RANsquawk Daily US Equity Opening News – 26th September 2018

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Nike (NKE) Q1 EPS USD 0.67 vs. Exp. USD 0.63, revenue USD 9.9bln vs. Exp. USD 9.94bln. Nielsen (NLSN) – The industrial group is attracting interest from Blackstone (BX), Carlyle Group (CG) and are mulling offers for the co. though talks are at an early stage. IBM (IBM) upgraded to buy from neutral at UBS 26th September 2018

EARNINGS

AAR Corp. (AIR) Q1 Adj. EPS USD 0.54 vs. Exp. USD 0.52, revenue USD 0.466bln vs. Exp. USD 0.452bln. (Newswires) CarMax (KMX) Q2 EPS USD 1.24 vs. Exp. USD 1.21, revenue USD 4.77bln vs. Exp. USD 4.65bln; comparable sales up 2.1%. (Newswires) Cintas (CTAS) Q1 EPS USD 1.89 vs. Exp. USD 1.80, revenue USD 1.70bln vs. Exp. USD 1.68bln. Q1 organic growth rate was up 5.4% from last year. Raises FY19 EPS view to USD 7.19-7.29 from USD 7.00-7.15, consensus USD 7.16 and raises FY19 revenue view to USD 6.80bln-6.855bln from USD 6.75bln-6.82bln, consensus USD 6.81bln. (Newswires) KB Home (KBH) Q3 Adj. EPS USD 0.87 vs. Exp. USD 0.77, revenue USD 1.23bln vs. Exp. USD1.26bln. Q3 deliveries were up 8% at 2,988 homes. Says supply and existing inventory remain insufficient to meet demand. Sees FY18 housing revenue of USD 4.6bln, low end of prior USD 4.6bln-4.8bln view. CEO sees slower sales in higher priced homes. (Newswires) Nike (NKE) Q1 EPS USD 0.67 vs. Exp. USD 0.63, revenue USD 9.9bln vs. Exp. USD 9.94bln. Q1 gross margin up by 60bps to 44.2%. Q1 North America revenue up by 6% to USD 4.145bln. Apparel saw 11% growth in Q1. Says has seen 17 straight quarters of revenue growth in greater China. Sees ‘strong’ sequential revenue growth in Q2 and notes recent ad campaign causing uptick in brand engagement. Some analysts are concerned over what they consider weaker than forecasted profit margins. (Newswires) DOW JONES

Apple (AAPL) – New iPhone sales momentum is likely to slow down later this year, DigiTimes reports, noting the first wave of sales was not as enthusiastic as the iPhone 6’s amid the high cost and the iPhone XS lack of specification upgrades. Separately, the tech products behemoth has reportedly removed certain parts from its new large sized iPhone in production to remove costs. This year’s iPhone XS Max 256gb costs USD 443 in parts where as last year’s 64gb iPhone X cost USD 395.44.  (DigiTimes/Newswires) Boeing (BA) – Malaysia Airlines has said its provisional deal for the purchase of eight Boeing 787 jets has lapsed. (Newswires) Chevron (CVX) – The co. has received an ‘expression of interest’ in the Rosebank North Sea oil and gas development. (Newswires) Merck (MRK) – The board of directors has withdrawn its policy subjecting the CEO to mandatory retirement at the age of 65 with current CEO Kenneth Frazier now set to remain in his position beyond December 2019. (Newswires) S&P500

AbbVie (ABBV) – Health Canada approved VENCLEXTAR/Rituximab leukaemia treatment in Canada, based on Phase 3 clinical data. (Newswires) Agilent (A) – The healthcare co. is to acquire ACEA Biosciences, a leading co. for the development of highly innovative products in the biotech and pharmaceutical industry; terms of the deal were not disclosed. (Newswires) Alexion (ALXN) – The co. is to acquire Syntimmune for upfront payment of USD 400mln. (Newswires) Allergan (AGN) – The pharma co. has announced the FDA acceptance of its supplemental new drug application for Vraylar (CARIPAZINE), which seeks to expand the treatment to include the treatment of Bipolar Depression. (Newswires) Andeavor (ANDV) – The co. will be replaced by Rollins (ROL) in the S&P 500 at open on October 1st since Marathon Petroleum’s (MPC) acquisition of Andeavor (ANDV) is expected to close soon. (Newswires) CBS (CBS) – The co. names Richard Parsons interim chairman, following the resignation of CEO Leslie Mooves earlier this month. (Newswires) Comerica (CMA), Regions Financial (RF), SunTrust (STI), Citizens Financial (CFG) and KeyCorp (KEY) – The co.s remain top picks for Goldman Sachs (GS). (Newswires) Delta Airlines (DAL) – The airline temporarily halted departures yesterday citing ‘technology issue’; the co. reported the IT systems have been restored and there are no cancellations because of the issue. (Newswires) Michael Kors (KORS) – Italian fashion brand Versace has said it received no offers from Italian investors for itself before accepting an offer from KORS. (Newswires) Moody’s (MOC) – The rating co. names Mona Breed CIO; effective October 15th. (Newswires) Nielsen (NLSN) – The industrial group is attracting interest from Blackstone (BX), Carlyle Group (CG) and are mulling offers for the co. though talks are at an early stage. (Newswires) Oneok (OKE) – The oil co. is to construct additional NGL infrastructure in in Mont Belvieu, Texas and between the Mid-Continent market hub to boost pipeline capacity. (Newswires) Philip Morris (PM) – The tobacco name is moving a large majority of its 1,000 sales employees in Japan to the streets to target elderly smokers and persuade them to switch to the new iQos smoking devices. (Newswires) Raytheon (RTN) – The defence group was awarded a USD 1.53bln contract modification from the US army, estimated to be completed in December 2022. (Newswires) Salesforce (CRM) – CEO states ‘I have Apple in my veins’ amid partnership with Apple (AAPL). (CNBC) NASDAQ 100

Alphabet (GOOGL) – The tech giant will admit later today, via an executive testimony to the US Senate, that it has made “mistakes” in handling user privacy issues. Separately, Google appoints privacy lawyer Keith Enright as Chief Privacy Officer. (Newswires) Amazon (AMZN) – The online retailer announced the launch of its Canadian Amazon Music Unlimited, where prime and non-prime members can choose multiple price plans from CDN 3.99. Elsewhere, it has been calling employees into meetings to give them pay rises of USD 0.25-0.55/hour. Separately, the retail giant is expanding its grocery delivery from Whole Foods Market through Prime Now in new cities including Ann Arbor, Detroit, Jacksonville, Madison, Milwaukee, Omaha, Orlando, St. Louis, Tampa and Tulsa as well as additional areas of New York City and Seattle. (Newswires) Comcast (CMCSA) – The broadcasting group said to have acquired 153.9mln additional shares in Sky (SKY LN) bringing the NBCUniversal and CNBC stake to 36.95%. Comcast now owns a 39% stake in the British broadcaster and continues to consider options for that stake. (Newswires) Starbucks (SBUX) – The coffee maker, in response to the critically low coffee prices, committed to USD 20mln to temporarily relieve Central Americans farmers. (Newswires) Tech names (GOOGL, AAPL, AMZN, MSFT, FB) – Tech giants have collectively spent USD 80blni in physical assets including specialised manufacturing equipment. (Newswires) OTHER NEWS

Alcoa (AA) – The union in the aluminium producer’s Western Australia operations has said it is meeting with the co. again on Wednesday in an effort to resolve a now 6-week long strike. (Newswires) Ctrip (CTRP) – The co. enters a collaboration with iClick Interactive Asia for the creation of an e-commerce platform to target 130mln foreign travellers to China to help them maximise sales closure. (Newswires) Dunkin Brands (DNKN) – Fans of the co.’s foundational doughnut products expressed concerns over its decision to remove doughnut from its name. (Newswires) Intelsat (I) – The aerospace co. and Azercosmos announce the successful launch of Intelsat 38 and Azerspace-2 satellite. (Newswires) International Game (IGT) – The betting group partners up with William Hill US, a subsidiary of William Hill PLC, to offer full service solutions for sports betting. (Newswires) KKR (KKR) – The co. has formed a management co. to provide high quality healthcare services in China through the consolidation of hospitals. (Newswires) Loxo Oncology (LOXO) – The drug maker announced a LOXO-292 durability update, with data for the most recently enrolled patients showing a 68% confirmed overall response rate in the presented subset. (Newswires) Navigators (NAVG) – The co. announced the 30-day “go-shop” period has ended under the terms of the previously announced merger agreement, under which Navigators will be acquired by Hartford Financial (HIG). (Newswires) Snapchat (SNAP) – VP of corporate communications Mary Ritti is leaving the co. at the end of the year. (WSJ) TechnipFMC (FTI) – The co. has signed a strategic collaboration agreement with Equinor to enable developing Equinor’s offshore projects globally. (Newswires)   Teleflex Incorporated (TFX) – Subsidiary NeoTract announced positive data from 5 real data studies of UroLift System for Benign Prostatic Hyperplasia (BPH) care. (Newswires) Tenneco (TEN) – The co. is to supply suspension technology on Jaguar E-PACE SUV. (Newswires) Trinity Industries (TRN) – The co.’s board has approved the separation of Arcosa, its infrastructure-related business. (Newswires) Zai Lab (ZLAB) – The co. presents positive results of its PK study for ZL-2306 for the treatment of ovarian cancer. (Newswires) BROKER MOVES

Upgrades

CHENIERE ENERGY (LNG) UPGRADED TO OVERWEIGHT FROM EQUAL WEIGHT AT MORGAN STANLEY GOPRO (GPRO) UPGRADED TO OUTPERFORM FROM PERFORM AT OPPENHEIMER HANOVER INSURANCE (THG) UPGRADED TO BUY FROM HOLD AT SANDLER O’NEILL IBM (IBM) UPGRADED TO BUY FROM NEUTRAL AT UBS KB HOME (KBH) UPGRADED TO OUTPERFORM FROM MARKET PERFORM AT JMP SECURITIES M&T BANK (MTB) UPGRADED TO BUY FROM NEUTRAL AT GOLDMAN SACHS RANDGOLD (GOLD) UPGRADED TO SECTOR PERFORM FROM UNDERPERFORM AT RBC CAPITAL SONIC (SONC) UPGRADED TO EQUAL WEIGHT FROM UNDERWEIGHT AT BARCLAYS STMICROELECTRONICS (STM) UPGRADED TO BUY FROM HOLD AT DEUTSCHE BANK VIACOM (VIAB) UPGRADED TO BUY FROM NEUTRAL AT B. RILEY FBR Downgrades

CABOT OIL & GAS (COG) DOWNGRADED TO EQUAL WEIGHT FROM OVERWEIGHT AT MORGAN STANLEY CHEFS’ WAREHOUSE (CHEF) DOWNGRADED TO HOLD FROM BUY AT JEFFERIES CIENA (CIEN) DOWNGRADED TO NEUTRAL FROM BUY AT UBS DOWDUPONT (DWDP) DOWNGRADED TO NEUTRAL FROM BUY AT NOMURA INSTINET J.M. SMUCKER (JM) DOWNGRADED TO UNDERPERFORM FROM PEER PERFORM AT WOLFE RESEARCH KOSMOS (KOS) DOWNGRADED TO OUTPERFORM FROM STRONG BUY AT RAYMOND JAMES LAM RESEARCH (LRCX) DOWNGRADED TO NEUTRAL FROM BUY AT UBS MANHATTAN ASSOCIATES (MANH) DOWNGRADED TO HOLD FROM BUY AT SUNTRUST NEXTDECADE (NEXT) DOWNGRADED TO MARKET PERFORM FROM OUTPERFORM AT COWEN PAYCOM (PAYC) DOWNGRADED TO NEUTRAL FROM BUY AT BOFA/MERRILL RANDGOLD UPGRADED TO SECTOR PERFORM FROM UNDERPERFORM AT RBC CAPITAL SYNCHRONY (SYF) DOWNGRADED TO NEUTRAL FROM BUY AT BOFA/MERRILL XO GROUP (XOXO) DOWNGRADED TO NEUTRAL FROM BUY AT B. RILEY FBR Initiations

AKUMIN (AKU/U CN) RATED NEW OUTPERFORM AT NATIONAL BANK; PT USD 5.25 AMEREN (AEE) RATED NEW HOLD AT SUNTRUST; PT USD 64 ARISTA NETWORKS (ANET) RATED NEW NEUTRAL AT UBS; PT USD 290 BIONANO GENOMICS (BNGO) RATED NEW BUY AT ROTH CAPITAL; PT USD 12 BURLINGTON STORES (BURL) RATED NEW BUY AT DA DAVIDSON; PT USD 187 CANADA GOOSE (GOOS CN) RATED NEW BUY AT DA DAVIDSON ELANCO ANIMAL HEALTH (ELAN) RATED NEW MARKET PERFORM AT BMO; PT USD 33 EVOFEM BIOSCIENCES (EVFM) RATED NEW OVERWEIGHT AT CANTOR; PT USD 9 FALCON MINERALS (FLMN) RATED NEW OUTPERFORM AT NORTHLAND; PT USD 13 FIRSTCASH (FCFS) RATED NEW OVERWEIGHT AT BARCLAYS; PT USD 95 HP ENTERPRISE (HPE) RATED NEW NEUTRAL AT UBS; PT USD 17 JUNIPER (JNPR) RATED NEW NEUTRAL AT UBS; PT USD 31 MINDBODY (MB) RATED NEW MARKET PERFORM AT WILLIAM BLAIR PVH (PVH) RATED NEW BUY AT DA DAVIDSON; PT USD 167 ROSS STORES (ROST) RATED NEW NEUTRAL AT DA DAVIDSON; PT USD 96 SENSUS HEALTHCARE (SRTS) RATED NEW BUY AT B RILEY FBR; PT USD 12.50 SHOTSPOTTER (SSTI) RATED NEW OUTPERFORM AT WILLIAM BLAIR TJX (TJX) RATED NEW BUY AT DA DAVIDSON; PT USD 130 VIPSHOP HOLDINGS ADRS (VIPS) RATED NEW NEUTRAL AT INDUSTRIAL SECURITIES YELP (YELP) RATED NEW BUY AT WILLIAM O’NEIL & CO INCORPORATED ZUMIEZ (ZUMZ) RATED NEW NEUTRAL AT DA DAVIDSON; PT USD 29  Ex-Dividends

Cypress Semiconductor Corp (CY). Amount USD 0.11  PotlatchDeltic Corp (PCH). Amount USD 3.54  (RANsquawk)