A roundup of some of the North American equities making moves in both directions
On the rise
In the wake of the late Friday announcement of its acquisition of the B.C.-based Bandstra Group of Companies, shares of Mullen Group Ltd. (MTL-T) jumped after a group of equity analysts raised their target prices.
IA Capital Markets’ Elias Foscolos said: “The Bandstra Group, which primarily operates in Northern BC, both expands MTL’s footprint while providing synergy capture opportunities. We expect that this acquisition is accretive on an EV/EBITDA basis proving an immediate uptick in value prior to any synergy capture and that this announcement will be viewed positively.”
Toronto-based CareRx Corp. (CRRX-T) increased after the premarket announcement it has has entered into a definitive agreement to acquire the Long-Term Care Pharmacy Division of Medical Pharmacies Group Ltd. for $75-million.
The provider of pharmacy services to seniors communities estimates the deal adds $150-million in annual revenue and is expected to be immediately accretive with “significant” synergies.
Coca-Cola Co. (KO-N) rose after it trounced estimates for quarterly profit and revenue on Monday, fueled by strong demand for its sodas as vaccine rollouts and relaxed restrictions in Asia encouraged consumers to return to their pre-pandemic routines.
The beverage maker said volumes, a key demand indicator, returned to 2019 levels in March.
“We are encouraged by improvements in our business, especially in markets where vaccine availability is increasing and economies are opening up,” Chief Executive Officer James Quincey said in a statement.
Consumers bought more sodas in China and India offseting weakness in the United States and Western Europe, where restrictions were more stringent and consumers preferred to snack or cook more at home.
Coca-Cola heavily depends on away-from-home channels such as sporting events, restaurants and theaters to generate its sales, while rival PepsiCo Inc emerged a pandemic winner since it sells its snacks and beverages largely in supermarkets and grocery stores.
U.S. motorcycle maker Harley-Davidson (HOG-N) on Monday reported a better-than-expected quarterly profit and raised its full-year forecast for sales growth, as its focus on bigger and profitable touring bikes boost demand, sending its shares up.
Since the middle of last year, the Milwaukee, Wisconsin-based company, which has struggled to grow sales for the past several years, shifted its focus to big bikes, traditional markets such as the United States and Europe, and older and wealthier customers.
In February, the motorcycle maker unveiled a new turnaround plan that targets low double-digit earnings growth through 2025.
The company said its retail sales, a measure of demand at its dealerships, surged 30 per cent to 32,800 motorcycles in North America in its first quarter.
Retail sales in Europe, Harley’s second biggest market outside the United States, slumped 36 per cent to 4,900 motorcycles, due to the company’s decision to stop selling its smaller and less profitable Street or Sportster motorcycles and shipping delays as a result of the COVID-19 pandemic.
The company said lower sales incentives and a cut in its selling, general and administrative expense lifted its motorcycle business operating margin by over 10 points to 18.5 per cent.
It now expects motorcycles business revenue to grow in the range of 30 per cent to 35 per cent in 2021, up from its prior estimate of between 20 per cent and 25 per cent.
Shares of Gamestop Corp. (GME-N) jumped after saying Monday Chief Executive Officer George Sherman would resign, as it pivots from a brick-and-mortar video game retailer to an e-commerce firm.
Mr. Sherman will be stepping down on July 31 or earlier upon the appointment of a successor, the company said in a statement.
Its board is searching to identify chief executive officer candidates.
The development, first reported by Reuters last week, is the biggest shakeup at GameStop since Ryan Cohen, the co-founder and former chief executive of online pet food company Chewy Inc , joined the company’s board in January.
GameStop has been in the process of shifting its business away from the brick-and-mortar retailer model into an e-commerce business that can compete with large-scale retailers such as Walmart Inc, as well as technology companies Microsoft Corp and Sony Corp.
On the decline
Nutrien Ltd. (NTR-T) slid with the late Sunday announcement Chuck Magro is stepping down as chief executive officer and will be replaced by Mayo Schmidt, who is currently chairman of the Saskatoon-based fertilizer giant.
As part of the executive shuffle, Russ Girling, Nutrien director and the former CEO of TC Energy Corp., will become board chairman. There is no indication of any controversy or pressure behind the executive changes. Nutrien said Mr. Magro, who has been its only CEO, is leaving to pursue other opportunities. It did not offer details.
Mr. Magro had been president and CEO of Calgary-based Agrium Inc. when it merged with Potash Corp. of Saskatchewan in 2018 to cement its place as the world’s largest producer of fertilizer. He will help with the leadership transition until May 16, the company said.
“I am very proud of the strong foundation we have built at Nutrien over the last several years,” Mr. Magro said in a statement. “I am grateful for the dedication of our employees, and the important partnerships we have forged with our customers and stakeholders.”
- Jeffrey Jones
Brookfield Renewable Partners LP (BEP.UN-T) was lower on news NextEra Energy Partners is set to acquire a 391-megawatt (MW) portfolio of its four operating wind assets for US$733-million.
NextEra Energy Partners, a company set up by U.S. electric utility NextEra Energy Inc. (NEE-N), buys and operates clean energy projects.
NextEra Energy, the world’s largest generator of renewable energy via wind and sun, briefly overtook Exxon Mobil Corp. (XOM-N) as the largest U.S.-listed energy company by market capitalization last year when the COVID-19 pandemic slashed fuel demand.
That, combined with the Biden administration’s plans to get all of the nation’s electricity from clean energy sources by 2035, has turned the spotlight on utilities like NextEra Energy, as well as other renewable energy companies.
The wind assets, located in California and New Hampshire, are in strong markets with long-term renewables demand and helps NextEra Energy Partners increase its limited partnership distributions per unit by 12 per cent to 15 per cent through 2024, the company said.
Gibson Energy Inc. (GEI-T) reversed early gains and fell after announcing before the bell “it has become the first public energy company in North America to fully transition its principal syndicated revolving credit facility into a sustainability-linked revolving credit facility.”
In a research note, ATB Capital Markets analyst Nate Heywood said: ““This puts GEI at the forefront of sustainability considerations for the energy industry as it becomes the first public Canadian energy Company to transition its revolving credit facility to be sustainability linked. The new 5-year, $750-million, facility includes terms that will impact borrowing costs dependant on meeting ESG/Sustainability targets. Overall, the agreement should be viewed positively as it demonstrates Gibson’s commitment to sustainability and highlights confidence in sustainability initiatives; however, we do recognize the potential risks for increased borrowing costs given any adverse sustainability-related impacts.”
Peloton Interactive Inc. (PTON-Q) plummeted after U.S. Safety regulators warned people with kids and pets Saturday to immediately stop using one of its treadmill after one child died and others were injured.
The U.S. Consumer Product Safety Commission said children and at least one pet were pulled, pinned and entrapped under the rear roller of the Tread+ treadmill, leading to fractures, scrapes and the death of one child.
The safety commission said in a news release and in emails that it knows of 39 “incidents” with the treadmill, involving “multiple” or “dozens” of children, but it did not specify a number of children. It said the majority of the incidents resulted in injuries, including the one death.
The commission posted a video on its YouTube page of a child being pulled under the treadmill.
Of the 39 incidents, 23 involved children, according to New York-based Peloton Interactive Inc.; 15 included objects like medicine balls, and one included a pet, it said.
Peloton said in a news release that the warning from the safety commission was “inaccurate and misleading.” It said there’s no reason to stop using the treadmill as long as children and pets are kept away from it at all times, it is turned off when not in use, and a safety key is removed.
Tribune Publishing Co. (TPCO-Q) dropped after it said on Monday Swiss billionaire Hansjoerg Wyss had decided to leave a group that had made a US$680-million approach for the owner of the Chicago Tribune and the New York Daily News.
The bid from Newslight LLC, which Mr. Wyss had earlier been a part of, will no longer be expected to lead to a “superior proposal,” Tribune said in a statement.
The Baltimore Sun owner received an US$18.50 per share offer from Newslight earlier this month that trumped an earlier proposal from hedge fund Alden Global Capital, the largest shareholder in Tribune.
The US$17.25 per share agreement with Alden remains in place, and shareholders of the publishing company should vote in favor of the Alden deal, the company said.
Tesla Inc. (TSLA-Q) was lower aftert the U.S. National Highway Traffic Safety Administration (NHTSA) said on Monday it was investigating a Texas crash on Saturday that left two dead and local police said appeared to have occurred with no one in the driver’s seat.
NHTSA said it “has immediately launched a Special Crash Investigation team to investigate the crash. We are actively engaged with local law enforcement and Tesla to learn more about the details of the crash and will take appropriate steps when we have more information.”
Tesla had no immediate comment.
The crash occurred as scrutiny is increasing over Tesla’s semi-automated Autopilot driving system following recent crashes.
Autopilot was operating in at least three Tesla vehicles involved in fatal U.S. crashes since 2016.
The 2019 Tesla Model S was traveling at a high speed, when it failed to negotiate a curve and went off the roadway, crashing to a tree and bursting into flames, local television station KHOU-TV said.
With files from staff and wires