Early Look

Thursday, October 28, 2021

Futures	Up/Down	%	Last
Dow	54.00	0.15%	35,443
S&P 500	11.25	0.26%	4,556
Nasdaq	74.50	0.47%	15.662

 

 

U.S. futures are looking at a rebound after a late day swoon erased record gains for stocks, as markets again await another earnings barrage, with yesterday and today the two busiest days of the quarter. Drama out of Washington D.C. also adding to the volatility as investors remain hopeful on a spending bill. As for Wednesday, a midday all-time high for the Nasdaq 100 was marred by a late day sell-off in U.S. stocks, as the S&P 500 and Dow each retreated from records set just the previous day, led by weakness in energy stocks as oil prices tumbled from 7-year highs and long-dated Treasury yields also slumped, with the 30-year falling as much as 10bps below 2%. Corporate earnings have generally been better-than-expected, but constant reminders about rising costs, supply-chain issues, and labor shortages on conference calls brings into question the strength of markets going forward. Couple that with expectations for the Fed to begin its asset tapering plans in November and chances of interest rate hikes in mid-2022 to help prevent inflation getting further out of hand remains a market concern. Shares of Dow components McDonald’s, Coca-Cola and Microsoft rallied behind strong earnings. In fact, the Nasdaq outperformed behind large cap winners (TSLA, GOOGL MSFT, AMZN), though breadth was decisively negative and SmallCaps plunged with the Russell 200 falling nearly 2%. President Biden’s infrastructure and social-spending plans still remain “up-in-the-air” which also adds uncertainty. In Asian markets, The Nikkei Index fell about 1% to 28,820, the Shanghai Index slipped -1.23% to 3.518 and the Hang Seng Index dipped about -0.25% to 25,555. In Europe, the German DAX is down -0.15% at 15,680, while the FTSE 100 is also down roughly -0.2% at 7,240.

Market Closing Prices Yesterday

·     The S&P 500 Index dropped -23.11 points, or 0.51%, to 4,551.68

·     The Dow Jones Industrial Average fell -266.19 points, or 0.74%, to 35,490.69

·     The Nasdaq Composite little changed, or 0.00%, to 15,235.84

·     The Russell 2000 Index declined -43.58 points, or 1.90% to 2,252.49

 

Events Calendar for Today

·     8:30 AM ET         Weekly Jobless Claims…est. 290K

·     8:30 AM EST      Continuing Claims…est. 2.415M

·     8:30 AM ET         Gross Domestic Product (GDP) for Q3-A…est. 2.7% (down from prior)

·     8:30 AM ET         GDP Consumer Spending for Q3-A…prior month 12.0%

·     8:30 AM ET         GDP Price Deflator for Q3…est. 5.5%

·     8:30 AM ET         Core-PCE Prices Advance for Q3…est. 4.5%

·     10:00 AM ET      Pending Home Sales MoM for September…est. 0%

·     10:30 AM ET      Weekly EIA Natural Gas Inventory Data

·     11:00 AM ET      Kansas City Fed Manufacturing for October

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

 

Earnings Calendar:

·     Earnings Before the Open: AB, ABMD, ADS, AEP, AGCO, ALNY, AMT, AOS, ATI, BAX, BC, BSIG, BTU, CARR, CAR, CBRE, CBZ, CFR, CG, CMCO, CMCSA, CMS, CNX, COLB, CONE, COOP, COR, CWT, DBD, EME, EXP, FCN, GPI, GVA, HBAN, HSY, IBP, ICE, ITW, KBR, KDP, KEX, LECO, LH, LKQ, MA, MCO, MDD, MO, MRK, NEM, NLSN, NOC, OSK, OSIS, OSTK, PBF, RGEN, RLGY, RS, SAH, SAIA, SNDR, SWI, SWK, TAP, TFX, TPX, TREE, TW, TXT, VC, VLY, WEX, WST, XEL, YUM

·     Earnings After the Close: AAPL, ABCB, ACHC, AGL, AMZN, ASPN, ATEN, ATR, AVT, AX, BIO, BY, CDNA, CHE, COHU, COLM, CPT, CUZ, CWST, DECK, DVA, DXCM, EB, EMN, FISI, FTDR, FTV, GILD, HIG, HUBG, LOPE, LPLA, LTC, NGRC, MHK, MMSI, MPWR, MSTR, NATI, NXGN, PEB, POWI, PSB, PTCT, QUMU, RMD, RSG, SBCF, SBUX, SGEN, SKX, SKYW, SM, SPNE, SSNC, SYK, TEX, TXRH, VCRA, VRSN, WDC, WRAP, WRE, X, ZEN

 

 

Macro	Up/Down	Last
Nymex	-1.61	81.05
Brent	-1.37	83.21
Gold	-2.10	1,801.20
EUR/USD	-0.0006	1.1598
JPY/USD	-0.23	113.57
10-Year Note	+0.012	1.541%

 

 

Sector News Breakdown

Consumer

·     eBay Inc. (EBAY) 3Q adj EPS $0.90 vs est. $0.89 on revs $2.5B vs est. $2.46B; guides 4Q adj EPS $0.72-0.76 vs est. $1.00, sees 4Q revs $2.57-2.62B vs est. $2.65B; raising estimated FY share buyback from $5.0B to $7.0B

·     Ford Motor (F) announces resumption of stock dividend in 4q; 3Q adj EPS $0.51 vs est. $0.27 on revs $35.7B vs est. $32.5B; expects cash flow over current planning period to be more than sufficient to fund growth, announces resumption of regular stock dividend in 4Q; no changes to FY adj FCF guide of $4.0-5.0B

·     Boot Barn (BOOT) Q2 EPS $1.25 vs est. $0.93 on revenue $312.7M (+67.1% vs 2Q19) vs est. $291M, same-store sales +61.7% YoY, +53.6% vs 2019; sees new unit growth 10% in FY22; named Jim Watkins as CFO with current CFO Greg Hackman continuing as VP and COO

·     Churchill Downs (CHDN) 3Q EPS $1.57 vs est. $1.47 on revs $393Mm vs est. $406.8Mm

·     Fresh Del Monte Produce Inc. (FDP) said it is raising prices on bananas, pineapples and fresh-cut fruit in response to unprecedented market conditions and inflationary pressures being felt across all industries

·     iRobot (IRBT) Q3 EPS $1.67 vs. est. $0.70; Q3 revs $440.7M vs. est. $417.04M; cuts FY21 non-GAAP EPS view to $1.15-$1.74 from $2.25-$3.15 (est. $2.70) and lowers FY21 revenue view to $1.56B-$1.59B from $1.55B-$1.62B (est. $1.58B)

·     Noodles (NDLS) Q3 adj EPS 12c vs est. 9c on in-line revenue $125.1M with digital sales 52% of total revs; system-wide comp sales +16.3% vs est. +14.3%, avg unit volume $1.38M, +16% YoY; now sees 7-9 new restaurants in 2021, down from prior outlook for 10-15; anticipates system-wide unit growth of at least 8% next year

·     O’Reilly Auto (ORLY) Q3 EPS $8.07 vs. est. $7.18; Q3 sales $3.48B vs. est. $3.3B; gross profit margin 52.3% vs. 52.4% y/y; raises year rev outlook to $12.9B-$13.2B from prior $12.3B-$12.6B (est. $12.73B)

·     Sleep Number (SNBR) 3Q EPS $2.22 vs est. $1.44 on revs $640Mm vs est. $587.1Mm; sees FY EPS $7.25 vs est. $7.15;

·     Spirit Airlines (SAVE) Q3 adj EPS ($0.69) was a narrower loss than est. ($1.02) on in-line revs $922.6M; load factor 77.6%, capacity +3.5% vs 3Q19; is slowing the pace to push back to full fleet utilization, expects to produce 53B-55B available seat miles in 2022

·     VICI Properties (VICI) 3Q adj FFO/shr $0.45 on revs $375.7Mm; guides FY adj FFO/shr $1.7901.80 vs est. $1.84

·     Wyndham Hotels (WH) 3Q EPS $1.09 vs est. $0.91 on net revs $463Mm vs est. $463Mm; guides FY RevPAR growth about 43%, sees fee-related and other revs $1.21-1.23B; guides FY adj EPS $2.93-3.03 vs est. $2.69

·     Yum China (YUMC) Q3 adj EPS $0.22 vs. est. $0.31; Q3 revs $2.55B vs. est. $2.51B; qtrly total system sales increased 1% year over year, with increases of 1% at both KFC and Pizza Hut, excluding f/x; increasing gross new stores target to over 1,700 in 2021; expect that covid-19, especially the delta variant outbreaks, will continue to affect consumer behavior and impact our same-store sales recovery.

·     Solo Brands, Inc. (DTC) prices 12.9M share IPO at $17.00 per share

·     Scientific Games Corp (SGMS) announces sale of lottery business to Brookfield business partners for $6.05 billion; deal consisting of $5.825 bln in cash & an earn-out of up to $225 mln based on achievement of certain ebitda targets in 2022 & 2023

 

Energy, Industrials & Materials

·     Allison Transmission (ALSN) 3Q EPS $0.89 vs est. $0.90 on revs $567Mm vs est. $584Mm; guides FY sales $2.325-2.4B vs est. $2.36B

·     Flowserve Corp. (FLS) 3Q adj EPS $0.29 vs est. $0.40 on revs $866.1Mm vs est. $899Mm; guides FY revs down 2-4% vs est. -2.3%, sees FY EPS $1.45-1.65 (was $1.40-1.45) vs est. $1.58, sees CAPEX $70-80Mm vs prior $65Mm

·     Kraton (KRA) Q3 adj EPS $0.98 vs. est. $0.79; Q3 revs $526.9M vs. est. $459.1M; Polymer segment operating income of $43.8 million, compared to an operating loss of $5.1 million YoY; Chemical segment operating income of $35.7M, compared to an operating loss of $401.7M YoY

·     Sunnova Energy (NOVA) Q3 EPS ($0.25) vs est. ($0.13) on revenue $68.9M vs est. $67.4M; reaffirmed FY21 view for adj EBITDA $80M-$85M, customer additions 55k-58k; set FY22 guidance for adj EBITDA $117M-$137M, customer additions 83k-87k

·     Tronox Holdings (TROX) Q3 adj EPS $0.72 vs. est. $0.64; Q3 revs rose 29% to $870M vs. est. $905.3M

·     United Rentals (URI) 3Q adj EPS $6.58 vs est. $6.80 on revs $2.6B vs est. $2.58B; guides FY revs $9.6-9.75B vs est. $9.6B, sees FY adj EBITDA $4.325-4.4B vs est. 4.3B

 

Financials

·     Aflac (AFL) Q3 adj EPS $1.53 vs. est. $1.32; Q3 revs $5.2B vs. est. $5.34B; in yen terms, Aflac Japan’s net premium income was ¥323.1 bln for quarter, or 4.0% lower than a year ago

·     AvalonBay (AVB) Q3 core FFO $2.06 vs est. 1.97, EPS $0.56 vs est. $0.77, same-store sales +1.2%; sees Q4 core FFO $2.19-$2.29 vs est. $2.11, raised FY core FFO view to $8.18-$8.28 from $7.92-$8.12

·     CyrusOne Inc. (CONE) 3Q adj FFO/shr $1.02 vs est. $0.99 on revs $304.1Mm vs est. $290.4Mm; guides FY revs $1.18-1.2B vs est. $1.17B

·     Invitation Homes (INVH) Q3 core FFO 38c/shr vs est. 36c, EPS 12c vs est. 10c, revenue $510M vs est. $497.8M; same-store NOI +11.9% YoY on same-store revs +7.9%; raised FY21 core EPS view to $1.49 at midpoint from $1.44, adj FFO ro $1.28 at midpoint from $1.24

·     Lending Club (LC) Q3 EPS $0.26 vs est. $0.03 on revenue $246.2M vs est. $221.2M; sees Q4 revs $240M-$250M vs est. $235.7M, loan originations $2.8-$3B; raised FY view for revenue to $796M-$806M from $750M-$780M

·     Raymond James (RJF) Q4 EPS $2.06 vs. est. $1.71; Q4 revs $2.7B vs. est. $2.54B; quarter-end records for client assets under administration of $1.18 trillion, financial assets under management of $191.9B, and net loans at Raymond James Bank of $25B

·     The SEC asked at least one asset manager not to proceed with plans for a leveraged bitcoin exchange-traded fund, according to a person familiar with the matter. The SEC indicated it wants to limit new bitcoin-related products to those that provide unleveraged exposure to bitcoin futures contracts, such as the ProShares Bitcoin Strategy exchange-traded fund, which was launched last week, the person said. https://on.wsj.com/3GvG2qg

 

Healthcare

·     Align Technology (ALGN) 3Q adj EPS $2.87 vs est. $2.60 on revs $1.02B vs est. $978Mm; guides FY revs $3.9-3.95B vs est. $3.94B; says clinical study validates benefits of the Itero Element 5D imaging system

·     Alnylam (ALNY) reports positive topline 18-month results from Helios-a phase 3 study of Vutrisiran in patients with HATTR amyloidosis with polyneuropathy

·     BioMarin (BMRN) Q3 GAAP EPS loss (-$0.20) vs. est. loss (-$0.25); Q3 revs $408.7M vs. est. $435.32M; Lower Kuvan product revenues primarily due to generic competition due to the loss of exclusivity in the U.S.; Lower Aldurazyme product revenues due to timing of product fulfillment to Genzyme

·     Edwards LifeSciences (EW) Q3 EPS $0.54 vs. est. $0.53; Q3 revs $1.3B vs. est. $1.32B; sees FY21 adjusted EPS at high end of $2.07-$2.27 (est. $2.26) and reaffirms FY21 revenue view $5.2B-$5.4B (est. $5.32B); TAVR sales grew 15%; underlying 14%; U.S. TAVR sales grew 12%; OUS approximately 20%

·     Encompass Health (EHC) Q3 adj EPS $1.03 vs. est. $1.06; Q3 revs $1.28B vs. est. $1.31B; cuts FY21 adj EPS view to $4.23-$4.38 from $4.32-$4.47 and lowers FY21 revenue view to $5.08B-$5.13B from $5.1B-$5.25B (est. $5.18B)

·     Molina Healthcare (MOH) Q3 adj EPS $2.83 vs. est. $2.79; Q3 revs $7.04B vs. est. $6.79B; backs FY21 EPS view of no less than $13.25 vs. est. $13.38 and backs FY21 revenue view of no less than $27.5B vs. est. $26.97B; consolidated MCR for Q3 was 88.9%, compared to 85.9% in the third quarter of 2020

·     Teladoc (TDOC) Q3 EPS loss (-$0.53) vs. est. loss (-$0.65); Q3 revs $521.66M vs. est. $516.6M; Q3 visits topped 3.9M, 37% higher than Q3 2020; sees Q4 EPS loss (73c)-(53c) vs. est. loss (69c); sees Q4 revs $536M-$546M vs. est. $539.74M; sees Q4 total visits 3.9M-4.1M

 

Technology, Media & Telecom

·     Cognizant (CTSH) Q3 adj EPS $1.06 vs. est. $1.05; Q3 revs $4.7B vs. est. $4.72B; sees Q4 revenue $4.75B-$4.79B vs. est. $4.76B; sees FY21 adjusted EPS $4.02-$4.06 vs. est. $4.05; sees FY21 revenue approximately $18.5B vs. est. $18.47B.

·     Flex Inc. (FLEX) 2Q adj EPS $0.48 vs est. $0.40 on revs $6.2B vs est. $6.3B; guides 3Q revs $6.1-6.5B vs est. $6.9B, sees FY adj EPS $1.70-1.85 vs est. $1.80, sees FY revs $24.8-25.8B vs est. $26B

·     Formfactor (FORM) 3Q adj EPS $0.40 vs est. $0.36 on revs $190Mm vs est. $188.6Mm; guides 4Q revs $192-204Mm vs est. $192.4Mm, sees 4Q adj EPS $0.37-0.45 vs est. $0.39

·     Impinj Inc. (PI) 3Q adj EPS ($0.04) vs est. ($0.10) on revs $45.2Mm vs est. $44.1Mm; guides 4Q adj EPS ($0.04)-0.02 vs est. ($0.14), sees 4Q revs $46-48Mm vs est. $42.3Mm

·     iHeartMedia’s (IHRT) subsidiary, iHeart Operations, Inc., repurchased and cancelled all of its 60K outstanding shares of Series A Perpetual Preferred Stock, utilizing cash on hand.

·     KLA-Tencor (KLAC) Q1 non-GAAP EPS $4.64 vs. est. $4.52; Q1 revs $2.08B vs. est. $2.04B; sees Q2 non-GAAP EPS $4.95-$5.85 vs. est. $5.14; sees Q2 revs $2.23B-$2.43B vs. est. $2.23B; Cash flow from operations and free cash flow were both records at $863.8M and $794.8M, respectively

·     Knowles Inc. (KN) 3Q adj EPS $0.45 vs est. $0.40 on revs $233Mm vs est. $232Mm; guides 4Q revs $230-235Mm vs est. $239.6Mm, sees 4Q adj EPS $0.43-0.45 vs est. $0.41

·     MKS Instruments (MKSI) Q3 Non-Gaap EPS $2.79 vs. est. $2.77; Q3 revs $742M vs. est. $725.44M; sees Q4 EPS about $2.85 vs. est. $2.82 and revs about $760M vs. est. $735.6M

·     Mimecast Ltd. (MIME) is exploring a possible sale, WSJ reported, according to people familiar with the matter. Mimecast, which has a market value of about $4.5 billion, is working with bankers to consider options including a sale or taking a big investment

·     NetGear (NTGR) 3Q adj EPS $0.50 vs est. $0.42 on revs $290.2Mm vs est. $295Mm; guides 4Q revs $250-265Mm vs est. $328.6Mm

·     ServiceNow (NOW) Q3 adj EPS $1.55 vs. est. $1.38; Q3 revs $1.5B vs. est. $1.47B; subscription revenues of $1.43B, representing 31% year-over-year growth, 30% adjusted for constant currency; sees Q4 sub revs $1.51B-$1.52B and year sub revs $5.46B-$5.57B

·     Twilio (TWLO) shares fell -12%; Q3 EPS Non-GAAP EPS $0.01 vs. est. loss (-$0.08); Q3 revs rose 65% to $740.2M vs. est. $680.5M; sees Q4 revs $760M-$770M vs. est. $744.7M but EPS loss (26c-23c) vs. est. loss (15c); more than 250,000 Active Customer Accounts as of September 30, 2021, compared to 208,000 Active Customer Accounts as of September 30, 2020.

·     Tyler Technologies (TYL) 3Q adj EPS $2.01 vs est. $1.76 on revs $460.6Mm vs est. $425Mm; guides FY adj EPS $6.94-7.02 vs est. $6.77, sees FY revs $1.577-1.597B vs est. $1.55B

·     Ultra Clean (UCTT) Q3 non-GAAP EPS $1.07 vs. est. $1.01; Q3 revs $553.7M vs. est. $542.27M; sees Q4 non-GAAP EPS $1.12-$1.29 vs. est. $1.02; Q4 revenue $590M-$630M vs. est. $544.76M

·     Upwork (UPWK) Q3 adj EPS $0.04 vs est. $0.02 on revenue $128.1M vs est. $126.6m, adj EBITDA $8.2M vs est. $4.5M; sees Q4 rev $130M-$132M vs est. $129.35M, adj EPS (5c)-(3c) vs est. (2c), FY adj EPS 5c-7c vs est. 6c and sales $496M-$498M vs est. $493.7M

·     Wolfspeed (WOLF) Q1 adj loss EPS (-$0.21) vs. est. loss (-$0.23); Q1 revs $156.6M vs. est. $149.17M; sees Q2 adj EPS loss (20c)-(16c) vs. est. loss (23c); sees Q2 revs $165M-$175M vs. est. $157.91M