Morning Preview: February 23, 2018

Scott GreenDaily Market Report

Early Look
Friday, February 23, 18
  
Stock futures are rising on the final day of trading this week, looking to close out strong, helped by easing yields and ahead of more Fed speakers on what has been a very volatile week of trading. Several Fed officials are set to speak today and their comments will be closely watched for more clues to future policy. Bond yields continued to ease after St. Louis Fed President James Bullard cast doubt on the likelihood of four rate rises this year. Stocks ended mixed on Thursday, with the Dow Industrials posting strong gains led by industrials, though the technology-focused Nasdaq declined for a 4th consecutive session, its longest stretch of closes in negative territory since November of 2016 (when it fell 9-straight sessions). All three benchmarks had suffered losses on Wednesday after minutes from the Federal Reserve hinted at rising borrowing costs ahead in 2018, sparking a rise in the benchmark 10-year Treasury note yield to a fresh four-year peak above 2.95%. In Asian markets, The Nikkei Index gained 156 points to settle at 21,892, the Shanghai Index gained 20 points to close at 3,289 and the Hang Seng Index rose 301 points to close at 31,267. In Europe, the German DAX is down about -10 points around 12,450, while the FTSE 100 is also down around -10 points at 7,235.
 
Market Closing Prices Yesterday
·      The S&P 500 Index inched higher 2.63 points, or 0.10%, to 2,703.96
·      The Dow Jones Industrial Average rose 164.70 points, or 0.66%, to 24,962.48
·      The Nasdaq Composite dropped -8.14 points, or 0.11%, to 7,210.09
·      The Russell 2000 Index declined -1.85 points, or 0.12% to 1,529.99
 
Events Calendar for Today
·      1:00 PM EST        Baker Hughes Weekly Rig Count
·      10:15 AM EST     Fed’s William Dudley and Boston Fed President Eric Rosengren are due to appear on a morning panel at the Chicago Booth School of Business’s Fed policy forum
·      3:30 PM EST        Fed’s Williams speaks on US Economic Outlook
   
World News
·      The Federal Statistical Office said that Germany’s gross domestic product (GDP) grew at a quarterly clip of 0.6% or an annualized rate of 2.5% in the fourth quarter, in-line with the prelim 2/14 estimate
·      In an interview with Bloomberg, Treasury Secretary Mnuchin brushed aside concerns over rising wages, saying these didn’t necessarily have to trigger a rise in overall inflation.
 
Sector News Breakdown
Consumer
·      General Mills Inc. (GIS) said it would acquire pet foods maker Blue Buffalo Inc. (BUFF) for $40 a share in cash, or roughly $8 billion; GIS said the deal will immediately add to its net sales growth and operating margin profile https://goo.gl/i7ybVi
·      BJ’s Restaurants (BJRI) Q4 EPS 37c/$261.1M vs. est. 32c/$259.29M; Q4 comp sales 1.6%
·      Continental Building (CBPX) Q4 adjusted EPS 41c/$131.4M vs. est. 33c/$125.6M; expands share repurchase program to $300M; 4Q wallboard volumes 725 million square feet; 4Q Ebitda $37.2M; sees 2018 effective tax rate 22-24
·      Comfort Systems USA (FIX) Q4 EPS 45c/$461.1M vs. est. 50c/$447.5M; sees after-tax earnings and cash flow benefiting in future periods from the tax rate reduction starting in 2018
·      Herbalife (HLF) Q4 adjusted EPS $1.29/$1.1B vs. est. 96c/$1.08B; sees Q1 adjusted EPS 90c-$1.10 vs. est. $1.30 and sees Q1 revenue (1%) to 3%; backs year EPS and revenue outlook
·      Planet Fitness (PLNT) Q4 EPS 24c/$134M vs. est. 23c/$131.12M; Q4 system-wide comp sales increased 11.6%; sees FY18 EPS growth approximately 40% and FY18 revenue growth approximately 20%; sees FY18 system-wide same store sales growth in the high single digit %; increases share repurchase program by $80M
·      Red Robin (RRGB) Q4 adjusted EPS 78c/$342.4M vs. est. 54c/$330.3M; Q4 comp restaurant revenue increased 2.7% using constant currency rates; comparable restaurant guest counts increased 1.9%; sees FY18 EPS $2.40-$2.80 vs. est. $2.75; sees FY18 comparable restaurant sales growth of 50 to 150 bps
·      WingStop (WING) Q4 EPS 17c/$28.3M vs. est. 16c/$27.5M; reported system-wide restaurant count increased 13.5% to 1,133 global locations, with a system-wide sales increase of 15.6%; sees FY18 adjusted EPS approximately 75c, below consensus 84c
·      Zoe’s Kitchen (ZOES) Q4 adjusted EPS loss (12c)/$71.4M vs. est. loss (12c)/$71.58M; reports Q4 comparable restaurant sales up 0.3%; sees FY18 revenue $358M-$368M vs. est. $358.63M; sees FY18 comparable restaurant sales growth 0%-2%
·      Hyatt Hotels Corporation (H) announced that it has reached a definitive agreement with Host Hotels & Resorts (HST) for the sale of 3-properties for approximately $1.0 billion
 
Energy
·      Covanta Holding (CVA) Q4 EPS 9c/$495M vs. est. 21c/$460.7M; sees FY adjusted Ebitda $425M-$455M vs. est. $439.3M; sees 2018 Free Cash Flow $70M-$100M
·      Edison International (EIX) Q4 core EPS $1.10/$3.22B vs. est. 92c/$2.98B; said to provide FY18 guidance after final CPUC decision
·      First Solar (FSLR) Q4 adjusted EPS loss (25c)/$339M vs. est. loss (31c)/$459.92M; raises FY18 EPS view to $1.50-$1.90 from $1.25-$1.75 (est. $1.51) and raises FY18 revenue view to $2.45B-$2.6B from $2.3B-$2.5B (est. $2.44B); sees year capex $700M-$800M
·      Eversource (ES) Q4 EPS 75c/$1.895B vs. est. 75c/$1.88B; sees long-term EPS growth through 2021 of between 5 percent and 7 percent on average
·      World Fuel (INT) Q4 EPS 25c/$8.87B vs. est. 61c/$8.72B
 
Financials
·      Intuit (INTU) Q2 adjusted EPS 35c/$1.165B vs. est. 34c/$1.16B; says added approximately 275,000 QuickBooks Online subscribers in the quarter, reaching more than 2.8M worldwide; sees Q3 adjusted EPS $4.57-$4.62 on revs $2.785B-$2.835B vs. est. $4.67 $2.75B; reaffirms year; through Feb 17, total TurboTax unit sales increased 1%
·      Kite Realty Group (KRG) files automatic mixed securities shelf
·      Redfin (RDFN) shared fell -6%; Q4 EPS loss (8c)/$95.8M vs. est. loss (5c)/$91.53M; sees Q1 revenue $74.6M-$78.4M below consensus $79.91M
·      Pebblebrook Hotel (PEB) sees FY18 adjusted FFO $2.46-$2.61 vs. est. $2.61; sees FY18 same-property RevPAR growth rate of (0.5%) to 1.5%
 
Healthcare
·      BioMarin (BMRN) Q4 EPS loss (30c)/$358.3M vs. est. loss (23c)/$351.62M; sees 2018 revenue $1.47B-$1.53B vs. est. $1.48B; sees 2018 cost of sales 20%-21% of total revenues; sees 2018 non-GAAP income $100M-$140M
·      Dova Pharmaceuticals (DOVA) 2.5M share Secondary priced at $32.00
·      Exact Sciences (EXAS) Q4 EPS loss (18c)/$87.4M vs. est. loss (24c)/$85.74M; Q4 revenue and test volume grew 148% and 115% from the same period of 2016, respectively; sees 900,000 to 920,000 completed Cologuard tests during 2018, vs 571,000 reported in 2017; sees FY18 revenue $$420M-$430M vs. consensus $422.13M
·      GTx, Inc (GTXI) announced the acceptance of an abstract on clinical results from an ongoing, open-label, Phase 2 proof-of-concept clinical trial evaluating enobosarm 3 mg in postmenopausal women with stress urinary incontinence
·      Tivity Health (TVTY) Q4 EPS 41c/$139.4M vs. est. 32c/$138.29M; sees FY18 EPS $2.12-$2.20, and revenue $607M-$625M vs. est. $1.76/$616.41M
 
Industrials & Materials
·      UPS Inc. (UPS) downgraded to hold at Deutsche Bank as the company’s 4Q capex guidance was “worse than even the most bearish expectations
·      Nordson (NDSN) Q1 adjusted EPS $1.35/$550.4M vs. est. $1.34/$538.78M; Q1 EBITDA increased 49% over prior year’s Q1 to $141M; Q1 backlog was approximately $405M, up 24% YoY
·      Century Aluminum (CENX) Q4 EPS 26c/$433.8M vs. est. 24c/$426.7M
·      Air Lease (AL) Q4 EPS $1.06/$398M vs. est. 87c/$381.9M
 
Technology, Media & Telecom
·      Appian (APPN) Q4 EPS loss (8c)/$50.6M vs. est. loss (16c)/$41.77M; sees Q1 EPS (18c)-(17c) on revs $46M-$46.2M vs. est. loss (11c)/$45.83M; sees FY18 EPS (54c)-(53c) on revs $198.1M-$201.1M vs. est. loss (46c)/$196.57M
·      GoDaddy (GDDY) Q4 total bookings of $657.9M, up 25.4% YoY; customers of 17.3M at end of year, up 17.6% YoY and average revenue per user of $139, up 7.4% YoY; domains revenue of $281.6M, up 16.1% YoY; sees Q1 revenue $620M-$625M vs. est. $598.62M; see FY18 revenue $2.58B-$2.61B vs. consensus $2.54B
·      HP Enterprise (HPE) shares rise 9%; Q1 EPS 34c/$7.7B vs. est. 22c/$7.07B; sees FY18 EPS $1.35-$1.45, vs. est. $1.18; sees increasing shareholder return commitment given recent tax reform in the U.S
·      HP Inc. (HPQ) shares rose 4%; Q1 EPS 48c/$7.67B vs. est. 42c/$7.06B; sees Q2 EPS 45c-49c vs. est. 44c; sees FY18 EPS $1.90-$2.00 up from prior $1.75-$1.80 and est. $1.90
·      MDC Partners (MDCA) Q4 EPS 22c/$402.7M vs. est. 20c/$408.65M; sees 2018 revenue growth 4% and sees adjusted EBITDA Margin up approximately 20 basis points
·      Trade Desk (TTD) shares gained 12%; Q4 EPS 54c/$102.6M vs. est. 43c/$101.7M; sees Q1 revs $73M above $65M estimate; sees Q1 Ebitda $7.5M
·      Universal Display (OLED) shares fell -10% on guidance; Q4 EPS 93c/$115.9M vs. est. 85c/$100.02M; sees FY18 revenue $350M-$380M below consensus $398.24M
·      Workiva (WK) Q4 adjusted EPS loss (19c)/$54.5M vs. est. loss (22c)/$53.23M; sees Q1 adjusted EPS (20c)-(19c) on revs $57.3M-$57.8M vs. est. loss (7c)/$59.05M

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Market commentary provided by Hammerstone Markets, a division The Hammerstone Group, a firm separate from and not affiliated with Regal Securities L.P.  Regal Securities L.P. has not participated in the creation of the content, and does not explicitly or implicitly endorse the content.

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