Early Look

Tuesday, April 26, 2022

Futures	Up/Down	%	Last
Dow	-101.00	0.30%	33,864
S&P 500	-12.25	0.29%	4,280
Nasdaq	-44.50	0.33%	13,491

 

 

U.S. futures looking at a slightly lower open after yesterday’s rebound, as all eyes on a heavy dose of corporate earnings results today/rest of the week, while the Federal Reserve remain in a “black-out” period ahead of next week’s policy meeting. A rebound off some key levels for major averages helped stocks recover off Monday morning lows, as the Dow cut a nearly 500-point intraday loss and the Nasdaq jumped 1.3% Monday as technology names rallied amid falling interest rates. Rates fell during the session as the 10-year yield dropped 8 basis points to reach 2.82%, while the 2-year was down 8 basis points to 2.63%. In stock news, ahead of a very busy earnings week (roughly 160 S&P 500 companies are expected to report), Twitter (TWTR) confirmed that its board had come to a sale agreement with Elon Musk, allowing him to acquire the social media platform for $44 billion and take the company private. Global stocks started the week lower after sharply selling in China on signs Beijing may have to widen its lockdown. Utility stocks ended lower, posting its first 3-day losing streak since January (has been one of the better performers this year along with energy). Among active stocks, oil stocks are the weakest in the S&P as crude sinks on China demand worries. Overnight some positive results from the likes of packaging and beverage can names as CCK, OI and PKG all posting beats. Asian markets partially rebound after yesterday’s heavy selling pressure, as The Nikkei Index rises over 100 points or 0.4% to 26,700, the Shanghai Index falls another 40 points or 1.44% to 2,886, and the Hang Seng Index edged higher +0.33% to 19,934. In Europe, the German DAX is higher by 1.2% to 14,090, while the FTSE 100 gains +0.85% to 7,444.

Economic Calendar for Today

·     7:45 AM ET         ICSC Weekly Retail Sales

·     8:30 AM ET         Durable Goods Orders m/m for March…est. +1.0%

·     8:30 AM ET         Durable Goods Ex: Transportation for March…est. +0.6%

·     8:55 AM ET         Johnson/Redbook Weekly Sales

·     9:00 AM ET         Monthly Home Price Index m/m for February

·     9:00 AM ET         CaseShiller 20 City for Feb…est. +1.5%

·     10:00 AM ET       Consumer Confidence for April…est. 108.0

·     10:00 AM ET       New Home Sales m/m for March…est. 765K

·     10:00 AM ET       Richmond Fed Index for April…prior 13

·     4:30 PM ET         API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: AAN, ADM, ARCH, AVY, CEQP, CNC, DHI, ECL, ENTG, FELE, FRME, GE, GLW, GPK, HUBB, IVZ, JBLU MMM, MSCI, NTRS, NURO, NVR, ONB, PCAR PEP, PII, ROP, RTX, SHW, SSTK, ST, TRU, TZOO, UPS, VLO WBD, WM

·     Earnings After the Close: ACCO, AGR, APAM, ASH, BHE, BYD, CHE, CMG, COF, CSGP, EGP, ENPH, EQR, ESS, EW, EXAS, FFIV, GM, GOOGL, HA, HAFC HIW IEX JNPR MANH MDLZ MKSI MSFT MTDR NAVI NCR QS RHI RRC RUSHA SKX TENB TER TRMK TXN UDR USNA V WH WSBC ZWS

 

Market Closing Prices Yesterday

·     The S&P 500 Index climbed 24.34 points, or 0.57%, to 4,296.12

·     The Dow Jones Industrial Average rose 238.06 points, or 0.70%, to 34,049.46

·     The Nasdaq Composite spiked 165.56 points, or 1.29%, to 13,004.85

·     The Russell 2000 Index advanced 13.54 points, or 0.70% to 1,954.20

 

 

Macro	Up/Down	Last
Nymex	0.14	98.68
Brent	0.40	102.72
Gold	9.80	1,905.70
EUR/USD	-0.0026	1.0685
JPY/USD	-0.37	127.75
10-Year Note	-0.036	2.791%

 

 

World News

·     Russia warned that conventional Western weapons in Ukraine are legitimate targets and therefore the world should not underestimate the potential for unintentional escalation as NATO is in essence engaged in the war – Reuters

·     Goldman Sachs sees the ECB now increasing rates by 25bp at the July meeting followed by 25bp in both September and December. Their call also includes 4 rate hikes in 2023 to reach 1.25%.

 

Sector News Breakdown

Consumer

·     Pepsi (PEP) raises 2022 organic sales outlook to up 8% from prior view up 6%; Q1 adj EPS $1.29 vs. est. $1.23; Q1 sales $16.2B vs. est. $15.53B; sees 8% increase in core constant currency eps in 2022; sees 2022 core eps of $6.63; now expects a 2-percentage-point foreign exchange translation headwind to impact reported net revenue and core eps growth in 2022

·     Polaris (PII) Q1 adj EPS $1.29 vs. est. $1.78; reports Q1 revs $1.96B vs. est. $2.11B; reaffirms FY22 adjusted EPS view of up 11%-14% or $10.10-$10.40 vs. est. $10.24 and reaffirms Y22 revenue view of up 12%-15% or $9.215B-$9.455B vs. est. $9.33B

·     Aaron’s Company (AAN) Q1 EPS non-GAAP EPS $0.87 vs. est. $0.68; Q1 revs fell -5.2% to $456.1M vs. est. $461.1M; Q1 Adjusted EBITDA loss $54.7M vs. estimate profit $47.2M; says 2022 core business outlook remains unchanged

·     Armstrong World (AWI) Q1 adj EPS $1.02 vs. est. $1.14; Q1 revs $282.6M vs. est. $289.92M, but backs 2022 EPS, adj Ebitda and rev outlook

·     Whirlpool (WHR) lowers FY ongoing EPS view to $24-$26, from prior $27-$29 and vs. est. $25.99; Q1 adj EPS $5.31 vs. est. $5.36; Q1 revs $4.99B vs. est. $5.32B; sees FY net sales growth of 2%-3%, down from prior view of up 5%-6%

·     TrueBlue (TBI) Q1 adj EPS $0.44 vs est. $0.36 on revs $552Mm vs est. $531.3Mm

·     Heidrick & Struggles (HSII) 1Q adj EPS $0.86 vs est. $0.96 on revs $284Mm vs est. $267.2Mm; guides 2Q revs $290-300Mm vs est. $260.6Mm

 

Energy, Industrials and Materials

·     UPS (UPS) Q1 adj EPS $3.05 vs. est. $2.88; Q1 revs $24.4B vs. est. $23.79B; backs 2022 rev outlook of $102B and said plans to double the mount of share repurchases for 2022; reaffirms consolidated adjusted operating margin of approximately 13.7% and adjusted return on invested capital above 30%

·     General Electric (GE) Q1 adj EPS $0.24 vs. est. $0.19; Q1 revs $17B vs. est. $16.89B; as we continue to work through inflation and other evolving pressures, currently trending toward low end of previous outlook range; remain on track to launch three independent, investment-grade companies; recognized $0.2 bln of pre-tax charges mainly from Russia Ukraine conflict in q1; sees FY22 adjusted EPS at low end of $2.80-$3.50 view, consensus $3.21

·     3M (MMM) Q1 adjusted EPS $2.65 vs. est. $2.31; Q1 revs fell to $8.8B vs. est. $8.74B; guides 2022 EPS $10.75-$11.25 vs. est. $10.31; sees 3M reports Q1 adjusted EPS $2.65, consensus $2.31

·     Axalta Coating (AXTA) Q1 adj EPS $0.31 vs. est. $0.26; Q1 sales rose 10.4% y/y to $1.17B vs. est. $1.11B; sees Q2 sales up around 11%-13%; sees Q2 EPS $0.35-$0.45

·     Crane Inc. (CR) Q1 EPS $1.81 vs. est. $1.68; Q1 sales $801M vs. est. $800.8M; lowers year GAAP EPS from continuing operations guidance to $6.35-$6.75, from $6.85-$7.25, to reflect additional anticipated transaction related costs (est. $7.36)

·     Crown Holdings (CCK) 1Q adj EPS $2.01 vs est. $1.82 on net sales $3.16B vs est. $2.94B; guides 2Q adj EPS $2.00-.210 vs est. $2.06; sees global beverage can growth projects on Target to commercialize 6B units in FY22; guides FY adj EPS $8.00-8.20 vs est. $8.14

·     Culp Inc. (CULP) said now expects Q4 net sales to be down significantly y/y and expects a consolidated operating loss in the range of $(6.5) million to $(7.5) million for the quarter; expects to end Q4 with approximately $10 million in cash and no outstanding borrowings

·     Hexcel (HXL) 1Q adj EPS $0.22 vs est. $0.17 on revs $391Mm vs est. $370.9Mm; reit FY guide

·     Owens Illinois (OI) 1Q adj EPS $0.56 vs est. $0.39 on net sales $1.7B vs est. $1.5B; sees 2Q adj EPS $0.55-0.60 vs est. $0.57, sees FY adj EPS $1.85-2.10 vs est. $1.89; reaffirms FY adj FCF guide at least $350Mm

·     Packaging Corp. (PKG) 1Q adj EPS $2.72 vs est. $2.52 on revs $2.1B vs est. $2.04B; guides 2Q EPS $2.83 vs est. $2.59

 

Financials

·     Ameriprise (AMP) Q1 adj EPS loss $5.98 vs. est. $5.86; said assets under management (AUM) rose 17% to $1.3 trln; raises quarterly dividend

·     Alexandria Real Estate (ARE) 1Q AFFO/share $2.05 vs est. $2.00; sees FY EPS $1.08-$1.18

·     Ares Management Corporation (ARES) entered into a definitive agreement to acquire, on behalf of funds managed by the Ares Credit Group, the Middle Market Lending portfolio from Annaly Capital Management, Inc. (NLY) for approximately $2.4 billion

·     Cadence Bancorp (CADE) 1Q adj EPS $0.65 vs est. $0.57, net interest revs $311.8Mm vs est. $172.8Mm year ago

·     Cathay General (CATY) Q1 EPS $0.99 vs. est. $0.91; Return on average stockholders’ equity was 12.29% and return on average assets was 1.46% for the quarter ended March 31, 2022; Net interest income before provision for credit losses increased $17.4 million, or 12.3%, to $159.2 million during the first quarter of 2022

·     Redfin (RDFN) downgraded to Underweight from Overweight at Piper Sandler

·     Retail Opportunity (ROIC) FFO/share $0.28 vs est. $0.26; raises FY FFO/share guide to $1.04-1.10 vs est. $1.06 (prior $1.02-$1.08)

·     Sun Communities (SUI) 1Q core FFO/shr $1.34 vs est. $1.26 on revs $548.5Mm vs est. $496.2Mm; guides 2Q core FFO/shr $1.97-2.01 vs est. $1.97; sees FY core FFO/shr $7.20-7.32 vs est. $7.13

·     WR Berkley (WRB) Q1 operating EPS $1.10 vs. est. $0.95; Q1 revs $2.91B vs. est. $2.75B

·     Zions Bancorp (ZION) Q1 EPS $1.27 vs. est. $1.15; qtrly net interest income was $544M and qtrly provision for credit losses was negative $33M, compared with negative $132M

 

Healthcare

·     Centene (CNC) Q1 adj EPS $1.83 vs. est. $1.68; Q1 revs $37.19B vs. est. $34.5B; managed care membership of 26.2M, an increase of 1.9M members, or 8%, compared to March 31, 2021; raises FY22 adj EPS view to $5.40-$5.55 from $5.30-$5.50 (est. $5.34) and raises FY22 revenue view too

·     Medpace Holdings (MEDP) 1Q EPS $1.69 vs est. $1.26 on revs $330.9Mm vs est. $327Mm; guides FY revs $1.4-1.46B vs est. $1.41B

·     Nkarta (NKTX) 13.33M share Spot Secondary priced at $15.00

·     Nektar Therapeutics (NKTR) announces strategic reorganization plan and corporate outlook; focusing on key pipeline programs NKTR-358, NKTR-255 and core research programs; cost restructuring plan results in cash runway into the first half of 2025

·     Protagonist Therapeutics (PTGX) announces topline data from phase 2 ideal study of pn-943 in ulcerative colitis; plans underway for a registrational phase 3 study anchored around twice daily 150 mg dose of pn-943

·     Universal Health (UHS) shares fell -7%; Q1 adj EPS $2.15 vs. est. $2.46; Q1 revs rose 9.3% to $3.29B vs. est. $3.21B; Q1 at behavioral health care facilities on a same facility basis, adjusted admissions decreased by 1.9% and adjusted patient days decreased by 1.3% y/y

 

Technology, Media & Telecom

·     Cadence Design Systems (CDNS) Q1 adj EPS $1.17 vs. est. $1.02; Q1 revs $902M vs. est. $857.3M; sees Q2 adj EPS 95c-99c vs. est. 92c and revs $825M-$845M vs. est. $823.74M; sees year EPS $3.89-$3.97 vs. est. $3.80 and revs $3.395B-$3.435B vs. est. $3.36B

·     Calix Inc. (CALX) Q1 adj EPS $0.22 vs est. $0.20 on revs $184.9Mm vs est. $177.6Mm; guides 2Q adj revs $192-198Mm vs est. $183.8Mm and adj EPS $0.15-0.20 vs est. $0.21

·     Entegris (ENTG) Q1 non-GAAP EPS $1.06 vs. est. $0.99; Q1 revs $650M vs. est. $640.85M; guides Q2 EPS $1.02-$1.07 vs. est. $1.02 and sees Q2 revenue $660M-$680M vs. est. $663.86M

·     Redbox (RDBX) says CFO Kavita Suthar to step down effective May 16; joined RDBX in 2015; served as CFO from 2020, and oversaw co’s market debut through SPAC merger in 2021

·     SBA Communication (SBAC) 1Q EPS $1.72 vs est. $1.00, AFFO/share $2.96 vs est. $2.87 on revs $619.7Mm vs est. $603.3Mm; guides FY AFFO/share $11.72-12.09 vs est. $11.75, sees FY revs $2,493-2.533B vs est. $2.464B

·     3D Systems (DDD) announces CFO Transition and Reiterates 2022 Guidance; Veteran CFO Wayne Pensky to serve as Interim Chief Financial Officer; reiterates 2022 full-year guidance