Equity Indexes Wrap: Cybersecurity, Big Tech Lead Indexes Higher; Entertainment Stocks Sink Ahead of Disney Earnings
9 hr 49 min ago
The Dow
Microsoft (MSFT) rose 2.1% to lead the index higher.
Boeing (BA) climbed 1.6% despite investigators finding that the 737 Max 9 that lost part of its fuselage mid-flight last month was delivered with four bolts missing.
Amgen (AMGN) sank 6.4% after reporting lower-than-expected sales of Enbrel, one of its best-selling drugs, amid price pressures in the fourth quarter.
Disney (DIS) finished flat ahead of its quarterly report after the bell.
The S&P 500
Enphase Energy (ENPH) soared 16.9% after its CEO estimated the solar industry would find the bottom of a long pull-back in demand sometime in the first quarter of 2024.
Emerson Electric (EMR) delivered better-than-expected quarterly earnings and raised its full-year sales forecast, sending its stock 10.5% higher.
Chipotle (CMG) jumped 7% to a record high after beating earnings estimates as increased traffic and prices boosted sales in the fourth quarter.
Ford (F) gained 6% after it announced a special dividend on the heels of a better-than-expected fourth quarter.
CVS Health (CVS) added 3.1% after a fourth-quarter earnings beat overshadowed the pharmacy and insurance giant cutting its full-year outlook on higher medical costs.
Pharmaceutical giant Eli Lilly (LLY) rose 2.8%, rebounding from yesterday’s losses that came after a better-than-expected earnings report.
Uber (UBER) inched up 0.3% after its earnings beat.
VF Corp. (VFC) tumbled 9.7% after falling short of expectations on the top and bottom lines with its fourth-quarter results.
Fox (FOXA) shares sank 6.8% after the company said ad revenue slumped 20% year-over-year to $2 billion. That cast a shadow over fellow broadcasters Paramount Global (PARA), which fell 8.2%, and Warner Bros. Discovery (WBD), down 3.2%.
The Nasdaq 100
Cybersecurity stocks got a boost from Fortinet’s (FTNT) fourth-quarter earnings beat. Palo Alto Networks (PANW) jumped 6.7%, while CrowdStrike Holdings (CRWD) gained 5.2% and ZScaler (ZS) added 4.2%. Fortinet rose 3.8%.
Big tech also gained, with Meta (META) adding 3.3%, Nvidia (NVDA) rising 2.8%, and Amazon (AMZN) ticking up 1%.
Tesla (TSLA) rose 1.3% amid reports suggesting the EV maker is considering lay-offs.
Gilead Sciences (GILD) fell 4.3% after reporting disappointing fourth-quarter earnings as sales of several HIV treatments came in softer-than-expected.
NBC-owner Comcast (CMCSA), also dragged down by Fox’s disappointing earnings report, slid 3.5%.
Chipotle Stock Surges to a Fresh Record as Higher Prices and Foot Traffic Boost Earnings
10 hr 39 min ago
Chipotle Mexican Grill (CMG) shares jumped to an all-time high in intraday trading Wednesday after the fast-casual chain posted better-than-expected results as it benefited from higher prices and foot traffic.
Chipotle reported fourth-quarter earnings per share of $10.36, with revenue up 15.4% from a year ago to $2.52 billion. Both exceeded forecasts.
Comparable store sales rose 8.4%, driven by a 7.4% increase in foot traffic and a 1% rise in the average check. Chipotle also got a boost from the addition of 121 restaurants at 110 locations in the period.
The company said it expects full-year comparable store sales growth in the mid-single-digit percentage range, and to add 285 to 315 new restaurants.
Shares of Chipotle were up 7.9% at $2,684.32 with about half an hour left in the session. They’ve gained more than 57% over the past year.
TradingView
Amgen Stock Slumps After Enbrel Sales and Prices Slipped in Q4
11 hr 12 min ago
Shares of Amgen (AMGN) fell Wednesday despite the drugmaker topping Wall Street estimates on the top and bottom lines with its quarterly earnings and affirming it will deliver results from clinical trials of two weight-loss drugs later this year.
Amgen posted adjusted net income of $2.5 billion, or $4.71 per share, on revenue of $8.2 billion. Both exceeded analysts’ forecasts. In the year-ago quarter, net income was $2.2 billion, or $4.09 a share, and revenue totaled $6.8 billion.
The company’s sales got a $954 million boost from its acquisition of Horizon Therapeutics, completed in October. Excluding Horizon, product sales grew 5% as lower prices slightly offset a 9% increase in volume.
Sales of osteoporosis drug Prolia rose 12% to $1.1 billion, while sales of Enbrel, one of Amgen’s top-selling drugs, declined 8% to just over $1 billion. The company expects the price of some drugs to remain under pressure, “driven by higher rebates to maintain broad first-line payer coverage.”
For 2024, the company forecast total revenue in the range of $32.4 billion to $33.8 billion, and adjusted earnings per share to be between $18.90 and $20.30. The guidance was generally in line with expectations.
Amgen expects to share initial data from a phase 1 trial of AMG 786, one of two weight-loss drugs the firm is developing, in the first half of 2024. Data from a phase 2 trial of MariTide, Amgen’s other candidate, is expected late in the year.
Amgen shares were down 4.9% at $300.48 late Wednesday afternoon. Still, the stock has gained more than 20% in the past year.
CVS Beats Estimates, but Cuts Full-Year Profit Outlook on Higher Medical Costs
11 hr 50 min ago
CVS Health (CVS) shares gained ground on Wednesday after the company reported better-than-expected earnings but lowered its 2024 guidance due to an increase in insurance payouts.
Adjusted profit of $2.12 per share was 4% higher than a year ago and was ahead of Wall Street estimates. Revenue grew 11.9% year-over-year to $93.8 billion.
However, health insurance groups are suffering from a rise in payouts to policyholders as more Americans are utilizing medical facilities after the pandemic restrictions were lifted. CVS said its medical benefit ratio rose by 2.7 percentage points from a year ago, to 88.5% in the fourth quarter.
The company delivered earnings per share guidance for 2024 of $8.30 a share, down from a previous forecast of $8.50 a share. Cash flow is expected to be between $12 billion and $12.5 billion.
CVS said the rise in medical costs was expected to continue, noting that the “guidance revision follows a review of its recently finalized medical cost trend analysis for the fourth quarter of 2023 and the potential implications for elevated medical cost trends in 2024.”
CVS shares were up 2.3% at $75.45 Wednesday afternoon. The stock has lost about 12% over the past year.
Alibaba Tumbles as Holiday Quarter Results Miss Estimates on E-Commerce and Cloud Sales
12 hr 37 min ago
American depositary receipts (ADRs) of Alibaba (BABA) tumbled close to 6% Wednesday after the Chinese e-commerce giant’s holiday results missed expectations even as it raised its stock buyback program.
Alibaba reported fourth-quarter earnings per share (EPS) of 18.97 Chinese yuan ($2.67), with revenue rising 5% from a year ago to 260.35 billion yuan ($36.6 billion). Both were below forecasts.
CEO Eddie Wu noted that going forward, Alibaba’s top priority would be “to reignite the growth of our core businesses, e-commerce and cloud computing.”
CFO Toby Xu announced that the company was increasing its share repurchase program by $25 billion, “demonstrating our confidence in the outlook of our business and cash flow.” That boosts the buyback to a total of $35.3 billion through the end of 2027.
Alibaba ADRs were 5.7% lower at $73.79 Wednesday afternoon. They’ve lost close to one-third of their value over the past year.
TradingView
Enphase Energy Leads S&P 500 as CEO Forecasts Demand Rebound
13 hr 28 min ago
Enphase Energy (ENPH) was the best-performing stock in the S&P 500 Wednesday as optimism about the near-term outlook for solar panel and battery demand overshadowed the company’s quarterly earnings miss.
Enphase posted adjusted earnings of $73.5 million, or 54 cents a share, on revenue of $302 million. Both earnings and revenue were more about 60% lower than the same quarter a year ago and below the Wall Street consensus.
On the bright side, adjusted gross margin of 50.3% was an improvement from the prior-year quarter’s 42.6%.
CEO Badri Kothandaraman also expressed optimism on the company’s earnings call. “we have been managing through a period of slowdown in demand. We think Q1 could be the bottom quarter,” said Kothandaraman. “Europe is already showing early signs of recovery, and we expect the non-California states to bounce back quickly,” he added.
Analysts agreed with the company’s upbeat outlook. Oppenheimer upgraded the stock to outperform following its earnings report, while Evercore ISI raised its price target to $125 from $115.
Enphase shares were up 16% at $116.71 Wednesday afternoon. Even with today’s gains, the stock is down nearly 50% in the past 12 months.
Peers in the solar industry followed Enphase higher. SolarEdge Technologies (SEDG) jumped more than 10%, while First Solar (FSLR) rose nearly 4% and SunRun (RUN) added about 3%.
Ford Stock Jumps on Strong Q4 Earnings and 2024 Outlook, News of Special Dividend
14 hr 3 min ago
Ford (F) shares rose more than 3% Wednesday after the company reported better-than-expected fourth-quarter earnings, projected strong 2024 earnings, and announced plans to return more cash to shareholders.
Ford posted earnings per share of 29 cents, down from 51 cents a share a year earlier but more than double analysts’ expectations. Fourth-quarter revenue rose 4% to $46 billion, also beating expectations.
For 2024, Ford forecast adjusted earnings of $10 billion to $12 billion before interest and taxes, compared to $10.4 billion in 2023. Those projections are at the higher end of the $10 billion to $10.5 billion the company predicted in November when it was hampered by a six-week strike from the United Auto Workers union.
Ford also announced a regular first-quarter dividend of 15 cents a share plus a supplemental dividend of 18 cents, to be paid on March 1. The company said it targets distributions to shareholders of 40% to 50% of adjusted free cash flow, which the automaker pegs at between $6 billion and $7 billion in 2024.
Despite Wednesday’s gains, Ford shares are down about 7% over the past year.
Snap Stock Dives On Disappointing Q4 Sales, Soft 2024 Outlook
15 hr 20 min ago
Shares in Snap (SNAP) plunged more than 30% Wednesday morning after the parent of instant messaging app Snapchat reported top-line numbers that came in below analysts’ expectations and issued a soft outlook for the current quarter as the conflict in the Middle East has contributed to slower digital advertising.
The company’s fourth-quarter revenue of $1.36 billion increased 5% from a year earlier but missed Wall Street’s expectation of $1.38 billion, marking the sixth consecutive quarter the Santa Monica, California-based company has reported single-digit growth or sales declines. Snap said the ongoing war between Israel and Hamas contributed to the weaker-than-expected revenue during the period.
Looking ahead, the company’s first-quarter revenue guidance range of $1.095 billion to $1.135 billion represents growth of 11% to 15% over last year’s corresponding quarter, though the midpoint of that band still falls short of the $1.117 billion Street forecast.
Source: TradingView.com.
Since bottoming out at around $8.50 in late September, SNAP trended higher for several months before tracking sideways into the 50-day moving average. During this post-earnings sell-off, monitor if the stock’s price can close above the key $12 level. This area on the chart finds a confluence of support from a multi-month horizontal trendline and the rising 200-day moving average.
Snap was down 34% at $11.48 about an hour after the opening bell.
-Timothy Smith
NYCB Stock Continues to Slide Following Liquidity Update, Board Changes
15 hr 58 min ago
Shares of New York Community Bancorp (NYCB) sank as much as 10% in early trading Wednesday, extending losses spurred by the lender’s unexpected fourth-quarter loss and concerns about its commercial real estate exposure.
NYCB on Tuesday night shared an update on its deposits and liquidity to reassure investors, spooked by credit-rating agency Moody’s decision to downgrade the bank’s debt to junk status.
“Despite the Moody’s ratings downgrade, our deposit ratings from Moody’s, Fitch and DBRS remain investment grade,” said CEO Thomas Cangemi in a press release. “The Moody’s downgrade is not expected to have a material impact on our contractual arrangements.”
And early Wednesday the firm appointed board member Alessandro DiNello as Executive Chairman, saying DiNello would “work alongside President and CEO, Thomas R. Cangemi, and the rest of the senior executive leadership team, to improve all aspects of the Bank’s operations.” DiNello joined NYCB’s board of directors in 2022 when the firm acquired Flagstaff Bank, of which DiNello had served as CEO since 2013.
NYCB stock has lost more than 60% of its value in the last month, much of its decline coming after the company reported a surprise loss on Jan. 31. Following the Moody’s downgrade, shares tumbled more than 20% yesterday to close at $4.20, their lowest price since 1997.
Stocks Making the Biggest Moves Premarket
16 hr 51 min ago
Gains:
- Fortinet Inc. (FTNT): Shares of the cybersecurity firm jumped more than 8% after it topped Wall Street estimates with its quarterly earnings and billings.
- Ford Motor Co. (F): The carmaker’s shares gained more than 5% after it beat earnings estimates and forecast a better-than-expected 2024.
- Warner Bros. Discovery (WBD): Shares of the entertainment company rose more than 3% after it said it was teaming up with Disney’s ESPN (DIS) and Fox (FOXA) to launch a sports streaming service. Disney shares were down about 1% in premarket trading, while Fox gained nearly 5%.
Losses:
- Snap Inc. (SNAP): Shares of the social media company tumbled 30% after it reported lower-than-expected fourth-quarter revenue, citing headwinds from conflict in the Middle East.
- Alibaba Group Holding Ltd. (BABA): American depositary receipts of the Chinese e-commerce giant slid more than 4% after it also missed expectations with its fourth-quarter sales.
- Uber Technologies Inc. (UBER): Shares of the ride-hailing software company fell 2% despite it beating on the top and bottom lines with its quarterly report. The stock’s price doubled in the 12 months leading up to Wednesday’s results.
Stock Futures Higher
17 hr 12 min ago
Futures contracts connected to the Dow Jones Industrial Average were 0.2% higher in premarket trading on Wednesday.
S&P 500 futures rose 0.3%.
Nasdaq 100 contracts gained 0.4% before the opening bell.
