Closing Recap

Thursday, November 05, 2020

Index	Up/Down	%	Last
DJ Industrials	542.85	1.95%	28,390
S&P 500	66.97	1.94%	3,510
Nasdaq	300.15	2.59%	11,890
Russell 2000	44.97	2.78%	1,660

 

Equity Market Recap

·     Stocks continue to surge as the S&P 500 and Nasdaq Composite are both within striking distance of record highs after the 4-day rally pushed stocks higher, once again paced by gains in large cap technology as markets exhibit zero fear. Overall, after posting its worst month since March, stocks start the first week of November with its best weekly returns since April as investors cheered the prospect of curbs on new regulations and diminished chances of higher taxes under a split Congress, with Joe Biden looking in better shape in the Presidential election, nearing the 270 electoral votes needed as markets still await final vote tallies from a handful of states (PA, GA, AZ, NV, NC). Republicans have won enough seats to potentially retain control of the Senate as the “Blue Wave” possibility seems to have passed. Investors’ anticipation of a divided gov’t, which could make it more difficult to pass legislation aimed at regulating technology companies and raising corporate taxes, has fueled sustained optimism this week (the Nasdaq Composite has risen about 1,000 points the last 3-days alone).

·     There were no surprises out of the FOMC which left its policy stance unchanged, maintaining its 0%-0.25% interest rate in place as well as the pace of QE unchanged at $120B per month. Fed Chairman Powell notes monetary policy is not out of ammo, as Fed strongly committed to using tools for as long as needed which helped boost stocks to afternoon highs. The S&P 500 and Dow posted their fourth consecutive gain of 1%, the longest such streak for both since October 1982.

·     In sector news, semiconductors set new all-time highs after better earnings results (QCOM, QRVO), Cyclical sectors took the baton from tech’s early strength, leading a broad-based rally as Basic materials traded new all-time highs. Gold jumped over 50% as the dollar dropped vs. all currencies though oil edged lower (miners rallied). Bank stocks rebounded as rates halted their downward slide. Tech shares have paced the gains on hopes that a Biden Presidency should improve relations with China. Even the reopen plays (travel, leisure, lodging) sound market strength despite the surging Covid-19 cases in the U.S. (topped over 100K daily cases yesterday) and Europe (where cases posted huge increases again).

·     European markets rose after the Bank of England added another 150 billion pounds ($195.20 billion) to its asset purchase program, while Asian stocks surged as well overnight with Japan’s Nikkei rising 1.7% to a more than nine-month high. Covid-19 cases count in key regions: Italy posts daily record of 34,505 new coronavirus cases on Thursday and reports 445 coronavirus deaths in last 24 hours, first time above 400 since May 2; Greece reports 2,917 new covid-19 cases on Thursday, new record; France says number of confirmed cases up 58,046 by over 24 hours, versus +40,558 on Wednesday

Economic Data

·     US jobless claims fell to 751,000 oct 31 week vs. est. 732,000 and down from 758,000 prior week (revised from 751,000); US continued claims fell to 7.285 mln from 7.823 mln (est. 7.2M); the 4-week moving average fell to 787,000 oct 31 week from 791,000 prior week (previous 787,750); the US insured unemployment rate fell to 5.0% from 5.3% prior week

·     U.S. Q3 non-farm productivity rose +4.9% vs. est. +5.6%, down from +10.6% in Q2 while unit labor costs fell -8.9% vs. est. decline of -11.5% and vs. up +8.5% in Q2

 

Commodities

·     Oil prices fell, failing to join the broader stock market advance, as WTI crude and Brent both slipped 30c on the day, snapping a streak of three straight gains despite a drop in the dollar. Gold prices jumped $50.60 or 2.7% to settle at $1,946.80 an ounce, its best closing total in a little less than 2-months, getting a big boost from U.S. dollar weakness as investors bailed on the safe-haven currency. Gold prices then extended their gains after the Federal Reserve left key U.S. interest rates near zero saying the economy is recovering but still "well below" precrisis levels.

 

Currencies & Treasuries

·     The U.S. dollar was broadly lower as the dollar index (DXY) slid over 0.7% to around 92.75, led by a sharp drop against the safe-haven yen to lows of 103.60 (0.8% move), its lowest levels since March while the euro pushed back above the 1.186 level (up 0.85%) after falling to lows of 1.162 the day prior. The Bank of England it would buy GBP150 billion ($195 billion) more of U.K. government bonds, which boosted the British pound, adding to the dollar decline. Bitcoin (BTC-USD) prices topped the $15,000 level for the first time since January 2018, when it was rapidly crashing from late December’s all-time high of about $20K. Today’s move means Bitcoin has more than doubled in value this year, with a gain of about 40% the last month. Treasury yields recover after posting its biggest one-day decline Wednesday, as the 10-year inches higher to 0.78% (off morning lows of 0.72% – but well below the 0.94% level the day prior).

 

 

Macro	Up/Down	Last
WTI Crude	-0.36	38.79
Brent	-0.30	40.93
Gold	50.60	1,946.80
EUR/USD	0.001	1.1825
JPY/USD	-0.88	103.60
10-Year Note	0.013	0.781%

 

 

Sector News Breakdown

Consumer

·     Retailers; GOOS EPS beats by $0.11, beats on revenue on better margins; FIVE downgraded to hold at Loop Capital based on valuation; HBI shares tumble as a weaker Q2 outlook (EPS of 25c-30c on revs $1.6-$1.61B below 45c and $1.71B) overshadow a Q3 beat; WWW reports revenue was down 14.6% in Q3 on a constant currency basis – the Wolverine Michigan Group saw a 10.2% drop in revenue and Wolverine Boston Group recorded a 20.3% decline; CPRI beats Q2revenue and profit estimates, as all three CPRI’s brands- Michael Kors, Jimmy Choo and Versace- saw sales growth in Mainland China in Q2; COST total October comp sales of +14.4% vs Consensus +10.5%, with the core US comp strong at +16.4%; YETI Q3 EPS of $0.61 vs est. $0.37 on better sales, driven by a top line beat and stronger than expected margin delivery

·     Auto sector; GM Q3 profit beats on strong demand for trucks and SUVs in the United States; says would generate cash flow between $7B-$9B in H2 and that’s GM’s sales in China rose 12% – the first quarterly sales growth in two years; NKLA rises after GM confirmed that the automaker is still in talks firm Nikola and plans to provide an update at the appropriate time.

·     Housing & Building Products; VMC downgraded to Sector Perform at RBC Capital as a Blue Wave now appears highly unlikely to occur, removing a potential upside catalyst for the aggregates (recall yesterday MLM, VMC among top decliners on same market premise); FTDR reported better than expected 3Q revenues driven by D2C channel strength as well as improved RE channel but higher COVID-19 related costs led to lower EBITDA for 3Q and for 4Q guidance; housing still benefits from low yields as 30-year mortgage rates fall to a record low of 2.78%

·     Consumer Staples; THS topped Q3 EBITDA expectations, posting margin improvement while falls slightly short of Q3 estimates with both its meal preparation and snacking/beverages businesses but says its saw organic growth of +0.7% during the quarter; ELF reported F2Q sales and EBITDA results above Street expectations but also gave initial guidance for FY21 which was above the Street on sales but below on EBITDA

·     Restaurants; PZZA 3Q EPS $0.35 vs. est. $0.32 on revs $472.9Mm vs. est. $466.1Mm, comps +23.8% in North Am, +20.7% International; announces new $75Mm share repurchase program; WEN upgraded to buy from neutral at Bank America and raise our estimates and price objective following 3Q earnings yesterday saying its well positioned to capitalize on restaurant market share consolidation to drive-thru centric; FRGI rises after earnings as sales have recovered behind strong gains in the drive-thru (+29% at Pollo Tropical (PT)), expanded delivery, and improved off-premise execution/ operations; TAST (Burger Kings) warned that sales took a downward turn in August and September after having risen from pandemic lows; CBRL Q1 comp store restaurant sales of -16.4%; and Comparable store retail sales of -8.1% and sees Q1 net income of ~$167M to $172M and adj. EBITDA of ~$50M to $55M

·     Leisure and Gaming; U.S. home rental company Airbnb Inc plans to make its initial public offering (IPO) registration public as early next week, setting course for a stock market debut next month – Reuters reported overnight; in lodging, PLYA Modest miss on EBITDA says all hotels expected to be open by YE, in time for high season; Hyatt (H) 3Q Adj. EBTDA modestly less bad than expected – as EPS loss miss driven by weaker-than-expected RevPAR, worse owned and leased contribution and operating deleverage; VAC 3Q Adj. EBITDA well above expectations though 4Q contract sales guide light; in theme park, SEAS 3Q EBITDA of ($11M) vs. est. loss ($17M) on slightly better sales of $106M (est. $99M) as attendance was down 81%

 

Energy

·     Energy stock movers; APA Q3 EPS loss (2c) on revs $1.1B vs. est. loss (35c) on revs $992.3M, and the company reduced full-year 2020 capital outlook to $1.0B, and anticipates an upstream capital budget of $1B or less in 2021; XEC Q3 adjusted EPS 51c on revs $401.66M vs. est. 26c and $389.11M as oil production averaged 71.6 Mbbls per day and total company production volumes for the quarter averaged 249.4 thousand barrels of oil equivalent per day; LPI reported Q3 adj EPS $4.02 on revs $132.46M vs. est. $3.03 and $181.53M, producing 87,857 BOE/day, including oil production of 25,120 BOPD, with both figures exceeding midpoint of guidance; MRO posted Q3 EPS loss (28c) in line with ests on revs $754M (down 44% YoY, est. $757M) and raised its full year oil-equivalent guidance by 5,000 net boed at midpoint; PXD reported Q3 EPS 17c on revs $1.82B (vs. est. 25c and $817.16M), average Q3 oil production 201k barrels of oil/day, total production avg 355k barrels/day (both at/near the top end of guidance), while increasing its guidance for 2020 oil production to a range of 209 to 211 MBOPD and total production range of 365 to 369 MBOEPD; ET largely posted better-than-expected 3Q results and capex trends/guides, though Q4 EBIDTA guidance is below consensus due to uncertainty; NS Q3 non-GAAP EPS 8c beats est. 2c on revs $362.59M (est. $357.2M) and raised its 2020 adj EBITDA guidance to be $690-730M; HFC reported Q3 EPS loss of (41c) on revs $2.82B, both topping estimates of (46c) loss on revs $2.35B; MUR reported Q3 Adj EPS loss (15c), narrower than the expected (17c) loss, on revs $421.87M, missing est. $473.2M

·     Energy research; Morgan Stanley sees an increasingly favorable risk-reward valuations for energy equities, and names CVX in integrated oil, COP in US E&P, ENB in midstream, SLB in oil services and MPC in refining, and SU in Canadian E&P as their top picks to add exposure to the sector; PSX was upgraded at Wolfe to Outperform, $63pt from Peer Perform

·     Utilities & Solar; NRG EPS misses by $0.26, misses on revenue, narrowed FY20 & provides FY21 guidance; Dominion (D) reported Q3 EPS $1.08 (est. $0.99) on revs $3.61B (est. $3.69B), and guides Q4 EPS to 73-84c (est. 75c), and reaffirms FY20 Adj EPS guidance range $3.37-3.63; EVRG Q3 Adj EPS $1.73 beats est. $1.57 and revs $1.52B slightly misses est. $1.56B, and narrows its guidance for FY20 Adj EPS $2.95-3.10, which narrows it to the upper half of the previous range; SRE reported Q3 Adj EPS $1.31, missing the lowest estimate on in-line revs $2.64B and the company reaffirms its FY20 and 2021 adj EPS guidance ranges; CNP Q3 EPS 34c on revs $1.62B vs. ests. 30c on $1.72B and raised its FY utility EPS guidance range to $1.12-1.20 from $1.10-1.20 (raised by Keybanc); AWK Q3 EPS $1.46 tops est. $1.38 on sales $1.08B, which slightly misses est. $1.11B and raised its FY20 EPS guidance to $3.87-3/93 from $3.79-3.89; CPK Q3 EPS beats estimates but revenues miss, SJI Q3 EPS beats ests on in-line revs and sees FY20 EPS at top half of its guidance range; Morgan Stanley lists AES, NEE, MGEE, XEL, DUK, PNW, AEE, and AEP as the biggest potential beneficiaries of increased renewables spending under a Biden presidency

 

Financials

·     Insurance; ALL reported Q3 adj EPS $2.94 vs. est. $1.77, lower frequency of auto accidents as the pandemic reduced miles driven, Q3 catastrophe losses $990.0 million (+94% YoY); LNC Q3 adjusted ops EPS loss (72c) widely misses est. $2.03 on revenue $5.36B, and the company will resume buybacks in Q4 and raises dividend to 42c for the quarter MET Q3 adjusted EPS $1.95 vs. est. $1.61 on in-line revs above $16B; VOYA posted Q3 Adj EPS 30c, lower than $1.36 consensus on annual actuarial review charge; EQH Q3 EPS $1.24 topped est. $1.18 on revs $1.84B; GNW Q3 EPS 26c and revs $2.42B both topped estimates (7c, $1.99B); FNF reported Q3 adj EPS $1.48 (est. $1.23), Continuing Operations EPS $1.39 on rev $3B (est. $2.75B); UHAL reported Q2 EPS $13.58 on revs $1.15B, both beating estimates ($4.58, $998M); CB was started at Buy with a $152 target at DA Davidson

·     Consumer Finance; The DoJ filed an antitrust lawsuit against Visa (V) regarding its planned $5.3B acquisition of Plaid, which Visa said is legally flawed and contradicted by the facts; WU was upgraded to Neutral from Sell at Citigroup citing growth of the digital business, a better-demonstrated ability to handle regulatory risk, and better cost management; PYPL was upgraded to Buy with a $210 target at DZ Bank; GDOT posted Q3 EPS 25c on revs $279.4M and sees full-year 2020 EPS $1.95-$2 and revs $1.175-1.185B, each topping estimates; MELI Q3 EPS 28c on revs $1.116B (est. 17c, $972.3M) as unique users nearly doubled YoY (+92%), off-platform total payment volume nearly tripled YoY (+197%), and gross merchandise volumes also show accelerating growth from Q2; TREE reported Q3 EPS loss (26c) (wider than expected (13c) loss) on revs $220.3M (ahead of est. $210.5M), adj EBIDTA $13-18M (down from $21.7M), and Q4 rev guidance range $200-215M below est. $215.4M; LC Q3 EPS loss (25c) is narrower than expected (45c) loss on revs $74.7M, topping est. $58M

·     REITs; Office REITs with exposure to California (HPP, DEI, KRC, REXR all rose early in the session after CA’s Prop 15, which would increase taxes on commercial properties and set property taxes based on current value instead of purchase price if passed, does not appear likely to pass given current vote returns (52-48% No with 72% reported); Stifel raised its estimates and reiterated their expectations of self-storage REITs outperforming after PSA, EXR both beat Q3 FFO estimates (CUBE, LSI, NSA other self-storage names report tonight); STOR reported Q3 FFO per share 45c on $175.2M, both slightly beating est. 44c / $171.8M, as rent and interest collection rates accelerated 90% in October from 70% in May; BRX Q3 FFO 36c missed 40c consensus, but several operating metrics improved and the company reinstated its quarterly dividend, declaring a 21.5c div per share for Q4; HR reported Q3 FFO 41c on revs $125.25M, both of which beat estimates; VER posted Q3 FFO 15c, matching estimates, on revs $295.3M (est. $283.2M), in addition to guiding FY20 FFO to 62c (est. 60c), and announces a 1-for-5 reverse stock split; KIM reported Q3 FFO 25c per share, narrowly missing est. 26c, on revs $259.8M, beating est. $250.2M, as the company collected 89% of rent for the quarter, including 91% in Sept and 90% in Oct; MAC reported Q3 EPS loss (15c) and FFO 52c on revs $185.8M, and its rent collection rate improved to 80% from 61% in Q2, though its mall occupancy falls slightly to 90.8% from Q2’s 91.3%; CLI Q3 FFO 30c per share on revs $77.7M, missing est. $96.5M; LXP posted Q3 adj FFO 19c on revs $84.5M, both topping estimates, and raised its quarterly dividend by 2.3%; STWD Q3 EPS 50c tops est. 47c on in-line revs $267.4M as the company shifted from cautious stance in Q2 and deployed $1.5B this past quarter and its liquidity remains strong

 

Healthcare

·     Pharma movers; AZN which is working on one of the world’s leading COVID-19 vaccine hopefuls, reported progress in its pipeline of other medicines as it posted a mixed set of third-quarter results; PRGO reported a 3Q that delivered EPS upside but will largely be lost in yesterday morning’s negative Irish High Court tax decision that had shares lower; ACAD with continued sales beat of Nuplazid with revenue guidance reiterated; BMY largely beat expectations for Q3 with revenue boost driven by the closing of the Celgene acquisition late last year and boosted its 2020 guidance for adjusted EPS to 6.25 to $6.35; ZTS trades record highs on beat and raise; MRK announced a deal to buy privately held biopharmaceutical company VelosBio Inc. for $2.75B

·     Biotech movers; BLUE falls as SCD filing in the US has been pushed out from H2:21 to late 2022 as BLUE transitions from clinical-grade/adherent cells to commercial-grade/suspension cells manufacturing and the FDA asks for more data (downgraded by analysts); GMAB better-than-expected Q3 results and updated on product pipeline; REGN 3Q better revenues $2.29B (vs. $2.1B est.), with strength in EYLEA and Libtayo along with EPS beat $8.36 vs. $6.97 though no significant update to the REGN-COV2 antibody program

·     Cannabis stocks surge after yesterday profit taking (ACB, APHA, CGC, CRON, TLRY) as Democrat Joe Biden’s electoral vote nears him close the becoming the 46th U.S. president. Biden, and his running mate Kamala Harris, have voiced support for decriminalizing marijuana on a federal level, and are expected if they come into power to adopt a more pro-cannabis legalization agenda than incumbent President Donald Trump; APHA said it will buy SweetWater Brewing Co. for about $300 million. Aphria said the craft brewer’s products, including its 420 beverages, are "closely aligned with a cannabis lifestyle." IIPR, a cannabis REIT, reported Q3 adj FFO $1.28 on revs $34.3M (vs ests. $1.17, $30.9M) and collected 100% of contractual rent from July – October

·     Healthcare services and providers; managed care stocks get a boost after better CI earnings and raised guidance (comes a massive move higher in managed care names yesterday UNH, HUM, MOH on the election direction – gridlock lowering risk of disruption/drug pricing); also in the services space, ABC, CAH among earnings movers; XRAY fell despite Q3 beat after not issuing guidance for the year; OSUR slides as delays launch timeline of its COVID-19 antigen test for the second time, saying it now expects to apply for an emergency use authorization (EUA) in Q1 2021

·     MedTech and Equipment; PODD posted another top to bottom beat and raise; CUTR Q3 results that beat expectations across the board though management remains somewhat cautious about the near-term outlook for the business; HOLX closed F20 with a massive top-to-bottom beat – while COVID-19 testing was a key driver the base business was also better than expected and FQ1 revenue and EPS were guided above expectations; CRY Q3 revenue beats estimates

 

Industrials & Materials

·     Industrial & Machinery; PH rises as Q1 EPS and revs top views and raises its guidance for FY21 earnings and organic revs; MTW shares outperform as Q3 estimates beat, guides Q4 revenue above consensus (est. $425M-$450M vs. est. $360M), despite weaker margins; ARNC Q3 sales of $1.42B an increase of 19% sequentially reflecting strength in automotive end-market volumes; and decline of 21.1% Y/Y reflecting weaker volumes; SRCL rises after Q3 beat on better margins

·     Chemicals & Materials; ALB forecasts FY profit above estimates while warns that the impact of the pandemic will subdue annual performance; VNTR with Q3 EBITDA miss ($17m vs street $21m) driven by weaker than expected margins in both businesses, as TiO2 margins were 70bps below consensus while Performance Additives came in 500bps below; OLN Q3 adj. EBITDA of $196mn vs. est. $161mn with better-than-expected pricing across OLN’s chlor-alkali business; CF Q3 EPS loss (13c) on revs $874M vs. est. 7c and $885.24M; Average selling prices for Q3 were lower than Q3 of 2019 across all segments due to increased global supply availability; LIN Q3 earnings beat and raising its full-year earnings forecast, citing increased industrial gas volumes and higher pricing; BLL touching record highs after better-than-expected Q3 EPS and rev, helped by 9% rise in global beverage can volume during coronavirus crisis (CCK, BERY, SEE, SLGN all higher in sympathy)

·     Metals; GOLD handily beat Q3 Street est. for profit as gold prices surge, and maintained 2020 outlook; MT Q3 results including EBITDA of $901M, down 15% Y/Y but ahead of consensus estimate of $838M while Q3 iron ore shipments rose 7.5% to 9.8M tons and raised its guidance for full-year iron ore shipments

 

Technology, Media & Telecom

·     Internet; in online travel, EXPE Q3 results were unsurprisingly weak with Gross Bookings down nearly 70% Y/Y. Trends improved mildly throughout Q3, but are plateauing with no clear evidence of sustained improvement into the end of 2020; MELI tgt raised to $1,555 from $1,450 at Credit Suisse; GDDY reported a clean beat and raise Q3 with revenue, bookings, and unlevered free cash flow all ahead of Street, and Q4 revenue guide above the Street; BABA Q2 results beat on profit but narrowly missed on revenue with $22.8B, which was up 30% Y/Y but $510M short of estimates.

·     Semiconductors; Philly semi index rises over 3% to fresh all-time highs above 2,450 (was below its 50-day MA just a few days earlier of 2,271) – group buoyed by earnings; QCOM surges as several analysts raise tgt prices after co forecasts Q1 revenue above estimates as it ramps up chip sales for AAPL’s 5G iPhone models – with global smartphone volumes steadily recovering, QCOM is well-positioned to benefit from the long-term 5G investment cycle; QRVO reported upside results/ outlook as F2Q sales/EPS of $1.06B/$2.43 topped positively revised guidance and beat original guide by 13%, led by mobile, though IDP was also strong, +67% YoY and Q3 guidance above views (follows recent SWKS, CRUS results); IIVI Q1 results beat on profit with $0.84 ($0.29 above estimates) but narrowly missed on the top line with better margins while guidance above views ($750M-780M vs. est. $730.4M)

·     Software news and research; MSFT upgraded to outperform with $260 tgt at Oppenheimer as delivered a strong quarter from Teams and strong cloud growth – there was a brief COVID-19 impact, but enterprises are racing to digitize and churn has not materialize; ZI upgraded to outperform at RBC with $50 tgt on the back of industry conversations suggesting the elevation of importance for the Sales engagement and Revops category as well as underlying data trends suggesting accelerating interest in ZI’s products; UPWK upgraded to Buy at Stifel as they expect strong growth for Upwork’s job outsourcing marketplace to; PING downgraded at Piper; COUP rises after WMT selects Business Spend Management platform

·     Software earnings; PAYC reported F3Q results well ahead of consensus and guided 4Q in line as new business trends continue to be very healthy, with the company continuing to lean into S&M to drive growth; RPD delivered a strong quarter with 29% ARR growth (31% last qtr) against expectations of 26% as management increased their 2020 ARR growth outlook to 24% vs. a previous midpoint of 21.5%; UPWK delivered a solid Beat & Raise Q3, w/ Revenue accelerating to 24% YoY, coming in % above Street, and a solid beat on EBITDA; ZNGA reported Q3’20 Bookings in-line and adj. EBITDA ahead of consensus; FROG delivered a strong first print as a public company, with all key metrics coming in above our/consensus expectations and the company issuing F4Q guidance above views; PING posts Q3 top and bottom line beat, but shares slump as Q4 ARR outlook disappoints

·     Media & Telecom movers; MTCH business continues to demonstrate resilience during the pandemic, as evidenced by 3Q revenue exceeding our/Street revenue and EBITDA by >5% and >12%, respectively according to Keybanc; NYT Q3 EPS and revs beat as revenue from digital-only products increased 34%; VZ upgraded to Overweight at JPMorgan citing accelerating wireless service revenue growth, spectrum shortages are clearing, Tracfone accretion among other reasons; MDP jumps as EPS beats by $1.04, beats on revenue with 15% growth in national digital advertising to a record high and a 43% increase in local political spot advertising (strength in broadcasting names NXST, SBGI, TGNA on political ad revs); GTN also reported better-than-expected results in Q3 benefitting from aggressive political ad spending for Nov. 3 elections; DIS ESPN is cutting its staff by roughly 10% through a combination of layoffs and attrition of workers, including remote employees; SATS Q3 consolidated revenues of $473.5M, beat by $10M

·     Hardware & Component news; AAPL is facing a power management chip shortage for its new family of iPhones and other devices in the important holiday shopping season, as per Bloomberg this morning; Nintendo (NTDOY) said it expects to sell 24 million of its Switch games consoles in the year ending March 2021, up from a forecast of 19 million but still seen as cautious – also boosted its operating profit forecast by 50% to 450 billion yen ($4.3 billion)