RANsquawk Daily US Equity Opening News – 15th August 2018 – Earnings from M, A

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15th August 2018

Earnings

Agilent (A) Q3 Adj. EPS USD 0.67 vs. Exp. USD 0.63, revenue USD 1.2bln vs. Exp. USD 1.2bln. Sees Q4 Adj. EPS between USD 0.72-0.74, consensus USD 0.73 and sees Q4 revenue USD 1.24bln-1.26bln, consensus USD 1.26bln. (Newswires)

Perspecta (PRSP) reports Q1 Ad. EPS USD 0.54 vs. Exp. USD 0.46, revenue USD 0.793bln vs. Exp. USD 1.03bln. Sees FY18 pro forma revenue USD 4.15bln-4.250bln, consensus USD 4.2bln and sees FY19 Adj. EPS USD 1.80-1.95, consensus USD 1.86. (Newswires)

Macy’s (M) Q2 Adj. EPS ex-items USD 0.70 vs Exp. USD 0.51, revenue USD 5.572bln vs Exp. USD 5.55bln; Raises annual sales and earnings guidance. Total sales expected to be flat to 0.7% increase in FY18. Reports flat comparable sales on owned basis for Q2. Department stores have been suffering with light mall traffic and from competition from off-price retailers and Amazon (AMZN). Other retailers such as J.C. Penney Co Inc (JC), Nordstrom Inc (JWN) and Kohl’s Corp (KSS) also fell on the back of the report. (Newswires)

Tencent (0700 HK) reports quarterly net profit of CNY 17.867bln vs. Exp. CNY 19.3bln (Prev. CNY 18.231bln), revenue CNY 73.675bln vs. Exp. CNY 77.7bln (Prev. CNY 56.606bln). (Newswires)

DJIA

Apple (AAPL) – Analysts predict that the tech giant will introduce smart glasses in 2020 and an Apple Car in 2023 according to a research note from TF Securities analyst Ming-Chi Kuo. (Newswires)

Goldman Sachs (GS) – A judge enabled shareholders to submit a class action litigation against the co. related to its CDO sales practices during the financial crisis in 2008. (Newswires)

Intel (INTC) – The co. and Phillips tested two healthcare imaging use to fasten up deep learning inference models on CPUs. (Newswires)

Walmart Inc (WMT) – A collaboration with TV talk show host Ellen DeGeneres, to launch a women’s fashion line, is said to be underway. This is part of Walmart’s strategy to attain a greater market share in the apparel space. (Newswires)

S&P500

Automakers, Alcohol & Tobacco Names (F, GM, FCAU, PM, MO, BUD, TAP) – Turkey doubles tariffs on US imports on products including cars, alcohol and tobacco is retaliation to the additional US tariffs announced last Friday by US President Trump. (Newswires)

Constellation Brands Inc (STZ) – The parent company of Corona Beer says it will invest USD 4bln in Canadian marijuana producer Canopy Growth, raising its stake to 38%. (Newswires)

CVS Health (CVS) – The co. stated it is ‘actively working’ with clients from the Ohio Managed Medicaid to restructure contracts. (Newswires)

Devon Energy (DVN) – The co. entered into an agreement with to sell 9,600 net acres of non-core Delaware Basin acreage for USD 215mln in Ward and Reeves County to Carrizo Oil (CRZO). (Newswires)

Endo (ENDP) – The co. stated it is lifting a temporary stay related to its litigation against the FDA over the compounding using bulk drug substances. (Newswires)

Express Scripts (ESRX) – The co. is in talks with biotech firms including Biomarin Pharmaceuticals (BMRN), Spark Therapeutics (ONCE) and Bluebird Bio (BLUE) for the distribution of haemophilia therapies. (Newswires)

Ford (F) – The automaker is planning to invest USD 740mln to modernise Detroit station and other nearby sites and intends to replace the building with a complex of offices focusing on self-driving vehicles for around 5,000 tech workers and software engineers. (Newswires)

Gaming names (EA, NTES, ATVI) – Chinese regulators have halted the approval of new games licences on the back of a government overhaul as cited by people familiar with the matter. (Newswires)

Gilead (GILD) – The co. announced management changes, new appointments and a new Chief Patient Officer position. (Newswires)

Idexx Laboratories (IDXX) – The co. expands its rapid overnight service for veterinary practices. (Newswires)

Jacobs Engineering (JEC) – The co. was awarded a General Engineering Services contract in Saudi Arabia. (Newswires)

Lockheed Martin (LMT) – The defence group was awarded USD 2.9bln contract from the US Air Force. (Newswires)

Newell Brands Inc (NWL) – Jeffrey Smith’s hedge fund Starboard Value said it had sold 50% of its stake in the consumer products co. This is after it sought to replace the CEO of the maker of Sharpies, Elmer’s Glue and Mr. Coffee machines. (Newswires)

Oracle (ORCL) – The court granted the co. motion for permanent injunction against Rimini Street (RMNI) over ‘years of infringement of Oracle’s copyrights’. (Newswires)

Solar names (SPWR, TSL, FSLR) – The China Commerce Ministry has submitted a complaint with the WTO over US solar tariffs. (Newswires)

SunTrust (STI) – The co. raised its quarterly dividend to USD 0.50/shr. (Newswires)

Twitter (TWTR) – An engineer at the co. deleted the social media app from his phone in a protest on CEO Jack Dorsey’s policies and criticising his leadership. (Newswires)

United Parcel Service (UPS) – The co. reached a labour deal, after four year of negotiations, with more than 1000 aircraft mechanics granting wage increases and healthcare without premiums. (WSJ)

NASDAQ 100

Alphabet (GOOGL) – YouTube TV is partnering up with Verizon (VZ) to launch a 5G residential broadband package this year, also in Indianapolis. (Newswires)

Amazon (AMZN) – The retail giant says it own’s USD 1bln worth of stock in public and private firms, at the end of Q2. (Newswires)

Tesla (TSLA) – Some members of the board began damage control after telling CEO Elon Musk to stop tweeting, though he continued to do so. (Newswires)

OTHER NEWS

Cabot Microelectronics (CCMP) – The co. is to acquire KMG Chemicals (KMG) for USD 1.6bln or USD 79.50/shr. (Newswires)  

Diamondback Energy (FANG) – The co. is to acquire Energen (EGN) in all-stock transaction of around USD 9.2bln. (Newswires)  

First American (FAF) – The co. raised quarterly dividend by 11% to USD 0.42/shr. (Newswires)

Sears Holdings Corp (SHLD) – CEO Edward Lampert’s hedge fund, ESL Investments, has offered to buy Kenmore appliances from the retail co. for USD 400mln. ESL also made an offer of USD 80mln for Sears’ Home Improvement business. This is according to the SEC. (Newswires)

Taiwan Semiconductor (TSM) – The board has approved USD 4.5bln for capacity expansion for technology purposes. (Newswires)

Tribune Media (TRCO)/Sinclair Broadcast (SBGI) – Tribune executives will be granted bonuses following the termination of the merger deal on August 9th. (Newswires)

WeightWatchers (WTW) – Holder Artal Luxembourg to sell 6mln shares in the co. (Newswires)

Yum China (YUMC) – Several investment firms, including Hillhouse Capital and China Investment Corp., are said to be targeting the restaurant operator for investment. (Newswires)

13-F

Icahn Capital

Takes stake in: Energen (EGN), VMware (VMW), AmTrust Financial Services (AFSI), Cigna (CI)

Increases stake in: Icahn Enterprises (IEP), Newell Brands (NWL)

Reduces stake in: Herbalife (HLF), Cheniere Energy (LNG)

Top holdings: Icahn Enterprises (IEP), CVR Energy (CVI), Herbalife (HLF), Cheniere Energy (LNG), Freeport-McMoRan (FCX)

Berkshire Hathaway (BRK.A)

Increased stake in: Apple (AAPL) by 5%, U.S. Bancorp (USB), Teva (TEVA), BNY Mellon (BK), and Delta Air Lines (DAL).

Reduced stake in: American Airlines (AAL), Phillips 66 (PSX), Charter Communications (CHTR), United Continental (UAL), and Wells Fargo (WFC)

Top holdings: Apple, Wells Fargo, Kraft Heinz (KHC), Bank of America (BAC), and Coca-Cola (KO)

Trian Fund

Increases stake in: Bank of New York Mellon (BK), General Electric (GE), and Mondelez (MDLZ).

Reduced stake in: Wendy’s (WEN) and Sysco (SYY)

Top holdings:  Procter & Gamble (PG), Sysco, GE, BNY Mellon, and Mondelez

Pershing Square

New buy: Lowe’s (LOW).

Increased stake in: United Technologies (UTX) and Mondelez (MDLZ)

Reduced stake in: ADP (ADP) and Restaurant Brands (QSR)

Top holdings: Restaurant Brands, Chipotle (CMG), Lowe’s, Mondelez, and United Technologies

Elliot Management

New buys: Devon Energy (DVN), VMware (VMW), 21st Century Fox (FOX), and Sempra Energy (SRE)

Exited stake in: Energen (EGN), Teradyne (TER), Nomad Foods (NOMD), and VICI Properties (VICI)

Increased stake in: Hess (HES), Dish (DISH), EQT Corp. (EQT), Micro Focus International (MFGP), and Invesco QQQ Trust Series 1 (QQQ)

Decreased stake in: CDK Global (CDK), Investors Bancorp (ISBC), Wipro (WIT), and Imperva (IMPV)

Top holdings: NXP Semiconductors (NXPI), Peabody Energy (BTU), Hess, Arconic (ARNC), and CDK Global

Soros Fund Management

New buys: Spotify (SPOT), Pandora (P), Coupa Software (COUP), Facebook (FB), and Devon Energy (DVN).

Exited stake in: Kennedy-Wilson (KW), Lam Research (LRCX), Alerian MLP (AMLP), Zayo Group (ZAYO) and Baxter International (BAX).

Increased stake in: NXP Semi (NXPI), XL Group (XL), Intelsat (I), LPL Financial (LPLA) and ServiceNow (NOW)

Reduced stake in:  FGL Holdings (FG), Netflix (NFLX), EQT Corp (EQT), and Williams (WMB)

Lone Pine Capital

New buys: Canadian Pacific (CP), NVIDIA (NVDA), and Mohawk Industries (MHK).

Exited stake in: Broadcom (AVGO), Taiwan Semiconductor (TSM), BlackRock (BLK), T-Mobile US (TMUS), and Exact Sciences (EXAS).

Increased stake in: Wynn Resorts (WYNN), TrandsDigm (TDG), Microsoft (MSFT), Alibaba (BABA), and ServiceNow (NOW)

Reduced stake in: Facebook (FB), PayPal (PYPL), Constellation Brands (STZ), Adobe Systems (ADBE), and Amazon (AMZN)

Top holdings: Microsoft, Alibaba, Activision Blizzard (ATVI), Adobe, and Booking Holdings (BKNG)

Paulson & Co.

New buys: Mitel Networks (MITL), Akorn (AKRX), Comcast (CMCSA), 21st Century Fox (FOXA), and LaSalle Hotel Properties (LHO).

Exited stake in: McDermott (MDR).

Increased stake in: Discovery (DISCA), NXP Semiconductors (NXPI), 21st Century Fox (FOX), Aetna (AET), and XL Group (XL)

Reduced stake in:  Randgold (GOLD), IAMGOLD (IAG), Rockwell Collins (COL), Agnico Eagle Mines (AEM), and Goldcorp (GG)

Top holdings:  SPDR Gold Shares, Bausch Health Companies (BHC), Shire (SHPG), Mylan (MYL), and Allergan (AGN)

Appaloosa

New buys: KeyCorp (KEY), Symantec (SYMC), Citizens Financial (CFG), Vistra Energy (VST), and New Oriental Education & Technology Group (EDU)

Exited stake in: Invesco QQQ Trust Series 1 (QQQ), Applied Materials (AMAT), VanEck Vectors Semiconductor ETF (SMH), Allstate (ALL), and NVIDIA (NVDA)

Increased stake in: Micron (MU), Western Digital (WDC), Cheniere Energy (LNG), Wells Fargo (WFC), and Platform Specialty Products (PAH)

Reduced stake in: Alibaba (BABA), NRG Energy (NRG), Bank of America (BAC), MGM Resorts (MGM), and Ally Financial (ALLY).

Top holdings: Micron, Facebook (FB), Allergan (AGN), Alibaba, and Alphabet Class C (GOOG)

BROKER MOVES

Upgrades

ADVANCE AUTO PARTS (AAP) UPGRADED TO BUY FROM NEUTRAL AT CITI

AUTOZONE (AZO) UPGRADED TO OVERWEIGHT FROM EQUAL WEIGHT AT STEPHENS

BEMIS (BMS) UPGRADED TO SECTOR PERFORM FROM UNDERPERFORM AT RBC CAPITAL

BOK FINANCIAL (BOKF) UPGRADED TO OUTPERFORM FROM MARKET PERFORM AT RAYMOND JAMES

BRIGHTHOUSE FINANCIAL (BHF) UPGRADED TO NEUTRAL FROM UNDERPERFORM AT CREDIT SUISSE

CHIPOTLE (CMG) UPGRADED TO OVERWEIGHT FROM EQUAL WEIGHT AT MORGAN STANLEY

COLUMBIA SPORTSWEAR (COLM) UPGRADED TO OUTPERFORM FROM MARKET PERFORM AT COWEN

CORVUS PHARMACEUTICALS (CRVS) UPGRADED TO OUTPERFORM FROM NEUTRAL AT CREDIT SUISSE

CRONOS GROUP (CRON) UPGRADED TO HOLD FROM SELL AT CANACCORD

DICERNA (DRNA) UPGRADED TO BUY FROM NEUTRAL AT H.C. WAINWRIGHT

HASBRO (HAS) UPGRADED TO BUY FROM NEUTRAL AT MKM PARTNERS

INCYTE (INCY) UPGRADED TO OUTPERFORM FROM SECTOR PERFORM AT RBC CAPITAL

NORFOLK SOUTHERN (NSC) UPGRADED TO BUY FROM HOLD AT DEUTSCHE BANK

NVIDIA (NVDA) DOUBLE-UPGRADED TO OUTPERFORM FROM UNDERPERFORM AT WELLS FARGO

PAPA JOHN’S (PZZA) UPGRADED TO HOLD FROM SELL AT STIFEL

SILICON MOTION (SIMO) UPGRADED TO OUTPERFORM FROM MARKET PERFORM AT COWEN

TERRAFORM POWER (TERP) UPGRADED TO OUTPERFORM FROM PERFORM AT OPPENHEIMER

Downgrades

AECOM (ACM) DOWNGRADED TO HOLD FROM BUY AT ARGUS

ALTA MESA RESOURCES (AMR) DOWNGRADED TO IN-LINE FROM OUTPERFORM AT IMPERIAL CAPITAL

AVALONBAY (AVB) DOWNGRADED TO NEUTRAL FROM OUTPERFORM AT BAIRD

CYTORI THERAPEUTICS (CYTX) DOWNGRADED TO HOLD FROM BUY AT MAXIM

DIAMONDBACK ENERGY (FANG) DOWNGRADED TO MARKET PERFORM FROM OUTPERFORM AT BMO CAPITAL

EVOLUTION PETROLEUM (EPM) DOWNGRADED TO HOLD FROM ACCUMULATE AT JOHNSON RICE

HOLLYSYS (HOLI) DOWNGRADED TO NEUTRAL FROM OVERWEIGHT AT JPMORGAN

INTELLICHECK (IDN) DOWNGRADED TO PERFORM FROM OUTPERFORM AT OPPENHEIMER

INTERCEPT (ICPT) DOWNGRADED TO SECTOR PERFORM FROM OUTPERFORM AT RBC CAPITAL

KIMBERLY-CLARK (KMB) DOWNGRADED TO HOLD FROM BUY AT SOCIETE GENERALE

MARCUS (MCS) DOWNGRADED TO NEUTRAL FROM BUY AT B. RILEY FBR

MATADOR (MTDR) DOWNGRADED TO ACCUMULATE FROM BUY AT JOHNSON RICE

NEW GOLD (NGD) DOWNGRADED TO UNDERPERFORM FROM SECTOR PERFORM AT RBC CAPITAL

NIELSEN (NLSN) DOWNGRADED TO HOLD FROM BUY AT PIVOTAL RESEARCH

SCHNITZER STEEL (SCHN) DOWNGRADED TO UNDERWEIGHT FROM EQUAL WEIGHT AT MORGAN STANLEY

TESARO (TSRO) DOWNGRADED TO HOLD FROM BUY AT ARGUS

UNION PACIFIC (UNP) DOWNGRADED TO HOLD FROM BUY AT DEUTSCHE BANK

WESTERN DIGITAL (WDC) DOWNGRADED TO MARKET PERFORM FROM OUTPERFORM AT COWEN

YOGAWORKS (YOGA) DOWNGRADED TO NEUTRAL FROM BUY AT GUGGENHEIM

Initiations

BARSELE MINERALS (BME CN) RATED NEW OUTPERFORM AT NATIONAL BANK

CISION LTD. (CISN) RATED NEW OUTPERFORM AT WILLIAM BLAIR

GW PHARMA ADRS (GWPRF) RATED NEW BUY AT STIFEL; PT – USD 181

OBSEVA (OBSV) RESUMED AT LEERINK PARTNERS WITH OUTPERFORM; PT – USD 25

TELLURIAN (TELL) RATED NEW OUTPERFORM AT BAIRD; PT – USD 15

Ex-Dividends

Archer Daniels Midland Co (ADM) – USD 0.34 

Aramark (ARMK) – USD 0.11 

CenterPoint Energy Inc (CNP) – USD 0.28 

Columbia Sportswear Co (COLM) – USD 0.22 

Duke Realty Corp (DRE) – USD 0.20 

Invitation Homes Inc (INVH) – USD 0.11 

Invesco Ltd (IVZ) – USD 0.30 

Marathon Petroleum Corp (MPC) – USD 0.46 

Microsoft Corp (MSFT) – USD 0.42 

Oshkosh Corp (OSK) – USD 0.24 

Resmed Inc (RMD) – USD 0.37 

TJX Companies Inc (TJX) – USD 0.39 

Wynn Resorts Ltd (WYNN) – USD 0.75 

Zions Bancorp (ZION) – USD 0.30 

(RANsquawk)