Early Look

Thursday, February 23, 2023

Futures	Up/Down	%	Last
Dow	84.00	0.26%	33,163
S&P 500	16.25	0.40%	4,015
Nasdaq	85.50	0.70%	12,182

 

 

U.S. futures are pointing to a higher open, paced by gains in technology after chipmaker NVDA posted a beat and raise quarter, sending shares up over 7%. Stocks closed mixed on Wednesday as the S&P 500 fell a fourth straight day and the Dow ended lower, but the Nasdaq and SmallCap 600 Index edged higher after minutes of the Federal Reserve’s latest meeting signaled interest rates will be higher for longer amid ongoing inflation concerns. The Fed Minutes statement also showed “almost all” officials agreed it was appropriate to raise interest rates by 25 basis points at the meeting, while “a few” favored or could have supported a bigger 50-bps hike. Those comments, however, came prior to last weeks “hotter” CPI and PPI inflation data points and a stronger retail sales number. Next up, a big day of data and Fed speakers on Thursday with Q4 GDP (est. +2.9%), PCE data points, Jobless Claims (est. 200K) all expected today at 8:30 AM, followed by important inflation data Friday with the Fed’s favorite inflation gauge coming (core PCE Price Index expected to rise +0.5% from the prior month) as well as monthly personal income/spending, UoM Confidence and New Home Sales in heavy data flow to end the week. In Asian markets, The Nikkei Index slides -368 points or 1.34% to 27,104, the Shanghai Index dips -3 points to 3,287, and the Hang Seng Index drops -72 points to 20,351. In Europe, the German DAX is up about 50 points to 15,550, while the FTSE 100 is down -35 points to 7,895. The US dollar overall looking flattish as the dollar index at 104.60; Canadian dollar weakens to a near seven-week low at 1.3568 to the U.S. Dollar. The US 10-yr yield up at 3.93%.

 

Economic Calendar for Today

·     8:30 AM ET           Weekly Jobless Claims…est. 200K

·     8:30 AM ET           Continuing Claims…est. 1.70M

·     8:30 AM ET           Gross Domestic Product (GDP) for Q4, 2^nd estimate…est. 2.9%

·     8:30 AM ET           GDP Consumer Spending for Q4-P

·     8:30 AM ET           GDP Price Deflator for Q4-P…est. 3.5%

·     8:30 AM ET           PCE Prices prelim-Q4

·     8:30 AM ET           Core PCE prices prelim-Q4…est. 3.9%

·     10:30 AM ET         Weekly EIA Natural Gas Inventory Data

·     10:50 AM ET         Fed’s Bostic speaks on banking system.

·     11:00 AM ET         Kansas City Fed Manufacturing for Feb.

·     1:00 PM ET            U.S. Treasury to sell $35B in 7-year notes.

 

Earnings Calendar:

·     Earnings Before the Open: AAOI AEP AGIO ALNY AMR AMT BAND BLD CARS CBRE CCOI CLDT CMLS COMM CPE CTG DEN DPZ DTE EME EXLS FCN GCI GPC HNI IRM KDP LAUR LAZY LKQ LNG LNTH MGPI MPW MRNA NAUT NEM NEO NKLA OGE OPCH PCG PLNT PLYM PWR PZZA RCII RUTH SHOO SRCL SPTN TFX TNC TRS VCEL W WOW XPRO YETI

·     Earnings After the Close: ACCO ADSK ALRM ALTR AMH AMSWA BALY BCOV BECN BIGC BKNG BLI BOOM BWXT BYND CABO CDXS CE CENX CHE CRC CTO CUBE CURO CVNA CWK DVAX EOG EIX ENV EXR FND FOXF GDOT GH GLPI INFN INT INTU IRTC KAMN KTOS KURA KWR LAW LNT LPRO LSI LYV LZ MAX MCW MDRX MP MTZ NOVA NTST NVTS OII OLED OPEN ORGN PAY PEN PLYA PODD PRI RHP RVLV SEM SG SQ SWN TMST TUSK UPLD VICI WBD WISH ZETA ZEUS

 

Other Key Events:

·     Barclay’s Industrials Conference, 2/22-2/23, in Miami, FL

·     Stephens West Coast Bank Trip, 2/21-2/23, in Denver

 

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -6.29 points, or 0.16%, to 3,991.05.

·     The Dow Jones Industrial Average fell -84.50 points, or 0.26%, to 33,045.09.

·     The Nasdaq Composite gained 14.77 points, or 0.13%, to 11,507.07.

·     The Russell 2000 Index climbed 6.46 points, or 0.34% to 1,894.68.

 

 

Macro	Up/Down	Last
Nymex	0.13	74.08
Brent	0.15	80.75
Gold	-7.60	1,833.90
EUR/USD	-0.0014	1.0588
JPY/USD	-0.08	134.83
10-Year Note	+0.01	3.933%

 

 

World News

·     NY Fed President Williams said last night it remains critical that the Fed remains committed to its 2% inflation goal; strong demand in the US continues to exceed supply, pointing to persistent price pressures in the services sector, excluding food, energy and shelter; continued demand for goods, as well as ongoing supply-chain issues in the global economy, may keep prices from falling as quickly as some have expected.

·     Bank of Korea leaves rates unchanged at 3.50% as expected; sees 2023 GDP growth at 1.6% vs 1.7% projection in November; 2024 GDP growth at 2.4% vs 2.3%; revises 2023 CPI forecast to 3.5% vs 3.6% estimate in November.

 

Sector News Breakdown

Consumer

·     Cheesecake Factory (CAKE) 4Q EPS ($0.07) on revs $892.8Mm vs est. $901.4Mm, comps +4% at The Cheesecake Factory restaurants (+11.4% vs 2019).

·     Churchill Downs (CHDN) Q4 adj EPS $1.46 vs. est. $1.67; Q4 revs $480.1M vs. est. $473.57M; Adjusted EBITDA for Q4 increased $30.6 million from the prior year quarter.

·     Dutch Bros (BROS) Q4 adj EPS $0.03 vs. est. $0.07; Q4 revs $201.8M vs. est. $195.76M; comp store sales fell (-0.6%); says expect low-single digits growth from pricing to roll-over into 2023 from menu pricing taken in 2022; sees 2023 revs $950M-$1B vs. est. $981.5M.

·     eBay Inc. (EBAY) Q4 adj EPS $1.07 vs. est. $1.06; Q4 revs $2.5B vs. est. $2.47B; Q4 Gross Merchandise Volume (GMV) was $18.2B, down 12% on an as-reported basis and down 6% on an fx-Neutral basis; sees Q1 adj EPS $1.05-$1.09 vs. est. $1.06 and revs $2.46B-$2.5B vs. est. $2.37B.

·     ETSY Inc. (ETSY) Q4 EPS $0.77 vs. est. $0.80; Q4 revs $807.2M vs. est. $751.7M; qtrly consolidated GMS was $4.0 bln, down 4.0% year-over-year and down 0.7% on a currency neutral basis; sees Q1 revs $600M-$640M vs. est. $621M.

·     Imax Corp. (IMAX) Q4 adj EPS $0.19 vs. est. $0.20; Q4 revs $98.0M vs. est. $94.73M; gross global box office increased 33% year over year to $850 million leading to record share of both global (3.3%) and domestic (4.8%) gross box office in 2022.

·     Lucid (LCID) 4Q EPS ($0.28) vs est. ($0.41) on revs $257.7Mm vs est. $302.6Mm, produced 3,493 vehicles in qtr, delivered 4,369 for FY; says over 28,000 reservations at of Feb. 21, representing potential sales of over $2.7B; sees FY23 production 10,000-14,000 vehicles.

·     Park Hotels (PK) 4Q AFFO/shr $0.45 vs est. $0.40 on revs $665Mm vs est. $620.6Mm; sees 1Q AFFO/shr $0.30-0.37 vs est. $0.37 and FY AFFO/shr $1.60-1.99 vs est. $1.79.

·     Sleep Number (SNBR) 4Q EPS ($0.24) vs est. ($0.22) on revs $498Mm vs est. $495.7Mm; guides FY23 net sales flat to -MSD y/y vs est. -1%, gr mgn more than +150bps y/y EPS $1.25-2.00 vs est. $1.76.

·     Marriott Vacations (VAC) Q4 ad EPS $2.74 vs. est. $2.72; Q4 revs $1.19B vs. est. $1.2B; Q4 adjusted EBITDA was $239 million; excluding the impact of the Alignment; sees FY23 adjusted EPS $10.75-$11.54 vs. est. $11.60; sees FY adjusted EBITDA $950M-$1B.

 

Energy

·     Coterra Energy (CTRA) Q4 adj EPS $1.16 vs. est. $1.10; Q4 revs $2.28B vs. est. $2.11B; Expect annual average natural gas production of 2,700 – 2,850 Mmcfe/d, down modestly y/y as Upper Marcellus delineation increases in 2023; sees FY23 capital investment $2B-$2.2B.

·     Pioneer Resources (PXD) Q4 adj EPS $5.91 vs est. $5.77; Q4 revs $5.1B vs. est. $5.53B; Q4 average realized price for oil was $83.53 per barrel; sees Q1 oil production is forecasted to average between 349 to 364 MBOPD and total production is expected to average between 659 to 687 MBOEPD. Production costs are expected to average $11.75 per BOE to $13.25 per BOE.

·     SM Energy (SM) Q4 adj EPS $1.29 vs. est. $1.26; Q4 revs $671.32M vs. est. $614.72M; Q4 production was 13.1 MMBoe or 142.9 MBoe/d; sees 2023 production in flat to low single digit growth and sees 2023 production 52.5-54.5 MMBoe.

·     SunRun (RUN) Q4 EPS $0.29 vs. est. loss (-$0.05); Q4 revs 40% to $609.2M vs. est. $593.1M; expects solar energy capacity installed growth to be in a range of 215 to 225 megawatts in q1 of 2023; expects solar energy capacity installed growth to be in a range of 10% to 15% for FY23.

·     Sunnova Energy (NOVA) Q4 EPS loss (18c) vs. est. loss (37c); Q4 rev $195.6M vs. est. $139.4M; sees FY23 adjusted EBITDA $235M-$255M and FY23 customer additions 115K-125K.

·     TPI Composites (TPIC) 4Q adj EBITDA $21.15Mm vs est. $13Mm on sales $402.28Mm vs est. $440.33Mm; sees blade volume down slightly in 2023 as have ceased operations in China; says expect to deliver y/y sales growth in high-single to low-double-digits in FY23 from rest of global footprint; sees FY23 net sales from continuing ops $1.6-1.7B vs est. $1.659B.

 

Financials

·     Lemonade Inc. (LMND) Q4 EPS loss (-$0.93) vs. est. loss (-$1.20); Q4 revs $88.4M vs. est. $78.26M; Q4 adjusted EBITDA ($51.7M); Q4 gross earned premium of $151.3 million increased by $62.0 million or 69% y/y; Q4 customer count increased by 27% y/y to 1,807,548; sees FY23 revenue $375M-$379M vs. consensus $376.16M.

·     Offerpad Solutions (OPAD) 4Q adj EBITDA ($103.7)Mm vs est. ($49.2)Mm on revs $677.2Mm vs est. $547.8Mm; guides 1Q homes sold 1,300-1,450, revs $480-540Mm vs est. $623.1Mm, adj EBITDA ($55)Mm-($35)Mm vs est. ($14.6)Mm.

 

Healthcare

·     American Well Corp. (AMWL) EPS ($0.99) vs est. ($0.25) on revs $79.2Mm vs est. $78Mm; guides FY23 revs $275-285Mm vs est. $319.8Mm and adj EBITDA ($160)Mm-($150)Mm vs est. ($126.4)Mm.

·     DaVita Inc. (DVA) Q4 adj EPS $1.11 vs. est. $0.91; Q4 revs $2.92B vs. est. $2.93B; sees FY23 adjusted EPS $5.45-$6.95 vs. est. $6.73; sees FY23 free cash flow $650M-$900M.

·     Glaukos (GKOS) 4Q adj EPS ($0.53) vs est. ($0.55) on revs $71.2Mm vs est. $68Mm, adj gr mgn approx 84%; guides FY23 revs $290-295Mm vs est. $304.65Mm.

·     NuVasive (NUVA) Q4 EPS $0.43 vs. est. $0.51; Q4 revs rose 1.1% y/y to $305.4M vs. est. $311.1M; sees 2023 revenue growth 6%-8%.

·     Tandem Diabetes (TNDM) 4Q EPS ($0.25) vs est. ($0.06) on revs $220.5Mm vs est. $221.8Mm; guides FY23 adj sales $885-900Mm vs est. $891.6Mm, adj gr mgn approx 52%, adj EBITDA mgn approx 5-6%.

·     Teladoc (TDOC) 4Q adj EBITDA $94.09Mm vs est. $91.75Mm on revs $637.7Mm, adj gr mgn 70.4%; guides 1Q revs $610-625Mm vs est. $642.4Mm, adj EBITDA $42-50Mm vs est. $62.3Mm; sees FY revs $2.55-2.675B vs est. $2.71B, adj EBITDA $275-325Mm vs est. $292.8Mm.

 

Industrials & Materials

·     Mosaic (MOS) Q4 adj EPS $1.74 vs. est. $2.26; global supplies remain constrained, unlikely to be sufficient to allow return to trend demand, could struggle to satisfy pent up demand in 2023; sees 2023 capex $1.3B-$1.4B; food security concerns, rising biofuel consumption, crop production headwinds suggest elevated crop prices will persist through 2023 & beyond

·     Valmont industries (VMI) 4Q adj EPS $3.57 vs est. $3.57 on sales $1.13B vs est. $1.06B; guides FY23 net sales +4-7% vs est. +7%, adj EPS $15.35-15.90 vs est. $15.65.

·     Albemarle (ALB) said it signed agreements with Mineral Resources Ltd. (MALRY) to restructure their MARBL lithium joint venture in Australia and separately for Mineral Resources to invest in Albemarle’s conversion assets in China.

 

Technology, Media & Telecom

·     Nvidia (NVDA) 4Q revs fell -21% y/y to $6.05B vs. est. $6.02B; Q4 adj EPS $0.88 vs. est. $0.81; Q4 adj gross margins 66.1% vs. est. 65.8%; sees Q1 revs $6.5B plus/minus 2% vs. est. $6.35B; Q4 data center revenue $3.62B vs. est. $3.86B and gaming revs $1.83B vs. est. $1.6B.

·     Altice USA (ATUS) Q4 EPS loss (-$0.43) vs. est. $0.21; Q4 revs fell -6% y/y to $2.37B vs. est. $2.39B; Q4 adj Ebitda loss -16% y/y to $913.3M; expects to continue to invest in key growth initiatives, with anticipated cash capex of approximately $1.7 bln to $1.8 bln in FY23.

·     ANSYS Inc. (ANSS) 4Q adj EPS $3.09 vs est. $2.80 on revs $694.1Mm vs est. $647.1Mm; guides 1Q revs $482.5-507.5Mm vs est. $450.9Mm and adj EPS $1.53-1.71 vs est. $1.42; sees FY23 adj revs $2.242-2.322B vs est. $2.189B and adj EPS $8.34-8.86 vs est. $8.41.

·     Bumble (BMBL) Q4 revs $241.6M vs. est. $235.9M; Q4 total paying users increased to 3.4 million, from 3 million a year earlier; sees FY23 revenue growth between 16% and 19%, the midpoint of which is above analysts’ estimate of 16.97%.

·     Five9 Inc. (FIVN) Q4 EPS $0.54 vs. est. $0.41; Q4 revs $208.3M vs. est. $204.5M; guides Q1 results above views and sees FY23 EPS $1.67-$1.71 vs. est. $1.57 and revs $900M-$903M vs. est. $900.6M; GAAP gross margin was 53.8% for Q4 vs. 54.1% y/y.

·     NetApp Inc. (NTAP) 3Q adj EPS $1.37 vs est. $1.31 on revs $1.53B vs est. $1.61B; guides 4Q net revs $1.475-1.625B vs est. $1.665B and adj EPS $1.30-1.40 vs est. $1.43; sees FY net revs flat y/y vs est. +3.3%, adj gr mgn 66-67%, adj op mgn 23-24%, adj EPS $5.30-5.50 vs est. $5.41.

·     ON Semiconductor (ON) said it intends to offer $1.1 billion of convertible senior notes due 2029 in a private offering.

·     Unity Software (U) Q4 revs $450.9M vs. est. $438.8M; sees 1q revs $470M-$480M below est. $514.8M and sees 2023 revs $2.05B-$2.20B vs. est. $2.21B

·     Matterport (MTTR) Q4 EPS loss (-$0.09) vs. est. loss (-$0.10); Q4 revs $41.1M vs. est. $39.7M; sees FY23 EPS loss (32c)-(36c) on revs $153M-$169M vs. est. loss (-$0.35) and $169.27M.

·     Magnite Inc. (MGNI) 4Q adj EPS $0.24 vs est. $0.32 on revs $175.4Mm vs est. $153.7Mm, adj EBITDA $64.2Mm vs est. $64.6Mm; guides 1Q revs ex-TAC $109-113Mm, sees FY revs ex TAC up y/y, sees FY FCF over $100Mm.