Early Look

Friday, February 16, 2024

U.S. stocks are pointing to another higher open with S&P futures (Spuz) up around 5,057, just shy of its’ all-time best level of 5,066.50 on 2/12, while Nasdaq futures outperform up over 0.5% with more early strength in tech. Investors prepare for another inflation report with January producer price index (PPI) expected at 8:30 AM. The consumer price index (CPI) report was higher than expected on Tuesday sending stock markets lower, but investors have quickly dismissed it, buying the dip…would a hotter PPI print today garner the same reaction? We also get January housing starts at 8:30 AM and the University of Michigan preliminary consumer sentiment survey for February at 10:00 AM (also inflation expectations. In Asian markets, The Nikkei Index jumped 329 points to 38,487, the Shanghai Index remained closed for its week-long Lunar holiday, and the Hang Seng Index gained 395 points to 16,339. In Europe, the German DAX is up 131 points to 17,178, while the FTSE 100 is up 78 points to 7,676.

U.S. stocks advanced again on Thursday, keeping hopes alive for a 6^th straight week of gains for the S&P 500 and Nasdaq Composite and make it 15 of the last 16 weeks closing higher in what has been a spectacular rally off the October 2023 lows. Stock prices were boosted by slightly higher expectations of near-term interest rate cuts Thursday after U.S. retail sales came in well below economists’ expectations in January (the only data point of six that disappointed, but markets hung on to that one). U.S. retail sales fell by the most in 10 months last month and were revised lower in November and December. Hotter than expected consumer price inflation (CPI) data on Tuesday pushed back expectations on when the Fed is likely to begin rate cuts to June, from May, and led stocks lower, but those losses have been erased in 2-days with the S&P 500 closing at another all-time high on Thursday. While Technology has been the spark for markets in 2023 and early 2024, many sectors have caught up with 52-week highs for likes of Industrials, Financials, and healthcare as well. The benchmark 10-year Treasury yield is now around 4.24%, down from a two-month high of 4.332% reached on Wednesday.

A little caution warranted perhaps as the S&P 500 (SPX) is now entering the worst 2-week period of the year based on historical data going back almost 100 years, according to Oppenheimer. Many continue to sound the alarm of caution for stock markets, but investors don’t want to hear it: GordonJohnson19 tweeted yesterday “the Fed/Yellen are doing the SAME THINGS that got inflation to 40yr highs in 2022. They are allowing financial conditions to loosen materially, pumping liquidity into private hands, & pushing stocks higher daily. This is the most predictable forthcoming inflation crisis ever."

• The Dow Jones Industrial Average rose 348.85 points, or 0.91%, to 38,773.12.
• The Nasdaq Composite gained 47.03 points, or 0.30%, to 15,906.17.
• The Russell 2000 Index advanced 49.38 points, or 2.45% to 2,061.48.

• 8:30 AM ET                  Producer Price Index (PPI) Y/Y for January…est. +0.6% (prior 1.0%)
• 8:30 AM ET                  PPI Core Ex: Food & Energy M/M for January…est. +0.1% (prior 0%)
• 8:30 AM ET                  PPI Core Ex: Food & Energy Y/Y for January…est. +1.6% (prior 1.8%)
• 8:30 AM ET                  Housing Starts M/M for January…est. 1.46M
• 8:30 AM ET                  Building Permits M/M for January…est. 1.509M
• 10:00 AM ET                University of Michigan Confidence, Feb-Prelim…est. 80.0
• 10:00 AM ET                University of Michigan 1yr and 5-yr inflation expectations
• 12:10 PM ET                Fed’s Daly Speaks at NABE Conference
• 1:00 PM ET                   Baker Hughes Weekly rig count data

• DraftKings (DKNG) Q4 adj EPS $0.29 vs. est. $0.08; Q4 revs $1.23B vs. est. $1.24B; said monthly unique payers increased to 3.5M and average revenue per monthly unique player was $116; raising midpoint of FY24 rev guidance range to $4.775B from $4.65B; announced that it has reached an agreement to acquire Jackpocket, the leading lottery app in the United States, for total consideration of approximately $750M.
• Texas Roadhouse (TXRH) Q4 EPS $1.08 vs. est. $1.06 on in-line revs of $1.16B; sees 2024 total capital expenditures of $340M-$350M; Comparable restaurant sales increased 9.9% at company restaurants and increased 8.9% at domestic franchise restaurants; Restaurant margin dollars increased 21.4% to $176.7M from $145.6M y/y.

• Eni SpA shares dropped after fourth-quarter profits in line with estimates offered few clues on how the Italian supermajor will offset broader weakness in energy markets.
• SunPower (SPWR) downgraded to Sell from Neutral at Guggenheim after rescue financing.

• Digital Realty (DLR) Q4 core FFO $1.63 vs. est. $1.64; Q4 revs $1.4B vs. est. $1.39B; Q4 adj Ebitda $700m vs. est. $666.4M; introduced 2024 core FFO per share outlook of $6.60-$6.75.
• Opendoor Technologies (OPEN) Q4 adj EBITDA ($69)Mm vs est. ($95.74)Mm on revs $870Mm vs est. $826.44Mm; guides Q1 revs $1.05-1.1B vs est. $1.214B, adj EBITDA ($80)Mm – ($70)Mm vs est. ($70.07)Mm.
• Tanger Inc. (SKT) Q4 core FFO/shr $0.52 vs est. $0.50, EPS $0.22 vs est. $0.21; guides FY24 core FFO/shr $2.02-2.10 vs est. $2.03, sees same-center NOI +2.0-4.0%.
• Toast Inc. (TOST) authorizes up to $250M share repurchase program; Q4 adj EBITDA $29Mm vs est. $13.85Mm on revs $1.0B vs est. $789.95Mm, ARR over $1.2B; guides Q1 adj EBITDA $15-25Mm vs est. $19.85Mm; sees FY adj EBITDA $200-220Mm vs est. $155.17Mm.

• AMN Healthcare (AMN) Q4 adj EPS $1.32 vs. est. $1.25; Q4 revs $818.27M vs. est. $803.09M; sees Q1 revenue $810M-$830M below consensus $835.02M and sees Q1 adjusted EBITDA margin 11.2%-11.7%.
• Bio Rad Labs (BIO) Q4 adj EPS $3.10 vs est. $2.82, adj gross mgn 54.4%, adj op Inc $105.2Mm vs est$105.44Mm on sales $681.2Mm vs est. $685.09Mm; guides FY24 adj currency-neutral revs +1.0-2.5% vs est+1.28%.
• GE HealthCare (GEHC) files to sell 13M shares of common stock for holders.
• Shockwave Medical (SWAV) Q4 EPS $1.16 vs est. $0.89, adj EBITDA $68.2Mm vs est. $48.77Mm on revs $202.979Mm vs est. $199.45Mm; sees FY revs $910-930Mm vs est. $918.91Mm.
• Trupanion (TRUP) Q4 EPS loss (-$0.05) vs. est. loss (-$0.18); Q4 revs rose 20% y/y to $295.9M vs. est. $289.84M; forecasts two material weaknesses in internal controls.
• Ultragenyx (RARE) Q4 EPS ($1.52) vs est. ($1.62) on revs $127.4Mm vs est. $119.38Mm; guides FY revs $500-530Mm vs est. $504.31Mm, net cash used in ops less than $400Mm.
• GE HealthCare (GEHC) 13M share Spot Secondary priced at $82.25.

• Ingersoll Rand (IR) Q4 EPS $0.86 vs. est. $0.77; Q4 revs $1.82BB vs. est. $1.78B; sees FY24 EPS $3.14-$3.2 vs. est. $3.17 and sees FY24 revenue growth of 5%- 7%, or $7.22B-$7.36B vs. est. $7.21B; sees FY adj EBITDA of $1.92B to $1.98B, up 7% to 11% over prior year vs. est. $1.89B.
• Tronox Holdings (TROX) adj EPS ($0.38) vs est. $0.00, adj EBITDA $94Mm vs est. $112.04Mm on revs $686Mm vs est. $668.95Mm; guides Q1 adj EBITDA $100-120Mm vs est. $123.52Mm.

• Cambium Networks (CMBM) Q4 adj EPS ($0.95) vs est. ($0.39), adj EBITDA ($32.9Mm) vs est. ($12.59Mm), adj gr mgn (19.4%) on revs $40.2Mm vs est. $41.16Mm; guides Q1 revs $43-48Mm vs est. $46.38Mm, adj gr mgn 41-44%, adj EBITDA ($6.6)Mm-($4.1)MM vs est. ($4.76)Mm, adj EPS ($0.31)-($0.22) vs est. ($0.20).
• Dropbox (DBX) Q4 adj EPS $0.50 vs est. $0.48, adj EBIT mgn 32.2% on revs $635Mm vs est. $631.13Mm; sees Q1 revenue $627M-$630M, vs. consensus $631.4M.
• Globant SA (GLOB) Q4 adj EPS $1.62 vs est. $1.61, adj gr mgn 38% on revs $580.7Mm vs est. $579.42Mm; sees Q1 revs at least $570Mm vs est. $574.37Mm, adj EPS at least $1.53 vs est. $1.53 and adj op mgn 15-16%.
• Liberty Media (LBTYA) Q4 revenue of $897.5 mln increased 11.7% yoy on a reported basis; Q4 adjusted EBITDA up 16.1% y/y; delivered postpaid growth across all our core FMC operations and over 80,000 aggregate net adds.
• Procore Technologies (PCOR) Q4 adj op mgn 7%, revs $260M vs est. $248.27M, adj gr mgn 85%; sees Q1 revs $262-264Mm vs est. $257.42Mm and adj op mgn 7-8%; sees FY revs $1.137-1.142M vs est. $1.127M and adj op mgn 7-8%.
• Roku Inc. (ROKU) Q4 EPS loss (-$0.55) vs. est. loss (-$0.54); Q4 revs $984.4M vs. est. $968.2M; said grew monetization with Platform revenue up double digits YoY in both Q4 and FY23; sees Q1 revenue $850M vs. est. $833.6M; said Q4 average revenue per user (ARPU) slipped 4% to $39.92; said y/y growth rate comparisons in streaming services distribution and a challenging M&E environment for the rest of the year.
• Trade Desk (TTD) Q4 EPS $0.41 vs. est. 40.43; Q4 revs $606M vs. est. $582.2M; sees Q1 revenue at least $478M above consensus $451.9M and sees Q1 adjusted EBITDA about $130M; additional share repurchase authorization, bringing total amount of authorized future repurchases to $700 mln of its class a common stock.
• Yelp Inc. (YELP) Q4 adj EBITDA $96.054Mm vs est. $88.92Mm on revs $342.376Mm vs est. $341.82Mm; guides FY net revs $1.42-1.44B vs est. $1.398B and adj EBITDA $315-335Mm vs est. $340.16Mm.