Mid-Morning Look: November 22, 2022

Mid-Morning Look

Tuesday, November 22, 2022






DJ Industrials




S&P 500








Russell 2000






U.S. stocks open higher, fade quickly, but quickly regain momentum, led by strength in Energy, Industrials, Materials, and Financials while Technology and Discretionary lag. Volumes are expected to be light into the Thanksgiving Day holiday Thursday (market early close on Friday as well), and currency markets volatile early. Retailers getting a nice bounce after well received earnings results from AEO, ANF, BBY, BURL, DKS, URBN while discounters fall behind mixed results from DLTR. Oil prices extend yesterday’s rebound, with WTI crude up about 2% at $81.60 after Algerian energy minister tells Reuters there are “no ongoing discussions” on a revision of the Oct 5 OPEC+ agreement (refuting the WSJ story yesterday talking about production cuts). Algeria energy minister tells Reuters speculation on improbable revisions of OPEC + production levels is likely to disrupt the well-functioning of oil markets. Treasury yields slide early along with the dollar in a quiet start to the day.







WTI Crude















10-Year Note





Sector Movers Today

·     Restaurants & Consumer Staples: BRBR 4.6M share Spot Secondary priced at $22.30; IPAR said it expects 2023 net sales of $1.11B, resulting in earnings per diluted share of $3.70 and excluding one-time items, we are targeting 12% earnings per diluted share growth in coming year; QSR tgt raised to $80 at RBC Capital and remains top pick among the global franchised fast food group following last week’s news of Patrick Doyle joining the company as Executive Chairman; JACK slides after guides FY23 adj EPS of $5.25-$5.65 below ests $6.59 after Q3 EPS miss of $1.33 saying decline in margins reflects rise in food and packaging costs and wage inflation

·     E&P and Majors: sector leader again, same story for much of 2022 with investors staying in energy stocks; PBR downgraded to Sell from Buy at UBS and cut tgt to R$22 from R$47 as expect an upcoming switch in the company’s direction; Repsol (REPYY) upgraded to Outperform at RBC Capital and raises PT to €19 calling it the most geared to refining, most geared to a tight distillate market and think market is underestimating near term and 2023 earnings potential; VAL announces contract award for drillship Valaris DS-12; FANG filed mixed shelf

·     Metals, Industrial & Machinery: in E&C space, DY Q3 EPS $1.80 vs. est. $1.32; Q3 sales rose 22% y/y to $1.04B vs. est. $975.6M; GTLS downgraded to a Neutral at Goldman Sachs saying while they do not reflect the proposed Howden transaction in view, are increasing assumed cost of capital for GTLS, driven largely by our view that the company’s willingness to raise longer term financial leverage targets, delay simplification of the capital structure; ZTO increased and extended its share repurchase program; industrial metals outperform STLD, FCX, CENX as well as gold miners in further rotation into industrials and materials



·     A +7%; Q4 EPS/revs beat driven by strong Life Sciences and Applied Markets Group performance; FY23 guidance mixed w/ EPS above and revs below consensus

·     AEO +15%; sound Q3 beat as EPS $0.42 top ests $0.22 on better revs $1.24B vs. est. $1.21B and said total ending inventory at cost increased 8% to $798M

·     ANF +18%; posted Q3 EPS and sales beat, guides Q4 revs $1.2B vs. est. $1.09B and sees FY22 net sales down 2%-3% from $3.7B in 2021 vs. prior view of down mid-single-digits

·     BBY +8%; Q3 EPS $1.38 vs. et $1.03; Q3 revs fell -11% y/y to $10.59B vs. est. $10.31B; Enterprise comp sales -10.4% vs. +1.6% y/y and estimate -13.1%; International comp sales -9.3% vs. -3% y/y, and US comp sales -10.5% vs. +2% y/y; resumes share repurchases

·     BURL +16%; Q3 adj EPS $0.43 vs. est. $0.52 and revs $2.04B misses the $2.07B est. as comp sales fell (-17%) and narrows FY22 adjusted EPS view to $3.77-$4.07 from $3.70-$4.30

·     DELL +3%; Q3 beat with a mixed F4Q23 outlook as sales forecast missed consensus and reflected a 16% y/y decline at the midpoint, with a sharper than expected decline in Commercial PCs

·     PACW +3%; announced an acceleration of its planned CEO transition to YE22 (from YE23) and that it has hired a new CFO

·     SWN +5%; along with big gains in EQT, RRC, AR, as energy names leveraged to natural gas outperform given colder temps

·     URBN +2%; Q3 EPS $0.40 vs est. $0.41 and revenue $1.18B vs est. $1.16B; comps +4% vs consensus +2.2% – Urban (9%) vs consensus (8.5%), Anthropologie +13% vs consensus +10.0%, and Free People +8% vs consensus +5.8%

·     WBA +2%; upgraded to Outperform from Market Perform at Cowen and raise tgt to $54 from $43 as WBA’s transformation into a health care services business accelerates



·     CSIQ -8%; mixed Q2 results as EPS beat but revs missed estimates

·     DLTR -8%; expects FY22 profit to be in the lower half of the previously provided outlook range of $7.10-$7.40 saying continues to experience inflationary cost pressures; does raise year sales view

·     GMDA -12%; said the FDA extended the review period for its experimental therapy omidubicel by 3 months as they will now decide on the use of omidubicel by May 1, 2023, vs previous Target action date of Jan. 30, 2023

·     JACK -13%; forecasts FY23 adj EPS of $5.25-$5.65 below ests $6.59 after Q3 EPS miss of $1.33 saying decline in margins reflects rise in food and packaging costs and wage inflation

·     MDT -5%; lowered its full-year profit outlook due to the stronger dollar and slower-than-anticipated recovery from supply chain disruptions; sees its adjusted profit in the range of $5.25 to $5.30 per share, compared with $5.53 to $5.65 previously expected

·     MOV -11%; lowers FY23 revenue view to $740M-$750M from $780M-$790M

·     ZM -7%; reported disappointing results, with 3Q above but another (slight) guide down on FY23 revenue (raise on margins) – Piper noted lead metrics (particularly RPO, cRPO, and new business) continue to decelerate and miss, total customers are declining, and Q4 guide came in beneath


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.