Mid-Morning Look: February 12, 2021

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Mid-Morning Look

Friday, February 12, 2021






DJ Industrials




S&P 500








Russell 2000






Overnight futures pointed to a weaker open, but as remains the case, investors take any-and-all opportunities to “buy the dip” with today being no exception, as stocks bounce back to the flatline. U.S. markets remain at or near all-time highs (for two weeks now), as the same catalysts continue to provide hope and optimism for global stock markets including additional stimulus measures (though now a month in and not much closer to a final deal), strong earnings this quarter (with about 80% S&P done), further vaccine rollout, improving economic data, a dovish Fed keeping rates low and investor FOMO (fear of missing out, chasing stocks higher by the day). The factors that could potentially weigh (but have not mattered to this point), increasing tensions with China with Biden, surging stock multiples and valuations, rising Treasury yields and a possible increase in Covid counts with new variant. Markets steady heading into the 3-day President Day holiday weekend with semiconductors again leading the charge at new highs (SOX above 3,200), while retailers see profit taking and energy rises with oil prices on track to post healthy gains this week. Dow component Disney (DIS) shares slide after hitting record highs earlier following a stellar quarter highlighted by surging Disney+ subscriptions.


Economic Data

·     University of Michigan surveys of consumers sentiment prelim Feb 76.2 (consensus 80.8) vs final Jan 79.0; the expectations index prelim Feb 69.8 (consensus 75.7) vs. final Jan 74.0 and the current conditions index prelim Feb 86.2 (consensus 88.0) vs final Jan 86.7







WTI Crude















10-Year Note





Sector Movers Today

·     Metals & Materials; in chemicals, Bernstein noted global fertilizer prices continue to rise, especially in the U.S. and increase earnings estimates for all three fertilizer companies (NTR, MOS), particularly MOS who benefits from rapidly rising US phosphate and potash prices; in lithium, ALB upgraded to buy from neutral with $184 tgt and SQM upgraded to buy with $62 tgt (up from $55), turning more bullish due to: EV momentum in China and Europe, the dissipation of excess lithium inventory, and announcements by OEMs like GM to go all-electric by 2035; in steel space, Cowen said they expect above Street NUE 2Q guidance, a miss from X and above consensus F3Q CMC results. NUE is our top pick

·     Internet; GOOGL no longer a top pick at Citigroup saying street ests seem to high, but still remain bullish – notes while COVID has accelerated the digital ad migration, Street estimates for the next three years seem too high to us; in online travel, EXPE reported 4Q results with bookings and room night growth roughly in line with both Street and 3Q growth rates, as the recovery in travel was halted due to the second wave of COVID in late October. Lodging bookings did improve during the holiday period and ended January down high 40% vs. down 60% in 4Q; GDDY reported 4Q results ahead of expectations with 1Q21 and FY bookings, revenue, and FCF ahead of consensus, and announced the retirement of CFO Ray Winborne; Coupang Inc., the South Korean e-commerce giant backed by Japan’s SoftBank Group Corp., filed for a U.S. initial public offering

·     Pharma movers; cannabis volatility continues, with more profit taking after big gains earlier in the week after being the latest “buy” target for Reddit forums; ACB sales and EBITDA for the Dec qtr were below the FactSet consensus; NK and partner ImmunityBio on Thursday aftermarket announced that the U.S. FDA had authorized the expansion of an early-stage study testing their T-cell COVID-19 vaccine; PFE and BNTX to supply the united states with 100 million additional doses of covid-19 vaccine, U.S. government exercises option to bring total supply to 300 mln doses, enabling vaccinations for 150 mln people – U.S. government will pay $1.95 bln for additional 100 mln doses; DNLI said its experimental treatment, DNL310, shows effectiveness in helping patients with Hunter syndrome in an ongoing early-stage trial saying the drug was well-tolerated and showed robust and durable biomarker response

·     Auto sector; TSLA must recall around 12,300 Model X cars worldwide due to car body moldings problems, Germany’s motor vehicle authority (KBA) said on its website, saying the recall affects cars built in 2015 and 2016 and added there was a risk that the molding could fall off the vehicle; Ford (F) was reiterated at OW by JPMorgan as the stock is trading in-line with history despite several significant positives in the name and after their fireside chat with the company’s senior leaders highlighted product-driven profit growth and EV efforts; Stephens upgraded CPRT to OW and upped their pt to $140 from $122, saying the stock’s recent underperformance provides an attractive entry point; Morgan Stanley issued initiations on EV stocks with FSR at OW with a $27 pt as their EV sleeper pick due to its design-centered business model, QS also at OW with a $70 pt as the company’s development of state cell tech over the past decade positions it well to supply US-based EV players, RIDE at UW with a $18 pt as it faces competitive pressures in EV pickups from startups and legacy OEMs with far greater scale and distribution advantages, and RMO at UW with a $12 pt as it sits in the middle/downstream part of the value chain of batteries and does not appear to be involved in vehicle design or cell technology; AXL reported Q4 Adj EPS 51c (est. 26c, 13c YoY) on sales $1.44B (est. $1.36B) and see FY21 sales $5.3-5.5B vs est. $5.49B



·     DIS ; posts top and bottom line beat and across most of its segments and surpassed consensus estimates for Disney+ subscribers in the quarter, coming in at 94.9m vs. consensus of 92m, along with outperformance primarily driven by Parks and Consumer Products

·     COHR +12%; IIVI joins the fray in the bidding war for rival COHR, making a $260 cash/stock buyout offer for the laser tech co valued at about $6.36B ($130 cash and rest in stock). MKSI earlier this week offered to acquire COHR in deal valued at about $5.8B ($240 per share), which had topped a previously agreed offer from LITE at $5.7B ($220 per share). With a $10.4B market cap, IIVI is the largest of the bidders https://on.mktw.net/2Ze35Bq

·     HUBS +18%; rises after better-than-expected 4Q results, which saw 41.5% Y/Y growth in customer count drive 43% growth in billings and EPS of $0.40 nearly double the $0.23 estimate

·     ILMN +11%; posted Q4 rev above analysts’ estimates and said it expects year-over-year revenue growth of 17%-20% in 2021 (as several analysts lift tgt price)

·     MHK +9%; after Q4 results easily topping consensus with upbeat guidance (Q4 adj EPS $3.54 vs. est. $2.87; Q4 revenue $2.64B vs. est. $2.49B; sees Q1 EPS $2.69-$2.79 vs. est. $2.11)

·     MOS +4%; following positive Bernstein comments earlier – Global fertilizer prices continue to rise, especially in the US. We increase earnings estimates for all three fertilizer companies, particularly MOS who benefits from rapidly rising US phosphate and potash prices

·     NK +18%; and partner ImmunityBio on Thursday aftermarket announced that the U.S. FDA had authorized the expansion of an early-stage study testing their T-cell COVID-19 vaccine

·     TWOU +11%; easily beat expectations with sharp revenue gains thanks to alternative credential segment boosted after Trilogy acquisition.

·     TWTR +3%; adding to weekly gains following better earnings mid-week



·     DVA 4%; noted higher mortality and COVID related expenses that drove a 4Q miss, with EPS of $1.67 below the $1.87 consensus, which was captured in year guidance

·     FOLD -22%; after saying last night its therapy, AT-GAA, to treat Pompe disease did not meet main goal of statistical significance for superiority in a 6-minute walk test in a late-stage trial – but the co said patients taking AT-GAA outperformed with those treated with standard of care by 14 meters in the trial

·     LLNW -23%; downgraded at Raymond James and Davidson on limited visibility after top and bottom-line miss (Q4 adj EPS loss (3c) vs. est. 2c; Q4 revenue $55.4M vs. est. $61.27M)

·     NET -6%; as 4Q results beat cons across most major metrics but prudent guidance for 1Q & 2021 weren’t enough for investors with great expectations as per Jefferies

·     NWL -6%; Q4 EPS of 56c beat the 48c est on better revs $2.69B vs. est. $2.63B, but sees 2021 profit between $1.55-$1.65, missing the $1.68 est, and sales also miss at $9.5B-$9.7B view (est. $9.73b) – JPM noted two out of NWL’s five segments positively surprising and three disappointing

·     SPCE -8%; after providing an update on its test flight – said “we have been progressing through our pre-flight preparations and, during that process, we have decided to allow more time for technical checks. We are working to identify the next flight opportunity.”

·     SVMK -11%; as guidance for the online survey company’s March quarter came in short of analyst estimates (sees revenue of $99.5M-$101.5M, falling shy of the Street consensus at $104.9M and for the year sees sales of $436M-$443M vs. est. at $450M



·     Applied Therapeutics (APLT) 3M share Secondary priced at $23.00

·     BridgeBio (BBIO) 3M share Spot Secondary priced at $62.50

·     Codiak (CODK) 2.75M share Secondary priced at $21.00

·     CollPlant (CLGN) 2M share Secondary priced at $17.50

·     Conformis (CFMS) 81M share Spot Secondary priced at $1.05

·     Decibel Therapeutics (DBTX) 7.062M share IPO priced at $18.00

·     Infinity Pharmaceuticals (INFI) 21M share Spot Secondary priced at $3.80

·     Longeveron (LGVN) 2.66M share IPO priced at $10.00

·     Neximmune (NEXI) 6.471M share IPO priced at $17.00

·     Oncorus (ONCR) 3M share Secondary priced at $19.00

·     Protalix BioTherapeutics (PLX) 7.609M share Secondary priced at $4.60

·     SilverCrest Metals (SILV) 13.05M share Spot Secondary priced at $9.20

·     SQZ Biotechnologies (SQZ) 3M share Secondary priced at $20.00

·     Talis Biomedical (TLIS) 13.8M share IPO priced at $16.00

·     Travere Therapeutics (TVTX) 6.55M share Secondary priced at $26.75

·     Urban-Gro (UGRO) 5.4M share Spot Secondary priced at $10.00


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.

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