A roundup of some of the North American equities making moves in both directions today
On the rise
Canopy Growth Corp. (WEED-T) jumped 5.4 per cent on Friday after it was revealed Thursday that the cannabis producer will replace Goldcorp Inc. (G-T) in the S&P/TSX 60 Index effective prior to the open of trading on Thursday, April 18.
Goldcorp, which is set to be acquired by Newmont Mining Corp. (NEM-N), will be dropped from the S&P/TSX Composite Index. Newmont Mining Corp. Its shares were up 0.5 per cent.
On Friday, Spectrum Cannabis, a wholly owned subsidiary of Canopy Growth, announced a partnership with and endorsement from CARP, Canada’s largest and most trusted advocacy association for aging Canadians and its print, online, radio and TV voice, ZoomerMedia.
Spectrum Cannabis will be offering tailored educational initiatives for over 320,000 CARP members seeking more information on medical cannabis.
Shares of Manulife Financial Corp. (MFC-T) were up 0.7 per cent on a Globe and Mail report that it is planning to eliminateits chief operating officer role as it redraws reporting lines for seven key divisions.
As part of the reorganization, chief operating officer Linda Mantia plans to leave Canada’s largest insurer this summer. Three other senior officers are also leaving or retiring between now and the end of the year. Chief information officer Gregory Framke, chief marketing officer Gretchen Garrigues, and senior adviser to the CEO Stephani Kingsmill, who had previously been head of human resources, have all set dates to depart the company.
The Cagary-based company is forecasting an increase of approximately 20 per cent in adjusted funds flow to $110-million to $120-million for 2019.
It is also increasing its monthly dividend by 50 per cent to 1.5 cents per month or 18 cents a year, effective for the July dividend payable in August.
“We will continue to take a conservative approach to operating our business and manage our debt levels and expect to assess our dividend rate again in 2020,” the company stated. “Any further adjustments to our dividend level are dependent on numerous factors including oil egress options and pricing in 2020.”
Walt Disney Co. (DIS-N) increased 11.5 per cent after announcing at its Investor Day event on Thursday that its new family-friendly streaming service will cost US$7 monthly or US$70 annually, which was seen as an aggressive move to challenge Netflix Inc.’s (NFLX-Q) market dominance.
Disney+, which will launch in the United States on Nov. 12 with major global markets to follow, will feature Disney films and TV shows, as well as programming from the Marvel superhero universe, the Star Wars galaxy, Toy Story creator Pixar animation the National Geographic channel and the entire library of The Simpsons.
Credit Suisse analyst Douglas Mitchelson said: “What captured the most attention was a Disney+ global subscriber target of 60 million to 90 million in FY24 (vs. a buyside expectation of 50 million according to our recent investor survey). Further, management targeting Disney+ profitability in FY24 was ahead of most expectations. Not surprisingly, the user interface, content quality, brands and upcoming marketing efforts were all impressive. Overall, the analyst day will likely be good news for Disney stock with management more optimistic on sub growth than the Street, greater content availability at the start, and a faster path to breakeven, even though streaming losses are likely higher in FY20-FY21 than most expected.”
Shares of Netflx Inc. (NFLX-Q) were down almost 4 per cent on the news.
JPMorgan Chase & Co. (JPM-N) was up 4.7 per cent as the largest U.S. bank by assets kicked off earnings season by posting better-than-expected quarterly profit on Friday, displaying strength across its businesses.
The bank said net income rose to a record US$9.18-billion, or US$2.65 per share, in the quarter ended March 31, from US$8.71-billion, or US$2.37 per share, a year earlier. Analysts had projected US$2.35 per share.
Loans in the consumer banking division rose 4 per cent from a year ago. Overall revenue rose 4.7 per cent to US$29.85-billion.
However, the bank’s net interest margin, a key measure of loan profitability, edged up only 0.02 per cent from the fourth quarter, a slower pace of improvement than in the two previous quarters.
“In the first quarter of 2019, we had record revenue and net income, strong performance across each of our major businesses and a more constructive environment," said chairman and CEO Jamie Dimon in a release. "Even amid some global geopolitical uncertainty, the U.S. economy continues to grow, employment and wages are going up, inflation is moderate, financial markets are healthy and consumer and business confidence remains strong.”
Photon Control Inc. (PHO-T) jumped 7.3 per cent after it announced the appointment of Nigel Hunton as its president, CEO and member of the board of directors, effective May 2. The company said Mr. Hunton “brings 30 years of executive management experience and his semiconductor relationships to his new role” at Photon Control.
“Although Badger reported a very solid Q4/18, accompanied by a 6-per-cent increase to the monthly dividend, we are inclined to move to the sidelines given the stock’s run-up in price,” said Elias Foscolos.
On the decline
Investors pushed its stock lower after the bank dialed back its forecast for how much net interest income it would bring in this year.
It now expects a decline of 2 per cent to 5 per cent in net interest income this year from 2018. It previously forecast between a 2-per-cent rise and a 2-per-cent fall.
For the quarter, Wells Fargo’s net income applicable to common stock rose to US$5.51-billion, or US $1.20 per share, in the first quarter ended March 31, from US $4.73-billion, or 96 US cents per share, a year earlier.
Analysts had expected a profit of US$1.09 per share.
Chevron is hoping to bolster its position in shale oil and the liquid natural gas (LNG) market.
It’s the biggest industry merger since Royal Dutch Shell bought BG Group in 2016.
Texas-based Anadarko jumped 32 per cent on the news.
"This transaction builds strength on strength for Chevron," said Chevron's chairman and CEO Michael Wirth. "The combination of Anadarko's premier, high-quality assets with our advantaged portfolio strengthens our leading position in the Permian, builds on our deepwater Gulf of Mexico capabilities and will grow our LNG business. It creates attractive growth opportunities in areas that play to Chevron's operational strengths and underscores our commitment to short-cycle, higher-return investments."
"This transaction will unlock significant value for shareholders, generating anticipated annual run-rate synergies of approximately $2 billion, and will be accretive to free cash flow and earnings one year after close."
Based on Chevron's closing price on Thursday and under the terms of the agreement, Anadarko shareholders will receive 0.3869 shares of Chevron and US$16.25 in cash for each Anadarko share. The total enterprise value of the transaction is US$50-billion.
Chevron also announced plans to divest US$15- to US$20-billion of assets between 2020 and 2022. The proceeds will be used to further reduce debt and return additional cash to shareholders.
LYFT Inc. (LYFT-Q) was down 1.9 per cent a day after rival Uber Technologies Inc. released its initial public offering filing, which gave the first comprehensive financial picture of the ride-sharing giant.
The S-1 filing with the U.S. Securities and Exchange Commission revealed Uber had 91 million average monthly active users on its platforms, which include ride-hailing and Uber Eats, at the end of 2018. This is up 33.8 per cent from 2017, but growth slowed from 51 per cent a year earlier.
After making the public filing, Uber will begin a series of investor presentations, called a roadshow, which Reuters has reported will start the week of April 29. The company is on track to price its IPO and begin trading on the New York Stock Exchange in early May.
Tesla Inc. (TSLA-Q) erased early gains and sat down 0.3 per cent after David Einhorn’s Greenlight Capital renewed criticism of Elon Musk and the car maker in a letter sent to clients of the hedge fund on Friday, saying it again appears to be on the “brink” of failure in a letter sent to clients of the hedge fund on Friday.
The letter cited a lack of demand, “desperate” price cuts, layoffs and more.
“We believe that right here, right now, the company appears to again be on the brink,” the letter said.
Greenlight is short Tesla stock, recently a profitable bet.
With files from staff and wires