Early Look

Friday, November 6, 2020

Futures	Up/Down	%	Last
DJ Industrials	-166.00	0.59%	28,131
S&P 500	-26.50	0.74%	3,478
Nasdaq	-115.50	0.96%	11,960

 

 

Stock futures are lower, but paring overnight losses, on track for their best weekly advance since April that has seen the S&P record more than 1% gains for four consecutive sessions led by massive gains in technology stocks. Democratic presidential candidate Joe Biden took a narrow lead over President Donald Trump in the battleground state of Georgia for the first time early on Friday, putting the White House within his reach as it and other undecided states continue to count ballots. Election uncertainty and a growing expectation that the size of any additional stimulus measures out of Washington will be limited has pushed down U.S. Treasury yields sharply this week (the U.S. 10-year Treasury yield steady at around 0.78%, above Thursday’s three-week low near 0.72%, but below last week’s 0/94% 5-month highs). Worries over the election are weighing on some sentiment after President Trump questioned its credibility and said the vote was being “stolen” from him. He’s pursuing lawsuits challenging the counting process in several states, as rival Joe Biden took a slight lead in Georgia and gained in Pennsylvania, though his lead contracted in Arizona and Nevada. Coronavirus cases have been put to the back page for now given the election uncertainty, but cases in the United States surged by at least 120,276 on Thursday, according to a Reuters tally, the second consecutive daily record rise as the outbreak spreads in every region. U.S. cases have risen by over 100,000 for three out of the last seven days. In between the election chaos and the Covid-19 scare, we get monthly nonfarm payroll data at 8:30 today with estimates for 600K jobs added and 690K private payrolls with the unemployment rate to slip to 7.7%. In Asian markets, The Nikkei Index gained 220 points to 24,325, the Shanghai Index slipped -7 points to 3,312 and the Hang Seng Index edged higher 17 points to 25,712. In Europe, the German DAX is lower by -115 points to 12,450, while the FTSE 100 is down slightly at 5,900.

Market Closing Prices Yesterday

·     The S&P 500 Index jumped 67.01 points, or 1.95%, to 3,510.45

·     The Dow Jones Industrial Average rose 542.52 points, or 1.95%, to 28,390.18

·     The Nasdaq Composite spiked 300.15 points, or 2.59%, to 11,890.93

·     The Russell 2000 Index advanced 44.96 points, or 2.78% to 1,660.05

 

Economic Calendar for Today

·     8:30 AM EST      Nonfarm Payrolls data for October…est. 600K

·     8:30 AM EST      Private Payrolls data for October…est. 700K

·     8:30 AM EST      Manufacturing Payrolls for Oct…est. 50K

·     8:30 AM EST      Unemployment Rate for October…est. 7.7%

·     8:30 AM EST      Average Hourly Earnings for October…est. 0.2%

·     10:00 AM EST    Wholesale Inventories for September…est. (-0.1%)

·     1:00 PM EST       Baker Hughes Weekly Rig Count

·     3:00 PM EST       Consumer Credit for September…est. $9.0B

 

Earnings Calendar:

·     Earnings Before the Open: AES, CLMT, CLNY, COTY, CVS, DOC, ELAN, ESNT, GOLF, HCAP, HE, HMSY, HSY, IMGN, LNG, MAR, MBUU, MD, MOG/A, NFG, NOG, PRIM, SABR, SSP, SXC, TILE, TRIP, UFS, VIAC, VIRT, VTR, WPG, ZBH

 

 

Macro	Up/Down	Last
WTI Crude	-1.26	37.53
Brent	-1.25	39.68
Gold	6.45	1,956.10
EUR/USD	0.0052	1.1878
JPY/USD	-0.23	103.26
10-Year Note	-0.003	0.773%

 

 

World News

·     President Donald Trump’s campaign lost court rulings in the closely contested states of Georgia and Michigan on Thursday, even as it vowed to bring a new lawsuit challenging what it called voting irregularities in Nevada.

·     The United States on Thursday reported a record increase in new coronavirus cases for the second day in a row with at least 109,658 new infections, according to a Reuters tally. U.S. cases have risen by more than 100,000 for three out of the last seven days.

·     Bitcoin rose another 9% overnight to nearly touch $16,000, spurred by a tumble in dollar, ever looser monetary policy and after the DOJ seized a record amount of cryptocurrency.

 

Sector News Breakdown

Consumer Discretionary & Staples

·     B&G Foods (BGS) Q3 adjusted EPS 74c on revs $495.8M vs. est. 66c and $461.87M; sees FY20 adjusted EPS $2.30-$2.40 vs. est. $2.22; sees FY20 revenue $1.95B-$1.97B, consensus $1.94B

·     Caesars (CZR) Q3 EPS loss ($6.09) on revs $1.4B vs. est. loss ($2.15) and $1.69B; Q3 Same-store Adjusted EBITDA of $463M vs. $810M a year ago

·     Chuy’s (CHUY) Q3 EPS 31c on revs $82.0M vs. est. 12c and $79.02M; Q3 comparable restaurant sales decreased 19.8%, Q3 restaurant-level operating profit increased approximately 12% to $17.7M YoY; Q3 restaurant-level operating margin increased by 700 basis points to 21.5% compared to 14.5% YoY; not providing FY20 guidance

·     GoPro (GPRO) Q3 adjusted EPS 20c on revs $281M vs. est. 6c and $234.5M; Q3 subscribers surpassed 500,000, up 35% sequentially; achieved a record $81 million in revenue in Q3 2020, up 37% sequentially; camera sell-through was more than 950,000 units in Q3 2020.

·     Monster Beverage (MNST) Q3 EPS 65c on revs $1.25B vs. est. 63c and $1.23B; doesn’t see COVID having material impact on liquidity; Gross profit, as a percentage of net sales, for the 2020 third quarter was 59.1 percent, compared with 59.4 percent in the 2019 third quarter.

·     Peloton (PTON) Q1 EPS 20c on revs $757.9M (+232%) vs. est. 11c and $734.2M; q1 connected fitness subscription workouts grew 306% to 77.8 million; sees 1.63 million ending connected fitness subscriptions for Q2; q1 ending paid digital subscriptions grew 382% to over 510,000, total members grew to over 3.6 million; sees $3.9 billion or more total revenue for fy 2021

·     Planet Fitness (PLNT) 3Q adj EPS $0.02 vs. est. $0.12 on revs $105.4Mm vs. est. $109Mm, comps -5.6%, says saw positive momentum in membership joins and usage rates after kick starting national marketing efforts in September, says are increasing level of national marketing spend for remainder of the yr.; not providing any update to FY guidance (previously withdrawn)

·     Turtle Beach (HEAR) 3Q EPS $1.04 vs. est. $0.23 on revs $112.5Mm vs. est. $86.7Mm; guides FY20 revs about $330Mm vs. est. $308.6Mm, sees FY adj EPS about $1.75 vs. est. $0.96

·     Uber (UBER) 3Q adj net revs $2.81B vs. est. $3.2B, qrtly gross bookings $14.75B (-10%), qtrly trips 1.15B (-35%); 3Q EPS ($0.62) vs. est. ($0.65); qtrly monthly active platform consumers 78Mm; says as consolidated growth returns, it will return to a more profitable foundation

·     Wynn Resorts (WYNN) Q3 adj EPS loss ($7.04) on revs $370.5M vs. est. loss ($6.68) and $424.4M; 3Q Las Vegas Local Adjusted EBITDA $20.3 million, -77% YoY and Las Vegas operating revenue $186.7 million; Adjusted Property EBITDA was $(65.9) million for the third quarter of 2020, compared to $396.9 million for the third quarter of 2019

·     Zillow Group (ZG) Q3 adjusted EBITDA $152.18M vs. $15.84M last year on revs $656.7M vs. est. $572.3M; Q3 traffic to Zillow Group’s mobile apps and websites reached a record 236M average monthly unique users, an increase of 21% year over year, driving 2.8B visits during the quarter, an increase of 32% year over year

 

Energy

·     EOG Resources (EOG) Q3 adjusted EPS 43c on revs $2.25B vs. est. 19c and $2.57B; compared with q3 2019, qtrly total co crude oil volumes were 19 percent lower, at 377,600 barrels of oil per day (bopd); expects to maintain its crude oil production at about same level as the fourth quarter 2020; expects to generate up to 10% compound annual crude oil production growth in 2022 and 2023 at $50 WTI crude oil price

·     Sunrun (RUN) with better than expected Q3 GAAP earnings, while revenues slipped 2.6% Y/Y to $209M; said MW deployed during Q3 totaled 109 MW, 40% above 78 MW in Q2 and 2% above than 107 MW in the year-ago quarter.

 

Financials

·     AIG Inc. (AIG) Q3 adjusted eps 81c vs. est. 55c; Q3 general insurance pre-tax cats $790 million; 3q total consolidated net investment income $3.8 billion vs $3.4 billion YoY; Q3 adjusted roe +5.8% vs. +4.10% YoY; Q3 net premiums written $5.92 billion, -11% YoY

·     Conduent (CNDT) 3Q adj EPS $0.26 vs. est. $0.12 on revs $1.041B vs. est. $996.3Mm; sees FY20 revs -6.4% to -7.4% vs. est. -8.6%, sees adj EBITDA mgn 11.25-11.75%; says on track to exceed high end of previous FY20 cost reduction target range of $120-140Mm

·     First Bancorp (FBNC) will replace AMAG Pharmaceuticals Inc. (AMAG) in the S&P SmallCap 600, effective prior to the opening of trading on Friday, November 13. Covis Group is acquiring AMAG Pharmaceuticals in a deal expected to be completed soon pending final conditions

·     MGIC Investment Corp. (MTG) will replace The Geo Group Inc. (GEO) in the S&P MidCap 400, and The Geo Group will replace Gulfport Energy Corp. (GPOR) in the S&P SmallCap 600, effective prior to the opening of trading on Friday, November 13

·     Redfin (RDFN) 3Q EPS $0.30 vs. est. $0.25 on revs $237Mm vs. est. $227Mm; guides 4Q revs $226-233Mm vs. est. $214.9Mm

·     Square (SQ) Q revs $3.03B vs. est. $2.065B, adj EPS $0.34 vs. est. $0.16, transaction-based revs $925Mm (+13% YoY)

·     Tanger Factory Outlet Centers (SKT) generated positive cash flow for the quarter as Q3 rent collection improved to 89% of billed rents; Q3 core FFO per share of 44 cents beats consensus of 28 cents and improved from 10 cents in Q2; Q3 total revenue of $103.2M vs. consensus of $86.6M and $64.0M in Q2; compares with $119.0M in Q3 2019

 

Healthcare

·     Endo (ENDP) Q3 EPS from continuing operations 52c vs. est. 14c on revs $635M vs. est. $550.7M; Q3 Xiaflex revenue $88M vs. est. $66.4M and Q3 adjusted Ebitda $286.7 million, -11% YoY

·     Global Blood Therapeutics (GBT) Q3 total costs and operating expenses climb 38.5% to $95.2M, weighing on shares; Q3 sales, general, and administrative expenses surge 83.5% partly due to increased employee-related costs; reported Q3 net loss of $59.9M vs. $64.5M YoY

·     Guardant Health (GH) Q3 GAAP EPS loss (78c) on revs $74.6M vs. est. loss (38c) and $65.93M; is not providing 2020 financial guidance; Reported 16,950 tests to clinical customers and 3,071 tests to biopharmaceutical customers in Q3’20, representing an increase of 28% and a decrease of 42%, respectively YoY

·     Halozyme Therapeutics Inc. (HALO) will replace Mednax Inc. (MD) in the S&P MidCap 400, and Mednax will replace Washington Prime Group Inc. (WPG) in the S&P SmallCap 600, effective prior to the opening of trading on Friday, November 13

·     Ironwood (IRWD) Q3 EPS 23c on revs $103.5M vs. est. 15c and $95.96M; boosts FY20 revenue to $370M-$385M from $360M-$380M (est. $369.2M) and also raises FY20 adj EBITDA view to over $130M from over $105M

·     Mettler-Toledo (MTD) Q3 adjusted EPS $7.02 on revs $807.4M vs. est. $5.95 and $748.59M; raises FY20 adj. EPS view to $24.87-$24.97 from $22.70-$23.20 (est. $23.19) and sees year local currency sales growth is expected to be approximately 1%; announces additional $2.5B share repurchase program

·     Nektar (NKTR) Q3 EPS loss (61c) on revs $30M vs. est. loss (74c) and $26.33M

·     Puma Biotechnology (PBYI) Q3 EPS loss (60c) on revs $50.8M vs. est. loss (39c) and $53.5M; said continued to be negatively impacted by the challenges presented by COVID-19

·     Tandem Diabetes (TNDM) Q3 EPS loss (15c) on revs $123.6M vs. est. loss (10c) and $115.2M; Q3 Worldwide pump shipments increased 23% to 22,021 pumps from 17,839 pumps; raises FY20 revenue view to $465M-$475M from $450M-$465M; Operating margin improved to negative 1 percent from negative 6 percent

 

Industrials & Materials

·     Axon Enterprises (AAXN) 3Q adj EPS $0.40 vs. est. $0.20 on revs $200Mm vs. est. $149.8Mm; guides FY21 revs $720-750Mm vs. est. $711.8Mm, sees FY21 adj EBITDA $120-130Mm vs. est. $128.7Mm

·     Modine Manufacturing (MOD) 2Q adj EPS $0.43 vs. est. $0.04 on sales $461.4Mm vs. est. $400.8Mm; guides FY21 sales -7% to -12% vs. est. -18.6%, sees FY adj EBITDA $155-165Mm, expects some cost increases in 2H21

·     Virgin Galactic (SPCE) says it expects its first spaceflight from Spaceport America to occur between November 19 and November 23. The flight will include revenue-generating payloads as part of the NASA flight opportunities program; company plans to retire its One Small Step program on December 31. The pool of participants is reported to be up to 900 people.

 

Internet

·     Alibaba (BABA) to launch Farfetch (FTCH) luxury shopping channels on Tmall Luxury Pavilion and Luxury Soho; will also invest in newly formed Farfetch China Joint Venture and in Farfetch Limited

·     Booking Holdings (BKNG) Q3 Non-Gaap EPS $12.27 on revs $2.6B vs. est. $14.13 and $2.54B; Q3 gross bookings fell 47.1% in Q3, agency bookings were down 47.4% and merchants’ bookings were down 46.1%; room nights were down 43.1%, while rental car days were off 55.6% and airline tickets were 9.3% lower; adjusted EBITDA was reported at $1.00B vs. $864M consensus

·     CarGurus (CARG) 3Q adj EPS $0.37 vs. est. $0.22 on revs $147.5Mm vs est $135.9Mm; guides 4Q revs $146.1-149.1Mm vs est $139.3Mm, sees 4Q adj EPS $0.26-0.28 vs est $0.09; guides FY revs $546-549Mm vs est $527.6Mm, sees FY adj EPS $1.01-1.03 vs est $0.69

·     Stamps.com (STMP) 3Q adj EPS $3.83 vs. est. $1.53 on revs $193.9Mm vs. est. $166.8Mm; guides FY adj EPS $10.35-11.35 ex items (GAAP EPS guide $7.30-8.27) vs. est. $8.10

·     TrueCar (TRUE) 3Q adj EPS $0.14 vs. est. $0.07 on revs $77.2Mm vs. est. $77.7Mm; guides 4Q revs $57-59Mm vs. est. $59.75Mm, sees adj EBITDA -$1Mm to +$1Mm

 

Media & Telecom

·     Eventbrite (EB) 3q net rev. $21.9m, -73% y/y, vs. est. $26.1m; Q3 adj Ebitda $4M vs. loss $6.50m y/y, vs. est. loss $18.9m

·     IAC Group (IAC) Q3 GAAP EPS $2.04 on revs $788.4M vs. est. $766.69M; considering a spin-off of its ownership stake in Vimeo to its shareholders; ANGI HomeServices revenue increased 9% to $389.9M, Vimeo revs up 44% to $75.1M and subscribers grew 21% to 1.46M; entered into agreement to raise $150 mln at Vimeo at enterprise value of about $2.75B

·     Live Nation (LYV) Q3 EPS loss ($2.45) on revs $184M vs. est. loss ($2.20) and $193.51M; said 83% of fans are holding onto their tickets for rescheduled shows. Live Nation’s estimated events for the quarter were 367, down from 9,128 a year ago; total estimated tickets were 9,715, down from 117,012 a year ago.

·     Roku (ROKU) Q3 revs $451.7M vs. est. $67M; qtrly average revenue per user (ARPU) grew to $27.00 (trailing 12-month basis), up 20% YoY and added 2.9 million incremental active accounts in q3 2020 to reach 46 million; Q3 active customer accounts 46.0M, +42% YoY; Q3 streaming hours 14.8 billion, +44% YoY; Q3 adjusted Ebitda $56.2M vs. est. loss $11.0M

·     T-Mobile (TMUS) 3Q EPS $1.00 vs. est. $0.43, 2.035Mm total net adds, 1.98Mm postpaid net adds, 3Q revs $19.3B vs. est. $18.3B; guides 2H20 postpaid phone net adds expected between 1.3-1.4Mm; sees 2H20 adj EBITDA $13.6-13.7B

 

Technology

·     Alteryx (AYX) 3Q adj EPS $0.39 vs. est. $0.14 on revs $129.7Mm vs. est. $119.7Mm; guides 4Q revs $146-150Mm vs. est. $151.5Mm, sees 4Q EPS $0.27-0.31 vs. est. $0.41

·     Ceridian (CDAY) Q3 adjusted EPS 12c on revs $204.4M vs. est. 5c and $200.39M; guides Q4 revenue $215M-$219M below consensus $221.99M which represents a decline of approximately 3% to 1% on both a GAAP and constant currency basis

·     Drop Box (DBX) 3Q adj EPS $0.26 vs. est. $0.15 on revs $487.4Mm vs. est. $483.6Mm, qtrly avg rev per paying user $128.03, paying users at qtr-end 15.25Mm vs 14Mm yr ago; had cash, cash equiv and s-t investments of $1.226B at qtr-end

·     DXC Technology (DXC) Q2 adjusted EPS 64c on revs $4.55B vs. est. 38c and $4.46B; said improved margins sequentially, and achieved a book-to-bill of 1.1x;

·     Electronic Arts (EA) Q2 EPS 63c on bookings $910M vs. est. 2c and $971.34M; guides Q3 EPS roughly 61c vs. est. $2.93 and sees Q3 net bookings roughly $2.35B vs. est. $2.33B; raises FY21 EPS view to $3.15 from $2.97 (est. $5.61) and backs FY21 net bookings view of roughly $5.95B

·     Cloudflare (NET) Q3 adjusted EPS loss (2c) on revs $114.2M vs. est. loss (5c) and $103.17M; said Q3 represented many significant milestones including surpassing $100M in revenue, crossing 100,000 paying customers; raises FY20 adj. EPS view to (13c)-(12c) from (18c)-(17c) and also ups its year rev view to $422.5M-$423.5M from $404M-$408M (est. $406.39M)

·     Microchip (MCHP) 2Q adj EPS $1.65 vs. est. $1.43 on sales $1.31B vs. est. $1.26B; says expects significant revenue growth in calendar 2021

·     New Relic (NEWR) 2Q adj EPS ($0.07) vs. est. $0.01 on revs $166Mm vs. est. $163.4Mm; guides 3Q revs $163-165Mm vs. est. $167.3Mm

·     Pluralsight (PS) 3Q adj pro forma EPS $0.00 vs. est. ($0.06) on revs $99.5Mm vs. est. $95.5Mm; guides FY20 revs $387-390Mm vs. est. $382.7Mm

·     SailPoint (SAIL) Q3 adj EPS $0.11 vs. est. ($0.05) on revs $94Mm vs. est. $83.6Mm; sees 4Q revs $93-95Mm vs. est. $92.5Mm; sees FY adj EPS $0.27-0.29 vs. est. $0.11, sees FY revs $355-357Mm vs. est. $344.5Mm

·     Synaptics (SYNA) Q1 EPS $1.85 on revs $328.4M vs. est. $1.67 and $324.81M; sees Q2 revenue $340M-$370M vs. est. $347.23M and sees Q2 gross margin of 39%-422%

·     Take-Two (TTWO) raises full-year adjusted rev forecast to a range of $3.15 bln-$3.25 bln from $2.80 bln-$2.90 bln vs. est. of $3.04 bln; reports Q2 adj sales of $957.5 mln vs est of $856.6 mln; adj profit of $2.00 vs. est. of $1.48; says largest contributors to net revenue were “NBA 2K20”, “NBA 2K21” and “Grand Theft Auto V”

·     Trade Desk (TTD) Q3 EPS $1.27 on revs $216.1M vs. est. 43c and $180.88M; sees Q4 revenue $287M-$291M vs. est. $252.63M and guides Q4 adj. EBITDA at least $115M; Connected TV grew over 100% from Q3 2019 to Q3 2020; Mobile Video spend grew about 70% from Q3 2019 to Q3 2020; Audio spend grew about 70% from Q3 2019 to Q3 2020

·     Xerox (XRX) rose after Carl Icahn boosts his active stake to ~14.4% (from prior 12.2%), disclosing the purchase of more than 1M common shares worth nearly $20M.