Early Look

Wednesday, October 28, 2020

Futures	Up/Down	%	Last
DJ Industrials	-438.00	1.60%	26,927
S&P 500	-43.50	1.29%	3,339
Nasdaq	-120.50	1.04%	11,467

 

 

Stock futures are plunging globally, as the surging coronavirus cases in the world, especially in Europe where many countries are tightening restrictions on business activity raising concerns about the economic recovery for many is spooking investors. The U.S. has yet to adopt stricter measures at this point, but remains a genuine concern. At the same time, investors are still waiting for more stimulus from Congress for the U.S. economy, as a deal before next week’s Presidential election remains a lost cause. Election uncertainty also has market players hesitant to make big moves ahead of another onslaught of earnings today and tomorrow. Dow components Boeing, Amgen and Visa are expected this morning after Microsoft reported better results overnight. In Asian markets, The Nikkei Index fell -67 points to 23,418, the Shanghai Index rose 14 points to 3,269 and the Hang Seng Index dropped -78 points to 24,708. In Europe, the German DAX is down over -330 points to 11,730, while the FTSE 100 slides -80 points to 5,647. The U.S. dollar is widely higher, along with Treasury prices while oil and other commodity markets sink in risk aversion trade.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -10.29 points, or 0.30%, to 3,390.68

·     The Dow Jones Industrial Average fell -222.19 points, or 0.80%, to 27,463.19

·     The Nasdaq Composite surged 72.41 points, or 0.64%, to 11,431.35

·     The Russell 2000 Index declined -14.50 points, or 0.90% to 1,590.71

 

Economic Calendar for Today

·     7:00 AM EST      MBA Mortgage Applications Data

·     8:30 AM EST      Advance Goods Trade Balance for September

·     10:30 AM EST    Weekly DOE Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: ADP, AIT, ALGT, AMGN, ANTM, BA, BDC, BG, BGCP, BKU, BSX, BX, CHEF, CME, DAN, DBD, DIN, DT, EAT, EPD, ETR, EXTR, FDP, FLOW, GD, GE, GNRC, GRA, HES, HESM, HZO, IART, INOV, LFUS, MA, MNRO, MPX, NSC, NYCB, OC, OI, R, ROL, SC, SEE, SIX, SLAB, TUP, TW, UPS

·     Earnings After the Close: AFG, AM, AMED, AMP, ASGN, AVB, AVT, AXTI, BHE, BLKB, BOOT, BXC, CACI, CASH, CERN, CGNX, CHDN, CONE, CREE, CTSH, CW, CXO, DRE, EBAY, ECHO, EGHT, EGOV, EQIX, ETSY, F, FBHS, FORM, FSLY, GILD, GRUB, INVH, KLAC, KRA, LVGO, MMSI, MOH, MUSA, NDLS, NLY, NOW, OII, ORLY, PI PINS, PKI, PLXS, PTC, RCII, RJF, RYN, SAVE, SFM, SPWR, TDOC, TXRH, URI, V, VNDA, VVV, WCN, WDC, WELL, WH

 

 

Macro	Up/Down	Last
WTI Crude	-1.59	37.98
Brent	-1.37	39.83
Gold	-10.00	1,898.00
EUR/USD	-0.0045	1.1751
JPY/USD	-0.23	104.19
10-Year Note	-0.025	0.751%

 

 

Sector News Breakdown

Consumer

·     Big Five Sports (BGFV) Q3 EPS $1.31 on sales $305M vs. est. $266.2M; said comp store sales rose 14.8% vs. a 0.3% increase YoY; believes it is reasonable to expect same store sales over remainder of fiscal 2020 q4 in range of -5% to +5%

·     Callaway Golf (ELY) agreed to merge with Topgolf Entertainment Group in an all-stock deal with an implied equity value of Topgolf of approximately $2B, including the 14% already owned by Callaway; Callaway shareholders will own 51.5% of the combined company and Topgolf holders will own 48.5%.

·     Denny’s (DENN) 3Q adj EPS $0.01 vs. est. ($0.03) on revs $71.6Mm vs. est. $71.95Mm; guides FY domestic comps 70-75% of prior year; sees FY20 total general and administrative expenses between $51M-$54M

·     2U Inc. (TWOU) 3Q adj EPS ($0.24) vs. est. ($0.25) on revs $201.1Mm vs. est. $188.6Mm; sees FY revs $760-775Mm vs. est. $743.5Mm; sees FY20 net loss $225.0M-$210.0M and Adjusted EBITDA $7.0M-$14.0M

·     Root (ROOT) 26.831M share IPO priced at $27.00

·     Six Flags (SIX) reports Q3 EPS loss ($1.37) on revs $126M misses the ($1.00) and $142.73M estimate; attendance was 2.6 million guests, a decline of 11.4 million guests YoY; Nine of the company’s 26 parks were closed in the third quarter due to the COVID-19 pandemic

 

Energy

·     The American Petroleum Institute (API) shows a build of 4.58M barrels of oil for the week ending Oct. 23, gasoline inventories showed a build of 2.25M barrels, distillate inventories show a draw of 5.33M barrels and Cushing inventories show a build of 136K barrels

·     EQT Corporation (EQT) files to sell 20M shares of common stock after saying it plans to buy U.S. oil major CVX assets in the Appalachian basin for $735 million.

·     EQT Corporation (EQT) 20M share Spot Secondary priced at $15.50

·     Enphase (ENPH) 3Q EPS $0.28 vs. est. $0.24 on revs $178.5Mm vs. est. $169.1Mm; sees 4Q revs $245-260Mm vs. est. $239.4Mm

·     Enterprise Products Partners (EPD) Q3 GAAP EPS of $0.48 in-line, revenue of $6.99B (-12.2% Y/Y) misses by $140M and EBITDA of $2.06B vs. $1.95B consensus.

·     First Solar (FSLR) Q3 EPS $1.45 on revs $928M vs. est. 61c and $687.6M; sees Q4 EPS $1.00-$1.50 on sales $540M-$790M vs. est. $1.07 and $814.6M; sees implied FY20 EPS $3.65-$4.15 on revs $2.6B-$2.9B above est. $2.86 and $2.67B

·     Idex Corp. (IEX) Q3 EPS $1.40 on revs $581.1M vs. est. $1.20 and $563.53M; Q3 gross margin of 43.3%, down 190 basis points YoY; sees Q4 organic revenue down 5% to down 3%

·     Matador Resources (MTDR) Q3 EPS 10c on revs $189.1M vs. est. loss (7c) and $190.7M; 3q adjusted Ebitda $121.0M vs. $26.3M YoY; raises FY20 oil production view to up 13% from up 11%

·     Oneok (OKE) 3Q EPS $0.70 vs. est. $0.61 on revs $2.2B vs. est. $2.5B; guides FY20 net inc. and adj EBITDA to approach midpoint of prior ranges of $500-900Mm and $2.6-3B, respectively

 

Financials

·     Aflac (AFL) Q3 adj EPS $1.39 on revs $5.67B vs. est. $1.13 and $5.48B; average yen/dollar exchange rate in the third quarter of 2020 was 106.23, or 1.0% stronger than the average rate of 107.31 in the third quarter of 2019; Total investments and cash at the end of September 2020 were $146.1 billion, compared with $139.5 billion at September 30, 2019

·     Chubb (CB) Q3 core EPS $2.00 vs. est. $2.12; 3Q net premiums written $9.08 billion, +5.3% YoY, 3Q book value per share $124.98 vs. $120.33 YoY, 3Q property & casualty combined ratio 95.2% vs. 90.2% YoY and 3Q net premiums earned $8.77 billion, +5.3% YoY

·     EastGroup Properties (EGP) raises FY20 FFO view to $5.33-$5.37 from $5.23-$5.33 and ups same PNOI growth on a cash basis to up 2.5%-3.5% from 2.0%-3.0%

·     Fiserv (FISV) Q3 EPS $1.20 on revs $3.79B vs. est. $1.16 and $3.58B; now expects adjusted earnings per share to grow at least 11% over adjusted earnings per share for 2019, as revised for the net impact of divestitures

·     Equity Residential (EQR) normalized FFO/shr $0.77 vs. est. $0.82, NOI -8.4% on same-store basis

·     MediaAlpha (MAX) 9.25M share IPO priced at $19.00

·     Unum Group (UNM) Q3 adjusted EPS $1.21 vs. est. $1.32 on in-line revs of $3B

 

Healthcare

·     Community Health (CYH) Q3 adjusted EPS 18c vs. est. loss (16c) and revs better at $3.13B vs. est. $2.9B; Q3 comp sales rose 2.9%; on same-store basis, qtrly admissions decreased 6.2% & adj admissions decreased 11.5%, compared with same period in 2019; says not able to fully quantify impact that the covid-19 pandemic will have on financial results during the remainder of 2020

·     Dexcom (DXCM) Q3 adjusted EPS 94c on revs $500.9M vs. est. 64c and $476.75M; raises FY20 revenue view to roughly $1.9B from $1.85B (est. $1.87B) and also raises FY20 adjusted EBITDA margin view to meeting or exceeding 26% from 24%.

·     Masimo Corp. (MASI) 3Q adj EPS $0.80 vs. est. $0.62 on revs $278.1Mm vs. est. $256.6Mm; guides FY adj EPS $3.46 vs. est. $3.17, sees FY20 revs $1.128B vs. est. $1.091B

·     Novartis (NVS) and Molecular Partners (MLLCF) announce a collaboration in the form of an option and license agreement to develop, manufacture and commercialize latter’s anti-COVID-19 DARPin program, consisting of two therapeutic candidates, MP0420 and MP0423.

·     Repligen (RGEN) announced that it has entered into a definitive agreement to acquire privately-held ARTeSYN BioSolutions for approximately $200M, comprised of approximately $130M in cash and approximately $70M in Repligen common stock

·     Scholar Rock (SRRK) files to sell $150M in common stock

·     Anthem (ANTM) Q3 adj EPS $4.20 vs. est. $4.15; Q3 revenue $30.6B vs. est. $29.75B; sees FY20 adjusted EPS greater than $22.30 vs. est. $22.47; benefit expense ratio was 86.8% in q3 of 2020, a decrease of 40 bps from 87.2% vs prior year quarter; medical enrollment increase driven by government business, which grew by 453,000lives in qtr, attributable to Medicaid, Medicare advantage

·     Biodesix (BDSX) 4M share IPO priced at $18.00

·     Mirati Therapeutics (MRTX) 4.33M share Secondary priced at $202.00

 

Industrials & Materials

·     CH Robinson (CHRW) 3Q EPS $1.00 vs. est. 98c and revs $4.22B vs. est. $3.85B; income from operations decreased 16.3% to $168.2 million; operating margin decreased 310 basis points to 28.6%; cash flow from operations decreased $335.9M to $168.6M used by operations; says freight markets continuing to tighten in Q4

·     General Electric (GE) Q3 adjusted EPS 6c on revs $19.42B vs. est. loss (4c) and $18.72B; expect industrial free cash flow to be at least $2.5 billion in the fourth quarter and positive in 2021; qtrly aviation orders of $4.1 bln, down 54% reported and 53% organically with declines of about 60% in both commercial engines and services; qtrly aviation rev $4.9 bln, down 39% reported and organically, with equipment down driven by 385 fewer engine sales

·     Gatos Silver (GATO) 21.43M share IPO priced at $7.00

·     Generac (GNRC) Q3 adj EPS $2.08 vs. est. $1.72 on revs $701Mm vs. est. $679.2Mm; guides FY revs +10-12% vs. est. +9.7%, sees FY net margin before non-controlling interests 13-13.5%

·     UPS Inc. (UPS) adj EPS $2.28 vs. est. $1.90 on revs $21.2B vs. est. $20.2B, domestic revs $13.225B vs. est. $12.98B

·     O-I Glass (OI) Q3 EPS 41c on revs $1.6B vs. est. 28c and $1.54B; guides Q4 EPS 30c-35c vs. est. 32c; expects fourth quarter sales and production volumes will be flat or slightly up compared to prior year levels but could vary depending on the course of the pandemic

·     Rollins (ROL) announces 3-for-2 stock split, regular qtrly, special cash dividend

·     Summit Materials (SUM) Q3 adjusted EPS 55c on revenue $645.2M vs. est. 65c and $681.51M; raises FY20 Capex view to $175M-$185M from $145M-$160M

·     Terex (TEX) Q3 EPS 31c on sales $765.6M vs. est. 3c and $747M; says revenue expectations for 2020 remains unchanged

 

Technology, Media & Telecom

·     Akami (AKAM) 3Q adj EPS $1.31 vs. est. $1.23 on revs $793Mm vs. est. $775Mm, qtrly web division revs $418Mm vs. est. $411Mm, qtrly media and carrier revs $375Mm vs. est. $363Mm; sees Q4 EPS $1.28-$1.32 on revs $812M-$837M vs. est. $1.29/$822.68M

·     FireEye (FEYE) 3Q adj EPS $0.11 vs. est. $0.07 on revs $238Mm vs. est. $227.7Mm; guides 4Q adj EPS $0.09-0.11 vs. est. $0.10, sees 4Q revs $237-241Mm vs. est. $236.7Mm

·     Lattice Semiconductor (LSCC) Q3 adjusted EPS 19c on revs $103.04M vs. est. 16c and $100.98M; sees Q4 revenue $99M-$107M vs. est. $101.24M and sees Q4 gross margin 61%, +/- 1%

·     Juniper (JNPR) Q3 EPS 43c on revs $1.138B vs. est. 43c/$1.12B; Operating margin (non-GAAP) fell to 17.1% from 18.3% (though up from Q2’s 14.3%); Q3 net income rose 24% from last quarter, but fell 13% year-over-year, to $144.4M

·     Maxim Integrated (MXIM) Q1 adj EPS 72c on revs $619M vs. est. 58c and $545.15M.; Q1 EPS excludes $30Min pre-tax special items which primarily consisted of $15M in charges related to the upcoming combination with Analog Devices

·     Microsoft (MSFT) Q1 EPS $1.82 vs. est. $1.55 on revs $37.2B vs. est. $35.7B, cloud revs $12.99B vs. est. $12.72B, more personal computing revs $11.85B vs. est. $11.69B; Intelligent Cloud revenue is forecast at revenue of $13.55-13.8B (consensus: $13.75B); More Personal Computing sales are expected at $13.2-13.6B (consensus: $14B)

·     MicroStrategy (MSTR) 3Q adj EPS $2.06 vs. est. $0.39 on revs $127.4Mm vs. est. $117.3Mm

·     MKS Instruments (MKSI) 3Q adj EPS $1.93 vs. est. $1.78 on revs $590Mm vs. est. $561.3M; sees 4Q revs about $600Mm vs. est. $551.4Mm, sees 4Q adj EPS $1.80-2.20 vs. est. $1.68

·     Omnicell (OMCL) Q3 adjusted EPS 60c on revs $213.7M vs. est. 49c and $208.46M; sees FY20 adjusted EPS $2.35-$2.40 vs. est. $2.24 and sees FY20 revenue $881M-$887M vs. est. $874.11M

·     PPD (PPD) Q3 adjusted EPS 30c on revs $1.23B vs. est. 32c/$1.12B; sees Q4 revenue $1.26B-$1.3B vs. est. $1.15B and sees Q4 adjusted EBITDA $244M-$250M; guides year revenue $4.57B-$4.62B vs. est. $4.36B

·     SolarWinds (SWI) Q3 adjusted EPS 25c on revs $261.0M vs. est. 24c and $256.61M; sees 2020 EPS 98c and revs $1.017B-$1.022B vs. est. 94c/$1.01B