Early Look

Wednesday, February 9, 2022

Futures	Up/Down	%	Last
Dow	185.00	0.52%	35,527
S&P 500	31.25	0.70%	4,544
Nasdaq	137.50	0.93%	14,872

 

 

U.S. futures are pointing to a strong open, with the S&P looking to break out of its recent trading range to the upside as Treasury yields ease and ahead of another heavy dose of corporate earnings results and key consumer price inflation data tomorrow morning. Later today, Uber and Walt Disney are among the companies scheduled to publish earnings results. Reopen stocks (travel, lodging, leisure names) may get another boost today after NY Governor Hochul will on Wednesday announce the end of her state’s mask mandate for most indoor public places, The New York Times reported. In another possible political move for Democrats, Punchbowl news is reporting that Speaker Pelosi is working on a stock-trading ban for members & senior staff, with a proposal expected soon. The dollar weakens against most FX majors as Treasury yields edge lower and U.S. index futures extend climb. In Asian markets, The Nikkei Index jumped over 1% to 27,579, the Shanghai Index gained about +0.8% to 3,479, and the Hang Seng Index surged over 2% or 500 points to 24,829. In Europe, the German DAX jumps 1.3% or over 200 points to 15,445, while the FTSE 100 rises 0.55% to move back above 7,600.

 

A solid day on Wall Street Tuesday as stocks closed higher across the board, with more than 1% gains for the Dow, Nasdaq, & Russell 2000, while the S&P advanced 0.8% in a day led by financials, consumer discretionary, materials, industrials, and healthcare. Bond yields continued to surge Tuesday with 10-year Treasuries climbing over 1.97% to the highest since July 2019. Crude futures fell after updated supply data showed that U.S. oil production will grow even more than the government previously expected to an average of 12.6 million barrels a day in 2023, up from the previous estimate of 12.4 million barrels, according to the Energy Information Administration. Gold futures rose for a third consecutive session on inflation hedges ahead of Thursday’s U.S. consumer price index data.

Market Closing Prices Yesterday

·     The S&P 500 Index gained 37.67 points, or 0.84%, to 4,521.54

·     The Dow Jones Industrial Average jumped 371.65 points, or 1.06%, to 35,462.78

·     The Nasdaq Composite spiked 178.79 points, or 1.28%, to 14,194.46

·     The Russell 2000 Index advanced 32.77 points, or 1.63% to 2,045.37

 

Events Calendar for Today

·     7:00 AM ET          MBA Mortgage Applications Data

·     10:00 AM ET        Wholesale Inventories MoM for December

·     10:30 AM ET        Weekly DOE Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: ARCC, AVYA, BDC, BG, BXMT, CHEF, CME, CRWS, CVS, FOXA, IIVI, LAD, MSGE, NNN, OESX, PAG, PFGC, REYN, RICK, SITC, TGI, VERU, YUM

·     Earnings After the Close: AEIS, AFG, AIRC, ASGN, AVXL, BKH, CDAY, CDW, CXW, DCP, DIOD, DIS, EFX, EMKR, ENS, EQT, FLNC, FR, FWRD, GBDC, IRBT, ITT, IVAC, KN, LUMN, MAT, MC, MDU, MESA, MGM, MOH, MSI, NGL, NLS, NLY, NVST, ORLY, PAA, PAGP, PAHC, PI, PPC, QMCO, RAMP, REXR, RM, RNWK, RPD, RWT, SGEN, SONO, TRMB, TTMI, TWOU, TWLO, TWO, UBER, UDMY, UHAL, ULCC, USX, VKTX, VMEO, WHG, WTS, ZNGA

 

Other Key Events:

·     Cowen Annual Aerospace/Defense & Industrials Conference (virtual), 2/8-2/10

·     Northland Winter Wonderland Best Ideas Investor Conference (virtual), 2/8-2/10

·     International Builders’ Show (IBS), in Orland 2/8-2/10

 

 

Macro	Up/Down	Last
Nymex	-0.61	88.75
Brent	-0.48	90.30
Gold	-1.30	1,826.60
EUR/USD	0.002	1.1434
JPY/USD	-0.10	115.43
10-Year Note	-0.029	1.927%

 

 

Sector News Breakdown

Consumer

·     Chipotle Mexican Grill (CMG) shares rise 7%; 4Q adj EPS $5.58 vs est. $5.25 on revs $2.0B vs est. $1.95B, qtrly comps +15.2% vs. est. 14.8%, qtrly digital sales +3.8% (41.6% of sales); qtrly restaurant level op margin 20.2% vs 19.5%; guides 1Q comps +mid-high-single digits

·     Container Store (TCS) shares fall -16%; Q3 adj EPS $0.28 vs. est. $0.21; Q3 revs $267.3M vs. est. $262.04M; guides Q4 EPS $0.24 vs. est. $0.30; sees Q4 sales decline of approximately 11% y/y or a decline of 6% excluding the impact of the 53rd week of sales from Q4’20

·     Corsair Gaming (CRSR) Q4 adj EPS $0.35 vs est. $0.25 on revenue $510.6M vs est. $495.3M; sees FY revenue $1.9B-$2.1B vs est. $1.89B; expect elevated freight costs and supply chain issues to start the year but believe they will fade, and expects to increase their cash position as macroeconomic conditions improve that should allow execution of M&A opportunities that fulfill their investment criteria or reduce debt

·     Jack Henry (JKHY) 2Q EPS $1.30 vs est. $1.13; guides FY adj revs $1.889-1.892B vs est. $1.91B and EPS $4.75-4.82 vs est. $4.71

·     Lyft Inc. (LYFT) shares fell -7%; 4Q adj EPS $0.09 vs est. $0.08 on revs $969.9Mm vs est. $940.1Mm; revs per active rider $51.79 +14.1%, active riders +49.2% to 18.7Mm with new rider activations +42%; active drivers +34% with new driver activations +50%; sees Q1 adjusted EBITDA will be between $5M-$15M versus $75M in Q4; sees Q1 revs $800M-$850M vs. $985.8M

·     Yum China (YUMC) 4Q adj EPS $0.03 vs est. $0.20, comps -11% (-12% KFC and -8% Pizza Hut); says January comps improved modestly vs 4Q; sees approx 1,000-1,200 new stores in 2022 and CAPEX $800Mm – $1B; says expect operating environment to remain challenging and volatile

·     Adtalem Global Education (ATGE) shares fall -15%; Q2 diluted EPS $0.75 vs est. $0.96 on revenue $371.2M vs est. $419.4M; now sees FY adj EPS $2.90-$3.10 (est. $4.05) from $4.20-$4.45 and revenue $1.35B-$1.39B (est. $1.66B) from $1.685B-$1.735B as the pending sale of its Financial Services segments moves it to discontinued operations

 

Energy

·     The American Petroleum Institute (API) reports that crude inventories fell 2.025M barrels last week, Gasoline inventories fell 1.138M barrels and distillates fell -2.20M barrels

·     Atmos Energy (ATO) 1Q EPS $1.86 vs est. $1.85, CAPEX $684.,2Mm; guides FY CAPEX $2.4-2.5B and EPS $5.40-5.60 vs est. $5.50

·     Enphase (ENPH) Q4 adj EPS $0.73 vs est. $0.58 on revenue $412.7M vs est. $396.7M; sees Q1 revenue $420M-$440M vs est. $409M; exited the qtr with $1B in cash, cash equivalents, and marketable securities

·     Nabors (NBR) Q4 EPS loss ($14.60) vs. est. loss ($12.17); Q4 revs $544M vs. est. $555.4M; Sees 1Q U.S. drilling increase in avg lower 48 rig count of 9 – 10 rigs over 4Q; sees FY22 total cap expenditures about $380M

 

Financials

·     Assurant Inc. (AIZ) Q4 adj EPS $2.47 vs. est. $2.30; Q4 revs $2.57B vs. est. $2.58B; in 2022, company expects 8%-10% growth in adjusted ebitda, excluding reportable catastrophes

·     CURO Group Holdings (CURO) Q4 adj EPS loss (-$0.29) vs. est. loss (-$0.35); Q4 revs $224.32M vs. est. $224.81M

·     EastGroup Properties (EGP) Q4 FFO $1.62 vs. est. $1.58; Q4 revs $107.37M vs. est. $106.38M; Q4 same property NOI for the same property pool ex: income from lease terminations increased 6.4% on a cash basis and 8.1% on a Straight-Line Basis sees FY22 FFO $6.56-$6.70 vs. est. $6.61

·     FLEETCOR Technologies (FLT) Q4 adj EPS $3.72 vs. est. $3.60; Q4 revs rose 30% to $802.3M vs. est. $766.9M; sees Q1 adj EPS $3.45-$3.55 vs. est. $3.52; sees Q1 revs $740M-$760M vs. est. $746.1M

·     i3 Verticals (IIIV) Q1 EPS $0.35 vs. est. $0.32; Q1 revenue $73.9M vs. est. $70.1M; raises FY22 EPS view to $1.28-$1.42 from $1.25-$1.40 (est. $1.34); boosts FY22 revenue view to $288M-$304M from $280M-$300M vs. est. $291.9M

·     NCR Corp. (NCR) Q4 adj EPS $0.76 vs. est. $0.70; Q4 revs $2.03B vs. est. $2.07B; said Board has unanimously approved commencing a comprehensive strategic review process; sees FY22 adj EPS $3.25-$3.55 vs. est. $3.49; sees FY22 revs $8B-$8.2B vs. est. $8.17B

·     UDR Inc. (UDR) 4Q adj FFO/ share $0.47 vs est. $0.54 on revs $348.2Mm vs est. $337.7Mm; sees 1Q adj FFO/share $0.50-0.52 vs est. $0.54 and FY adj FFO/share $2.02-2.10 vs est. $2.27

·     Voya Financial (VOYA) Q4 adj EPS $1.90 vs. est. $1.52; As of Dec. 31, 2021, Voya had approximately $1.5 billion of excess capital — largely unchanged from Sept. 30, 2021

·     XP inc. (XP) Q4 revenue R$3.447B vs est. R$3.33B; total AUC and active clients both +23% YoY

 

Healthcare

·     CVS Corp. (CVS) Q4 adj EPS $1.98 vs. est. $1.79 and revs rose 10.1% to $76.6B vs. est. $75.56B; revised cash flow from operations guidance range to $12B-$13B from $12.5B-$13B; reaffirms year adj EPS of $8.10-$8.30 vs. est. $8.27; announced a significant investment in its employees by raising minimum enterprise hourly wage to $15.00 an hour effective July 2022

·     Doximity, Inc. (DOCS) Q3 Non-GAAP EPS $0.29 vs. est. $0.13; Q3 revs $97.9M vs. est. $86.27M; sees Q4 revenue $89.0M-$90.0M vs. est. $89.26M and year revs $450M vs. est. $425.4M; agreed to acquire Amion which powers nearly 200,000 physician schedules

·     Healthpeak Properties, Inc. (PEAK) 4Q adj FFO/share $0.41 vs est. $0.41; guides FY adj FFO/share $1.68-1.74 vs est. $1.74

·     Inspire Medical Systems (INSP) 4Q EPS ($0.09) on revs $78.4Mm vs est. $76.6Mm; guides FY revs $318-326Mm vs est. $312.7Mm, gross margin 85-86% and expects to activate 52-56 new US medical centers implanting Inspire therapy per qtr

·     STERIS Plc (STE) 3Q adj EPS $2.12 vs est. $1.96 on revs $1.2B vs est. $1.19B; guides FY adj EPS $7.85-7.95 vs est. $7.73 on organic revs +11% vs prior +10-11%, sees CAPEX about $300Mm

·     USANA Health (USNA) Q4 EPS $1.03 vs est. $1.28 on revs $267M vs est. $271.9M; initial FY22 guidance for EPS $5.25-$6 vs est. $5.79 on sales $1.125B-$1.225B vs est. $1.174B; said Q4 sales came in below expectations as business was negatively impacted in key Asia Pacific markets

·     Varex Imaging (VREX) Q1 EPS $0.25 vs. est. $0.28; Q1 revs $199M vs. est. $208.3M; sees Q2 EPS $0.15-$0.40 vs. est. $0.33; sees Q2 revenue $190M-$220M vs. est. $211M

 

Industrials & Materials

·     Compass Minerals (CMP) Q1 adj EPS $0.38 vs. est. $0.55; Q1 revs $331.5M vs. est. $370.27M; lowers its FY22 adj EBITDA view to $200M-$235M from $220M-$250M and cuts cap-ex guidance by $25M to a range of $100M to $110M to offset inflationary pressures

·     Crown Holdings (CCK) Q4 adj EPS $1.66 vs. est. $1.54; Q4 revs $3.05B vs. est. $2.79B; sees FY22 adj EPS $8.00-$8.20 vs. est. $7.99; said effective income tax rate for 2022 is expected to be between 24% and 25%; year adj FCF expected to be approximately $400M

·     FMC Corp. (FMC) board authorized a new $1B share buyback program; Q4 adj EPS $2.16 vs. est. $2.01 and Q4 revenue $1.41B vs. est. $1.38B; sees FY22 adj EPS $8.60-$8.10 vs. est. $7.68; sees FY22 revenue $5.25B-$5.55B vs. est. $5.34B; looking ahead to 2022, we anticipate strong commodity prices will continue to drive demand for our differentiated product portfolio

·     Hub Group (HUBG) Q4 EPS $2.48 vs. est. $1.43; Q4 revs $1.26B vs. est. $1.18B; sees FY22 EPS $5.90-$6.30 vs. est. $5.02; sees FY22 revenue $4.9B-$5.1B vs. est. $4.82B; gross margin as a percentage of revenue will range from 13.9% to 14.3%; sees year capex $240M-$270M

·     Iron ore futures in China plunged more than 6% on Wednesday, snapping a five-session rally, after authorities pledged to strengthen supervision of the market and crack down on any irregularities – Reuters

·     Republic Services Inc. (RSG) is said in advanced discussions to buy rival US Ecology Inc. (ECOL) in a deal could be announced as soon as this week, according to a Bloomberg report. The report didn’t include the price for a potential transaction. https://bit.ly/3ozxyY5

·     Trinseo PLC (TSE) Q4 adj EPS $0.83 vs est. $1.22 on sales $1.298B vs est. $1.256B; sees FY22 net income $294M-$332M vs est. $299M, adj EBITDA $700M-$750M vs est. $724M

·     XPO Logistics (XPO) 4Q adj EPS $1.34 vs est. $0.99 on revs $3.36B vs est. $3.27B; guides FYQ adj EPS $5.00-5.45 vs est. $4.73, adj EBITDA $1.36-1.4B vs est. $1.34B and FCF $400-450Mm

·     Valvoline (VVV) 1Q adj EPS $0.48 vs est. $0.45 on revs $858Mm vs est. $826.7Mm; guides FY22 sales +19-21% vs est. +18.5%, adj EBITDA $675-700Mm vs est. $682Mm, adj EPS $2.07-2.20 vs est. $2.13

 

Media & Telecom

·     Omnicom (OMC) Q4 EPS $1.95 vs. est. $1.73; Q4 revs rose 2.6% to $3.86B vs. est. $3.68B; Operating profit of $622.5 million increased 1.3%; Operating profit margin of 16.1% and net income of $416.2 million increased 4.5%

·     Quinstreet (QNST) 2Q adj EPS $0.06 vs est. $0.08 on revs $125.3Mm vs est. $133.2Mm; guides 3Q revs $155-160Mm vs est. $180.2Mm; sees FY revs $600-620Mm vs est. $653.6Mm; says reducing FY outlook due to insurance market volatility

 

Technology

·     SoftBank Group Corp (SFTBY) said on Wednesday there was no link between Alibaba (BABA) registering a U.S. share facility and any specific plans to sell down its stake in the Chinese e-commerce giant (recall shares fell Monday on speculation Softbank could be selling shares

·     Digital Turbine (APPS) 3Q adj EPS $0.49 vs est. $0.43 on revs $375.5Mm vs est. $353.3Mm; guides FY22 revs $1.225-1.24B vs est. $1.521B, adj EBITDA $195-197Mm vs est. $195.2Mm and adj EPS $1.66-1.68 vs est. $1.61

·     GlobalFoundries Inc. (GFS) 4Q adj EPS $0.18 vs est. $0.11 on revs $1.85B vs est. $1.82B, says believe on track to deliver another year of strong growth in revs and profitability in 2022

·     Mandiant (MNDT) Q adj EPS ($0.10) vs est. ($0.13); guides 1Q adj EPS loss $0.13-0.15 vs est. loss $0.10 and revs $128-131Mm vs est. $135.4Mm; sees FY adj EPS loss $0.36-0.38 vs est. loss $0.32 and revs $555-565Mm vs est. $574Mm

·     Model N (MODN) 1Q adj EPS $0.15 vs est. $0.09 on revs $51.5Mm vs est. $49.9Mm; guides 2Q revs $51.0-51.5Mm vs est. $50.95Mm and adj EPS $0.06-0.08 vs est. $0.07; sees FY revs $212-214.5Mm vs est. $212.6Mm and adj EPS $0.46-0.52 vs est. $0.46

·     New Relic (NEWR) shares fall -19%; Q3 adj EPS ($0.18) vs est. ($0.15) on revenue $204M vs est. $200.4M; sees Q4 adj EPS ($0.22)-($0.19) vs est. ($0.02) on revenue $204M-$206M vs est. $204.2M; lowered FY guidance for adj EPS to ($0.75)-($0.72) from ($0.60)-($0.54) (vs est. for ($0.54) loss) and raised FY revenue view to $784M-$786M from $778M-$782M (vs est. $781.4M

·     Paycom Software (PAYC) Q4 adj EPS $1.11 vs est. $1.08 on revenue $285M vs est. $276M; sees Q1 revenue $342M-$344M vs est. $341.2M, FY22 revenue $1.314B-$1.316B vs est. $1.3B

·     ScanSource (SCSC) Q2 adj EPS $1.02 vs est. $0.85 on sales $864.4M vs est. $847.6M; raised FY sales outlook to growth of at least +7% from prior view of at least +5.5% and adj EBITDA of at least $148M from at least $135M (vs est. $138.5M)