Mid-Morning Look

Wednesday, February 21, 2024

Index	Up/Down	%	Last
DJ Industrials	-64.48	0.16%	38,500
S&P 500	-11.85	0.24%	4,963
Nasdaq	-92.02	0.59%	15,539
Russell 2000	-9.74	0.49%	1,994

 

 

U.S. stocks open to the downside, with major averages looking lower for a 3^rd straight day, but optimism is building ahead of the NVDA earnings results tonight, the poster child for the “AI” stock market story. The Philly semi-index (SOX) extends losses -1.33% below 4,400, down a 4th day into those results tonight, but paring losses since the open. No major U.S. economic data today, but a few Fed speakers on the calendar. Fes sectors sticking out to the downside early including cyber security as PANW loses 25% after its mixed results and lower guidance; solar stocks tumble after SEDG weak guidance, though homebuilders a bright spot following better TOL earnings/new order results and Energy names outperform. Treasury yields and the U.S. dollar index (DXY) are steady, Bitcoin prices drop 1% and gold is flat. Dow Transports another bright spot +0.3% with news in space as UBER to replace JBLU in the index on 2/26, while AMZN will replace WBA in the Dow Jones Industrial Average on the same day. Stocks opened lower but moving sideways the first hour – all awaiting NVDA earnings!

 

 

Macro	Up/Down	Last
WTI Crude	0.22	77.26
Brent	-0.11	82.23
Gold	0.670	2,040.50
EUR/USD	0.0008	1.0811
JPY/USD	0.13	150.12
10-Year Note	-0.002	4.273%

 

• In Metals & Mining: aluminum producers rise early after CSTM results; ESI reported Q4 EBITDA/EPS of $120M/$0.32 that were below consensus of $124M/$0.33 while organic sales declined 3%, driven primarily by weaker industrial markets (Industrial/Specialty segment (-7%) and Electronics (-1%). RIO reported a 12% fall in annual underlying earnings on Wednesday, in line with forecasts, but paid a better-than-expected final dividend and said realized iron ore prices dropped 22%; copper, 19%; and for aluminum. Gold miners tumbled.
• In Oil E&P: FANG Q4 profit topped expectations as reported production of 462,600 barrels of oil equivalent per day (boepd), compared with 391,402 boepd in the year-ago quarter which helped offset a decline in prices. Its average unhedged realized price for oil fell to $76.42 per barrel, compared with $80.37 per barrel, last year. CHK posted a profit of $569M in Q4, down from $3.51B y/y and a decline in production. MTDR full-year capex/production outlook was near expectations, however 1Q24 guidance disappointed with anticipated oil volumes ~8% below consensus.

 

• BLCO +7%; reported 4Q revenue of $1.17B (vs. $1.11B est.) and EBITDA of $231M (vs. $227M est.) FY24 rev guidance was ahead of street, with $4.6B to $4.7B vs. $4.525B est., while EBITDA of $840M to $890M topped est. of $870M.
• CSTM +7%; shares advanced after earnings results for the aluminum producer; lifts shares of AA as well.
• EBS +37%; said they appointed Joseph Papa as its new CEO, effective Feb. 21 as Haywood Miller will step down from his role as interim CEO (Papa recently was CEO and Chairman at Bausch + Lomb).
• GRMN +10%; advanced on Q4 beat (ESP $1.72 vs. $1.40 est.) and guidance as sees FY sales about $5.75B, above analysts’ estimates of $5.56B, as it expects strong growth in its auto and fitness businesses.
• TOL +5%; reported Q1 beat on revenue and margins as EPS of $2.25, well ahead of consensus of $1.78 and better than expected higher average selling price (ASP), gross margin and well-controlled SG&A expenses.
• WIX +6%; following earnings and guidance results.

 

• HSBC -8%; lost $153M in Q4 of last year, after writing down the value of its stake in a large Chinese bank; quarterly revenue was $13B, down around 11% from the same period in 2022 vs. est. $15.4B.
• IFF -9%; as forecasts 2024 sales below estimates ($10.8B-$11.1B vs. est. $11.4b) and takes a $2.6B non-cash impairment charge on its nourish segment in Q4, and cut its quarterly dividend.
• PANW -26%; after forecast Q3 billings of $2.30B-$2.35B below est. $2.62B and Q3 revs of $1.95B-$1.98B vs. est. $2.04B which followed a slight Q2 rev beat; cut its annual rev outlook to $7.95B-$8B, down from its prior range of $8.15B-$8.2B on lower profit (sunk shares of CRWD, FTNT, ZS among others).
• SEDG -15%; Q4 adj EPS loss (-$0.92) vs. est. loss (-$1.33); Q4 revs fell -65% y/y to $316.04M vs. est. $323.3M and guided Q1 revs $175M-$215M well below the $373.44M consensus.
• TDOC -22%; 4Q results missed consensus on revenue but was above on adj. EBITDA as BetterHelp revenue and adj. EBITDA came in below consensus; also guided lower FY24 sales.
• WING -3%; beat Q4 sales and profit estimates driven by increased traffic resulting in 18.3% growth in domestic same-store sales but guides mid-single digit growth in FY24 domestic same-store sales vs. 18.3% growth reported in FY23.

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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.