Early Look

Tuesday, May 11, 2021

Futures	Up/Down	%	Last
Dow	-210.00	0.61%	34,458
S&P 500	-36.25	0.87%	4,147
Nasdaq	-179.50	1.34%	13,177

 

 

U.S. stock futures are moving sharply lower, adding to yesterday’s late day slide that saw the Nasdaq drop over 2%, falling below its 100-day moving average support as investors bail on technology-related stocks with lofty valuations on worries over inflation. The late day drop also pushed the Dow into negative territory after earlier touching fresh all-time highs along with the Dow Transport index. The S&P 500 also finished lower despite strength in commodity related stocks. The CBOE Volatility index (VIX) hits its highest since March 25 this morning, last up over 2 points at 21.75. The yield on benchmark U.S. 10-year Treasury note ticked up to 1.604% ahead of consumer price index report on Wednesday (and PPI on Thursday) with investors fearing that a strong reading could prompt the Federal Reserve to alter its ultra-loose monetary policy despite several claims by Fed members they plan to keep rates accommodative. Inflation jitters have driven investors away from growth stocks to cyclicals, which benefit the most as the economy reopens, resulting in the S&P 500 logging its worst day in nearly eight weeks. The Nasdaq has now lost 5.2% from its April 26 record close and around 5.7% from its April 29 intraday peak. The Dow Transports are on track to end its record 14-week win streak. In Asian markets, The Nikkei Index tanked over -900 points (3.08%) to settle at 28,608, the Shanghai Index rose 13 points to 3,441 and the Hang Seng Index dropped -581 points to 28,013. In Europe, the German DAX is plunges over -330 points to 15,060, while the FTSE 100 is down -150 points to 6,970.

 

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -44.17 points, or 1.04%, to 4,188.43

·     The Dow Jones Industrial Average fell -34.94 points, or 0.10%, to 34,742.82

·     The Nasdaq Composite slumped -350.38 points, or 2.55%, to 13,401.86

·     The Russell 2000 Index declined -58.93 points, or 2.59% to 2,212.70

 

Events Calendar for Today

·     6:00 AM EST      NFIB Small Business Optimism for April

·     7:45 AM ET         ICSC Weekly Retail Sales

·     8:55 AM ET         Johnson/Redbook Weekly Sales

·     10:00 AM EST    JOLTSs Job Openings for March

·     1:00 PM EST       U.S. Treasury to sell $58B in 3-year notes

·     4:30 PM ET         API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: AEE, ARMK, BLI, CSPI, DCTH, GHLD, HBI, IGT, MAC, MIME, NOVT, PAR, PLTR, PMTS, RPRS, SDGR, TDG, VITL, VPG, XTNT

·     Earnings After the Close: ARRY, BGS, BIGC, CHK, CLPT, COKE, CURI, DAR, EA, EGAN, FUBO, GAIN, GO, HLI, NYLN, JAMF, KIN, LMND, LPRO, NAVB, OPEN, OPNT, OTIC, PAYS, QS, RMED, SD, SIEN, SLQT, SNDX, TGH, U, VZIO, XGN

 

Other Key Events:

·     Bank of America Healthcare Conference (virtual), 5/10-5/13

·     JMP Securities’ Insurance Week (virtual), 5/10-5/14

·     Goldman Sachs Industrials & Materials Conference (virtual), 5/11-5/13

·     Citigroup Global Energy & Utilities Conference (virtual), 5/11-5/12

·     American Society of Gene & Cell Therapy Annual Meeting (ASGCT), 5/11-5/14

·     Stat Health Tech Virtual Summit 2021, 5/11-5/12

·     Oppenheimer Emerging Growth Conference, 5/11-5/12

 

 

Macro	Up/Down	Last
Nymex	-0.46	64.46
Brent	-0.45	67.87
Gold	3.90	1,840.00
EUR/USD	0.0036	1.2165
JPY/USD	-0.05	108.76
10-Year Note	+0.002	1.604%

 

 

Sector News Breakdown

Consumer

·     Callaway Golf (ELY) 1Q adj EPS $0.62 vs est $0.14 on net revs $652Mm vs est $561.6Mm, Topgolf exceeds expectations; says operating segments are recovering faster and performing better than expected; now guides revs and adj EBITDA for FY will exceed 2019 for legacy business and Topgolf will meet or exceed full 12-mo 2019 levels

·     CarLotz (LOTZ) 1Q EPS ($0.15) vs est ($0.14) on revs $56.6Mm vs est $44.1Mm, retail unit sales 2,554 +76%; guides FY adj EBITDA loss $67-79Mm vs est loss $75.6Mm

·     Extended Stay America (STAY) 1Q adj FFO/shr $0.28 vs est $0.00 on revs $259.6Mm vs est $253.3Mm, comparable system-wide REVPAR -1.7%

·     International Flavors (IFF) 1Q adj EPS $1.60 vs est $1.53 on revs $2.5B vs est @2.45B; guides FY sales $11.25B vs est $11.1B, sees adj EBITDA mgn 23% vs est 23%

·     National CineMedia (NCMI) Q1 EPS loss (25c) vs. est. loss (18c); Q1 revs down 91.7% to $5.4M vs. est. $13.1M; increasingly optimistic given many positive signs of a cinema industry revival; expects revenue to begin to meaningfully increase in June 2021, but it is expected to remain well below pre pandemic level

·     Nautilus (NLS) Q1 EPS 93c as sales rose 120% to $206M above ests. 52c and $159.1M; Operating income was $39.7M, a $40.3 million improvement compared to a loss $0.6 million for the same period last year; EBITDA was $40.4 million compared to $2.3M for the same period last year driven higher due to increased operating income; net sales expected to grow between 40% and 50% versus prior year

·     RealReal (REAL) Q1 non Gaap EPS loss (49c) vs. est. (49c); Q1 revs $98.8M vs. est. $95.9M; sees 2q GMV $320m-$330m, representing 75% to 80% YoY growth; Buyers who purchased in-store in Q1 spent 4.4 times more compared to online-only buyers; and buyers who purchased in-store in Q1 generated AOVs approximately 2.6 times higher than online-only buyers.

·     Summit Materials (SUM) Q1 adj EPS loss (19c) vs. est. loss (47c); Q1 revs $398.5M vs. est. $355M; backs FY21 adjusted EBITDA view $490M-$520M and continues to expect 2021 capital expenditure guidance of approximately $200M-$220M

·     Tesla Inc (TSLA) has halted plans to buy land to expand its Shanghai plant and make it a global export hub, people familiar with the matter said, due to uncertainty created by U.S.-China tensions. – Reuters

·     Utz Brands (UTZ) to acquire Great Lakes Festida Holdings and related entities to acquire all of the assets, including the real estate located in Grand Rapids, MI, related to the operation of Festida Foods for $41M

·     Wynn Resorts (WYNN) 1Q adj EPS ($2.41) vs est ($1.98) on revs $725.8Mm vs est $758.0Mm

·     Yum! Brands, Inc. (YUM) declares quarterly dividend of $0.50 per share and announces authorization of up to $2 billion in buybacks

 

Energy, Industrials and Materials

·      Occidental Petroleum (OXY) Q1 adj EPS loss (15c) vs. est. loss (33c); Q1 revs $5.48B vs. est. $4.91B; qtrly Permian production of 457 MBoed came in at the high end of guidance; qtrly average worldwide realized crude oil prices increased by 37 percent from the prior quarter to $55.65 per barrel; sees fy production for total company about 1,140 MBoed, for Permian about 485 MBoed

·     Ingersoll-Rand (IR) 14.92M share Spot Secondary priced at $49.00

·     Chemical companies Lyondell (LYB), Dow Chemicals (DOW), Huntsman (HUN) all downgraded to neutral at Goldman Sachs while upgraded Dupont (DD), Eastman Chemical (EMN) and Univar (UNVR) to Buy from Neutral

·     Trex Company (TREX) Q1 EPS 42c vs. est. 38c; Q1 revs $246M vs. est. $237.82M; Gross margin for the quarter was 39% after absorbing the impact of start-up costs and increased depreciation related to the company’s capital expansion program; sees Q2 revs $295M-$305M vs. est. $278.06M

·     Virgin Galactic (SPCE) 1Q EPS ($0.55) vs est ($0.27), cash and equiv $617Mm; timing of next flight currently being evaluated, says continuing to experience ongoing delays to business due to covid

 

Financials

·     Ambac (AMBC) 1Q adj EPS $0.59 vs est ($0.53), net premium earned $14Mm vs est $11.5Mm, net investment income $49Mm vs est $42.6Mm

·     Genpact (G) Q1 adj EPS 59c vs. est. 49c; Q1 revs $946M vs. est. $924.43M; Sees adjusted EPS $2.27 to $2.30, slightly above prior view of $2.26 to $2.29 (est. $2.29)

·     National Storage (NSA) to replace Charles River in S&P 400 at open on 5/14

·     Repay Holdings (RPAY) 1Q adj EPS $0.18 vs est $0.16 on revs $47.5Mm vs est $44.9Mm, qtrly card payment volume $4.6B; guides FY revs $210-220Mm vs est $184.8Mm; separately says to acquire Billingtree for $503Mm, will finance with $228Mm newly issued shares of repay class A common to be issued to seller; guides annualized synergies of $5Mm by 2022

·     Simon Property Group (SPG) 1Q FFO/shr $2.48 vs est $2.27, says US malls and premium outlets operating occupancy was 90.8% at March 31; guides FY FFO/shr $9.70-9.80 up from $9.50-$9.75 and vs est $9.68

·     Voya Financial (VOYA) Q1 adj EPS $1.70 vs. est. $1.19; Investment Management achieved new fixed income mandates in Q1 and is expected to achieve its 2-4% net flow organic growth target for 2021 due to a strong, unfunded pipeline; total assets under management and administration were $729 billion as of March 31, 2021.

 

Healthcare

·     The FDA has expanded the emergency use authorization of the COVID-19 vaccine developed by Pfizer (PFE) and BioNTech (BNTX) for use in adolescents aged 12 to 15 years of age (shares of NVAX slipped after hours on the headlines)

·     Fluidigm Corp. (FLDM) rises after hours following a report that activist investor Caligan Partners has accumulated an 11% stake in the Covid-19 test maker and may ask the company to consider the sale of one of its businesses.

·     Charles River (CRL) to replace FLIR Systems (FLIR) in S&P 500 at open on 5/14

·     AVEO Pharma (AVEO) 1Q EPS ($0.81) vs est ($0.55) on revs $1.9Mm vs est $1.01Mm expects cash and equiv along with product revs from Fotivda launch will enable maintaining ops for at least 12 mos from 10Q filing

·     FibroGen (FGEN) Q EPS ($0.78) vs est ($0.87) on revs $38.4Mm vs est $41.8Mm; guides FY ending cash of $660-670Mm

·     Novavax (NVAX) 1Q EPS ($3.05) vs est ($3.60) on revs $447Mm vs est $233.9Mm; anticipate remainder of global covid vaccine capacity to come online in 4Q

·     Prothena (PRTA) announces achievement of $60 million milestone from Roche for first patient dosed in phase 2b study of prasinezumab in early Parkinson’s disease

·     Shockwave Medical (SWAV) Q1 EPS loss (68c) vs. est. loss (45c); Q1 revs $31.9M vs. est. $29.9M

·     SmileDirectClub (SDC) Q1 adj EPS loss (12c) vs. est. loss (13c); Q2 revs $199M vs. est. $197.51M; in light of cyber-attack and associated business disruption, co is adjusting rev expectations for q2 based on possible impact; sees Q2 revs $195M-$200M vs. est. $203.8M and adjusted ebitda to be about breakeven, as co recovers from cyber-attack

 

Technology, Media & Telecom

·     Production of the Apple (AAPL) iPhone 12 at a Foxconn factory in India has slumped by more than 50% because workers infected with COVID-19 have had to leave their posts, two sources told Reuters. The Foxconn facility in the southern state of Tamil Nadu produces iPhones specifically for India, the world’s No.2 smartphone market

·     3D Systems (DDD) Q1 non-Gaap EPS 17c vs. est. 2c; Q1 revs $146.1M vs. est. $136.6M; strong revenue growth and cost improvements drove adjusted EBITDA margins of 13.6% and positive operating cash flow of $28.5 million

·     Brooks Automation (BRKS) Q2 adj EPS 61c vs. est. 50c; Q2 revs $287M vs. est. $272M; sees Q3 adj EPS 65c-75c vs. est. 52c; sees Q3 revenue $300M-$320M vs. est. $274.1M; announced plans to separate into two independent, publicly traded companies (standalone life sciences company and standalone automation company)

·     J2 Global (JCOM) Q1 adj EPS $2.18 vs. est. $1.66; Q2 revs $398.2M vs. est. $363.23M; raises FY21 EPS view to $9.27-$9.51 from $8.93-$9.27 (est. $9.10) and boosts FY21 revenue view to $1.676B-$1.7B from $1.63B-$1.676B (est. $1.65B)

·     Magnite Inc. (MGNI) Q1 EPS 3c vs. est. 0c; Q1 revs $60.7M vs. est. $26.75M; CTV revenue for Q1 2021 was $12.0 million up 32% YoY; Adjusted EBITDA was $9.4 million for Q1 2021 for a margin of 15%, as compared to Adjusted EBITDA of $2.8 million for Q1 of 2020

·     Model N Inc. (MODN) 2Q adj EPS $0.04 vs est ($0.05) on revs $48.2Mm vs est $46.4Mm; sees Q3 adj EPS 1c-2c vs. est. 0c; sees Q3 revenue $48.5M-$49M vs. est. $47.89M

·     NortonLifeLock (NLOK) Q4 adj EPS 40c vs. est. 38c; Q4 revs $672M vs. est. $659.96M; boosts share buyback authorization by $1.5B; sees Q1 adj EPS 40c-42c vs. est. 39c; sees Q1 revs $680M-$690M vs. est. $659.06M

·     Nuance Communications (NUAN) Q2 adj EPS 20c vs. est. 17c; Q2 revs $347M vs. est. $344.05M; GAAP operating margin of 11.5%, compared to 3.5% in the same period last year; non-GAAP operating margin of 27.4%, compared to 20.6% in the same period last year

·     Rackspace Technology (RXT) 1Q adj EPS $0.23 vs est $0.21 on revs $726Mm vs est $724Mm; guides 2Q adj EPS $0.21-0.23 vs est $0.23, sees 2Q revs $735-745Mm vs est $735Mm (sees 2Q core revs $690-698Mm; guides FY revs $2.9-3.1B (core revs $2.7-2.9B) vs est $3.0B, sees FY adj EPS $0.95-1.05 vs est $1.01

·     Roblox (RBLX) Q1 EPS loss (46c) vs. est. 13c; Q1 revs $386.98M vs. est. $504.61M; qtrly bookings increase 161% over prior year to $652.3 mln; in qtr, daily active users were 43.3 mln, up 37% YoY; April 2021 bookings were between $242 mln and $245 mln and April average bookings per dau were between $5.59 – $5.66; qtrly hours engaged were 9.7 bln, an increase of 98% year over year

·     SailPoint Technologies (SAIL) Q1 adj EPS 0c in-line with ests and Q1 revs $90.8M vs. est. $91.19M; guides Q2 adjusted EPS loss (7c)-(5c) vs. est. 0c and sees Q2 revenue $98M-$100M vs. est. $98.75M; cuts FY21 adjusted EPS view to (13c)-(5c) from (10c)-(1c) and reaffirms year revs $404M-$412M

·     Switch (SWCH) Q1 adj EPS 8c vs. est. 5c; Q1 revs $130.9M vs. est. $129.03M; Adjusted EBITDA of $73.4 million, compared to $61.5 million for the same quarter in 2020, an increase of 19%. Adjusted EBITDA margin was 56.1%; sees FY21 revs $543M-$555M vs. est. $547.05M and sees FY21 adjusted EBITDA in the range of $281M-$290M

·     Synchronoss Technologies (SNCR) 1Q adj EPS $0.33 vs est ($0.15) on revs $65.5Mm vs est $63.5Mm; guides FY revs $275-285Mm vs est $277.9Mm; sees FY adj EBITDA $32-37Mm vs est $30.9Mm

·     Velodyne Lidar (VLDR) Q1 adj EPS loss (14c) vs. est. loss (12c); Q1 revs $17.7M vs. est. $15.81M; sees FY21 revenue $77M-$94M, vs. est. $93.76M; sees non-GAAP Gross margins expected to be between 16% to 24%