Mid-Morning Look: February 18, 2021
Mid-Morning Look
Thursday, February 18, 2021
Index |
Up/Down |
% |
Last |
|
||
DJ Industrials |
-319.04 |
1.01% |
31,293 |
|||
S&P 500 |
-44.97 |
1.14% |
3,886 |
|||
Nasdaq |
-245.53 |
1.76% |
13,720 |
|||
Russell 2000 |
-28.12 |
1.25% |
2,227 |
|||
Stocks under pressure, with major averages on track to post its first losing week in over a month as several market factors weighing on market sentiment early. Treasury yields inching higher again as 10-year back above 1.3%; Dow component and retail giant Wal-Mart (WMT) disappoints as Q4 adj EPS $1.39 missed the $1.50 estimate, while also forecast 2022 adj EPS and sales below estimates; inflation fears also weighing on high multiple stocks – seeing strength in commodity prices again (copper 9-yr highs, Lumber futures soar to all-time high of $1,000) and food prices rising – recall “hotter” PPI yesterday; economic data mixed today with another jump in weekly jobless claims (and higher revisions); also vaccine news mixed following reports PFE/BNTX on South African Covid variant as NEJM study shows the dominant local coronavirus variant may reduce antibody protection from Pfizer’s COVID-19 vaccine by two-thirds. Markets also await a grilling in DC as Robinhood’s Vlad Tenev, Melvin Capital’s Gabe Plotkin, Reddit’s Steve Huffman and Citadel’s Kenneth Griffin and Keith Gill are all set to testify before the U.S. House Financial Services Committee at noon, as well as a Reddit trader known as “Roaring Kitty”, who is credited with helping start the GameStop mania. Lawmakers will get their chance to ask questions in a hearing focused on “short selling, online trading platforms, gamification and their systemic impact. Yields higher, dollar higher, gold rolls to 7-month lows and Bitcoin down modestly.
Economic Data
· Import prices for January rose 1.4% MoM, topping the 1.0% consensus (prior revised to 1% from +0.9%), while export prices rose +2.5% MoM, well above the +0.7% consensus and upwardly revised +1.3% (from 1.1%)
· Housing Starts for January fell -6.0% MoM to 1.580M, below the 1.655M expected and 1.680M prior (revised from 1.669M), while building permits jumped +10.4% to 1.881M vs. 1.670M expected and 1.704M prior (revised from 1.709M).
· Philly Fed Business Outlook for Feb reported at +23.1 topping the +20 consensus but down from the +26.5 prior (unrevised)
Macro |
Up/Down |
Last |
|
||
WTI Crude |
-0.35 |
60.78 |
|||
Brent |
-0.17 |
64.17 |
|||
Gold |
-4.60 |
1,768.40 |
|||
EUR/USD |
0.0027 |
1.2064 |
|||
JPY/USD |
-0.01 |
105.84 |
|||
10-Year Note |
0.012 |
1.311% |
|||
Sector Movers Today
· Semiconductors; after touching record highs earlier this week, semiconductor index (SOX) seeing profit taking, while chip shortages remain hot topic; Citigroup said MU checks indicate DRAM pricing is better than expected, and expect upside to DRAM pricing throughout 2021 given the supply/demand imbalance – also believe Micron peak EPS can reach $15.00, and the stock can eventually reach $150.00; LASR posted better-than-expected Q4 results as revenue increased 53% y/o/y above the high end of guidance and ahead of Street expectations of 46% growth; NVDA tgt raised to $700 from $600 at Oppenheimer as sees upside to Q4 & Q1 consensus estimates; STX double upgraded to buy from underperform at Bank America as expects to deliver strong revenue and earnings growth over next few years well above consensus
· Auto sector; VC reported mostly in-line Q4 results as EPS $1.06 vs. est. $1.17 on revs $787M vs est. $789.9M, and said it expects industry production volumes will increase about 8% in 2021 to 80 million units vs the initial expectation of 14% growth; DAN Q4 adj EPS $0.24 vs est. $0.41 on sales $2.11B vs est $1.93B, guiding FY21 revs $8.05-8.55B (est $8.3B), and sees FY21 EPS $1.90-2.40 (est $2.20); ALSN reported Q4 EPS 53c vs est. 71c on revs $535M vs est. $521.4M and sees FY21 sales $2.265-2.415B; LKQ posted Q4 EPS 69c on revs $3.0B vs ests. 59c, $2.9B and sees FY21 Adj EPS $2.65-2.85 (est. $2.74); Citi raised its price target on GM from $70 to $85 and sees a path to $100 and removed its High Risk designation on the stock following its recent results and conversations with management; TSLA cut the price of its Model 3 Standard Range Plus to $36,990 from $37,990, and its Model Y Standard Range’s price to $39,990 from $41,990, according to the company’s website
· Chemicals; NTR Q4 EPS 24c tops est. 15c on better revs $4.05B vs. est. $3.58B as Q4 potash EBITDA up 48%, nitrogen EBITDA up 3% while firm increases dividend to 46c and approved the purchase of up to 5% of outstanding common shares; MOS Q4 EBITDA beat expectations by ~7% due to higher volumes while sales of $2.46 bln topped $2.15 bln est. and adjusted EBITDA was $508M vs consensus of $472m; AXTA posted stronger than expected as sales exceeded expectations in all but the lock-down impacted Refinish segment and margins did solidly better owing to greater cost savings and modest price improvements; CF also top and bottom line beat for Q4 and said FY21 nitrogen pricing outlook more positive
· Utilities & Solar; SPWR posted Q4 EPS 14c, topping est. 7c, on revs $341.8M vs est. $355.84M, seeing Q1 GAAP net loss ($20M)-($10M) on revs $270-330M vs est. $328.85M but expects to meet or exceed its 2021 guidance given the confidence it has in its business entering the year; PPL Q4 EPS 59C vs est. 61c on revs $1.93B vs est. $2.14B and did not provide formal guidance due to its process to sell its U.K. utility business, which is expected to be announced in 1H21; SO Q4 Non-GAAP EPS $0.47 (est. $0.42), GAAP EPS of $0.37 (est. $0.27) on rev $5.12B (+4.3% Y/Y) vs est. $4.53B; Guggenheim upped their price target on ES to $96 from $87 after management pointed to the top half of their growth range during their earnings on Tuesday; FE shares jumped on headlines the company got a letter from Carl Icahn on buying a stake (Bloomberg)
· Consumer Staples; SAM shares fell as reported strong 4Q organic sales growth of 53%, with EPS of $2.64 that was in line with consensus; HRL reported Q1 EPS 41c vs. est. 40c on better revs. GM -110bps. Ebit margins -60bps and see FY21 EPS $1.70-$1.82 vs. est. $1.72 (doesn’t include Planters acquisition); APRN falls after mixed Q4 as EPS ($0.67) vs consensus ($0.61) and revenue $115.5M vs consensus $110.5M; guides EBITDA loss of no more than $6M vs consensus ($0.6M); HLF drops on Q4 EPS and rev miss (EPS $0.71/$1.41B vs est. $0.84/$1.45B); food names overall among the early gainers in the market
Stock GAINERS
· BCOV +10%; posted upside in both revenue and AEBITDA and raised its Q1 outlook above consensus
· FE +6%; shares jumped on headlines the company got a letter from Carl Icahn on buying a stake (Bloomberg)
· KHC +3%; as food related stocks seeing outperformance (HRL, K, GIS, CPB)
· LKQ +4%; posted Q4 EPS 69c on revs $3.0B vs ests. 59c, $2.9B and sees FY21 Adj EPS $2.65-2.85 (est. $2.74)
· RIGL +19%; enters strategic collaboration with LLY to develop ripk1 inhibitors for the potential treatment of immunological and neurodegenerative diseases – Lilly will pay an upfront cash payment of $125M, potential $835M in milestone payments
· TWLO +8%; outperforms as delivered strong 4Q20 results, solidly exceeding consensus (even ex-M&A), and issuing strong 1Q21 revenue guidance, albeit w/below consensus EPS on accelerated/deferred investment and dilution from Segment
Stock LAGGARDS
· APRN -9%; falls after mixed Q4 as EPS ($0.67) vs consensus ($0.61) and revenue $115.5M vs consensus $110.5M; guides EBITDA loss of no more than $6M vs consensus ($0.6M)
· FSLY -7%; tumbles as forecasts a larger-than-expected loss for both Q1 and sees FY21 loss in the range of (44c-35c), worse than the expected loss of (21c), despite a Q4 beat
· PLTR -5%; direct listing in September included a lockup period, which expires today. Insiders were only allowed to sell 20% of their shares in the listing, which means the remaining 80% are open for trading today
· SPWR -10%; posted Q4 EPS 14c, topping est. 7c, on revs $341.8M vs est. $355.84M, seeing Q1 GAAP net loss ($20M)-($10M) on revs $270-330M vs est. $328.85M but expects to meet or exceed its 2021 guidance
· STMP -17%; despite a beat on top and bottom line as markets disappointed by no guidance
· UAVS -20%; after short report/cautious comments by Bonitas research; recall earlier this week, Wolfpack research had short call on rival drone maker EH which sent shares tumbling
· WMT -5%; disappoints as Q4 adj EPS $1.39 missed the $1.50 estimate, while also forecast 2022 adj EPS and sales below estimates, which offset news of a $20B share repurchase plan
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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.