Early Look

Wednesday, February 7, 2024

Futures	Up/Down	%	Last
Dow	-29.00	0.08%	38,584
S&P 500	-0.75	0.01%	4,974
Nasdaq	22.50	0.13%	17,682

 

 

A flattish open for S&P futures (Spuz) around the 4,974 after major averages bounced in the final minutes of trading Tuesday to settle modestly higher in a week filled with earnings and Fed speakers. Treasuries bounced on Tuesday following their worst 2-day stretch since June 2022, as a well received $54 3-year auction helped along with comments from the more hawkish Fed President Mester who could see rate cuts later in the year. In Fed news overnight, Philadelphia Fed President Harker didn’t comment on outlook for interest rates but was optimistic that “soft landing is in sight”. He also said that “data point to continued disinflation and labor market is rebalancing”. Treasury yields are edging slightly higher this morning ahead of a $37B 10-year auction at 1:00 PM today and more Fed speakers. On Tuesday the Dow advanced 0.37%, with the S&P 500 0.23% higher, and the NASDAQ up 0.07% while Smallcaps outperformed rising +0.85%. In Asian markets, The Nikkei Index dipped -40 points to 36,119, the Shanghai Index rose 40 points to 2,829, and the Hang Seng Index dropped -54 points to 16,081. In Europe, the German DAX is down -48 points to 16,984, while the FTSE 100 id down -29 points to 7,650. Note China goes on an extended break on 10 – 17 Feb for their Lunar Year celebration. 

 

• The Dow Jones Industrial Average rose 141.24 points, or 0.37%, to 38,521.36.
• The Nasdaq Composite edged higher 11.32 points, or 0.07%, to 15,609.00.
• The Russell 2000 Index advanced 16.39 points, or 0.85% to 1,953.63.

• 8:30 AM ET                  International Trade for December
• 10:30 AM ET                Weekly DOE Inventory Data
• 11:00 AM ET                Fed’s Kugler Speaks at Brookings Event
• 12:30 PM ET                Fed’s Barkin Speaks on Outlook, Regional Economy
• 1:00 PM ET                   US Treasury to sell $37B in 10-year notes.
• 3:00 PM ET                   Consumer Credit for December

• Earnings After the Close: ACLS ALL APPS ASGN BARK BKH BLBD CENT CFLT CMP COTY CSGS CUZ CXW DHX DIS EFX EGP EHC ENS ENTA FLNC FLT FORM FR GEOS GL GPRO HMN KN MAA MAT MC MCK MKSI MMS MPWR MUSA NLY NTGR NVST NWSA OHI ORLY OSCR PAHC PAYC PFLT PYCR PYPL RDN RM RPD RRR STC STE TTGT UHAL VKTX WFRD WYNN

• China CPI, PPI for January
• China M2 Money Supply

 

 

Macro	Up/Down	Last
Nymex	0.74	74.04
Brent	0.44	79.03
Gold	-1.10	2,050.30
EUR/USD	0.0016	1.0770
JPY/USD	0.07	148.01
10-Year Note	+0.029	4.121%

 

• Chipotle Mexican Grill (CMG) Q4 adj EPS $10.36 vs. est. $9.71; Q4 revs rose 15% y/y to $2.52B vs. est. $2.49B; Q4 comparable sales +8.4% vs. +5.6% y/y, and above est. +7.1%; Q4 operating margin 14.4% vs. 13.6% y/y; authorized repurchases of common stock with a total aggregate purchase price of $200 mln, exclusive of commissions; sees 2024 comparable restaurant sales growth in mid-single digit range.
• Elf Beauty (ELF) Q3 EPS $0.74 vs. est. $0.56; Q3 revs $270.9M vs. est. $238.9M; raises FY24 EPS view to $2.84-$2.87 from $2.47-$2.50 (est. $2.50) and boosts FY24 rev view to $980M-$990M from $896M-$906M (est. $927.1M).
• Ford Motor (F) Q4 adj EPS $0.29 vs. est. $0.14; Q4 revs $46B vs. est. $40.11B; declares first-quarter regular and supplemental dividends of 15 and 18 cents per\share, respectively; sees FY24 adjusted EBIT $10B-$12B, adjusted FCF $6B-$7B and FY24 capital spending $8B-$9B.
• Hilton (HLT) Q4 adj EPS $1.68 vs. est. $1.57; Q4 revs $2.61B vs. est. $2.61B; Q4 system-wide comparable RevPAR increased 5.7% and 12.6%, on a currency neutral basis, for the Q4 and FY24, respectively, compared to the same periods in 2022; sees FY24 adjusted EPS $6.80-$6.94 vs. consensus $7.07.
• VF Corp. (VFC) Q3 adj EPS $0.57 vs est. $0.77 on revs $3.0B vs est. $3.241B, adj gr mgn 55.3%, adj EBIT mgn 9.3%; reaffirms FY24 free cash flow approx $600Mm.
• Yum China (YUMC) Q4 EPS $0.23 vs. est. $0.16; Q4 revs $2.49B vs. est. $2.41B; said total system sales grew 21% year over year excluding foreign currency translation; declared a 23% increase in cash dividend to $0.16; in 2024, plans to open approximately 1,500 to 1,700 net new stores; sees 2024 capex in range of approximately $700M-$850M.

• Nabors (NBR) Q4 EPS loss (-$2.70) vs. est. loss (-$1.22); Q4 revs $726M vs. est. $744M; expect high level of rig churn in q1 to keep average rig count essentially in line with q4 exit rate; said operating rigs continue to reprice to current market, expect in q1 some erosion in daily margin; to allocate 2024 cash flow generation to reducing net debt.
• Weatherford (WFRD) Q4 adj EBITDA $321Mm vs est. $309.72Mm on revs $1.362B vs est. $1.338B; guides FY24 revs +dd to +low-teens vs est. +9.63%.

• Alliance Bernstein (AB) Q4 adj EPS $0.77 vs. est. $0.63; Q4 revs $1.09B vs. est. $857.83M; By asset class, lower Active Equities demand was mostly offset as Municipals grew organically by 11%, with strong demand from US Retail, and Taxable Fixed Income grew organically by 3%, driven by cross-border demand.
• Cincinnati Financial (CINF) Q4 adj EPS $2.28 vs. est. $1.95; Q4 revs $3.36B vs. est. $2.47B; qtrly earned premiums $2,064 mln vs $1,875 mln; Q4 $77.06 Book Value Per Shr at Dec 31, 2023.
• H&R Block (HRB) CFO Tony Bowen to retire; Q2 adj EPS loss (-$1.27) vs. est. loss (-$1.56); Q2 revs $179.08M vs. est. $169.45M; backs FY24 adjusted EPS view $4.10-$4.30 and revs view of $3.53B-$3.59B.
• Jack Henry Associates (JKHY) Q2 EPS $1.26 vs. est. $1.14 and revs $545M vs. est. $540.6M; raises lower end of FY adj. rev view to $2.20B-$2.21B from $2.19B-$2.21B and forecasts FY EPS $5.09-$5.13 from prior $4.92-$4.99 (est. $5.05).
• MeridianLink (MLNK) 6.9M share Spot Secondary priced at $19.00.
• MicroStrategy (MSTR) Q4 adj EPS $5.62 vs est. $0.55 on revs $124.484Mm vs est. $132.9Mm; acquired 850 bitcoin for $37.2 million in January.
• Prudential (PRU) Q4 adj EPS $2.58 vs. est. $2.60; announces new CFO; raises quarterly dividend to $1.30 from $1.25; Book value per Common share of $76.77 versus $82.48 per share for the year-ago quarter; Assets under management of $1.450 trillion versus $1.377 trillion for the year-ago quarter.
• Voya Financial (VOYA) Q4 adj EPS $1.63 vs. est. $1.81; said expects additional commercial momentum, healthy margins, strong cash generation, and further return of excess capital to shareholders in 2024.
• Western Union (WU) Q4 adj EPS $0.37, in-line with consensus on revs $1.05B vs. est. $1.02B; sees FY24 adjusted EPS $1.65-$1.75 vs. est. $1.68 and sees FY24 GAAP revenue $4.075B-$4.175B vs. est. $4.17B; said that its consumer segment saw a 1% decline in revenue, despite transactions increasing 5% compared to a year ago.

• CVS Health (CVS) Q4 EPS $2.12 vs. est. $1.99; Q4 revs $93.81B vs. est. $90.36B; cuts FY24 adj EPS view to at least $8.30 from at least $8.50 and lowers FY24 cash flow from operations view to at least $12B from $12.5B saying the guidance revision follows a review of its recently finalized medical cost trend analysis.
• Edwards Lifesciences (EW) Q4 adj EPS $0.64 vs. est. $0.64; Q4 revs $1.53B vs. est. $1.5B; said confident in 2024 guidance of 8%-10% constant currency sales growth; said anticipate launching multiple breakthrough technologies globally and advancing important clinical trials; said confident in our ability to accelerate growth in 2025 and beyond.
• 4D Molecular (FDMT) 6.59M share Secondary priced at $29.50.
• Gilead Sciences (GILD) Q4 adj EPS $1.72 vs est. $1.76 on revs $7.07B vs est. $7.101B; guides FY sales $27.1-27.5B vs est. $27.663B, Veklury sales approx $1.3B, adj EPS $6.85-7.25 vs est. $7.21
• Inspire Medical (INSP) Q4 EPS $0.49; Q4 revs $192.5M vs. est. $187.24M; said achieved Q4 gross margin of 85.4%, activated 78 new U.S. centers in Q4, bringing the total to 1,180; reaffirms FY24 revs in the range of $775M-$785M.
• Varex Imaging (VREX) Q1 adj EPS $0.06 vs est. $0.11 on revs $190Mm vs est. $187.98Mm, gr mgn 30%, adj operating mgn 5%; guides Q2 revs $195-215Mm vs est. $206.88Mm and adj EPS $0.10-0.30 vs est. $0.21.

• O-I Glass (OI) Q4 adj EPS $0.12 vs. est. $0.03; Q4 revs $1.6B vs. est. $1.63B; sees FY24 adjusted EPS $2.25-$2.65, vs. consensus $2.52; said will likely be down from 2023, which represented O-I’s highest adjusted earnings in the past 15 years; anticipates 2024 free cash flow will approximate $150M-$200M, an improvement from 2023 levels.
• Werner Enterprises (WERN) Q4 adj EPS $0.39 vs. est. $0.43; Q4 revs $821.9M vs. est. $820.37M; said freight conditions remained challenging in the fourth quarter with ongoing pricing pressure.

• Cirrus Logic (CRUS) Q3 adj EPS $2.89 vs est. $2.01 on revs $619Mm vs est. $540.06Mm; sees Q4 revs $290-350Mm vs est. $331.88Mm and gr mgn 49-51%
• Fortinet (FTNT) Q4 adj EPS $0.51 vs est. $0.43 on revs $1.42B vs est. $1.409B, billings $1.86B, adj op Inc $454Mm vs est. $394.4Mm; guides Q1 revs $1.3-1.36B vs est. $1.375B, billings $1.39-1.45B, adj gr mgn 76.5-77.5%, adj op mgn 25.5-26.5%, adj EPS $0.37-0.39 vs est. $0.37; sees FY24 revs $5.715-5.815B vs est. $5.934B, billings $6.4-6.6B, adj gr mgn 76-78%, adj op mgn 25.5-27.5%, adj EPS $1.65-1.70 vs est. $1.67.
• Kyndryl Holdings (KD) Q3 adj EPS ($0.05) vs est. ($0.26) on revs $3.936B vs est. $3.915B, adj EBITDA $615Mm vs est. $594.87Mm; guides FY24 adj EBITDA mgn at least 14.5%, adj pre-tax Inc at least $150Mm and constant currency revs -7% to -6% vs reported revs est. -6.5%.
• Lumen Technologies (LUMN) Q4 adj EPS $0.08 vs est. ($0.01), adj EBITDA $888Mm vs est. $1.052B, adj FCF $50Mm; sees FY24 adj EBITDA $4.1-4.3B vs est. $4.148B, FCF $100-300Mm, CAPEX $2.7-2.9B.
• Omnicom (OMC) Q4 adj EPS $2.20 vs. est. $2.16; Q4 revs rose 5% y/y to $4.06B vs. est. $3.99B; said finished 2023 with 4.4% organic revenue growth in the fourth quarter and 4.1% for the year; said its operating expenses increased 5.9% due to higher salary and service costs.
• Snap Inc. (SNAP) shares tumbled; Q4 adj EPS $0.08 vs est. $0.06, adj EBITDA $159.149Mm vs est. $107.18Mm on revs $1.361B vs est. $1.376B, DAUs 414Mm vs est. 411.58Mm; guides Q1 DAUs about 420Mm, revs $1.095-1.135B vs est. $1.117B and adj EBITDA ($95Mm) – ($55Mm) vs est. ($31.84Mm).
• Sonos (SONO) Q1 adj EPS $0.84 vs est. $0.40 on revs $612.869Mm vs est. $587.2Mm, gr mgn 46.1%, adj EBITDA $115.2Mm vs est. $101.58Mm; FY24 guide unchanged, sees revs $1.6-1.7B vs est. $1.649B, adj gr mgn 45.4-46.4%, adj EBITDA $150-180Mm vs est. $162.72Mm.
• Tenable (TENB) Q4 EPS $0.25 vs. est. $0.14; Q4 revs $213.3M vs. est. $206.47M; said Q4 calculated current billings was $271.6M, a 14% increase y/y; Sees revenue $895.0M-$905.0M vs. est. $905.9M and guides FY adj EPS $1.03-$1.10 above est. $0.81.
• In Media: ESPN, a subsidiary of The Walt Disney Company (DIS), FOX (FOXA) and Warner Bros. Discovery (WBD) have reached an understanding on principal terms to form a new Joint Venture to build an innovative new platform to house a compelling streaming sports service. The platform brings together the companies’ portfolios of sports networks, certain direct-to-consumer sports services, and sports rights – including content from all the major professional sports leagues and college sports. By subscribing to this focused, all-in-one premier sports service, fans would have access to the linear sports networks including ESPN, ESPN2, ESPNU, SECN, ACCN, ESPNEWS, ABC, FOX, FS1, FS2, BTN, TNT, TBS, truTV, as well as ESPN+.

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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.