Early Look

Tuesday, February 28, 2023

Futures	Up/Down	%	Last
Dow	72.00	0.22%	32,981
S&P 500	10.25	0.25%	3,998
Nasdaq	38.50	0.32%	12,121

 

 

U.S. futures edge higher following a narrow trading range overnight of roughly 25 points in the S&P, currently at the upper end of range (3,972.50 low and 3,999 high), adding to stock gains on Monday. A busy morning of economic data coming up today, along with another flurry of earnings results will headline today’s action. Retailing giant Target (TGT) reports better Q4 results, but guides Q1 and FY23 profit lower, and in financials, Goldman Sachs (GS) holds its investor day starting at 8:30 AM. Stocks look to extend yesterday gains which was paced by strength in Technology shares. Higher Treasury yields not having an impact on futures early with the 10-yr at 3.95%. Bond markets have repriced for higher rates for longer as the Federal Reserve battles still high inflation while a still strong economy gives it room to tighten policy further. In Asian markets, The Nikkei Index rose 21 points to 27,445, the Shanghai Index gained 21 points to 3,279, and the Hang Seng Index fell -157 points to 19,785. In Europe, the German DAX is up about 20 points to 15,400, while the FTSE 100 is down -25 points to 7,908.

Market Closing Prices Yesterday

·     The S&P 500 Index climbed 12.20 points, or 0.31%, to 3,982.24.

·     The Dow Jones Industrial Average rose 72.17 points, or 0.22%, to 32,889.09.

·     The Nasdaq Composite gained 72.04 points, or 0.63%, to 11,466.98.

·     The Russell 2000 Index advanced 5.78 points, or 0.31% to 1,896.27.

 

Economic Calendar for Today

·     7:45 AM ET              ICSC Weekly Retail Sales

·     8:30 AM ET              Advance Goods Trade Balance for January…prior (-$89.67B)

·     8:55 AM ET              Johnson/Redbook Weekly Sales

·     9:00 AM ET              Monthly Home Prices M/M for December

·     9:00 AM ET              CaseShiller 20-City Index for December…est. (-0.5%)

·     9:45 AM ET              Chicago PMI for February…est. 45.0

·     10:00 AM ET            Consumer Confidence for February…est. 108.5

·     10:00 AM ET            Richmond Fed Index for January…prior (-11.0)

·     4:30 PM ET               API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: AAP ADT AHCO ALT AMWD AZO BFLY BKI BLDR CBRL CCO CHS CLOV CNSL CVEO DK DORM FOUR FTCI GOGO HAYW HOV HSKA IGT JILL KTB LIND MPLN NCLH NXST OCGN OMI PCRX RDNT SEAS SJM SKIN SRE TAST TGT TILE TWKS VRTV WRBY XRAY ZVIA

·     Earnings After the Close: A ALEX ALLO AMBA AMBC AMC AXON BGFV BGS BLNK CARG CLNE COMP CSTL CUTR DDD DOMA DUOL EB EDR EHTH EVA FATE FIGS FLYW FSLR GDRX GMRE GO GPOR HPQ HRZN HURN ICFI IHRT IOVA IPAR JAMF KIDS MARA MASI MBI MCHX MDXG MEG MNST MQ MYGN NRDY NSTG NTRA NVAX NVTA OMCL PAYO PETQ PUBM QUOT REAL RIVN RLB RKT ROST RRGB RVNC RYAN SDC SHLS SILK SNDX SPCE SRPT SUPN TALO URBN VRM VRSK VZIO

 

Other Key Events:

·     Deutsche Bank Annual Media, Internet & Telecom Conference, 2/27-3/1, in Palm Beach, FL

·     Mobile World Congress, 2/27-3/2, in Barcelona, Spain

·     Truist Texas Bank Summit (virtual), 2/27-2/28

·     China NBS Manufacturing for February

 

 

Macro	Up/Down	Last
Nymex	1.23	76.91
Brent	1.03	83.48
Gold	-7.50	1,817.40
EUR/USD	0.0008	1.0615
JPY/USD	0.50	136.70
10-Year Note	+0.027	3.949%

 

 

Sector News Breakdown

Consumer

·     Target Corp. (TGT) Q4 adj EPS $1.89 vs. est. $1.40; Q4 revs $30.98M vs. est. $30.72B; Q4 comparable sales up 0.7% down from 8.9% y/y and est. -1.7%; guides Q1 EPS $1.50-$1.90 vs. est. $2.19 and year EPS $7.75-$8.75 vs. est. $9.25; Sees comparable sales in a “wide range from a low-single digit decline to a low-single digit increase.”

·     SeaWorld (SEAS) Q4 EPS $0.76 vs. est. $0.73; Q4 revs $390.52M vs. est. $382.08M; Q4 attendance was 4.9 million guests and total revenue per capita increased 5.7%.

·     Trex Company (TREX) Q4 adj EPS $0.23 vs. est. $0.21; Q4 revs $192.1M vs. est. $185.3M; Q4 adj Ebitda $46.21M; guides Q1 revs $230M-$240M vs. est. $242.5M.

·     Darlington Ingredients (DAR) Q4 EPS $0.96 vs. est. $1.34; Q4 sales $1.8B vs. est. $1.7B; expects continued growth and sets guidance for FY23 at $1.80-$1.85B combined adjusted ebitda.

 

Energy

·     Chevron (CVX) raised its share repurchase guidance to $10 billion to $20 billion a year; said it will raise its targeted annual buyback rate to $17.5 billion, starting in the second quarter.

·     Ranger Oil Corp. (ROCC) is being bought by Baytex Energy Corp. in a cash and stock transaction valued at $2.35B including debt; Ranger shareholders will receive a fixed ratio of 7.49 shares of Baytex and $13.31 in cash for each Ranger share for a total consideration of $44.36 a share. https://on.mktw.net/3xYO6gs

·     Occidental Petroleum (OXY) Q4 adj EPS $1.61 vs. est. $1.80; oil and gas pre-tax income on continuing operations for Q4 was $2.5B vs $3.3B for Q3 of 2022; qtrly average domestic realized gas prices decreased by about 37% from prior quarter to $4.45 per MCF.

·     ONEOK (OKE) Q4 EPS $1.08 vs. est. $1.02; Q4 adj Ebitda rose 14% to $967.4M, 27% increase in natural gas pipelines segment adjusted EBITDA, 18% increase in natural gas gathering and processing segment adjusted EBITDA.

·     Range Resources (RRC) Q4 adj EPS $1.30 vs. est. $1.20; Q4 revs $998M vs. est. $975.3M; development plan for 2023 will target a maintenance program that holds production approximately flat; 2023 capital budget of $570 to $615 million planned to maintain production at 2.12 to 2.16 Bcfe per day.

 

Financials, REITs

·     Goldman Sachs (GS) Investor Day starts at 8:30 AM ET.

·     Credit Suisse Group AG (CS) “seriously breached” its risk management obligations in the Greensill Capital supply-chain financing affair, Switzerland’s banking regulator has concluded as it closed its probe against the bank.

·     RLJ Lodging (RLJ) 4Q AFFO/shr $0.33 vs est. $0.32 on revs $302.2Mm vs est. $304Mm, adj EBITDA 79Mm vs est. $78.1Mm; sees 1Q comparable RevPAR $133-137Mm, adj EBITDA $76-82Mm vs est. $89Mm, AFFO/shr $0.29-0.33 vs est. $0.36.

·     President Joe Biden’s plan to cancel $430 billion in student debt for some 40 million borrowers is placed in the hands of the U.S. Supreme Court on Tuesday in a case that presents another major test of executive branch authority.

·     WesBanco (WSBC) files mixed-securities shelf.

 

Healthcare

·     Acadia Healthcare (ACHC) 4Q adj EPS $0.70 vs est. $0.75 on revs $675.3Mm vs est. $660.4Mm, adj EBITDA $150.9Mm vs est. $151.2Mm; guides 1Q revs $690-700Mm vs est. $673.8Mm, adj EBITDA $140-150Mm vs est. $150.2Mm, adj EPS $0.70-0.74 vs est. $0.73; sees FY revs $2.82-2.88B vs est. $2.83B, adj EBITDA $635-675Mm vs est. $653.6M, adj EPS $3.10-3.40 vs est. $3.31.

·     Acadia Pharma (ACAD) 4Q EPS ($0.26) vs est. ($0.24) on revs $136.5Mm vs est. $134Mm; sees FY23 Nuplazid sales $520-550Mm, sees GAAP R&D $235-255Mm, SG&A $360-380Mm.

·     Alcon (ALC) Q4 EPS $0.42 vs. est. $0.42; Q4 revs $2.16B vs. est. $2.15B; sees FY23 EPS $2.55-$2.65 vs. est. $2.52 and sees FY23 revenue $9.2B-$9.4B vs. est. $9.22B.

·     BioMarin (BMRN) Q4 EPS $0.00 vs. est. loss (-$0.07); Q4 revs $537.5M vs. est. $536.9M; sees FY23 EPS under new method of $1.80-$2.05 vs. est. $1.61 and sees FY23 revenue $2.375B-$2.5B, vs. consensus $2.58B; said delivered double-digit revenue growth and profitability for the full-year driven by the strong global launch of VOXZOGO.

·     CareDx (CDNA) Q4 adj EPS loss (-$0.07) vs. est. loss (-$0.09); Q4 revs $82.4M vs. est. $81.66M; sees FY23 revenue $328M-$338M vs. est. $338.42M.

·     FibroGen Inc. (FGEN) 4Q EPS ($0.70) vs est. ($0.94) on revs $34.4Mm vs est. $24Mm.

·     Hims & Hers Health (HIMS) 4Q EPS ($0.05) vs est. ($0.07), adj EBITDA $3.9Mm on revs $167.2Mm vs est. $161.2Mm; guides 1Q revs $175-180Mm and adj EBITDA $3-6Mm, adj EBITDA mgn 2-3%; guides FY23 revs $735-755Mm and adj EBITDA $20-30Mm, adj EBITDA mgn 3-4%.

·     ICU medical (ICUI) 4Q adj EPS $1.60 vs est. $1.56 on revs $578Mm vs est. $578.8Mm, adj EBITDA $96.4Mm vs est. $91.5Mm, gr mgn 30%; guides FY23 GAAP EPS ($3.00)-($1.50) and adj EBITDA $375-425Mm vs est. $407.4Mm.

·     Inari Medical (NARI) 4Q EPS ($0.11) vs est. ($0.17) on revs $107.8Mm vs est. $104.8Mm; reaffirms FY revs guide $470-480Mm vs est. $465.3Mm.

·     Ingevity (NGVT) 4Q adj EBITDA $74.3Mm vs est. $86.5Mm on net sales $383.6Mm vs est. $392.9Mm; guides FY23 sales $1.9-2.1B vs est. $1.83B and adj EBITDA $495-515Mm vs est. $516.7Mm.

·     Progyny (PGNY) 4Q adj EBITDA $33.05Mm vs est. $32Mm on revs $214.3Mm vs est. $211.8Mm; guides 1Q revs $245-250Mm vs est. $230.9Mm and adj EBITDA $41.5-44Mm vs est. $36Mm, sees FY revs $1.0-1.03B vs est. $1.02B and adj EBITDA $166-174Mm vs est. $167.1Mm.

·     SI-BONE (SIBN) 4Q EPS ($0.32) vs est. ($0.40) on revs $31.95Mm vs est. $31.22Mm; guides FY23 revs $124-127Mm vs est. $125.3Mm, gr mgn 80%, expects adj EBITDA loss will continue to improve y/y in 2023.

·     Universal Health (UHS) Q4 adj EPS $3.02 vs. est. $2.96; Q4 revs rose 5.2% y/y to $3.45B vs. est. $3.4B; guides year EPS $9.50-$10.50 vs. est. $10.74.

·     ViewRay (VRAY) Q4 EPS loss (-$0.15) vs. est. loss (-$0.16); Q4 revs $34.7M vs. est. $33.9M; sees FY23 total revs rising 25%-40%; Q4 operating expenses were $30.4M, compared to $29.0M for the same period last year; had total cash and cash equivalents of $142.5M at December 31, 2022.

 

Industrials & Materials

·     Ameresco (AMRC) 4Q adj EPS $0.35 vs est. $0.39 on revs $331.7Mm vs est. $367.6Mm; guides 1Q revs $220-240Mm vs est. $354.9Mm, adj EBITDA $20-30Mm vs est. $46.2Mm and adj EPS slightly positive vs est. $0.37; sees FY revs $1.45-1.55B vs est. $1.55B, gr mgn 19.5-10.0%, adj EBITDA $210-220Mm vs est. $212.2Mm and adj EPS $1.80-1.90 vs es.t $1.86.

·     Heico Corp. (HEI) 1Q EPS $0.67 vs est. $0.69 on sales $620.9Mm vs est. $588.8Mm.

·     Primoris Services (PRIM) 4Q adj EPS $0.93 vs est. $0.72 on revs $1.3B vs est. $1.31B, adj EBITDA $95.6Mm vs est. $94.7Mm; guides FY adj EPS $2.50-2.70 vs est. $2.60, adj EBITDA $350-370Mm vs est. $363.2Mm.

 

Technology, Media & Telecom

·     MKS Instruments (MKSI) Q4 adj EPS $2.00 vs. est. $1.34; Q4 revs $1.085B vs. est. $994M; Q4 operating margin 15% and gross margin 44.7%; anticipates previously announced ransomware incident identified on Feb 3 to have material impact on company’s Q1 results; says full scope of costs and related impacts of ransomware incident not yet been determined.

·     Workday INC. (WDAY) 4Q adj EPS $0.99 vs est. $0.91 on revs $1.65B vs est. $1.63B, adj EBIT mgn 23%; says maintains FY prelim subscription revs guidance, raises FY adj op mgn outlook to high end.

·     Zoom Video (ZM) Q4 adj EPS $1.22 vs. est. $0.80; Q4 revs rose 4.3% y/y top $1.12B vs. est. $1.1B; sees Q1 revs $1.08B-$1.09B vs. est. $1.11B; and year revs $4.44B-$4.46B vs. est. $4.59B; at end of q4 of fiscal year 2023, zoom had approximately 213,000 enterprise customers, up 12% y/y.

·     Dish Networks (DISH) downgraded to underperform from Buy at Bank America and slash tgt to $10 from $30.