Mid-Morning Look

Tuesday, February 06, 2024

Index	Up/Down	%	Last
DJ Industrials	84.61	0.22%	38,464
S&P 500	0.31	0.01%	4,943
Nasdaq	-19.17	0.13%	15,575
Russell 2000	12.07	0.62%	1,949

 

 

U.S. stocks are mixed, led higher by 2024 underperforming sectors initially (REITs, Materials, Smallcaps) as Treasury yields pare their sharp 2-day gains and markets await a handful of Fed speakers, while Tech leaders take a breather. The S&P 500 and Nasdaq slip at the open with investors focusing on large cap earnings and upcoming commentary from Federal Reserve officials. Gains in some mega caps drove the tech-heavy Nasdaq higher the last few days (weeks, months), but pausing early as semis (SOX) lead to downside. The Russell 2000 Smallcap seeing an early bounce as yields dip off highs and investors rotate into the lagging names/sectors. No major US economic data today, just a handful of Fed speakers and the $52B 3-yr Treasury auction at 1:00 PM in macro. Materials (XLB) rebounding early as Asian markets surge overnight on more hopes on government intervention to help markets, while Healthcare (XLV) outperforms behind better earnings and guidance from LLY (new all-time highs). Dow Transports another bright spot led by UPS after an analyst upgrade, though the whole group higher early. Fed Speakers lineup today: 12:00 PM Fed’s Mester Speaks on Economic Outlook, at 1:00 Fed’s Kashkari, at 2:00 Fed’s Collins and tonight at 7:00 PM, Fed’s Harker Speaks on Fed’s Role in Economy.

 

 

Macro	Up/Down	Last
WTI Crude	0.69	73.47
Brent	0.80	78.79
Gold	10.10	2,053.00
EUR/USD	-0.0001	1.0739
JPY/USD	-0.61	148.06
10-Year Note	-0.048	4.116%

 

• In Industrials: ACM reported better than expected results as adjusted EPS of $1.05 was above consensus of $0.95, as beat in EPS and EBITDA reflects ongoing execution of ACM’s strategy of pursuing higher-margin design business in the Americas. AGCO reported a top and bottom line miss for Q4, but FY profit and rev guide was above consensus. CARR Q4 EPS results topped views with mixed guidance as sees FY sales about $26.5B, above estimate $24.4B, while mid-point of EPS guide $2.80-$2.90 below the $2.87 estimate. CMI shares slipped on results, guidance; sees full year 2024 revenues expected to decline between 2% and 5%; EBITDA expected to range between 14.4% and 15.4% of sales. SYM posted in-line Q1 results but introduced new FQ224 EBITDA guidance lighter than consensus.
• In Chemicals: FMC reported Q4 EBITDA of $254M below consensus of $268M as volumes fell 25% y/y (vs. -26% in Q3), and pricing declined 5% (vs. -3% in Q3); also lowered ’24 guidance (revenue of $4.50B-$4.70B vs. est. $4.69) and for Q1 expects EBITDA of $150M at the midpoint compared to consensus of $265M. DD reports Q4 a little better than recent preannouncement, helped by $1B share buyback and 6% increase in dividend; LIN reports better quarter and raises guidance a day after competitor APD cut forecasts.

 

• COHR +13%; Q2 adj EPS $0.36 vs. est. $0.26; Q2 revs $1.13B vs. est. $1.12B; sees FY24 adjusted EPS $1.30-$1.70, vs. consensus $1.28; sees FY24 revenue approximately $4.55B-$4.7B, consensus $4.59B.
• GEHC +10%; Q4 adj EPS $1.18 vs. est. $1.07; Q4 revs $5.2B vs. est. $5.09B; sees FY24 adj EPS $4.20-$4.35, vs. consensus $4.22, sees organic revenue growth of approximately 4% y/y.
• PLTR +26%; outperforms after a stronger-than-expected Q4 and outlook, prompting analysts to raise price tgts (Citigroup upgraded to Neutral from Sell) as Q4 beat led by backlog and US Commercial growth acceleration.
• TM +7%; raised its full-year operating profit forecast by nearly 9% and revs to Y43.5T from Y43T after its Q3 earnings topped analysts’ estimates thanks to a weaker yen and strong sales of high-margin cars.
• UPS +4%; upgraded from Neutral to Buy at UBS and raised tgt to $175 from $160 as expects management to deliver a strong cost reduction program to support margin expansion and attractive EPS growth.
• VRNS +8%; behind earnings and guidance as Wedbush upgraded shares to Outperform on the heels of another strong quarter with further evidence the model transition is hitting its next gear of growth and the AI Revolution.

 

• DOCU -3%; after saying they will stay a public company after failed takeover talks; reduce workforce by approximately six percent, impacting approximately 400 employees; announces restructuring plan to support multi-year growth and said it expects to meet/exceed Q4 and FY24 guidance.
• FI -4%; Q4 adj EPS $2.19 topped the $2.15 estimate but revs rose 3.2% y/y to $1.72B, below the $1.75B estimate but on better adj operating margins of 40.7% vs. 39.2% y/y; forecasts 2024 adj EPS $8.55-$8.70 vs. est. $8.57 and forecasts 2024 organic revs +15% to +17%.
• FMC -9%; reported Q4 EBITDA of $254M below consensus of $268M as volumes fell 25% y/y (vs. -26% in Q3), and pricing declined 5% (vs. -3% in Q3); also lowered ’24 guidance.
• MDGL -17%; Following the LLY results, shares of NASH drug developers declined after Eli Lilly’s weight loss drug meets main goal in liver disease trial; shares of MDGL, AKRO, ETNB and NRBO among names that fell.
• SYM -21%; posted in-line Q1 results but introduced new FQ224 EBITDA guidance lighter than consensus on in-line revenues.

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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.