Mid-Morning Look

Wednesday, February 19, 2025

U.S. stocks seeing a little bit of profit taking to start Wednesday after the S&P 500 closed at all-time highs late Tuesday, though the Nasdaq, Dow and Russell 2000 are not as close to recent all-time highs. Today’s lone piece of economic data showed weaker housing starts for January which followed a quarterly miss from luxury homebuilder Toll Brothers (TOL) overnight sending housing stocks lower. Markets see strength in energy stocks, with DVN, OXY, EQT among leaders in the S&P 500 after earnings results for all three top views, while solar gets a boost on SEDG results. Meanwhile natural gas prices hit their highest price since December 2022 amid colder forecasts across the country. Regarding the macro-outlook, U.S. Federal Reserve officials remain uncertain about the impact tariffs might have on inflation but have begun outlining more serious risks to supply chains. Trump has so far raised the levy on Chinese goods, delayed others on Mexico and Canada, set tariffs on imported steel and aluminum starting next month, and directed his team to draw up duties for any country imposing them on U.S. goods, and more actions may follow. Several key movers overnight on earnings such as ANET, ETSY, PERI slide in tech on results while ADI rises in semis; CE and IFF among the latest chemical companies with weaker guidance sends those shares tumbling and in restaurants, WING declines on a revenue miss. Another busy night of earnings coming up with more than 80% of S&P having reported so far this quarter.

• In the Oil E&P sector: MTDR reported a 4Q production and EBITDA beat, while providing 2025 guidance with similar production (205 mboe/ d, 60% oil) and slightly lower D&C capex ($1.375B, 2% below modeling). OXY FY25 outlook came below the average analyst estimate. EQT Q4 profit estimates helped by higher prices and sales of natural gas as the average-realized price for natural gas in the quarter was up 9.5% over the year earlier at $3.01 per thousand cubic feet equivalent and Q4 sales volumes were up 7.3% at 605,183 million cubic feet. DVN delivered a 4Q24 beat, with oil and total production coming in 3% ahead of consensus expectations along with higher gas realizations and lower LOE. For FY25, oil and production guidance were ahead of view while capex was 4% below consensus. MGY posted modest earnings beat driven by liquids realizations.
• In Metals & Mining: HBM Q4 net income attributable to shareholders of $21.2M vs year-ago profit of $30.7M and Q4 adj core profit of $257.3M vs. $274.4M y/y on in-line EPS of $0.18; reports Q4 revs of $584.90M vs est. of $588.28M; AU quarterly earnings and cash flow from operations jumped on rising gold prices, but EPS of $0.89 misses the $0.99 estimate as results reflect the 35% on-year increase in average gold prices received to $2,653 an ounce during the quarter ended Dec. 31.
• Online Services: BMBL shares tumbled after Q4 revs fell -4.4% y/y to $261.6M vs. est. $2605.M but guided Q1 revs $242M-$248M, below consensus views of $256.9M; follows weaker Q1 forecast from bigger rival MTCH earlier this month; ETSY shares slip after saying Q4 revs rose 1.2% y/y to $852.2M, but misses expectations of $861.8M and said they anticipate consolidated Q1 GMS will decline at a rate similar to yoy performance reported for Q4. WIX Q4 net profit expectations due to price hikes and its artificial intelligence and Studio products for designing advanced websites and for sees 2025 revs up to $2B vs. analysts’ views for $1.5B (though Q1 revs were light).

• COMP +12%; after reported Q4 revenue of $1.38B, above analysts’ expectations of $1.34B and forecast Q1 2025 revenue between $1.35B-$1.475B, above estimate of $1.335B
• DVN +8%; delivered a 4Q24 beat, with oil and total production coming in 3% ahead of consensus expectations along with higher gas realizations and lower LOE.
• GRMN +11%; shares rallied on results as Q4 EPS of $2.41/$1.82B in sales topped consensus of $2.05/$1.7B and guided 2025 above estimates.
• PEN +10%; delivered a Q4 beat on sales/EPS, and introduced 2025 guidance for sales/margins, while 2025 guidance was a little light on the topline, though a few analysts called it conservative, while the company looks to a second half 2025 Thunderbolt acceleration.
• SEDG +23%; a short squeeze in shares after earnings helped boost the solar sector today as Q4 revenue fell -38% y/y to $196.2M, but topped consensus of $187.8M while its adj EPS loss of (-$3.52) was larger than the (-$1.71 estimate) helped as operating expense $151.4M, fell -16% y/y

• CE -22%; shares stumbled as posted Q4 beat (EPS $1.45/$2.4B above est. $1.20/$2.36B) but guides Q1 EPS $0.25-$0.50, well below consensus of $1.65 (but includes non-recurring costs) due to a combination of turnarounds, lower equity earnings, seasonality and soft demand.
• ETSY -9%; after saying Q4 revs rose 1.2% y/y to $852.2M but misses expectations of $861.8M and said they anticipate consolidated Q1 GMS will decline at a rate similar to yoy performance reported for Q4.
• FOUR -15%; shares declined after the payments processing firm gave a weaker-than-expected outlook for adjusted Ebitda while it was announced it would acquire GB for $7.50 per share in cash.
• HRMY -8%; shares slide after receiving refusal to file letter from FDA for Pitolisant.
• PHG -11%; reported a Q4 adj EPS of $0.51EU vs. est. $0.55EU as sales of EUR5.04 billion were below the consensus estimate for EUR5.08 billon; said comparable sales increased by 1%, including a double-digit decline in China; guided 2025 comp sales growth of 1% to 3%, which includes a mid-to-high-single-digit decline in China and factors in the effect of tariffs the U.S. has imposed on China.
• SUPN -14%; shares dropped after the company’s Phase 2b study of SPN-820 in treatment-resistant depression failed to meet its primary endpoint.
• TOL -7%; after results as Q1 EPS $1.75 missed the consensus est. $2.04 on light revs of $1.86B vs est. $1.906B, and adj home sales gr mgn 26.9% vs 28.9%; also delivered 1,991 homes and reported 2,307 homes under contract in Q1, falling short of the 2,060 deliveries and 2,452 new orders consensus
• WING -11%; shares tumbled after Q4 revenue of $161.8M was above $127.1M y/y but below consensus of $165M, offsetting a profit beat as EPS of $0.92 topped the $0.86 consensus; said Q4 same-store sales rose 10.1% and guided FY25 same-store sales to rise in the low to mid-single digits.