Morning Preview: May 09, 2024

Early Look

Thursday, May 9, 2024

Futures

Up/Down

%

Last

Dow

-59.00

0.15%

39,136

S&P 500

-8.25

0.16%

5,204

Nasdaq

-35.75

0.20%

18,150

 

 

S&P futures are marginally softer, as the Nasdaq contracts -0.2% on semi weakness as Arm Holdings (ARM) shares slide (-7%) on a softer forecast. The dollar is mixed against all FX majors after a recent rally and the Treasury 10-year yield adds two basis points to 4.51%. For the 4th day in a row, no incremental economic data in the U.S. to move markets (lone piece weekly jobless claims at 8:30), as it appears the markets will remain choppy into next weeks key consumer price (CPI) inflation data on Wednesday 5/15. The Dow Jones Industrial Average managed a 6th straight day of gains while the S&P narrowly snapped its 4-day losing streak along with the Nasdaq in quiet market action. Futures overnight in 20-point range digesting another round of earnings results. In Asian markets, The Nikkei Index fell -128 points to 38,073, the Shanghai Index rose 25 points to 3,154, and the Hang Seng Index jumped 223 points to 18,537. In Europe, the German DAX is up 66 points to 18,564, while the FTSE 100 is up slightly at 8,357. Later this morning, the Bank of England (BoE) central bank decision is expected where Governor Andrew Bailey may deliver a signal on when the central bank can finally lower borrowing costs. Treasuries slipped after a $42 billion sale of 10-year notes received tepid demand yesterday, while the Treasury auctions $22B in 30-year notes later this afternoon.

 

Market Closing Prices Yesterday

  • The S&P 500 Index little changed, almost flat at 5,187.67.
  • The Dow Jones Industrial Average rose 172.13 points, or 0.44%, to 39,056.39.
  • The Nasdaq Composite slipped -29.80 points, or 0.18%, to 16,302.76.
  • The Russell 2000 Index declined -9.51 points, or 0.46% to 2,055.14.

Economic Calendar for Today

  • 8:30 AM ET                  Weekly Jobless Claims…est. 215K
  • 8:30 AM ET                  Continuing Claims…est. 1.785M
  • 10:30 AM ET                Weekly EIA Natural Gas Inventory Data
  • 1:00 PM ET                   US Treasury to sell $22B in 30-year notes.

Earnings Calendar:

  • Earnings Before the Open: ACRE ALE ARHS BERY BIGC BTAI CARS CCO CCOI CEVA COMM CRL CRNC DM DNUT DTC EDR FOLD FOUR FUN GRDX GOCO H HAE HBI HGV IHRT IRWD KELYA LQDT MPW NABL NTCT NXST OB PAR PET PLL PLNT PZZA RBLX RPRX SBH SGA SIX SN SOHO SPB SPH TGLS TPR UP USFD VTNR VTRS WBD WMG WRBY YETI
  • Earnings After the Close: AAOI ACHR ACHV ACTG AKAM ALRM AMN ARLO ARRY ARWR BE BEAT BLNK BW CARG CDNA CHRS CHUY CLNE CMBM COLD CTSO CUTR DBX DIOD EGAN ESE ETON EVH EVLV EXFY FARM FIGS FNKO G GDOT GEN GETY GH GRPN HCAT HRB IAS III INDI IOVA LAW LEGH LFLY MAIN MARA MBI MTD NGVC NNI NTRA NVTS OUST PACB PGNY PLBY PLUG PODD QRHC QSI RICK RPAY RXT SG SKIN SOUN SSP SYNA TELA TREX TTGT U VCSA VCTR VRM YELP ZIP ZOM

Other Key Events:

  • BMO Capital 19th Annual Real Estate Conference, 5/7-5/9, in New York
  • DA Davidson 26th Annual Financial Institutions Conference, 5/8-5/10, in Colorado Springs, CO
  • Oppenheimer 9th Annual Emerging Growth Conference, 5/9
  • RSA Conference, 5/7-5/9, in San Francisco, CA

 

 

Macro

Up/Down

Last

Nymex

0.71

79.70

Brent

0.61

84.19

Gold

-3.70

2,318.60

EUR/USD

-0.0011

1.0734

JPY/USD

0.40

155.89

10-Year Note

+0.023

4.506%

 

World News

  • China’s exports and imports returned to growth in April after contracting in the previous month, as shipments from China grew 1.5% year-on-year last month by value, in line with the increase forecast by economists. They fell 7.5% in March, which marked the first contraction since November. Imports for April increased 8.4%, beating an expected 4.8% rise and vs. a -1.9% fall m/m.
  • The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was 17 vs 6 last week. Bulls rise to 40.8% from 38.5%, Neutrals rise to 35.4% from 29%, Bears fall to 23.8% from 32.5%.
  • Japan’s Ministry of Finance reserves fell $25bn in April, with the biggest drops coming in foreign reserves ($14bn) and securities ($16bn) offsetting gains in gold and total deposits,

Sector News Breakdown

Consumer

  • AirBnB (ABNB) Q1 EPS $0.41 vs. est. $0.24; Q1 revenue $2.14B vs. est. $2.06B; said Q1 net income of $264M more than doubled y/y; sees Q2 revenue $2.68B-$2.74B below consensus $2.74B and sees Q2 adjusted EBITDA flat to up on a nominal basis; said active listings on the platform grew 17% year-over-year with Asia and Latin America leading the additions; average cost per night in an Airbnb or average daily rate was $173 in the reported quarter, a 3% rise y/y.
  • B&G Foods (BGS) Q1 adj EPS $0.18 vs est. $0.11, adj EBITDA $75Mm vs est. $77.4Mm on revs $475.2Mm vs est. $480.9Mm; sees FY sales $1.955-1.985B vs est. $1.981B, adj EBITDA $300-320Mm vs est. $309.7Mm and adj EPS $0.75-0.95 vs est. $0.86.
  • Beyond Meat (BYND) Q1 EPS loss (-$0.84) vs. est. loss (-$0.67); Q1 revs $75.6M vs. est. $75.24M; backs FY24 revenue view $315M-$345M (est. $329.64M), backs FY24 capex view $15M-$25M and backs FY24 operating expenses view $170M-$190M; sees Q2 revs $85M-$90M.
  • Bumble (BMBL) Q1 EPS $0.19 vs. est. $0.07; Q1 revs $267.8M vs. est. $265.46M; Q1 total paying users increased to 4.0M from 3.5M and total Average Revenue per Paying User decreased to $21.84, compared to $22.83; sees Q2 revenue $269M-$275M, below consensus $278.63M and sees FY24 year-over-year revenue growth 8%-11%.
  • Cheesecake Factory (CAKE) Q1 EPS $0.68 vs. est. $0.63; Q1 revs $891.2M vs. est. $890.9M; said Comparable restaurant sales at The Cheesecake Factory restaurants declined 0.6% year-over-year in the Q1; continues to expect to open as many as 22 new restaurants in fiscal 2024.
  • Costco Wholesale (COST) net sales of $19.80B for retail month of April, four weeks ended May 5, up 7.1 % from $18.48B last year; net sales for first 35 weeks were $166.44B, up 7.0 % from $155.62B last year; April total comparable sales +5.6% and US comparable sales excluding fuel, currencies +5.2%.
  • Instacart (CART) Q1 EPS $0.43 vs est. ($0.02), adj EBITDA $198Mm vs est. $158.1Mm on revs $820Mm vs est. $793.4Mm; sees Q2 gr transaction value $8.0-8.15B and adj EBITDA $180-190Mm vs est. $168.75Mm.
  • Light & Wonder (LNW) Q1 EPS $0.88 vs est. $0.65, adj EBITDA $281Mm vs est. $269.8Mm on revs $756Mm vs est. $722.7Mm.
  • Topgolf Caloway (MODG) Q1 adj EPS $0.09 vs est. $0.01 on revs $1.144B vs est. $1.157B; guides FY revs $4.435-4.475B vs prior $4.515-4.555B and est. $4.519B, adj EBITDA $620-640Mm vs prior $620-640Mm and est. $624.95Mm, adj EPS $0.31-0.39 vs prior $0.26-0.34 and est. $0.30.

Energy,

  • Atmos Energy (ATO) H1 EPS $4.93 vs implied est. $4.70, CAPEX $1.415B; raises FY EPS to $6.70-6.80 vs prior $6.45-6.65 and est. $6.60; said capital expenditure guidance increased to approximately $3.1 billion.
  • Energy Transfer (ET) Q1 EPS $0.32 vs. est. $0.38; Q1 revs $21.63B vs. est. $21.04B; said Q1 growth capital expenditures were $461M, while maintenance capital expenditures were $115M; Q1 crude oil transportation volumes were up 44%, setting a new Partnership record; now sees FY24 adjusted EBITDA $15B-$15.3B vs. prior view $14.5B-$14.8B.
  • SolarEdge (SEDG) Q1 EPS loss (-$1.90) vs. est. loss (-$1.57); Q1 revs $204.4M vs. est. $195.98M; Q1 GAAP gross margin was negative 12.8%, compared to negative 17.9% in the prior quarter; GAAP operating expenses were $147.5 million, down 19% from $181.2 million in the prior quarter; Gross margin from the solar segment was negative 3.5%, compared to 4.0% prior.
  • Sunrun (RUN) Q1 EPS loss (-$0.40) vs. est. loss (-$0.46); Q1 revs $458.2M vs. est. $468.62M; reiterating cash generation guidance of reaching an annualized level of $200 mln to $500 mln in Q4; said exceeded high-end of Q1 guidance range for both Storage and Solar installations; Storage Capacity Installed of 207 Megawatt hours in Q1, representing 192% year-over-year growth, as storage attachment rates reach 50%.

Financials

  • Jackson Financial (JXN) Q1 adj EPS $4.23 vs est. $3.75, adj pre-tax Inc $389Mm.
  • Robinhood (HOOD) Q1 EPS $0.18 vs. est. $0.05; Q1 revs $618M vs. est. $548.61M; said Q1 transaction-based revenues increased 59% y/y to $329M, primarily driven by cryptocurrencies revenue of $126M, up 232%, options revenue of $154M, up 16%, and equities revenue of $39M, up 44%; Q1 net interest revenues increased 22% y/y to $254 million; said sees adjusted operating expenses and SBC for full-year 2024 to be in the range of $1.85 billion to $1.95 billion.

Healthcare

  • Exact Sciences (EXAS) Q1 EPS ($0.60) vs est. ($0.47) on revs $637-524Mm vs est. $627.37Mm; sees FY revs $2.81-2.85B (no change) vs est. $2.833B.
  • Quidel (QDEL) Q1 adj EPS $0.44 vs. est. $0.39; Q1 revs $711M vs. est. $693.24M; said achieved solid business performance in Q1 with 6% top-line constant currency revenue growth across our global regions; Following the appointment of Brian J. Blaser as President and Chief Executive Officer, QuidelOrtho is suspending its 2024 financial guidance.
  • STERIS (STE) Q4 adj EPS $2.58 vs. est. $2.37; Q4 revs $1.5B vs. est. $1.43B; sees FY25 adj EPS $9.05-$9.25 vs. consensus of $9.38 and guides organic revenue at constant FX +6% to +7%; announcing a targeted restructuring plan that includes restructuring of the healthcare surgical business in Europe.

Industrials and Materials

  • Azek Company (AZEK) prelim Q2 adj EBITDA $167-169Mm vs est. $111.54Mm on net sales $418.4Mm vs est. $412.74Mm; guides Q3 net sales $385-400Mm vs est. $390.11Mm and adj EBITDA $103-110Mm vs est. $103.4Mm; sees FY net sales $1.407-1.438B vs est. $1.424B and adj EBITDA $364-380Mm vs est. $370.71Mm.
  • Blue Bird Corp. (BLBD) Q2 adj EPS $0.89 vs est. $0.48, adj EBITDA $45.8Mm vs est. $29.9Mm on revs $345.9Mm vs est. $298.41Mm; sees FY revs $1.275-1.325B vs est. $1.249B, adj EBITDA $145-165Mm vs est. $134.51Mm and adj FCF $70-80Mm.
  • Celanese (CE) Q1 adj EPS $2.08 vs. est. $1.91; Q1 revs $2.61B vs. est. $2.67B; sees Q2 adj EPS $2.60-$3.00 vs. est. $2.91; Acetyl Chain delivered Q1 net sales of $1.3B, a 7% increase from the prior quarter as volume increased by 5 % sequentially.

Technology, Media & Telecom

  • Amdocs (DOX) Q2 adj EPS $1.56 vs est. $1.57 on revs $1.246B vs est. $1.245B, FCF $113Mm; guides Q3 revs $1.235-1.275B vs est. $1.263B and adj EPS $1.57-1.63 vs est. $1.67; sees FY revs +1.6-3.6% vs prior +1.5-5.1% and est. +3.14%, sees FY adj EPS +7-11% vs prior +8-12% and est. +9.99%.
  • AppLovin (APP) Q1 adj EBITDA $549Mm vs est. $496.3Mm, adj EBITDA mgn 52%; sees Q2 revs $1.06-1.08B vs est. $1.007B, adj EBITDA $550-570Mm vs est. $521.78Mm, adj EBITDA mgn 52-53%.
  • Arm Holdings (ARM) Q4 adj EPS $0.36 vs. est. $0.30; Q4 revs rose 47% y/y to $928M vs. est. $876.4M; guides Q1 EPS $0.32-$0.36 vs. est. $0.31 and revs $875M-$925M vs. est. $868M; sees FY25 EPS $1.45-$1.65 vs. est. $1.53 and FY25 revs $3.8B-$4.1B vs. est. $4.01B.
  • Cardlytics (CDLX) Q1 EPS ($0.56) vs est. ($0.11) on revs $67.608Mm vs est. $71.69Mm; guides Q2 revs $73-81Mm vs est. $81.39Mm and adj EBITDA ($3.0)Mm – $1.0Mm vs est. $2.486Mm.
  • Duolingo (DUOL) Q1 daily active users were 31.4 mln, an increase of 54% from the prior year quarter and monthly active users were 97.6M, an increase of 35% from the prior year quarter; Q1 EPS $0.57 vs. est. $0.27; Q1 revs $167.55M vs. est. $165.68M; Guides revenue $726.5M to $735.5M, from $717.5M to $729.5M and boosts adj Ebitda outlook.
  • HubSpot (HUBS) Q1 adj EPS $1.76 vs est. $1.50, adj op Inc $92.6Mm vs est. $84.22Mm on revs $617.4Mm vs est. $597.58Mm; sees Q2 revs $617-619Mm vs est. $623.04Mm and adj EPS $1.62-1.64 vs est. $1.57; sees FY revs $2.55-2.56B vs est. $2.564B and adj EPS $7.30-7.38 vs est. $6.97.
  • Magnite Inc. (MGNI) Q1 adj EPS $0.05 vs est. $0.00, adj EBITDA $25Mm vs est. $17.4Mm on revs $149.3Mm vs est. $124.2Mm; sees FY adj EBITDA +mid-teens vs est. +12.39% and adj EBITDA mgn +100-150bps.
  • MKS Instruments (MKSI) Q1 EPS $0.22 vs est. $0.75 on revs $868Mm vs est. $848.9Mm; sees Q2 revs $820-900Mm, adj EBITDA $174-220Mm vs est. $182.5Mm and adj EPS $0.67-1.19 vs est. $0.82.
  • News Corp. (NWS) Q3 EPS $0.11 vs. est. $0.10; Q3 revs $2.42B vs. est. $2.45B; said extended our existing partnership with Google (GOOGL); have been reviewing company’s structure and made underlying changes to company’s structure; Q1 news media rev in qtr decreased $33m, or 6%, as compared to the prior year, primarily driven by lower advertising revs; Q1 Dow Jones circulation and subscription rev increased $19M, or 4%, driven by a 10% increase in professional info business Revs.
  • TKO Group (TKO) Q1 EPS loss (-$1.26) on revs $629.7M vs. est. $611.64M; raised FY24 revenue to $2.610B-$2.685B, increased its target for adjusted EBITDA to $1.185B-$1.205B, and revised its target for free cash flow conversion to in excess of 40%.
  • Trade Desk (TTD) Q1 adj EPS $0.26 vs est. $0.21, adj EBITDA mgn 33% on revs $491Mm vs est. $480.31Mm; sees Q2 revs at least $575Mm vs est. $566.63Mm and adj EBITDA approx $223Mm vs est. $218.61Mm.
  • Huawei’s latest high-end phone features more Chinese suppliers, including a new flash memory storage chip and an improved chip processor, a teardown analysis showed – Reuters.

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Market commentary provided by Hammerstone Markets, Inc, a firm separate from and not affiliated with Regal Securities. Regal Securities has not participated in the creation of the content, and does not explicitly or implicitly endorse the content.