Morning Preview: February 21, 2020

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Early Look

Friday, February 21, 2020





DJ Industrials




S&P 500










U.S. stock futures are sliding as safe haven assets continue to push higher with major averages pulling back from record all-time highs earlier this week for the Nasdaq Composite and S&P 500 index as coronavirus fears once again rears its head. Gold prices are jumping again, up another $16 to $1,635 an ounce (seven-year highs) and Treasury prices are at their best levels of the week as the 10-year yield moves back below 1.50% (and the 30-year yield is once again nearing record lows). In Asian markets, The Nikkei Index dropped -92 points to 23,386, the Shanghai Index inched higher 9-points to 3,039 and the Hang Seng Index fell -300 points to 27,308. In Europe, the German DAX is lower by -20 points to 13,640, while the FTSE 100 is also down around -20 points to 7,420. While stocks have managed to trudge higher over the last few weeks despite constant reminders by companies warning that businesses, facilities and store closures have been affected due to the impact of the virus, the outbreak has not been contained, with new cases popping up in greater quantities in areas outside of China, particularly South Korea which announced more cases overnight. South Korea’s government declared a health emergency in its fourth largest city as 100 new virus cases were reported, while China reported another fall in new virus cases. The issue remains, causing uncertainty for markets this morning.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -12.92 points, or 0.38%, to 3,373.23

·     The Dow Jones Industrial Average fell -128.05 points, or 0.44%, to 29,219.98

·     The Nasdaq Composite dropped -66.21 points, or 0.67%, to 9,750.96

·     The Russell 2000 Index advanced 3.50 points, or 0.21% to 1,696.07


Economic Calendar for Today

·     9:30 AM EST      Markit US Manufacturing PMI, Feb-P…est. 51.5

·     9:30 AM EST      Markit US Services PMI, Feb-P…est. 53.4

·     10:00 AM EST    Existing Home Sales MoM for January…est. 5.45M

·     1:00 PM EST       Baker Hughes Weekly Rig Count


Earnings Calendar:

·     Earnings Before the Open: B, BCPC, CFX, CNK, DE, HMSY


Other Key Events:

·     Consumer Analyst Group of New York (CAGNY) Conference, 2/17-2/21, in Boca Raton, FL

·     Fed’s Kaplan speaks in Dallas, 9:35 AM

·     Fred’s Brainard and Bostic in panel policy forum at 10:15 AM

·     Fed’s Mester and Clarida discuss monetary policy on panel 1:30 PM






WTI Crude















10-Year Note





World News

·     The IHS Markit flash eurozone manufacturing purchasing managers index rose to a 12-month high of 49.1 in February (est.47.5) from 47.9 in January, while the services PMI reached a 2-month high of 52.8 from 52.5 (est. 52.2)

·     The outbreak of the new virus threatens to erase $29 billion of this year’s revenue for global airlines, mostly for Chinese carriers, as travel crashes worldwide, according to the International Air Transport Association

·     Health authorities in South Korea reported 52 new cases of the illness, raising its total to 156, most of them since Wednesday. The spike, especially in and around Daegu city, has raised fears the outbreak is getting out of control in the country.


Sector News Breakdown


·     Boyd Gaming (BYD) Q4 adjusted EPS 50c/$833.1M vs. est. 46c/$825.64M; sees FY20 adjusted EBITDAR $915M-$935M; said newly opened FanDuel Sportsbooks helped attract new customers to our properties in Pennsylvania, Indiana and Iowa

·     Builders FirstSource (BLDR) Q4 EPS 40c vs. est. 35c; reports Q4 revenue $1.76B vs. est. $1.76B; sees company meeting full year 2020 objectives; reported Q4 gross margin 27% vs. 27.1% YoY

·     Casa Systems (CASA) Q4 EPS 15c/$112.9M vs. est. 0c/$105.9M; sees FY20 EPS 0c-12c vs. est. loss (3c); sees FY20 revenue $340M-$360M vs. est. $370.92M

·     Fastly (FSLY) Q4 EPS loss (10c)/$59M vs. est. loss (11c)/$54.83M; reports Dollar-Based Net Expansion Rate of 136%, up from 135% in Q3 2019; Enterprise customer count of 288, up from 274 in Q3 2019; Average enterprise customer spend of approximately $607,000, up from $575,000 in Q3 2019; sees 2020 EPS (43c)-(32c) on revs $255M-$265M vs. est. loss (41c)/$256.55M

·     Fitbit (FIT) Q4 adjusted EPS loss (12c) on revs $502.1M vs. est. 30c and $523.2M; said for Q4 added 2M active users, increasing total to 29.6M, and grew devices sold by 15%; expect to grow our higher margin revenue streams in 2020; Q4 average selling price down -19% YoY to $81

·     Floor & Decor (FND) Q4 adj. EPS 26c vs. est. 21c and revs $527.0M vs. est. $526.96M; Q4 adjusted EBITDA increased 32.1% to $58.8M compared to $44.5M last year; said delivered 5.2% comparable store sales growth, adjusted EBITDA, and adjusted earnings per share that all exceeded our expectation; sees FY20 GAAP EPS $1.34-$1.41 vs. est. $1.34 and guides FY20 revenue $2.485B-$2.51B vs. est. $2.53B

·     Hannon Armstrong (HASI) Q4 core EPS of 40 cents beats the average analyst estimate of 37c; boosts quarterly dividend to 34c; Q4 total revenue of $38.3M declined from $39.7M in the year-ago quarter

·     Lululemon Athletica Inc. (LULU) said the majority of its 38 stores in China have been closed “for a period of time” since Feb. 3, as a result of the coronavirus outbreak. The company said some stores are operation in a reduced schedule, while the online business has continued to operate

·     National CineMedia (NCMI) 4Q adj EPS $0.24 vs. est. $0.21 on revs $147.2Mm vs. est. $140.3Mm; guides 2020 revs $450-465Mm vs. est. $452.5Mm

·     Texas Roadhouse (TXRH) 4Q EPS $0.61 vs. est. $0.52, co-owned comps +4.4% vs. 5.6% YoY;, sees 2020 CAPEX $210-220Mm vs. prior $190-200Mm; raises dividend



·     Cabot Oil (COG) 4Q adjusted EPS 30c vs. est. 31c; sees 1Q production 2,350 to 2,400 mmcfe/d and Q4 production 2,457 mmcfe/d, +9.5% YoY; said 4Q cash flow from operations $263.0 million, -17% YoY and 4Q capital expenditure $167.7 million, -32% YoY

·     DMC Global (BOOM) Q4 EPS 65c on revs $86.37M vs. est. 45c and $83.61M; guides lower as sees Q1 EPS 50c-55c below est. 79c and sees Q1 revenue $80M-$84M, below consensus $97.32M

·     First Solar (FSLR) Q4 EPS $1.48/$1.4B vs. est. $2.72/$1.75B; sees 2020 EPS $3.25-$3.75 vs. est. $3.56 and sees 2020 sales $2.7B-$2.9B vs. est. $3.37B; announced that it, working together with advisors, is reviewing options for its U.S. project development business



·     CubeSmart (CUBE) 4Q adj FFO $0.42 vs. est. $0.42; guides 1Q adj FFO $0.40-0.41 vs. est. $0.41, sees 2020 adj FFO $1.67-1.71 vs. est. $1.72

·     Vici Properties (VICI) 4Q FFO $0.21 vs. est. $0.32 on revs $237.5Mm vs. est. $236.2Mm; guides 2020 FFO $1.30-1.35 vs. est. $1.66



·     Aerie Pharma (AERI) rises 19%; Q4 product revenue of $24.7M tops highest estimate of $21.2M, while Q4 net loss of $55.1M compares to $51.5M net loss YoY and said expects 2020 cash use between $110m-$120m; sees year revs $100M-$110M vs. est. $101M

·     BioMarin Pharmaceutical Inc. (BMRN) said the FDA accepted for priority review the biologics license application for the company’s investigational AAV5 gene therapy, valoctocogene roxaparvovec, for adults with hemophilia A

·     eHealth (EHTH) Q4 EPS $4.13 on revs $301.7M vs. est. $2.43 and $234.87M; guides year EPS $3.56-$4.09 vs. est. $3.01

·     Emergent Biosciences (EBS) 4Q adj EPS $1.57 vs. est. $1.73 on revs $360.4Mm vs. est. $358.4Mm; guides 1Q revs $190-215Mm vs. est. $270.2Mm; still sees 2020 revs $1.18-1.28B vs. est. $1.21B

·     NuVasive (NUVA) Q4 non-GAAP EPS 73c/$310.4M vs. est. 64c/$304.78M; sees 2020 adjusted EPS $2.55-$2.65 vs. est. $2.60; Q4 adjusted gross margin 73.2% vs. 70.1% YoY vs. estimate 72.6%

·     Puma Biotechnology (PBYI) shares fell -10%; Q4 adjusted EPS 1c vs. est. loss (48c) and revenue $62.9M vs. est. $59.96M; Q4 cash and equivalents fell -45% YoY to $60M while operating expenses fell -20% YoY to $71.6M


Industrials & Materials

·     Deere (DE) Q1 EPS $1.63 on sales $6.53B (down -5.9% YoY) vs. est. $1.23 and $6.28B; still sees FY net income $2.7B-$3.1B vs. est. $2.88B

·     Century Aluminum (CENX) 4Q adj EPS loss (9c) vs. est. loss (15c) on net sales $435.5Mm vs. est. $426.7Mm

·     Livent (LTHM) Q4 adjusted EPS 5c (in-line) on revenue $78M vs. est. $78.8M; sees FY20 adjusted EPS 18c-31c below est. 38c and sees FY20 revenue $375M-$425M vs. est. $459.99M saying guidance is based on the company’s expected volume growth, on a total LCE basis, of roughly 30% versus 2019


Technology, Media & Telecom

·     Dropbox (DBX) shares rise 14%; Q4 adj EPS 16c vs. est. 14c; to buy back up to $600M of stock; closed the year with more than $1.6 billion in revenue, over 450,000 Dropbox business teams

·     HP Inc. (HPQ), fighting off a hostile acquisition bid by Xerox Holdings Corp. (XRX), adopted a shareholder rights plan that would make the takeover more difficult to carry out. If a person or group acquires 20% or more of HP’s stock, the plan would let other shareholders boost their voting power and dividends, HP said Thursday in a statement.

·     Rogers Corp. (ROG) 4Q adj EPS $1.14 vs est $1.06 on net sales $193.8Mm vs est $205Mm; guides 1Q adj EPS $0.75-0.95 vs est $1.17, sees 1Q net sales $185-200MM vs est $214.3Mm

·     SBA Communications (SBAC) 4Q AFFO $2.18 vs. est. $2.15 on revs $513.7Mm vs. est. $506.4Mm; guides 2020 AFFO $9.07-9.47 vs. est. $9.31

·     TrueCar (TRUE) Q4 EPS loss (1c) on revs $89.7M vs. est. loss (4c) and $88M; sees 2020 revenue $335M-$355M vs. est. $368.6M; sees 1Q revenue $87M-$89M vs. est. $87M; 4Q units sold 248,037 as average monthly unique visitors 7.7 million and average revenue per transaction $342

·     Universal Display (OLED) 4Q EPS 56c on revs $101.7M vs. est. 76c and $100.9M; sees 2020 revenue about $430M-$470M vs. est. $496.0M; raises quarterly dividend

·     Zscaler (ZS) shares fell -8%; 2Q adj EPS $0.09 vs. est. $0.03 on revs $101.3Mm vs. est. $99Mm; guides FY adj EPS $0.14-0.16 (prior $0.13-0.15) vs. est. $0.15; guides 3Q adj EPS $0.01-0.03 vs. est. $0.04, sees 3Q revs $105-107Mm vs. est. $104.4Mm


Market commentary provided by Catena Media Financials US, LLC, 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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