7:45 AM ET ICSC Weekly Retail Sales
· 8:55 AM ET Johnson/Redbook Weekly Sales
· 1:00 PM ET U.S. Treasury to sell $40B in 3-year notes.
· 12:05 PM ET Fed’s Williams Speaks to Economic Club of New York.
· 4:30 PM ET API Weekly Inventory Data
Earnings Calendar:
· Earnings Before the Open: AGEN AMCX APD APO ARMK AXGN BALY BHG BLUE CECO CHH COTY CPSI CRBG CRNC CTG CTLT DOCN DUK EGRX EHTH ELAN ENFN EPC ESPR EVBG FOXA FSR GFS HAIN HE HNST HSIC IGT J LCII LITE MRSN NKLA NVAX NXST OB RDNT REFI RKLB SCSC SEAS SHOO SQSP SWIM SWX TDG TH TPX UAA UP VRTV VST VYGR WAT WE WHD WMG WRBY XPEL YOU
· Earnings After the Close: ABNB AFRM AGL AGS AKAM MBC AMPH AMRS ANGI APPN ARQT ARRY AXON BE BIRD BLND BLZE BROS BRP CANO CARG CASA CE CELH CLNE CMP CPNG CRCT CTMX DAR DOUG DUOL EA EB EBS ESE EXAS EXEL FARM GH GO GPRO GRWG HALO HCI HLI HRB IAC IIIN IOVA IRBT LAZR LDI LNC LVLU LZ MASI MBI MESA MODN MQ NRDY NVTA OVV OXY PMTS PRA PUBM QUOT REAL RIVN RNG RPD RXT RYAM SCM SDC SPCE SSTI TDUP TOST TTGT TWLO TWNK UPST VRM VZIO WYNN ZD ZIP
Other Key Events:
· BTIG 3rd Annual Housing Ecosystem Conference, 5/8-5/9, in NY
· Data Center World 2023 in ATX, 5/8-5/11
· Oppenheimer 18th Annual Industrial Growth Conference, 5/8-5/10 (virtual)
· Raymond James 7th Annual Lodging Tour, 5/8-5/9, in Washington DC
Macro |
Up/Down |
Last |
Nymex |
-0.66 |
72.51 |
Brent |
-0.72 |
76.29 |
Gold |
3.40 |
2,036.60 |
EUR/USD |
-0.0027 |
1.0976 |
JPY/USD |
-0.18 |
134.90 |
10-Year Note |
-0.033 |
3.486% |
World News
· China’s imports contracted sharply in April, while exports rose at a slower pace. Inbound shipments fell 7.9% y/y in April, extending the 1.4% decline seen a month earlier, while exports grew 8.5%, easing from the 14.8% surge in March, data showed – Reuters poll had predicted no growth in imports and an 8.0% increase in exports.
· U.S. Fed Loan Officer Survey: Regarding loans to businesses, survey respondents reported on balance, tighter standards, and weaker demand for commercial and industrial (C&I) loans to large and middle-market firms as well as small firms over the first quarter. Meanwhile, banks reported tighter standards and weaker demand for all commercial real estate (CRE) loan categories.
Sector News Breakdown
Consumer
· Coty Inc. (COTY) Q1 EPS $0.19 vs. est. $0.03 and sales rose 8.7% y/y to $1.29B above ests. $1.23B; said it is reinvesting incremental profit from higher sales into new skincare initiatives.
· International Fragrances (IFF) 1Q adj EPS $0.87 vs est. $0.87 on revs $3.03B vs est. $2.985B, adj EBITDA 503Mm vs est. $482.6Mm, adj EBITDA mgn 16.6%; sees 2Q sales approx $3.0-3.1B vs est. $3.24B and adj EBITDA approx $540-590Mm vs est. $614.4Mm; guides FY sales approx $12.3B vs prior $12.5B and est. $12.4B, adj EBITDA approx $2.34B (no change) vs est. $2.35B.
· Lucid Group (LCID) shares slip as posts Q1 EPS loss (-$0.43) vs. est. loss (-$0.41); Q1 revs $149.4M vs. est. $209.88M; had cash and cash equivalents of $900 million at the end of the first quarter, compared with $1.74 billion in the fourth quarter; files $7.4B mixed securities shelf.
· SeaWorld (SEAS) Q1 EPS loss (-$0.26) vs. est. loss (-$0.16) and revs $293.35M vs. est. $282.93M; Q1 attendance was 3.4M guests, total revenue per capita increased 9.2% to a record $86.84.
· Trex Company (TREX) Q1 EPS $0.38 vs. est. $0.34; Q1 revs $239M vs. est. $237.4M; reported Q1 EBITDA of $69 million and EBITDA margin of 28.8%; Consolidated gross profit as a percentage of net sales, gross margin, was 39.6% in Q1; adopts new buyback for up to 10.8M shares of stock.
· Wayfair Inc. (W) announces proposed offering of $600 million convertible senior notes.
· Tempur Sealy (TPX) to acquire Mattress Firm for $4B in cash, stock as significantly expands consumer touchpoints and accelerates U.S. omni-channel strategy.
Energy
· Devon Energy (DVN) expands stock-repurchase program by 50% to $3 Billion; Q1 adj EPS $1.46 vs. est. $1.38; Q1 revs $3.82B vs. est. $3.94B; Q1 oil production averaged 320,000 barrels per day; for 2023, co has not made any modifications to previously announced plan to sustain production in range of 643,000 to 663,000 boe per day.
· Shoals Technologies (SHLS) 1Q adj EPS $0.14 vs est. $0.10 on revs $105.1Mm vs est. $96.6Mm, adj EBITDA $36.1Mm; guides FY revs $480-510Mm vs est. $489.2Mm, adj EBITDA $145-160Mm vs est. $147.5Mm, adj net Inc $92-102Mm; said backlog and awarded orders increased 75% year-over-year to a record $527.5M, reflecting continued robust demand for our products.
· Essential Utilities (WTRG) 1Q EPS $0.72 vs est. $0.71 on revs $726.45Mm vs est. $682.87Mm; reaffirms FY guide EPS $1.85-1.90 vs est. $1.86, compound annual growth 5-7% through 2025 vs 2022 EPS $1.77.
· Tidewater (TDW) 1Q EPS $0.21 vs est. $0.24 on revs $191.18Mm vs est. $188Mm, adj EBITDA $59.1Mm vs est. $50.25Mm.
Financials
· PayPal (PYPL) Q1 adj EPS $1.17 vs. est. $1.10; Q1 revs rose 10% y/y to $7.04B vs. est. $6.98B; payments volume rose 12% on a forex-neutral basis to $354.5 billion in Q1; now expects full-year adjusted profit to grow about 20% to $4.95 per share, above est. $4.88; Adjusted operating margin in Q1 reported at 22.7% compared with 20.7% last year; warned that its adjusted operating margin won’t grow as quickly as it had anticipated earlier.
· Premier (PINC) announced that its Board of Directors is evaluating potential strategic alternatives to enhance value for stockholders.
· Brookdale Senior Living (BKD) Q1 EPS loss (-$0.20) vs. est. loss (-$0.29); Q1 revs $753.26M vs. est. $752.31M; Q1 RevPAR and RevPOR increased year-over-year 12.9% and 8.6%, respectively; sees Q2 adjusted EBITDA $72M-$77M after Q1 adj EBITDA $88.6M.
· Cohen & Steers, Inc. (CNS) preliminary assets under management of $80.9 billion as of April 30, 2023, an increase of $1.0 billion from assets under management at March 31, 2023.
· EverQuote (EVER) Q1 EPS loss (-$0.08) vs. est. loss (-$0.18); Q1 revs $109.2M vs. est. $103.0M; withdraws previously provided FY23 guidance; guided Q2 revs $70M-$75M vs. est. $100.9M.
· WeWork (WE) files to sell 2.48B shares of Class A common stock for holders.
Healthcare
· Acadia (ACAD) 1Q EPS ($0.27) vs est. ($0.21) on revs $118.5Mm vs est. $120.3Mm; guides FY sales $520-550Mm vs est. $556.5Mm.
· AstraZeneca (AZN) said its Farxiga treatment has been approved in the U.S for use on patients with heart failure; said Farxiga was previously approved in the U.S. for adults with heart failure with reduced ejection fraction.
· DaVita In. (DVA) Q1 adj EPS $1.58 vs. est. $1.14; Q1 revs $2.87B vs. est. $2.84B; boosts FY23 adjusted EPS view to $6.20-$7.30 from $5.45-$6.95 (est. $6.21) and raises FY23 free cash flow view to $750M-$1B from $650M-$900M.
· FibroGen (FGEN) and Fortis Therapeutics announced that FibroGen has entered an exclusive license with Fortis Therapeutics for FOR46, a potential first-in-class Phase 1 antibody-drug conjugate, ADC, targeting a novel epitope on CD46.
· Hims & Hers Health (HIMS) 1Q EPS ($0.05) vs est. ($0.07) on revs $190.78Mm vs est. $179.07Mm, gr mgn 80%, subs +87%, adj EBITDA $6.1Mm vs est. $4.2Mm; guides 2Q revs $200-205Mm vs est. $183.3Mm, adj EBITDA $4-7Mm vs est. $4.2Mm; sees FY revs $810-830Mm vs est. $755.3Mm and adj EBITDA $25-30Mm vs est. $25.8Mm, adj EBITDA mgn 3-4%.
· ICU Medical (ICUI) 1Q adj EPS $1.74 vs est. $1.43 on revs $568.65Mm vs est. $565.3Mm, adj EBITDA $102Mm vs est. $92.1Mm.
· Maravai LifeSciences Holdings Inc’s (MRVI) shares slip after cuts its 2023 profit forecast to a range of $0.27-$0.33 from $0.32-$0.38 and trims its 2023 sales forecast to a range of $400M-$440M from $420M-$460M prior following a 68% decline in Q1 revs.
· McKesson (MCK) 4Q adj EPS $7.19 vs est. $7.17 on revs $68.91B vs est. $68.08B; guides FY24 adj EPS $26.10-26.90 vs est. $26.33.
· Novavax (NVAX) to cut about 25% of its global workforce; announced global restructuring and cost reduction initiative with expected 2024 full-year R&D and SG&A reduction of approximately 40% to 50% vs 2022.
· Progyny (PGNY) 1Q adj EBITDA $46.36Mm vs est. $42.51Mm on revs $258.39Mm vs est. $246.4Mm; guides 2Q revs $260-265Mm vs est. $253.4Mm and adj EBITDA $44-45.5Mm vs est. $43.19Mm; sees FY revs $1.04-1.065B vs est. $1.019B.
· Shockwave Medical (SWAV) 1Q EPS $1.03 vs est. $0.81 on revs $161.1Mm vs est. $147.3Mm, gr mgn 87%; guides FY revs $700-720Mm vs est. $671.6Mm and prior guide $660-680Mm.
Industrials & Materials
· AECOM (ACM) Q2 adj EPS $0.92 vs. rest. $0.89; Q2 revs $3.49B vs. est. $3.40B; affirms both 2023 and 2024 adjusted earnings outlook.
· BWX Technologies (BWXT) 1Q EPS $0.67 vs est. $0.61 on revs $568.4Mm vs est. $558.2Mm, adj EBITDA $110.7Mm vs est. $106.1Mm; guides FY revs $2.4B vs est. $2.39B, adj EPS $2.80-3.00 vs est. $2.88, adj EBITDA $475Mm vs est. $474.3Mm, FCF $200Mm.
· Cabot Corp. (CBT) Q2 adj EPS $1.33 vs. est. $1.31; Q2 revs $1.03B vs. est. $1.11B; raises dividend by 8.1% to $0.40 from $0.37; Q2 EBIT in Reinforcement Materials increased by $21 million compared to the second quarter of fiscal 2022.
· Century Aluminum (CENX) Q1 EPS loss (-$0.11) vs. est. loss (-$0.07); Q1 revs $552.40M vs. est. $510.50M; expects Q2 adjusted EBITDA to range between $25 to $30M based on improved power and other input costs; Q1 EBITDA was $24.1M.
Technology, Media & Telecom
· Skyworks Solutions (SWKS) Q2 EPS $2.02 vs est. $2.03; Q2 revs $1.15B vs. est. $1.15B; sees Q3 EPS $1.67 vs. est. $2.07 and revs $1.05B-$1.09B below consensus $1.15B.
· Western Digital (WDC) Q3 adj EPS loss (-$1.37) vs. est. loss (-$1.57); Q3 revs $2.8B vs. est. $2.7B; guides Q4 adj EPS loss (-$2.20)-($1.90) vs. est. loss (-$1.22) and guides Q4 revenue $2.4B-$2.6B, below consensus $2.86B; Q3 GAAP operating loss was $472M and Non-GAAP op loss $304M.
· Fabrinet (FN) 3Q adj EPS $1.94 vs est. $1.87 on revs $665.3Mm vs est. $651.5Mm; guides 4Q revs $630-650Mm vs est. $651.5Mm and adj EPS $1.76-1.83 vs est. $1.92.
· Nintendo Co Ltd (NTDOY) said it sees a further slide in sales of its aging Switch console to 15 million units in the financial year to end-March 2024, a 17% annual drop; said operating profit fell 15% year-on-year to 504.38 billion yen ($3.73 billion) in the year ended March. The company forecast profit will fall 11% to 450 billion yen for the current financial year.
· Palantir Technologies (PLTR) 1Q adj EPS $0.05 vs est. $0.04 on revs $525Mm vs est. $505.6Mm, customer count +41%, adj EBITDA $133.43Mm vs est. $99.44Mm; guides 2Q revs $528-532Mm vs est. $536.2Mm, adj Inc from ops $118-122Mm vs est. $118.9Mm; sees FY revs $2.185-2.235B vs est. $2.203B, adj Inc from ops $506.556Mm vs est. $496.3Mm.
· TaskUs (TASK) Q1 adj EPS $0.32 vs. est. $0.27; Q1 revs $235.3M vs. est. $232.32M; have taken action to drive efficiencies into our business, resulting in strong Adjusted EBITDA margins and Free Cash Flow in the quarter and the confidence to raise our Adj EBITDA margin outlook for FY; guides Q2 revs $226M-$228M vs. est. $236.1M.
· Veeco (VECO) Q1 EPS $0.30 vs. est. $0.20; Q1 revs $153.5M vs. est. $141.84M; guides Q2 EPS $0.26-$0.34 vs. est. $0.26 on revs $145M-$165M vs. est. $154.46M.
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.