Good Morning US Marex Equities 2nd May 2024

Stock Futures Remain Higher After Jobless Claims. APPLE tonight. QCOM strong. Light EBAY quarter.

Wake Up Call

• Hello !  Stock futures remained higher as traders took the latest labor-market reading in stride a day after the Federal Reserve signaled rate hikes are unlikely. 
• Further insight into the health of the US economy will come from factory orders, though the main focus will be April non-farm payrolls data due at the end of the week. So far, US Weekly Jobless Claims unchanged came at 208k, Below Est 211k. 
  
  
• Also, APPLE’s figures, which are due after the US market closes, will give investors a better sense of how the iPhone maker is weathering a sales slump, due in part to a sluggish China market. CEO Cook is reportedly expected to hint at new AI features next week and then unveil them at WWDC in June.  “Earnings are looking quite resilient, quite constructive on the equities side,” John Woods, CIO for Asia Pacific at Lombard Odier, said in an interview on Bloomberg Television. “It’s overwhelmingly a US story for now.”
  
  
• DATAS
  * US Weekly Jobless Claims Unchanged at 208K, Below Est.
  * Canadian Trade Balance C$* (Mar) -2.28bn CA vs. Exp. 1.5bn CA (Prev. 1.39bn CA, Rev. 0.48bn CA)

Wall Street Movers

• CARDINAL HEALTH flat boosts its FY adj EPS 4cst $7.30 to $7.40, est $7.29 but reported mixed results in Q1 (adj EPS $2.08, est $1.95 ; rev $54.91bn, est $56.05bn).   
  
  
• CARNAVA +36% after the online used-car retailer reported a surprise profit, boosted by a $75mn gain on the value of warrants that it holds in insurer Root Inc. Analysts were positive about the company’s unit-growth acceleration. 
  
  
• CIGNA flat boosts FY op EPS at least $28.40, saw at least $28.25 but still below est $28.43. Better Q1 w/ adj op EPS $6.47, est $6.22 and adj rev $57.25bn, est $56.4bn.
  
  
• COGNIZANT +1% Q1 Rev $4.76bn ($4.72bn exp) / EPS $1.12 ($1.11 exp) / Sees Q2 rev $4.75bn - $4.82bn (Est $4.82bn) / Sees FY revenue $18.9B - $19.7B (saw $19B - $19.8B Est $19.43B) / Sees FY adj EPS $4.50 - $4.68 (Est $4.61) 
  
  
• CONOCO +1% FY guidance remains unchanged. Posted Q1 adj EPS $2.03 below est $2.04 and cash flow from op $4.99bn, est $5.05bn; adj net income $2.41bn vs est $2.39bn.
  
  
• DOORDASH -8% Q1 Rev $2.51bn ($2.45bn exp) / loss/sh $0.06 (est loss $0.05) / adj Ebitda $371mn (Est $369mn) / Sees Q2 adj Ebitda $325-425mn (Est $395mn) 
  
  
• EBAY -3.4% Q1 Rev $2.6bn ($2.53bn exp) / EPS $1.25 ($1.21 exp) / gross merchandise volume $18.6bn (Est $18.36bn) / Sees Q2 net rev $2.49-2.54bn (Est $2.56bn) & adj EPS $1.10 -1.15 (Est $1.14) / Targeting “just over” $2bn share buyback in 2024
  
  
• ETSY -13% is warning that pressure on consumer discretionary spending is here to stay. CEO says on a call with analysts that consumers' wallets are being squeezed by higher costs for other items. Says the headwinds aren't easing up and have dented sales in Q1 more than exp. 
  
  
• MGM  +7% Q1 Rev $4.38bn ($4.24bn exp) / EPS $0.74 ($0.62 exp) ; rev growth was due primarily to an increase in rev at MGM China resulting from the continued ramp up of operations after the removal of covid related entry restrictions in Macau in the prior year quarter.
  
  
• MODERNA +1% smaller than exp Q1 loss/sh $3.07, est loss $3.58 as well as Covid-9 vaccine rev $167mn, est $57.2mn despite lower demand for its Covid vaccine. Company targets fall 2024 for its U.S. RSV vaccine launch; reaffirms FY24 expected product sales of approximately $4bn. 
  
  
• PELOTON +8% is decreasing its global headcount by nearly 15%, affecting about 400 employees. Also said that President & CEO is stepping down and will serve as a strategic adviser through the end of 2024. Posted Q3 Paid digital subscribers 674,000, est 742,266 ; rev $718mn as exp and adj Ebitda $5.8mn vs est loss $25mn.
  
  
• QORVO -9% forecast adj EPS and rev for Q1 that trailed est. Analysts note that iPhone weakness in China weighed on the Apple-supplier’s guidance. 
  
  
• QUALCOMM +5.5% Q2 Rev $9.39bn ($9.32bn exp) / EPS $2.44 ($2.32 exp) / Sees Q3 revenue $8.8-9.6bn (Est $9.08bn) & adj EPS $2.15-$2.35 (Est $2.16). This better than exp forecast suggests demand for handsets is increasing after a two-year slump. Also said that this quarter results were buoyed by headway in China, where it sells technology to local phone manufacturers.
  
  
• REGENERON -2.70% Q1 rev $3.15bn misses est $3.22bn due to less than exp Dupixent and Libtayo sales; adj EPS $9.55 below est $10.17 too. Raises its FY R&D expense $4.92bn to $5.17bn, saw $4.82bn to $5.07bn but cut capex.
  
  
• ZOETIS +4.50% Q1 adj EPS $1.38 above est $1.34 as well as rev $2.19bn, est $2.14bn. Cut its FY adj EPS 4cst $5.71 to $5.81, est $5.78, same for rev $9.05bn to $9.2bn, est $9.15bn.

At A Glance

• AMETEK boosts FY adj EPS 4cst $6.74 to $6.86 (midpoint at $6.8), est $6.83 and expects sales to be up low digits despite mixed results in Q1 (Adj EPS $1.64, est $1.59; Net sales $1.74bn, est $1.78bn). 
• APTIV cut FY net sales 4cst $20.85bn to $21.45bn, est $21.5bn driven by reduced customer schedules. Recorded Q1 adj EPS $1.16 above est $1.02 while net sales $4.9bn, est $4.98bn.  
• AVIS BUDGET push to sell off older cars in its fleet dragged on through Q1. CEO Joe Ferraro saysthe company disposed of a record number of vehicles in the quarter.
• BAXTER recorded good Q1 results w/ sales $3.59bn, est $3.56bn and Adj EPS from cont ops 65c, est 61c. Boosts Fy adj EPS 4cst $2.88 to $2.98, matching est $2.90. Expects Kidney Care Business Separation in 2H 2024
• BORGWARNER raises FY adj EPS from cont ops $3.80 to $4.15, est $3.90 after recorded good Q1 results. 
• CHURCH & DWIGHT recorded Q1 net sales $1.50bn above est $1.49bn as well as adj EPS 96c vs. 85c y/y, est 87c. 
• EXELON still sees adj op EPS $2.40 to $2.50 below est $2.44; weak results in Q1 (Adj operating EPS 68c, est 69c; op income $1.11bn, est $1.21bn). Projects EPS growth of 5% to 7% through 2027. 
• ICE Sees FY adj operating expenses $3.79-3.82bn, est $3.83bn on Q1 rev less transaction expenses $2.29bn, est $2.31bn.
• IQVIA Q1 adj EPS $2.54 beats est $2.48 as well as rev $3.74bn, est $3.7bn. 
• IRON MOUNTAIN maintains FY rev 4cst $6.00bn to $6.15bn, est $6.09bn; mixed Q1 results (Normalized FFO per share 74c, est 88c; Rev $1.48bn, est $1.45bn. 
• KELLANOVA Q1 adj EPS $1.01, est $0.85 on rev $3.20bn, est $3.16bn. Reaffirms FY24 guidance. 
• KIMCO Q1 FFO/shr 39c above est 37c as well as rev $503.8mn, est $458.2mn. Raises FY FFO/Shr $1.56 to $1.60, saw $1.54 to $1.58.
• LAMAR ADVERTISING boosts its FY AFFO/shr 4cst $7.75 to $7.90, saw $7.67 to $7.82 w/ good results in Q1. 
• MOODY'S raises FY adj EPS $10.40 to $11.00, saw $10.25 to $11 but still missing est $10.75 by 0.05. Recorded good results in Q1 (adj EPS $3.37, est $2.99; rev $1.79bn, est $1.69bn)
• MOSAIC Q1 Rev $2.68bn ($2.83bn exp) / EPS $0.65 ($0.66 exp) / adj Ebitda $576mn (Est $576mn) / Factors suggest the global potash market is balanced and the phosphate market will remain tight in 2024. 
• PAYCOM SOFTWARE cut Q2 forecast
• QUANTA SERVICES raises its FY adj EPS 4cst $8.15 to $8.65, est $8.34 as well as rev $22.5bn to $23.0bn, est $22.59bn after good results in Q1 (adj EPS $1.4, est $1.30; rev $5.03bn, est $4.92bn)
• SOUTHERN CO reported good Q1 results (adj EPS $1.03, est 0.89; rev 6.64bn, est 6.57bn)
• STANLEY BLACK & DECKER Q1 net sales $3.87bn above est $3.83bn w/ higher than est tools & outdoor rev. Maintains FY guidance. 
• TARGA RESOURCES maintains its FY adj EBITDA 4cst  $3.7bn to $3.9bn slightly below est $3.84bn after recorded mixed results in Q1 (Rev $4.56bn, est $4.73bn; Adj Ebitda $966.2mn, est $938.9mn). 
• TELEFLEX narrows FY adj EPS from cont op $13.60 to $13.95, est $13.73; higher than est Q1 results (Net rev $737.8mn, est $726.8mn; Adj EPS from cont op $3.21, est $3.07).  
• UBER was sued by thousands of London’s black cab drivers in a suit seeking £250mn accusing it of unlawfully operating in the capital city.
• WAYFAIR topped sales estimates and saw active customers grow in Q1.
• WESTROCK Q2 adj EPS 39c above est 24c while net sales $4.73bn, est $4.8bn. 
• XYLEM is on track to capture the synergies of integration with Evoqua. Higher than est results in Q1 w/ adj EPS 90c, est 84c and rev $2.03bn slightly as exp $2.0bn. 
• ZIMMER BIOMET recorded Q1 adj EPS $1.94 above est $1.87 as well as net sales $1.89bn, est $1.87bn. Company maintains FY guidance on rev and adj EPS. 
• ZOETIS recorded Q1 adj EPS $1.38 above est $1.34 as well as rev $2.19bn, est $2.14bn. However, company cut its FY adj EPS 4cst $5.71 to $5.81, est $5.78, same for rev $9.05bn to $9.2bn, est $9.15bn.

Key Events (UK Time)

Thursday
15:00 US Factory Orders; Durable Goods Orders; Cap Goods Orders & Ship Nondef Ex Air

Friday
13:30 US Change in Nonfarm Payrolls; Change in Manufact. Payrolls; Unemployment Rate
14:45 S&P Global US Services & Composite PMI
15:00 ISM Services Index

Game Of Corporate Actions 

DIV EX DATE 

• Today : Norfolk Southern ($1.35) ; Constellation Brandz ($1.01) ; Lamb Weston ($0.36) ; Carrier Global ($0.19)
• Tomorrow : Eaton ($0.94) ; Citigroup ($0.53) ; Brown & Brown ($0.13) ; Ameriprise Financial ($1.48) ; Synchrony Financial ($0.25)

TODAY EARNINGS

• Results aft mkt : APPLE ; AES ; Alliant Energy ; Ameren ; Amgen ; Booking ; Camden Property Trust ; Consolidated Edison ; Coterra Energy ; DaVita ; Digital Realty Trust ; EOG Resources ; Expedia ; Federal Realty Investment Trust ; Hologic ; Illumina ; Ingersoll Rand ; Live Nation Entertainment ; MercadoLibre ; Monster Beverage ; Motorola Solutions ; Pioneer Natural Resources ; Regency Centers

TOMORROW

• Results bef mkt : CBRE ; CBOE ; Equinix ; Hershey ; Microchip Technology ; Trimble 
• Results aft mkt : --

Stay Tuned