Morning Preview: November 06, 2018

Terrie AmengualDaily Market Report

Early Look

Tuesday, November 6, 2018

U.S. stock futures are down slightly as markets await the results from the mid-term elections later tonight, where all 435 House seats and 35 Senate seats are up for grabs in the midterms as latest polls showed Democrats taking the House, while Republicans are in better shape to hold the Senate. U.S. stocks finished mixed on Monday ahead of today’s elections, with the S&P 500 and the Dow closing in the green, but the tech heavy Nasdaq Comp sliding on more weakness in the large cap tech sector (AAPL). Sterling climbed to a two-week high on Tuesday, helped by optimism about progress on a Brexit deal. Note WTI crudes losing streak extended to a seventh day, while gold rises as the dollar is mixed. Natural gas prices slip after rallying over 8% in the previous session on a forecast for chilly temperatures in the U.S. In Asian markets, The Nikkei Index gained 248 points to 22,147, the Shanghai Index dipped -6 points to end at 2,659 and the Hang Seng Index rose 186 points to 26,120. In Europe, the German DAX is off -20 points at 11,470, while the FTSE 100 is down over -20 points at 7,075. Today marks another heavy dose of corporate earnings (all week in fact), but the impact of the election outcomes today is likely to shape the direction of markets tomorrow.

Market Closing Prices Yesterday

· The S&P 500 Index gained 15.25 points, or 0.56%, to 2,738.31

· The Dow Jones Industrial Average rose 190.87 points, or 0.76%, to 25,461.70

· The Nasdaq Composite slipped -28.14 points, or 0.38%, to 7,328.85

· The Russell 2000 Index dipped -0.47 points, or 0.03% to 1,547.51

Events Calendar for Today

· 7:45 AM EST ICSC Weekly Retail Sales

· 8:55 AM EST Johnson/Redbook Weekly Sales

· 10:00 AM EST JOLTs Job Openings for Sept

· 4:30 PM EST API Weekly Inventory Data

Earnings Calendar:

· Earnings Before the Open: ABC, ADM, APD, BCC, BDX, BHC, BR, CVS, EXPD, EMR, GOGO, HSIC, IRWD, LLY, MLM, MNK, MOS, OCN, ONDK, REGN, RL, SAGE, SERV, TRI, USFD, WLK, ZBRA

· Earnings After the Close: ACAD, AIZ, COHR, DATA, DIOD, DVN, DXC, DXCM, ETSY, FTR, FIVN, G, GDDY, GLUU, INFN, JAZZ, JKHY, LC, MB, MBI, MODN, MTCH, NEWR, PLT, PRI, QTWO, RPD, SCSC, TWLO, RPD, UCTT, WEN, ZG

Other Key Events:

· RW Baird 48th annual Industrials Conference, 11/6-11/8, in Chicago

· Stephens Investment Conference, 11/6-11/8, in New York

· RBA policy decision (Monday night)

World News

· China is open to a trade dialogue with the US, said Chinese vice-president Wang Qishan on Tuesday

· The Reserve Bank of Australia held rates again at its November meeting, in line with expectations. The central bank kept its cash rate unchanged at 1.5%

· German factory orders rise 0.3% MoM in Sept vs. est. -0.5% MoM; workday adjusted factory orders down 2.2% y/y vs est. down 2.8% y/y.

· UK total retail spending in October was up 1.3% compared with a year earlier after growing by 0.7% in September, its slowest rate for almost a year

Sector News Breakdown

Consumer

· Avis Budget (CAR) Q3 EPS $3.33/$2.78B vs. est. $3.54/$2.81B; sees FY adjusted EPS $3.30-$3.70 on revs $9.10B-$9.20B vs. est. $3.57/$9.17B; 3Q Americas per-unit fleet costs -10%; reaffirms forecast for 2018 adj. EBITDA

· Toyota (TM) raised its annual profit and revenue forecast as aggressive cost cuts and a weaker yen offset declining profit margins in the US; Sees FY net income 2.3 trillion yen, saw 2.12 trillion yen, estimate 2.30 trillion yen

· Bluegreen Vacations (BXG) Q3 EPS 27c/$202.2M vs. est. 33c/$204.43M; Q3 adjusted EBITDA of $34.9 million, which was negatively impacted by lost business associated with Hurricane Florence vs. $39.1M last year

· e.l.f. Beauty (ELF) Q3 EPS 17c/$63.9M vs. est. 8c/$60.09M; sees FY EPS 59c-61c vs. est. 56c; narrows FY18 adjusted EPS view to 59c-61c from 56c-61c (est. 57c); backs FY18 revenue growth view of low single digits, consensus $272.18M

· Freshpet (FRPT) Q3 EPS 0c/$50.8M vs. est. 4c/$50.35M; sees FY18 revenue to exceed net sales of $190M vs. est. $191.13M

· Fiesta Restaurant (FRGI) Q3 EPS 11c/$174.6M vs. est. 19c/$173.3M; Q3 Pollo Tropical comparable sales +6.5% vs. est. +4.4% and Q3 Taco Cabana comp. sales +12.2% vs. est. +8.40%; says all 14 planned 2018 restaurant openings completed this week

· Inter Parfums (IPAR) Q3 EPS 60c/$177.2M vs. est. 58c/$179.92M; aid, “Jimmy Choo and Coach, two of our largest brands, achieved 19.7% and 40.9% third quarter sales growth, respectively

· Marriott (MAR) Q3 EPS $1.70/$5.05B vs. est. $1.31/$5.37B; sees FY18 EPS $6.15-$6.18 vs. est. $5.88; sees Q4 EPS $1.37-$1.41 vs. est. $1.50; sees Q4 comparable systemwide RevPAR up 2%

· Rent-A-Center (RCII) Q3 EPS 32c/$644.9M vs. est. 28c/$632.7M; 3Q comparable sales +5.7%; not providing guidance due to the pending Vintage Merger

· TrueBlue (TBI) Q3 adjusted EPS 79c/$680.4M vs. est. 78c/$672.38M; sees Q4 EPS 55c-62c on revs $642M-$659M vs. est. 57c/$664.6M

· William Hill revised down expectations for its full-year profits following a government crackdown on the UK gambling sector.

Energy

· Carrizo Oil (CRZO) Q3 EPS 94c vs. est. 79c; sees 4Q oil production 67,700 to 68,700 b/d and sees FY oil production 60,200 to 60,500 b/d; 3Q production 64,627 boe/d; 3Q lease operating expenses $41.0M; raises 2018 production guidance to 60,200-60,500 Boe/d from 58,700-60,100

· Centennial Resource Development (CDEV) Q3 EPS 15c/$234.9M vs. est. 21c/$243.6M; average daily crude oil production increased 71% to 36,027 barrels of oil per day compared to the prior year period

· Itron (ITRI) reports Q3 adjusted EPS $1.13/$596M vs. est. 84c/$605.88M; cuts FY18 adj. EPS view to $2.40-$2.50 from $2.75-$2.90 (est. $2.81) and cuts FY18 revenue view to $2.37B-$2.39B from $2.425B-$2.475B (est. $2.44B)

· Occidental Petroleum (OXY) Q3 core EPS $1.77/$5.22B vs. est. $1.54/$4.58B; 3Q production 681,000 boe/d; chemical pre-tax income for 3Q $321 million

· PDC Energy (PDCE) Q3 EPS 48c vs. est. 64c; 3Q adjusted Ebitda $213.2M vs. Bloomberg est. $224.3M; 3Q production 10.1 million mmboe

· Rosneft increased its third-quarter net profit by 250% year-on-year buoyed by higher oil prices, a weaker rouble and operational gains from increased crude

· SandRidge Permian Trust (PEN) announced that on November 1, 2018, SandRidge Energy sold all of its interests in the oil and natural gas properties underlying the Trust and all of its outstanding Trust units to Avalon Energy

Financials

· American Equity (AEL) Q3 EPS $1.87; 3Q annuity sales $1.0 billion; 3Q policyholder funds under management $50.6 billion

· Brighthouse Financial (BHF) Q3 revs $1.42B; 3Q net investment income $853 million; 3Q loss per share $2.26

Healthcare

· Eli Lilly (LLY) Q3EPS $1.39/$6.06B vs. est. $1.35/$6.04B; raises year EPS view to $5.55-$5.60, up from prior view $5.40-$5.50

· AmerisourceBergen (ABC) Q4 EPS $1.45/$43.3B vs. est. $1.44/$43.26B; raises dividend by 5% and to buyback up to $1B in shares; sees year EPS $6.65-$6.95 vs. est. $7.11

· AVEO Oncology (AVEO) announced positive topline results from the primary analysis of the TIVO-3 trial, the company’s Phase 3 randomized, controlled, multi-center, open-label study to compare tivozanib to sorafenib in 351 subjects with highly refractory advanced or metastatic renal cell carcinoma. The trial met its primary endpoint of demonstrating a statistically significant benefit in progression-free survival

· EyePoint Pharmaceuticals (EYPT) reported an exclusive license agreement for the development and commercialization of EyePoint’s three-year micro insert using the Durasert technology for chronic, non-infectious posterior segment uveitis in the greater China territory

· Insys Therapeutics (INSY) Q3 EPS loss (37c)/$18.3M vs. est. loss (21c)/$23.52M; started a process to review strategic alternatives for its portfolio of opioid-related assets, including SUBSYS fentanyl sublingual spray

· Mallinckrodt (MNK) Q3 EPS $2.10/$640M vs. est. $1.80/$635.89M; raises FY18 adj. EPS view to $7.00-$7.20 from $6.50-$6.90 (est. $6.70)

· Mylan (MYL) Q3 adjusted EPS $1.25/$2.86B vs. est. $1.19/$2.91B; says remain confident in our full year adjusted free cash flow outlook

· Neurocrine Bio (NBIX) Q3 EPS 52c/$151.8M vs. est. 50c/$151.9M; 3Q cash and other $635.3M

· Nevro (NVRO) Q3 EPS loss(37c)/$95.6M vs. est. loss (29c)/$94.28M; sees FY18 revenue at low end of $385M-$390M range, consensus $385.81M

· PTC Therapeutics (PTCT) Q3 EPS loss ($1.06)/$53.6M vs. est. loss (40c)/$70.9M; lowers FY18 revenue view $260M-$280M to $260M-$295M; reiterates Translarna net product revenue for the FY18 $170M-$185M. PTC projects a 5-year compound annual growth rate of 15% for net product revenues, representing continued strong growth year-over-year by increasing penetration in current countries and pursuing opportunities for label expansion

· Tenet (THC) Q3 EPS 29c/$4.49B vs. est. 13c/$4.38B; adjusted EBITDA was $577M in Q3 compared to $507M last year; hospital segment same-hospital net patient revenue grew 6.0%. Admissions decreased 2.1%, adjusted admissions increased 0.3%, and revenue per adjusted admission increased 5.7%.

Industrials & Materials

· FMC Corporation (FMC) Q3 EPS 98c/$1.0B vs. est. 93c/$1B; sees Q4 EPS $1.33-$1.43 vs. est. $1.51 and EPS $5.93-$6.03 vs. est. $6.04

· Kennametal (KEM) Q1 EPS 70c vs. est. 65c; sees FY adjusted EPS $2.90-$3.20 vs. est. $3.15; sees FY capital expenditure $240 million to $260 million

· Manitowoc (MTW) Q3 EPS 20c/$450.1M vs. est. 10c/$452.55M; narrows FY18 revenue view to $1.8B-$1.825B from $1.775B-$1.85B (est. $1.84B); backs FY18 adjusted EBITDA view of $105M-$115M; 3Q backlog $700.2 million

· Matson (MATX) Q3 EPS 97c/$589.4M vs. est. 91c/$563.5M; expects full year Ocean Transportation operating income to be modestly higher than the $126.4 million achieved in 2017

· Mosaic (MOS) Q3 adjusted EPS 75c/$2.928B vs. est. 65c/$2.86B; 3Q phosphates volumes 2.2 million tonnes; Sees FY adjusted EPS $1.80-$2.00 vs. est. $1.77; sees 4Q phosphates sales volumes 1.7 million to 2.0 million tonnes

· Nutrien (NTR) Q3 EPS 47c/$4.03B vs. est. 43c/$3.92B; boosts quarterly dividend; Nutrien raises FY18 adjusted EPS view to $2.60-$2.80 from $2.40-$2.70 and raises FY18 adjusted EBITDA view to $3.85B-$4.05B from $3.7B-$4.0B

· Tronox (TROX) Q3 EPS 17c/$456M vs. est. 18c/$468.62M; reports TiO2 operating cash flow of $148M; TiO2 free cash flow of $120M

Technology, Media & Telecom

· Altice USA (ATUS) Q3 revs $2.42B vs. est. $2.4B; 3Q adj. Ebitda $1.07B vs. est. $1.06B; 3Q residential revenue growth 2.4% y/y, business services revenue growth 6% y/y, advertising revenue growth 37.8% y/y; reiterates 2018 revenue growth forecast of 2.5%-3.0% y/y; reiterates plan to expand adjusted Ebitda and cash flow margins over the medium- to long-term

· Booking Holdings (BKNG) Q3 EPS $37.78/$4.85B vs. est. $38.21/$4.8B; Q3 gross travel bookings of $24.3B, an increase of 12% over a year ago, or approximately 14% on a constant-currency basis; 3Q gross travel bookings +12%, 3Q room nights sold +13.4%; sees 4Q adjusted EPS $18.90 to $19.40 vs. estimate $18.74

· Fabrinet (FN) Q1 adjusted EPS 92c/$377.2M vs. est. 81c/$352.28M; sees Q2 adjusted EPS 91c-94c on revs $380M-$388M vs. est. 84c/$366.07M

· Pandora (P) Q3 adjusted EPS loss (6c)/$417.6M vs. est. loss (11c)/$401.29M; reports Q3 subscription revenue $125.8M, up 49%; says added 784,000 subscribers in Q3; 3Q total listener hours 4.81 billion

· RingCentral (RNG) Q3 EPS 19c/$174M vs. est. 16c/$166.71M; sees Q4 adjusted EPS 17c-19c on revs $179M-$182M vs. est. 17c/$175.61M; raises FY18 adj. EPS view to 71c-73c from 66c-70c and raises FY18 revenue view to $664M-$667M from $649M-$656M

· 2U (TWOU) Q3 adjusted EPS loss (1c)/$107M vs. est. loss (3c)/$106.49M; sees Q4 adjusted EPS 20c-21c on revs $114.4M-$115.3M vs. est. 22c/$114.94M

· SBA Communications (SBAC) Q3 FFO $1.92/$467.2M vs. est. $1.87/$459.21M; adjusted EBITDA for the quarter was $328.1 million, an 8.2% increase over the prior year period; Sees FY AFFO/share $7.42-$7.64 on revs $1.84B-$1.86B vs. est. $7.45/$1.84B

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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