Early Look

Wednesday, February 14, 2024

U.S. futures are pointing to an extended rally from late yesterday, with Russell 2000 futures higher by 1% and S&P (Spuz) +0.35% around 4,990 (overnight highs 4,994.75). Stocks posted one of their worst days of 2024 on Tuesday though a late day rally lessened the losses after a hotter-than-expected inflation report sent stocks tumbling and sparked worries about just how soon the Federal Reserve will start cutting interest rates. The Nasdaq Composite fell -1.8%, while the Dow Jones Industrial Average declined -1.4%, or about 525 points a day after closing at record highs. The benchmark S&P 500 fell -1.4%, pulled lower by all 11 of its sectors while the Smallcap Russell 2000 index fell nearly -4%. Consumer prices rose 0.3% in January from a month earlier, the Labor Department said and core prices, which exclude food and energy, were up 0.4%. The benchmark 10-year Treasury note yield rose 14 bps to settle at 4.315%, while the yield on the 2-year Treasury note rose to 4.654%. Stocks perceived as being especially sensitive to interest rates were particularly weak such as homebuilders and dividend paying sectors (REITs). Stocks aren’t’ the only assets bouncing as Bitcoin jumps 3.5% to $51,250, crosses $1 trillion in mkt cap for the first time since November 2021. The dollar is mixed holding gains vs. the euro, but yen with small bounce. In Asian markets, The Nikkei Index declined -260 points to 37,703, the Shanghai Index remained closed for the week-long Lunar Year holiday and the Hang Seng Index reopened from its holiday to gain 132 points to 15,879. In Europe, the German DAX is up 39 points to 16,920, while the FTSE 100 rises 58 points to 7,571.

For those that have fought back on the view that the stock market isn’t just a handful of names doing the heavy lifting, this tweet from @KobeissiLetter counters that saying: “since February 2023: 1. Magnificent 7: +77%, 2. S&P 500: +20%, 3. Russel 2000: +5%, and 4. S&P 500 Equal Weight: +4%. If you remove the Magnificent 7 from the S&P 500, the index is barely up 5% over the last year. In other words, if you bought all S&P 500 stocks other than tech last year at this time, you’re almost breaking even. The top 10 stocks in the S&P 500 now account for a record 35% of the ENTIRE index.”

• The Dow Jones Industrial Average fell -524.63 points, or 1.35%, to 38,272.75.
• The Nasdaq Composite plunged -286.95 points, or 1.80%, to 15,655.60.
• The Russell 2000 Index tumbled -81.08 points, or 3.96% to 1,965.17.

• 9:30 AM ET                  Fed’s Goolsbee Speaks in Q&A
• 10:30 AM ET                Weekly DOE Inventory Data
• 4:00 PM ET                   Fed’s Barr Speaks at NABE Conference

• Earnings After the Close: ADPT ALB AM AMWL APP AR ATEX ATUS AWK CC CF CNXN CSCO CW CXT EQIX EQT ES ET FBRT FCPT FSLY GPMT GTY HCC HL HLF HUBS INFA MCRI MGY MSA MTW NMIH NRDS NEW OEC OXY PEGA PGRE PLMR QS RBBN RGLD ROIC ROL SON SUM TGL TRIP TWLO TYL UDMY UPWK VECO VTR WH

• Stifel Transportation & Logistics Conference, 2/13-2/14, in Miami, FL
• TD Cowen 45th Annual Aerospace & Defense Conference, 2/13-2/14, in Virginia
• American Academy of Orthopedic Surgeons (AAOS) Annual Meeting, 2/12-2/16, in San Francisco, CA

• Denny’s (DENN) Q4 adj EPS $0.14 vs. est. $0.17; Q4 revs $115.4M vs. est. $115.67M; sees FY24 domestic system-wide same-restaurant sales between 0%-3%, sees consolidated restaurant openings of 40-50, sees FY24 labor inflation between 4%-5% and sees FY24 adjusted EBITDA between $85M-$89M.
• Instacart (CART) Q4 adj EBITDA $641Mm vs est. $172.4Mm, qtrly GTV +7%, on revs $803Mm vs est. $804.2Mm; sees Q1 GTV 8-8.2B, adj EBITDA $150-160Mm vs est. $151.57Mm; authorized additional $500Mm for share repurchase.
• Lyft Inc. (LYFT) Q4 adj EBITDA $66.6M vs ($248.3M) last year; Q4 revs $1.2B vs. est. $1.22B; Q4 rides 191M, up 26% year-over-year; guides Q1 adjusted EBITDA $50M-$55M and gross bookings roughly $3.5B-$3.6B; Sees FY24 gross bookings growth slightly faster than Rides growth and adj EBITDA margin expansion roughly 500 bps.
• MGM Resorts (MGM) Q4 adj EPS $1.06 vs est. $0.71, adj EBITDA $1.2B vs est. $1.215B on revs $4.4B vs est. $4.139B.
• Topgolf Calloway Brands (MODG) Q4 EPS loss (-$0.30) vs. est. loss (-$0.33); Q4 revenue $897.1M vs. est. $866.08M; sees FY24 EPS $0.26-$0.34 vs. est. $0.36 and revs $4.515B-$4.555B vs. est. $4.54B; Topgolf business delivers full year 1% Same Venue Sales growth and positive Free Cash Flow.
• Zillow Inc. (ZG) Q4 revenue rose 9% y/y to $474M vs. est. $451.5M; Q4 adj Ebitda was $69M, or 15% of total revenue, $19M above the midpoint of the company’s outlook range; Traffic to Zillow Group’s mobile apps and sites in Q4 was 194M average monthly unique users, down 2% y/y and visits during Q4 were 2.2B, up 1% y/y.

• BP Plc (BP) said it has agreed to form a joint venture with Abu Dhabi National Oil Company (Adnoc) to explore and develop gas assets in Egypt; BP said that it will contribute its interests in three Egyptian development assets–Shorouk, North Damietta and North El Burg–as well as exploration agreements to the venture.
• Comstock Resources (CRK) Q4 EPS $0.10 vs. est. $0.13; Q4 revs $410.6M vs. est. $398.46M; said continued weak natural gas prices weighed heavily on Q4 results; said plans to suspend its quarterly dividend until natural gas prices improve; plans to reduce number of operating drilling rigs it is running from seven to five.
• EQT Corp. (EQT) Q4 adj EPS $0.48 vs. est. $0.52; Q4 operating revs $2.04B vs. est. $1.57B; still forecasts 2024 CAPEX $2.15B to $2.35B and Q1 CAPEX $525M to $600M; sees q1 total sales volume 525 bcfe– 575 bcfe and sees FY total sales volume 2,200 bcfe – 2,300 bcfe.
• Generac (GNRC) Q4 adj EPS $2.07 vs. est. $2.08; Q4 revs rose 1% y/y to $1.06B vs. est. $1.09B; Q4 Gross margin expanded to 36.5% from 32.7% in the year-ago quarter thanks to a stronger product mix; Residential product sales increased 1% to $580M; sees FY24 net sales up 3%-7% from last year.
• GXO Logistics (GXO) Q4 adj EPS $0.70 vs est. $0.69, adj EBITDA $193Mm vs est. $192.9Mm on revs $2.6B vs est. $2.552B; sees FY organic revs +2-5% vs est. +5.5%, adj EBITDA $760-790Mm vs est. $803.2Mm and adj EPS $2.70-2.90 vs est. $2.87.
• Kratos Defense (KTOS) Q4 adj EPS $0.12 vs est. $0.09, adj EBITDA $29.1Mm vs est. $22.36Mm on revs $273.8Mm vs est. $254.4Mm; guides Q1 revs $240-260Mm vs est. $253.31Mm, adj EBITDA $16-18Mm vs est. $21.44Mm; sees FY revs $1.125-1.15B vs est. $1.108B and adj EBITDA $102-107Mm vs est. $104.21Mm.
• Waste Connections (WCN) Q4 adj EPS $1.11 vs. est. $1.08; Q4 revs $2.04B vs. est. $2.03B; sees FY24 revenue about $8.75B vs. est. $8.7B and sees FY24 net income about $1.096B.

• Robinhood Inc. (HOOD) Q4 revenue $471M vs. est. $457M and transaction-based revenue $200M vs. est. $191.2M; qtrly net deposits were $4.6B, which translates to an annualized growth rate of 21% relative to AUC y/y; said earned higher interest off customers on loan repayments.
• Upstart Holdings (UPST) Q4 adj EPS loss (-$0.11) vs. est. loss (-$0.14); Q4 revs $140M vs. est. $134.89M; sees Q1 revenue $125M below consensus $151.2M and sees Q1 loss (-$75M); Total Q4 fee revenue was $153 million, a decrease of 2% year-over-year.
• Invitation Homes (INVH) Q4 results in-line with FFO $0.45, and revs rose 7.7% y/y to $624M and property operating, and maintenance costs increased 9.0% to $229M: guides FY24 core FFO $1.82-$1.90 and adj FFO $1.54-$1.62.

• DaVita (DVA) Q4 adj EPS $1.87 vs. est. $1.59; Q4 revs $3.15B vs. est. $3.01B; sees FY24 adjusted EPS $8.70-$9.80, vs. consensus $8.68 and FCF $900M-$1.15B; Q4 total U.S. dialysis treatments were 7,254,559, or an average of 92,533 treatments per day.
• Immunome (IMNM) 10M share Spot Secondary priced at $20.00.
• Larimar Therapeutics (LRMR) 17.2M share Spot Secondary priced at $8.74.
• Quidel (QDEL) Q4 adj EPS $1.17 vs est. $2.05, adj EBITDA $195Mm on revs $743Mm vs est. $796.9Mm; guides FY revs $2.76-3.07B vs est. $2.948B, adj EBITDA $565-720Mm vs est. $801.37Mm, adj EBITDA mgn 21-24% and adj EPS $2.40-3.07 vs est. $5.07.

• Blackline (BL) Q4 adj EPS $0.69 vs est. $0.55 on revs $155.73 vs est. $154.3Mm, adj op mgn 24.8%; guides Q1 revs $154-156Mm vs est. $175.54Mm, adj op mgn 15-16% and adj EPS $0.45-0.48 vs est. $0.50; sees FY revs $637.5-649.5Mm vs est. $656.06Mm, adj op mgn 17-18% and adj EPS $2.01-2.14 vs est. $2.02.
• Corsair Gaming (CRSR) Q4 adj EPS $0.22 vs est. $0.25 on revs $417.286Mm vs est. $428.66Mm; guides FY revs $1.45-1.6B vs est. $1.628B, adj EBITDA $105-125Mm vs est. $130.41Mm.
• Entegris (ENTG) Q4 adj EPS $0.65 vs est. $0.58 on sales $812.3Mm vs est. $780.87Mm; guides Q1 sales $770-790Mm vs est. $803.42Mm, adj EBITDA mgn 26.5-27.5% and adj EPS $0.60-0.65 vs est. $0.64.
• Go Daddy (GDDY) Q4 revs $1.1B vs. est. $1.1B; Q4 Applications & Commerce revenue up 13%; delivered Q4 net income margin of 103%, inclusive of non-routine items, and Q4 Normalized EBITDA margin of over 29%; cash provided by operating activities up 43% in Q4 and free cash flow up 51% in Q4; Q4 total bookings +7% y/y to $1.1B.
• Resideo Technologies (REZI) Q4 adj EPS $0.48 vs est. $0.44 on revs $1.54B vs est. $1.524B; guides Q1 revs $1.46-1.51B vs est. $1.546B, adj EBITDA $120-140Mm vs est. $149.5Mm and adj EPS $0.28-0.38 vs est. $0.36; sees FY revs $6.08-6.28B, adj EBITDA $560-640Mm vs est. $628.5Mm and adj EPS $1.48-1.88 vs est. $1.62.
• SS&C Technologies (SSNC) Q4 adj EPS $1.26 vs est. $1.24 on adj revs $1.412B vs est. $1.39B, adj op Inc $545.2Mm vs est. $496.15Mm; guides Q1 adj revs $1.397-1.437B vs est. $1.407B, adj EPS $1.19-1.25 vs est. $1.23; sees FY adj revs $5.668-5.868B vs est. $5.701B and adj EPS $4.85-5.15.