Mid-Morning Look: February 23, 2022

Mid-Morning Look

Wednesday, February 23, 2022






DJ Industrials




S&P 500








Russell 2000






After initially looking like a solid rebound overnight following yesterday’s weakness, equity markets quickly erased those gains to turn lower on the day, as investors await/fear further headlines on the Russia/Ukraine conflict that has many on edge. The U.S. and its European allies rolled out a range of sanctions against Russia Tuesday, over its recognition of two separatist areas in eastern Ukraine, which they have promised to ratchet up should Mr. Putin push further into Ukraine. Those measures could include sanctions against big Russian companies and the country’s business elite. Headline risk remains for stocks and commodity prices, with major U.S. averages sliding a day after the S&P 500 registered its first 10%+ correction since the COVID Crash in Feb/Mar ’20. The Treasury yield curve continues to narrow – last at 37 bps with 10-yr yield 1.98% and 2-yr 1.61%. Gold prices bounce along with oil prices while palladium rose over 3 driven by fears of a hit to supply from top producer Russia. Earnings results, economic data and even Fed headlines/outlook on direction of interest rates (which is to the upside) are put to the backburner for now.







WTI Crude















10-Year Note





Sector Movers Today

·     E&P and Majors; FANG higher-than-expected Q4 profit and boosted its dividend/said its average unhedged realized prices during Q4 more than doubled to $56.47 per barrel of oil equivalent and Q4 output was 387,100 barrels of oil equivalent per day, compared with 299,000 last year; BRY adj 4Q21 CFPS was 3% below consensus, CAPEX was $10M below consensus. 4Q21 production was 0.7% below consensus, but 4Q21 oil production was in line; RRC Q4 CFPS was 2.5% below consensus; 2022 production guide was 2.2% below consensus, and 2022 capex guide was 3.5% above consensus; VNOM 4Q21 CFPS 16% above consensus and 4q21 distribution $0.06 above consensus; 2022 oil guide was 2.7% above consensus

·     MedTech Equipment; Agilent (A) reported a solid FQ1 with 9% core growth ahead of 6% guide and a guidance raise the key highlights as Biopharma and C&E drove the upside in the quarter and stronger growth here looks set to continue; DGX downgraded to Neutral from Buy at UBS and cut tgt to $139 from $160 as see risk to meeting mgmt’s Target of $8.50 in FY23; TNDM reported strong 4Q results, as sales of $210.0M (+25%) topped consensus by $11.0M driven by a balanced performance across both the U.S. (+$5.5M) and OUS ($+5.5M) segments on better guidance; EXAS 4Q EPS ($1.28) vs est. ($1.04) on revs $473.8Mm vs est. $449Mm; guides FY revs $1.975-2.027B vs est. $1.985B; OMI 4Q adj EPS $0.81 vs est. $0.71 on revs $2.467B vs est. $2.43B; guides FY revs $9.2-9.6B vs est. $9.78B and adj EPS $3.00-3.50 vs est. $3.35

·     REITs; PSA Q4 core FFO $3.54 vs est. $3.44 on revenue $924.3M vs est. $908.7M; sees FY22 revenues +12-15%, core FFO $14.75-$15.65; ACC Q4 FFO $0.75 vs. est. $0.71 on revs $272.3M vs. est. $249.1M, grew same store net operating income (NOI) by 14.8% YoY, sees 2022 FFO $2.46-$2.56 vs. est. $2.41; SHO Q4 adj FFO 8c vs est. 10c on revs $173.9M vs est. $277.7Mm, 14 hotel portfolio REVPAR +421.2% to $136.50; DOC Q4 normalized FFO matched estimates with revenue slightly missing consensus; EPR Q4 adj FFO $1.11 vs est. $0.96 on revs $154.9M vs est. $134.2M, sees adj FFO $4.30-4.50 whose midpoint represents +42% annual growth; O Q4 adj FFO 94c vs est. 88c on revenue $685M vs est. $653.4M; PEB Q4 adj FFO missed estimates with Q1 guidance that sees a much wider loss than expected

·     Retailers; OSTK shares rose after ICE announced that it is making a strategic investment in tZERO, a leader in blockchain innovation and liquidity for digital assets (note OSTK is an original investor in tZERO); TJX said it plans to raise its quarterly dividend by 13%, to 29.5c from 26c, and to buy back up to $2.5 billion in stock during the current fiscal year; ODP posts a top and bottom line Q4 beat and says expects 2022 revs and cash flows in range with 2021; TUP issues lower guidance as sees year EPS $2.60-$3.20, below consensus $3.13 after Q4 EPS missed views; shares of GIL and WWW also active following earnings results



·     CDNS +7%; reported strong 4Q results, posting a $16M revenue beat on broad-based strength and guided double-digit revenue growth of 11-13% (about $118M above midpoint)

·     LL +6%; mixed Q4 results as EPS $0.35 vs. est. $0.24; Q4 revs $285.3M vs. est. $295.5M and Q4 total comp store sales decreased 6.7% y/y but increased 3.8% on a two-year stack basis

·     LOW +5%; a better reaction to earnings than peer HD yesterday as Q4 adj EPS $1.78 beats est. $1.71 on better revs $21.34B vs. est. $20.9B; reports consolidated comparable sales up 5% and U.S. comparable sales up 5.1% – raised year EPS/rev views

·     OSTK +35%; rose after ICE announced that it is making a strategic investment in tZERO, a leader in blockchain innovation and liquidity for digital assets (note OSTK is an original investor in tZERO)

·     PANW +7%; strong 2Q results that beat across the board as billings, and NGS ARR well exceeded expectations and FY22 guidance was lifted across most key metrics by more than the beat

·     REGI +22%; shares surge after Bloomberg reported the company is exploring options after receiving takeover interest https://bloom.bg/3hayvSq

·     TEN +95%; as entered into a definitive agreement to be acquired by funds managed by affiliates of Apollo in an all-cash transaction with an enterprise valuation of approximately $7.1 billion, including debt, with holders to get $20 per share in cash



·     CSGP -9%; Q4 adj EPS 35c vs est. 29c on revs $507M vs est. $501.3M though Q1 and FY EPS and revenue guidance both came in short of consensus

·     KOD 77%; after saying its experimental drug KSI-301 failed to meet the primary goal of showing non-inferior visual acuity gains compared to REGN’s Eylea in wet age-related macular degeneration patients

·     MNDY -21%; despite smaller-than-expected Q4 loss of (-$0.26) vs. est. loss (-$0.52) and better revs, while sees Q1 operating loss $45M-$47M and FY22 operating loss $142M-$147M

·     MOS -2%; after Q4 adjusted EPS and revs missed expectations, as sales volumes fell sharply for both potash and phosphates from a year earlier (Q4 potash sales volumes fell to 2.1M metric tons from 2.7M tons in the year-ago quarter)

·     MRNS -10%; after announces delay to RAISE phase 3 clinical trial in status epilepticus and associated IV Ganaxolone clinical trials

·     RXT -21%; as delivered solid 4Q21 slightly above expectations but 1Q22 and FY22 guidance was well below expectations for revenue growth, margins and FCF

·     SBGI -3%; swung to a Q4 loss and revs fell to $1.48B from $1.51B (below views $1.56B) – cites loss due to a ransomware cyberattack that hampered operations, but increased its quarterly dividend

·     TUP -1%; slides initially on lower guidance as sees year EPS $2.60-$3.20, below consensus $3.13 after Q4 EPS missed views (shares rebound off lows)

·     WK -12%; 4Q21 results beat expectations across-the-board with revenue growth of 28.7% but shares fell as CY22 operating-loss guidance of ~$36M was well below expectations


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.