Early Look

Tuesday, April 27, 2021

Futures	Up/Down	%	Last
Dow	6.00	0.02%	33,883
S&P 500	1.25	0.04%	4,181
Nasdaq	6.50	0.05%	14,018

 

 

Stock futures edging slightly higher a day after solid corporate earnings reports pushed the S&P 500 to another record high, with results from TSLA, MMM, UPS, LLY, GE among those out last night/early this morning moving markets. According to FactSet, a quarter of the companies in the S&P 500 have so far reported first-quarter results, and 84% of them have topped analysts’ expectations. That is above the 77% one-year average and a record high, FactSet said, since it started tracking the data in 2008. Stocks surged again on Monday as the S&P 500 and Nasdaq each closed at record highs, led by strength in heavyweight tech giants ahead of a massive week of earnings (over 30% of the S&P 500 reports this week), highlighted by Tesla (TSLA) results overnight which came in above expectations. The Nasdaq’s record high close confirmed the end of an 11% correction in the index that began after its previous record high close on Feb. 12, with the index closing at a low on March 8. Reuters noted that companies that constitute about 40% of the S&P 500’s market capitalization report from Tuesday through Thursday, including Microsoft Corp, Google parent Alphabet Inc. Apple Inc., and Facebook Inc., as tech dominates earnings on the week. The other highlight on the week is the 2-day Federal Reserve monetary policy meeting which kicks off today and concludes Wednesday afternoon, with no changes expected on rates, but Wall Street will be paying close attention to indications of when the Fed might begin to trim its $120 billion in monthly asset purchases and its outlook on inflation. Also on investors’ radar is a reading of first-quarter gross domestic product (GDP) later this week. Cryptocurrency and blockchain-related firms surged on Monday, as Bitcoin snapped five straight days of losses. In Asian markets, The Nikkei Index dropped -134 points to 28,991, the Shanghai Index edged higher by a point to 3,442 and the Hang Seng Index dipped -11 points to 28,941. In Europe, the German DAX is down around -50 points to 15,250, while the FTSE 100 is down a few points to 6,955.

Market Closing Prices Yesterday

·     The S&P 500 Index gained 7.45 points, or 0.18%, to 4,187.62

·     The Dow Jones Industrial Average fell -61.92 points, or 0.18%, to 33,981.57

·     The Nasdaq Composite jumped 121.97 points, or 0.87%, to 14,138.78

·     The Russell 2000 Index advanced 26.15 points, or 1.15% to 2,298.01

 

Events Calendar for Today

·     7:45 AM ET         ICSC Weekly Retail Sales

·     8:55 AM ET         Johnson/Redbook Weekly Sales

·     9:00 AM EST      CaseShiller 20 City Index for February

·     10:00 AM EST    Consumer Confidence for April

·     10:00 AM EST    Richmond Fed Index for April

·     10:30 AM EST    Dallas Fed Manufacturing for April

·     1:00 PM EST       U.S. to sell $62 bln 7-year notes

·     4:30 PM ET         API Weekly Inventory Data

 

Earnings Calendar:

·     Earnings Before the Open: AAN, ABG, ADM, AWI, CNC, CROX, DTE, ECL, ENTG, FCF, FELE, FISV, GE, GLW, GPK, HAS, HEES, HUBB, IVZ, JBLU, LECO, LLY, MMC, MMM, MSCI, PCAR, PHM, PII, PJT, PROV, ROP, RTN, RTX, SCL, SF, SHW, SSTK, ST, SYF, TRU, UPS, WM

·     Earnings After the Close: AAT, AMD, AMGN, APAM, ARAY, ATEN, ATNI, BXP, BYD, CALX, CASH, CHE, CHRW, COF, CSGP, CYBE, EIX, EGP, EQR, ENPH, ESS, FEYE, FFIV, GOOGL, HA, HIW, HVT, IEX, ILMN, IRBT, JNPR, MANH, MATX, MDLZ, MSFT, MXIM, NAVI, NCR, NOV, OKE, OLN, PFG, PINS, QTS, RRD, SBUX, SYK, TENB, TER, TXN, UDR, USNA, V, WSBC

 

 

Macro	Up/Down	Last
Nymex	0.47	62.389
Brent	0.41	66.06
Gold	-0.50	1,780.90
EUR/USD	-0.0015	1.2071
JPY/USD	0.23	108.31
10-Year Note	+0.011	1.581%

 

 

World News

·     Bank of Japan Leaves interest rates unchanged at -0.1%, leaves 10y JGB yield target unchanged ~ zero, leaves ETF cap ~ 12T yen; revised up economic growth f/c’s , median real GDP for FY 2021 4% vs 3.9% previous, FY 2022 GDP 2.4% vs 1.8% previous, FY 2023 GDP 1.3%; lowered their fiscal year 2021 core CPI f/c to 0.1% from 0.5%

·     Germany increased their 2021 economic growth f/c to 3.5% vs 3.0% prior f/c; 2022 GDP f/c 3.6%; Germany will return to pre C-19 lvl’s in 2022 at the latest; CPI will increase to 2.2% this year & then fall to 1.5% next year

 

Sector News Breakdown

Consumer

·     Tesla Motors (TSLA) Q1 adj EPS 93c vs. est. 80c; Q1 revs $10.38B vs. est. $10.29B; qtrly automotive gross margin 26.5% vs 25.5% reported last year; said 1st deliveries of the new Model S should start very shortly, model y production rate in shanghai continues to improve quickly; qtrly automotive rev of which regulatory credits $518 mln vs $354 mln reported last year; quarter-end cash and cash equivalents decreased to $17.1 bln in Q1

·     Hasbro (HAS) announced that it has entered into a definitive agreement to sell Entertainment One Music for an aggregate price of $385M in cash; 1Q adj EPS $1.00 vs est $0.65 on revs $1.11B vs est $1.17B, qtrly franchise brands revs $491.5Mm, qtrly partner brands revs $188Mm; continues to target FY double-digit revs growth vs +11% est

·     Polaris (PII) Q1 adj EPS $2.30 vs. est. $1.59; Q1 revenue $1.95B vs. est. $1.86B; Q1 North American retail sales increased 70% in Q1; said market share improved for all segments during the quarter; ORV, snowmobiles, motorcycles and boats; raises FY21 adjusted EPS view to $9.00-$9.25 from $8.45-$8.75 (est. $8.88) and boosts FY21 revenue view to $8.3B-$8.5B from $7.95B-$8.15B (est. $8.12B)

·     Lyft (LYFT) sells self-driving vehicle unit to Toyota subsidiary for $550M

·     Heidrick & Struggles (HSII) Q1 adj EPS 86c vs. est. 53c; Q1 revenue $193.7M vs. est. $163.47M; sees Q2 revenue $215M-$225M well above the consensus $165.59M

·     TrueBlue (inc. (TBI) 1Q adj EPS $0.25 vs. est. ($0.06) on revs $459Mm vs. est. $450.3Mm

·     TriNet Group (TNET) 1Q adj EPS $1.66 vs. est. $1.30 on revs $1.1B; guides 2Q adj EPS $0.70-0.86 vs. est. $0.86, sees 2Q revs +12-14%

 

Energy

·     Range Resources (RRC) Q1 adjusted EPS 30c vs. est. 25c; Q1 revenue $626M vs. est. $553.63M; Avg oil production 8,422 b/d, -12% y/y, estimate 6,940; NGL production in B/D 97,144, -8.2% y/y, estimate 97,000

 

Financials

·     Synchrony (SYF) Q1 EPS $1.73 vs. est. $1.38; Q1 interest and fees on loans decreased 14% to $3.7B; purchase volume increased 8% to $34.7B. Average active accounts decreased 8% to 66.3M

·     TransUnion (TRU) 1Q adj EPS $0.91 vs. est. $0.80 on revs $745Mm vs. est. $703.8Mm; guides 2Q revs $744-754Mm vs. est. $691.6Mm, sees 2Q adj EPS $0.89-0.92 vs. est. $0.79; guides FY revs $2.949-2.992B vs. est. $2.86B

·     Ameriprise (AMP) 1Q adj EPS $5.43 vs. est. $4.69, adj net op revs $3.3B vs. est. $3.25B; raises qtrly div 9% to $1.13/share

·     Alexandria Real Estate (ARE) Q1 FFO $1.91 vs. est. $1.85; Q1 revenue $479.8M vs. est. $376.56M; cuts 2021 view to eps $1.58-eps $1.68 and cuts 2021 view to FFO $7.07-$7.17

·     Cathay General (CATY) Q1 EPS 92c vs. est. 77c; Q1 reversal of provisions for credit losses of $13.6M compared to a reversal for loan losses of $5.0M for the Q4 of FY20; Q1 NII rose 8 bps to 3.2% from the Q4 and saw reversal of provisions for credit losses of $13.6M in the Q1

·     Heartland Financial (HTLF) Q1 EPS $1.20 vs. est. $1.10; Q1 net interest income $139.6M vs. $112.5M YoY, up 24%; efficiency ratio (non-GAAP)1 of 56.61% compared to 61.82% for the first quarter of 2020

·     Weingarten Realty (WRI) Q1 FFO 48c vs. est. 41c; revenue $121.4M vs. est. $104.43M; reports Q1 occupancy 93.0%; not providing guidance

 

Healthcare

·     Eli Lilly (LLY) 1Q adj EPS $1.87 vs. est. $2.13 on revs $6.806B vs. est. $6.988B, 1Q Trulicity revs $1.452B +18% yr/yr; guides FY adj EPS $7.80-8.00 vs. est. $8.32, sees FY revs $26.6-27.6B vs. est. $27.7B, sees mid-single-digit price declines globally for FY

·     Centene (CNC) Q1 adj EPS $1.63 vs. est. $1.59; Q1 revenue $29.98B vs. est. $29.5B; raises FY21 adjusted EPS view to $5.05-$5.35 from $5.00-$5.30 (est. $5.21) and boosts FY21 revenue view to $120.1B-$122.1B from $116.1B-$118.1B (est. $118.01B); March 31, 2021 managed care membership of 25.1 mln, an increase of 1.3 mln members, or 5%

·     Illumina (ILMN), presenting today at 5 p.m. ET, will face Wall Street for the first time after the FTC sued to block its proposed merger with the cancer testing firm Grail. That suit marks the second time in about 18 months that federal regulators have balked at Illumina’s efforts to expand by acquisition – STATNews

·     HealthStream (HSTM) raises FY21 revenue view to $245M-$255M from $242.5M-$252.5M (est. $246.13M); raises FY21 adjusted EBITDA view to $40M-$44M from $34.0M-$38.3M – follows Q1 top and bottom-line beats

·     Masimo (MASI) raises FY21 EPS view to $3.83 from $3.80 (est. $3.81) and boosts FY21 revenue view to $1.205B from $1.2B (est. $1.2B); Q1 adjusted EPS 90c vs. est. 88c; Q1 product revenue $299.04M, consensus $295.22M

·     Medpace Holdings (MEDP) Q1 EPS $1.14 vs. est. $1.00; Q1 revenue $260M vs. est. $265.28M; boosts FY21 EPS view to $4.24-$4.42 from $4.08-$4.50 (est. $4.37) and raises FY21 revenue view to $1.09B-$1.15B from $1.075B-$1.175B

·     Universal Health (UHS) Q1 EPS $2.44 vs. est. $2.27; Q1 revenue $3.01B vs. est. $2.94B; resumes stock purchase program; said Q1 adjusted admissions, at our behavioral health care facilities on a same facility basis, decreased 4.9% and adjusted patient days decreased 3.8%, as compared to the first quarter of 2020.

 

Industrials & Materials

·     General Electric (GE) Q1 adj EPS 3c vs. est. 1c; Q1 revenue $17.1B vs. est. $17.52B; Q1 total orders $17B. Reports Industrial organic revenues $16B, industrial profit margin of 2.3%; still sees FY21 adjusted EPS 15c-25c vs. est. 24c; sees FY Industrial free cash flow $2.5B-$4.5B, with GE Industrial organic revenue down low single digits

·     3M (MMM) Q1 adj EPS $2.77 vs. est. $2.29; Q1 revenue $8.9B vs. est. $8.47B; sees FY sales up 5%-8% and sees year EPS $9.20-$9.70 vs. est. $9.61; qtrly safety and industrial sales of $3.3 bln, up 13.7%; qtrly transportation and electronics sales of $2.5 bln, up 13.1% and qtrly health care sales of $2.2 bln, up 6.8%

·     UPS (UPS) Q1 adj EPS $2.77 vs. est. $1.72; Q1 revenue $22.9B vs. est. $20.49B; not providing FY21 earnings, revenue guidance; U.S. domestic revenue rose 22% to $14.01 billion, above the FactSet consensus of $12.93 billion; international revenue grew 23% to $4.61 billion, beating expectations of $4.13 billion; and supply chain and freight revenue increased 34% to $4.29 billion, beating expectations of $3.90 billion

·     Axalta Coating (AXTA) Q1 adj EPS 50c vs. est. 42c; Q1 sales rose 8% to $1.06B vs. est. $1.03B; sees semiconductor chip shortage impact on light vehicle to continue throughout Q2; sees 2021 net sales up 20% – 22% and sees 2021 adjusted diluted eps: $1.95 – $2.10 vs. est. $1.89; said constrained supply chain impact persists in early q2 on industrial volumes

·     Covenant Logistics (CVLG) 1Q adj EPS $0.56 vs. est. $0.36 on revs $154Mm vs. est. $206.2Mm; says expect steady incremental progress on dedicated segments margins over remainder of 2021, says over time expect managed freight segment’s margin to gravitate toward mid-single digits

·     Hydrofarm Holdings (HYFM) enters into agreement to acquire premium nutrient maker Heavy 16, guides Q1 sales $109M-$111M vs. est. $104.9M; said will fund full transaction consideration of up to $78.1M; expects transaction to be accretive to earnings in 2021 and beyond; says will fund transaction using combination of cash, co’s existing credit facility and $15.0M in newly issued stock

·     PotlatchDeltic (PCH) Q1 adjusted EPS $1.94 vs. est. $1.76; Q1 revenue $354.2M vs. est. $340.73M; generated record total adjusted Ebitda of $195.0 million and total adjusted Ebitda margin of 55%; record wood products adjusted Ebitda of $125.5 million driven by historic lumber prices; Timberlands adjusted Ebitda was a record and due to leveraged Idaho lumber index pricing

·     PQ Group (PQG) to sell 12.5M shares of common stock for holders

 

Technology, Media & Telecom

·     NXP Semiconductors (NXPI) Q1 EPS $1.25 vs. est. $2.21; Q1 revenue $2.57B vs. est. $2.56B; Q1 cash flow from operations was $732M, with net capex investments of $150M, resulting in non-GAAP free cash flow of $582M; guides 2Q revs $2.5-2.64B vs .est. $2.56B; sees 2Q adj op income $768-841Mm vs. est. $842Mm

·     MKS Instruments (MKSI) Q1 EPS $2.56 vs. est. $2.20; q1 revenue $694M vs. est. $652.2M; sees Q1 EBP about $2.92 vs. est. $2.23. sees Q2 revs about $740M vs. est. $654.4M

·     Cadence Design (CDNS) 1Q EPS $0.67 vs. est. $0.75 on revs $736Mm vs. est. $717.8Mm; guides 2Q revs $705-725Mm vs. est. $722.7Mm

·     SBA Communications (SBAC) sees FY adj Ebitda $1.57b to $1.59b, saw $1.56b to $1.58b; sees FY rev. $2.22b to $2.26b, saw $2.17b to $2.21b; sees FY AFFO $10.15 to $10.57, saw $10 to $10.41

·     SS&C (SSNC) Q1 adjusted EPS $1.18 vs. est. $1.10; Q1 adj revenue $1.24B vs. est. $1.19B; sees Q2 adjusted EPS $1.10-$1.16 vs. est. $1.11; sees Q2 adjusted revenue $1.19B-$1.23B vs. est. $1.18B

·     Snap (SNAP) offers to sell $1.0B in convertible senior notes due 2027