A roundup of some of the North American equities making moves in both directions today
On the rise
Wheaton Precious Metals Corp. (WPM-T) was up after announcing it has entered into a definitive Precious Metal Purchase Agreement with Capstone Mining Corp. (CS-T) in respect to the Cozamin Mine located in Zacatecas, Mexico.
In a research note, Industrial Alliance Securities analyst Puneet Singh said: “While the impact is small right now, WPM used to hold a stream on Cozamin previously, i.e. they know the asset well and see upside. Taking into account recent conference calls, this deal and the Caldas acquisition earlier this year, Wheaton’s corporate development team seems to be the most active on the acquisition front amongst its peers, looking to add new deals to bolster its growth profile (which is more front-loaded). One deal which is likely on the table, that would be needle moving, is on the large Oyu Tolgoi Cu-Ag mine in Mongolia that has a more than $2-billion funding gap. We would expect Wheaton and its larger peers to all be actively making bids.”
Brookfield Renewable Partners LP (BEP.UN-T) gained after announcing a definitive agreement with Exelon Generation Co. (EXC-Q) to acquire a distributed generation development platform comprising 360 megawatts of operating distributed solar across nearly 600 sites throughout the U.S. with an additional over 700 megawatts under development.
The total purchase price is expected to be approximately US$810-million
“This transaction represents an opportunity to acquire a high-quality operating portfolio with a strong development pipeline of advanced-stage projects and a dedicated PPA origination team with a consistent track record of delivering high value projects to customers,” it said. “The portfolio is contracted under long-term power purchase agreements, and Brookfield Renewable intends to leverage its scale, and operating and commercial capabilities to drive additional value.”
Walt Disney Co. (DIS-N) soared in the wake of announcing a heavy slate of new shows for its streaming services, including Marvel and Star Wars series on its fast-growing Disney+ platform and programming from reality TV fan-favorites the Kardashians for Hulu.
The blizzard of new content announcements in a marathon investor day presentation also came with bold new business targets - and programming costs of up to US$16-billion in fiscal 2024 - as Disney races with U.S. entertainment industry rivals to catch up to video streaming pioneer Netflix Inc.
By the end of fiscal 2024, Disney expects to attract as many as 350 million global subscribers across all of its streaming services, easily more than double the 137 million it has today. Armed with fresh content, Disney will also raise the price of Disney+ by US$1 in the U.S. to US$7.99 per month and by 2 euros in continental Europe to 8.99 euros (US$10.92).
The aggressive push comes as Disney taps into a home entertainment boom stoked by the global coronavirus pandemic, with more people staying indoors and seeking out new shows. Launched less than a year ago, Disney+ has already hit 86.8 million subscribers, Disney said, nearly reaching the upper end of a goal its previously set for 2024.
On the decline
First Quantum Minerals Ltd. (FM-T) was lower after the Bank of Zambia said it will begin buying gold from the Canadian miner and the state mining firm as it resumes holding the precious metal as part of its foreign reserves.
The southern African nation - a major copper producer - became Africa’s first pandemic-era sovereign default last month after it failed to pay a coupon on one of its dollar-denominated bonds.
“During periods of market stress - when assets would be losing value - gold would be adding value, thereby shielding the whole portfolio from large losses,” Bank of Zambia Governor Christopher Mvunga said.
Under an agreement signed between the central bank and First Quantum, Zambia will buy gold produced as a by-product of the company’s Kansanshi copper mine.
Kansanshi produced 145,386 ounces of gold in 2019, according to First Quantum’s website.
Lululemon Athletica Inc. (LULU-Q) was lower after it raised its holiday quarter revenue and profit forecasts on Thursday after the bell, as the COVID-19 pandemic induced popularity of home workouts boosted demand for athleisure apparel.
Spiking coronavirus infections and ensuing capacity restrictions imposed in multiple markets would, however, limit fourth-quarter productivity levels to only about 70 per cent of last year, the company warned, causing a marginal slip in its shares.
The shares have gained about 60 per cent this year, boosted by robust demand for comfortable athletic clothing as gym closures led people to workout more at home. Online comparable sales surged 93 per cent in the third quarter, which more than compensated for declines in store traffic.
Sales at retail stores during the holiday season may remain down, as surging virus infections in the United States and Europe and new lockdown measures keep consumers away from high-street shopping.
Still, Lululemon said it expects fourth-quarter revenue to rise by a mid-to-high teens percentage, compared to its prior forecast of a high single to low double-digit increase. Analysts estimate a 14.4-per-cent increase, according to IBES data from Refinitiv.
Fourth-quarter adjusted earnings per share is expected to rise by mid-single-digits, up from a prior forecast of a modest decline.
Excluding certain items, Lululemon earned US$1.16 per share, beating estimates of 88 US cents per share.
See also: Friday’s analyst upgrades and downgrades
Pfizer Inc. (PFE-N) fell after the U.S. Food and Drug Administration said on Friday it was working rapidly to issue an emergency use authorization for its COVID-19 vaccine, with the first Americans set to be immunized as early as Monday or Tuesday.
U.S. Department of Health and Human Services Secretary Alex Azar said regulatory authorization should come within days.
A panel of outside advisers to the FDA on Thursday voted overwhelmingly to endorse emergency use of the vaccine, paving the way for the agency to authorize the shot for a country that has lost more than 285,000 lives to COVID-19.
Pfizer has asked that the two-dose vaccine, developed with German partner BioNTech (BNTX-Q), be approved for use in people aged 16 to 85.
The agency has also notified the U.S. Centers for Disease Control and Prevention and Operation Warp Speed so that they can execute their plans for timely vaccine distribution, it said in a statement.
Bahrain and Canada have also authorized the vaccine, and Canada expects to start inoculations next week.
Inter Pipeline Ltd. (IPL-T) slipped in the wake of saying after the bell on Thursday it will shell out $1-billion in capital expenditures in 2021 as it pushes to finish its petrochemical plant.
The Calgary-based company says it will spend $800-million next year on the Heartland Petrochemical Complex, which it now expects to start up in early 2022.
The update on the plant comes after the company said last month it would find a partner for the plant by the middle of next year.
Inter Pipeline says the rest of its capital spending will be spread across several areas, including keeping up on existing projects, making its oilsands pipelines more efficient, working on systems around a traditional oil pipeline connector launched this year, natural gas liquid processing and bulk storage.
But Inter Pipeline says 93 per cent of the $1-billion will be spent on driving new growth.
The energy company says it will fund the spending program through cash from operations and unspent credit.
Metlife Inc. (MET-N) slid after Zurich Insurance and Farmers Exchanges agreed to buy its U.S. property and casualty business for US$3.94-billion after the COVID-19 pandemic made motor and home insurers more profitable.
The sector has had a windfall as government lockdowns to curb the spread of infection reduced the number of claims for road accidents and burglaries.
Insurers, such as Zurich, by contrast have faced hefty claims from event cancellation and business interruption and premium rates are rising.
“It is an acquisition that complements very well...what we see on the commercial side where the market is hardening,” Zurich Chief Executive Officer Mario Greco told a media call.
The Swiss insurer will contribute US$2.43-billion to the deal through its Farmers Group Inc (FGI) unit, while the Farmers Exchanges will contribute US$1.51-billion, Zurich said.
Mastercard Inc. (MA-N) fell after the UK Supreme Court on Friday allowed a 14-billion pound (US$18.5-billion) class action to proceed against the company for allegedly overcharging more than 46 million people in Britain over a 15-year period in a landmark judgment.
The complex case, brought after Mastercard lost an appeal against a 2007 European Commission ruling that its fees were anti-competitive, could entitle adults in Britain to 300 pounds each if it is successful.
The court dismissed a Mastercard appeal, setting the scene for Britain’s first mass consumer claim brought under a new legal regime and establishing a standard for a string of other, stalled class actions.
“Mastercard has been ... imposing excessive card transaction charges over a prolonged period in a way it must have known would impose an invisible tax on UK consumers,” said Walter Merricks, a lawyer who is leading the action.
Mastercard said the claim was driven by “hit and hope” U.S. lawyers.
Broadcom Inc. (AVGO-Q) dipped after it appointed its principal accounting officer, Kirsten Spears, as chief financial officer and forecast first-quarter revenue above estimates as key client Apple Inc doubles down on 5G devices, driving demand for its chips.
Ms. Spears replaces Tom Krause, who has been named president of Infrastructure Software Group, which oversees the chipmaker’s six software divisions. Chief Sales Officer Charlie Kawwas was also named chief operating officer.
Shares of Broadcom, however, fell after the company warned of soft demand from enterprise clients.
Supply disruptions due to the COVID-19 pandemic continue to persist, Chief Executive Officer Hock Tan said.
Broadcom is seeing deceleration in orders for its wireless business, which was offset by strong demand for other products, Mr. Tan added.
The global roll out of 5G technology is expected to boost sales of higher-priced chips used in next-generation smartphones, helping semiconductor firms such as Broadcom.
AMC Entertainment Holdings Inc. (AMC-N) was down after it said on Friday it will get US$100-million as an investment from Mudrick Capital Management, a shot in the arm for the cash-strapped movie theater operator struggling with delayed Hollywood releases and theater closures.
The world’s largest theater operator said it would need at least US$750-million of additional liquidity to fund its cash requirements through next year.
AMC estimated its cash and cash equivalents amounted to about US$320-million at Nov. 30, and in the absence of additional liquidity it anticipates existing cash resources will be depleted during January next year.
The company said it would renegotiate its rent payments with landlords, seeking reductions, abatements and deferrals.
Theater chains across the world have been devastated by the COVID-19 pandemic, with many forced to lay off workers and borrow funds to stay afloat. From Oct. 1 to Nov. 30, AMC said overall attendance at its U.S. theaters declined about 92 per cent compared to a year earlier.
Shares of Airbnb Inc. (ABNB-Q) gave back early gains after they more than doubled in their stock market debut on Thursday, valuing the home rental firm at just over US$100-billion in the biggest U.S. initial public offering (IPO) of 2020 and capping a bumper year in which investors flocked to tech stocks.
Airbnb opened at US$146 on the Nasdaq, far above the IPO price of US$68 per share that raised US$3.5-billion for the company. The stock hit a high of US$165 and closed at US$144.71.
The IPO is the culmination of a stunning recovery in Airbnb’s fortunes after the firm’s business was heavily damaged by the COVID-19 pandemic earlier this year.
But as lockdowns eased, more travelers opted to book homes instead of hotels, helping Airbnb post a surprise profit for the third quarter. The San Francisco-based firm also gained from increased interest in renting homes away from major cities.
“I don’t think this summer too many people expected to see an Airbnb IPO this year,” Airbnb Chief Executive Brian Chesky told Reuters in an interview.
“We were planning on going public, we put our IPO on hold and this has been the most unbelievable journey. It’s been quite a comeback for our hosts and for what I hope will be travel,” added Mr. Chesky, whose Airbnb stake is now worth around US$11-billion.
With files from staff and wires