Morning Preview: May 11, 2023
Early Look
Thursday, May 11, 2023
Futures |
Up/Down |
% |
Last |
Dow |
-2.00 |
0.01% |
33,600 |
S&P 500 |
9.25 |
0.22% |
4,161 |
Nasdaq |
33.50 |
0.25% |
13,442 |
U.S. markets are slightly higher, looking to build on yesterday’s advance after in-line April consumer price inflation data, raising bets that the Fed will “pause” its interest rate hike cycle at the June meeting, overshadowing any fears the U.S. debt ceiling not being raised by the end of the month. The Bank of England is poised to raise borrowing costs for the 12th meeting in a row later this morning, with a 25-bps hike widely anticipated. Dow component Disney (DIS) shares slide over -5% after hours after losing Disney+ subscribers in Q2. Next important data points at 8:30 AM ET with the Producer Price Index (PPI) for April, which is expected to show further deceleration from March and weekly jobless claims. In Asian markets, The Nikkei Index was little changed, up 4 points to 29,126, the Shanghai Index dipped -9 points to 3,309, and the Hang Seng Index fell -18 points to 19,743. In Europe, the German DAX is up about 13 points to 15,910, while the FTSE 100 rises 5 points to 7,747. Overall a quiet start to the day with global markets not doing much of anything thus far.
Market Closing Prices Yesterday
· The S&P 500 Index gained 18.42 points, or 0.45%, to 4,137.59.
· The Dow Jones Industrial Average fell -30.81 points, or 0.09%, to 33,531.00.
· The Nasdaq Composite jumped 126.89 points, or 1.04%, to 12,306.44.
· The Russell 2000 Index advanced 9.84 points, or 0.56% to 1,759.51.
Economic Calendar for Today
· 8:30 AM ET Weekly Jobless Claims…est. 245K
· 8:30 AM ET Continuing Claims…est. 1.82M
· 8:30 AM ET Producer Price Index (PPI) Headline M/M for April…est. +0.3%
· 8:30 AM ET Producer Price Index (PPI) Headline Y/Y for April…est. +2.4%
· 8:30 AM ET PPI Core, Ex; Food & Energy M/M for April…est. +0.2%
· 8:30 AM ET PPI Core, Ex: Food & Energy Y/Y for April…est. +3.3%
· 10:30 AM ET Weekly EIA Natural Gas Inventory Data
· 1:00 PM ET U.S. Treasury to sell $18B in 30-year notes.
Earnings Calendar:
· Earnings Before the Open: AVAH AWH BFLY BLDE BWEN CRL ENTG EYE FLWS HAE KELYA MKTW MRNS OPTN OSS PGTI PKI SLQT TAST TPR USFD UTZ VERU YETI
· Earnings After the Close: AIRG APDN ARLO CELL CTIC EAR EGAN EGHT GEN GETY HROW OUST PLSE SANM SIEN SLGC SOUN TBIO TELA WEST
Other Key Events:
· BMO Capital 2023 Real Estate Summit, 5/10-5/12, in New York
· Data Center World 2023 in ATX, 5/8-5/11
· EH Hutton Inaugural Global Conference, 5/10-5/11, in New York.
· Oppenheimer’s 8th Annual Emerging Growth Conference, 5/11 (virtual)
Macro |
Up/Down |
Last |
Nymex |
0.41 |
72.97 |
Brent |
0.58 |
76.99 |
Gold |
-2.80 |
2,034.30 |
EUR/USD |
-0.0057 |
1.0923 |
JPY/USD |
0.23 |
134.57 |
10-Year Note |
-0.015 |
3.422% |
World News
· The bull-bear spread in the American Association of Individual Investors (AAII) weekly survey was -11.8 vs -20.8 last week. Bulls rise to 29.4% from 24.1%, Neutrals fall to 29.4% from 31%, Bears fall to 41.2% from 44.9%.
· U.S. Treasury Secretary Janet Yellen says a federal government default would “risk undermining US global economic leadership,” ahead of the G-7 meeting in Japan.
Sector News Breakdown
Consumer
· Beyond Meat (BYND) Q1 EPS loss (-$0.92) vs. est. loss (-$1.01); Q1 revs $58.8M vs. est. $68.5M; Q1 adj. Ebitda loss -$45.8M vs. est. loss -$48M; sees FY23 revenue $375M-$415M, vs. consensus $390.44M and still sees FY operating expenses $250M.
· Cheesecake Factory (CAKE) 1Q adj EPS $0.61 vs est. $0.59 on revs $866.114Mm vs est. $871.16Mm, comps at The Cheesecake Factory restaurants +5.7% yr/yr and +14.9% vs 2019.
· Corsair Gaming (CRSR) 1Q adj EPS $0.11 vs est. $0.10 on revs $354Mm vs est. $352.2Mm, adj EBITDA $20.6Mm; guides FY revs $1.35-1.55B vs est. $1.471B, adj EBITDA $90-110Mm vs est. $98.9Mm.
· Purple Innovations (PRPL) Q1 adj EPS loss (-$0.12) vs. est. loss (-$0.13); Q1 revs $109.4M vs. est. $104.8M; wholesale revenue decreased 25.3% and Direct-to-Consumer (DTC) revenue decreased 22.5%; gross margin increased 340 bps to 39.5% compared to 36.1%; operating expenses were $65.2 million, or 59.6% of revenue compared to $70.0 million, or 48.9% of revenue.
· Tapestry (TPR) Q3 EPS $0.78 vs. est. $0.59; Q3 revs $1.51B vs. est. $1.44B; inventory of $934 mln at quarter-end favorable to expectations & about 2% above prior year’s ending inventory of $913 mln; raises FY23 EPS view to $3.85-$3.90 from $3.70-$3.75 and ups sales growth view to $6.7B.
Energy, Industrials and Materials
· Alcoa (AA) upgraded to outperform from neutral at Credit Suisse and makes it a top pick citing expectations of recovering aluminum prices.
· Coeur Mining (CDE) 1Q adj EPS ($0.11) vs est. ($0.09) on revs $187.3Mm vs est. $175.1Mm, adj EBITDA $25.1Mm vs est. $43Mm; guides FY total production 10-12Mm oz silver and 320-370k oz gold.
· Crane Inc. (CR) Q1 adj EPS $1.25 vs. est. $0.85; Q1 revs $514M vs. est. $485.96M; raises 2023 adj EPS outlook to $3.60-$3.90 from $3.40-$3.70 and boosts 2023 total sales growth to about 5%, up from the prior 3%, and core sales growth of about 4%-6% from the prior 3%-5%.
· Tetra Tech (TTEK) 2Q adj EPS $1.17 vs est. $1.03 on revs $1.16B vs est. $826.4Mm, record backlog $4.27B; guides 3Q adj EPS $1.15-1.20 vs est. $1.21 and net revs $750-800Mm vs est. $922.6Mm; sees FY adj EPS $5.07-5.17 vs est. $5.03 and net revs $3.10-3.20B vs est. $3.45B.
Financials
· PacWest Bancorp (PACW) said on Thursday it had $15 billion worth of immediately available liquidity, as of May 10.
· Genpact (G) Q1 adj EPS $0.68 vs. est. $0.65; Q1 revs $1.09B vs est. $1.1B; said still sees 2023 adjusted EPS $2.92-$2.99 9est. $2.97); still sees 2023 revenue $4.64B-$4.71B vs. est. $4.67B.
· Robinhood (HOOD) Q1 EPS loss (-$0.57) vs. est. loss (-$0.61); Q1 revs rose 16% to $441M vs. est. $424.5M; assets under custody increased 26% sequentially to $78B; Q1 monthly active users (MAU) increased 0.4 mln sequentially to 11.8M; on track for goal of launching brokerage services in UK by end of year.
Healthcare
· CareDx (CDNA) 1Q adj EPS ($0.11) vs est. ($0.10) on revs $77.26Mm vs est. $80.70Mm, adj EBITDA $(6.4Mm) vs est. $(5.35Mm); withdraws FY guidance given multitude of unknown variables related to the March and May 2023 Billing Article revisions.
· Catalyst Pharmaceuticals (CPRX) 1Q adj EPS $0.41 vs est. $0.32 on revs $85.4Mm vs est. $81.6mm; guides FY revs $375-385Mm vs est. $381.5Mm and adj Net Inc $195-205Mm.
· Ginkgo Bioworks (DNA) Q1 revs fell -52% y/y to $80.7M vs. est. $71.9M; Q1 cash and cash equivalents fell -19% y/y to $1.21 billion; guides FY revs $275M vs. est. $304M.
· Jazz Pharmaceuticals (JAZZ) Q1 adj EPS $3.95 vs. est. $4.24; Q1 revs $892.8M vs. est. $895.43M; reaffirms FY23 adj EPS view $16.90-$17.85 (est. $17.44) and revs $3.675B-$3.875B (est. $3.78B).
· STERIS Plc (STE) 4Q adj EPS $2.30 vs est. $2.15 on revs $1.38B vs est. $1.27B; guides FY24 revs +7-8% vs est. $6.2%, constant currency organic revs +6-7%, adj EPS $8.55-8.75 vs est. $8.75.
Technology, Media & Telecom
· Disney (DIS) shares slide -5%; 2Q adj EPS $0.93 vs est. $0.93 on revs $21.815B vs est. $21.784B, total Disney+ paid subs down -2% Q/Q to 157.8Mm vs. est. 163.5Mm, ESPN+ subs 25.3Mm, Hulu subs 48.2Mm; Q1 streaming loss narrows to $659m, est. loss of $850m; is on track to meet or exceed $5.5b cost cuts target.
· Apple Inc (AAPL) supplier Foxconn posted a 56% plunge in Q1 net profit, lagging forecasts in its biggest quarterly fall in three years, and said visibility for the full year was “limited”; said net profit fell to T$12.8 billion ($417.17 million) from T$29.45 billion y/y.
· Allegro Microsystems (ALGM) 4Q adj EPS $0.37 vs est. $0.36 on revs $269Mm vs est. $265Mm, adj gr mgn 57.8%; guides 1Q sales $270-280Mm vs est. $257Mm, adj gr mgn approx 56%, adj EPS $0.35-0.39 vs est. $0.33.
· AppLovin (APP) Q1 revenue and forecast topped expectations; Q1 revenue rose to $715.4M from $625.4M y/y and above ests $694.9M; guides Q2 revs $710M-$730M vs. est. $695.7M.
· Desktop Metal (DM) Q1 EPS loss (-$0.16) vs. est. loss (-$0.08); Q1 revs $41.3M vs. est. $48.68M; guides 2023 revs $210M-$260M vs. est. $237.5M and affirms 2023 Ebitda outlook.
· DoubleVerify Holdings (DV) 1Q adj EBITDA $35.9Mm vs est. $29.11Mm on revs $122.594Mm vs est. $118.09Mm; guides 2Q revs $131-135Mm vs est. $132.77Mm and adj EBITDA $37-39Mm vs est. $38.25Mm; sees FY revs $557-569Mm vs est. $557.3Mm and adj EBITDA $171-179Mm.
· Flex Inc. (FLEX) Q4 adj EPS $0.57 vs. est. $0.51; Q1 revs $7.5B vs. est. $7.22B; guides Q1 adj EPS and revs below views at 47c-53c and $7B-$7.5B vs. est. 55c and $7.47B; but reaffirms FY view.
· JD.com (JD) reported Q1 non-GAAP earnings of 4.76 Chinese Renminbi ($0.69) per diluted American depositary share, up from 2.53 Renminbi a year earlier.
· Sonos Inc. (SONO) shares slide -20%; 2Q adj EPS $0.04 vs est. ($0.18) on revs $304.173Mm vs est. $297.97Mm; guides FY revs $1.625-1.675B vs prior $1.7-1.8B and est. $1.731B, gr mgn 44.3-44.8% vs prior 45-46%, adj EBITDA $138-168Mm vs prior $145-180Mm and est. $157.6Mm.
· Trade Desk (TTD) Q1 EPS $0.23 vs. est. $0.12; Q1 revs $383M vs. est. $364.5M; names Laura Schenkein as new CFO; sees Q2 revenue at least $452M vs. est. $445.4M and guides Q2 adjusted EBITDA $160M.
· Unity Software (U) Q1 revs $500M vs. est. $481.4M; and guides Q2 revs $510M-$520M vs. est. $497.4M and FY revs $2.08B-$2.2B from prior $2.05B-$2.2B.
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.