A survey of North American equities heading in both directions
On the rise
Shares of Shopify Inc. (SHOP-T) rose 4.4 per cent on Monday after it reported record Black Friday sales data.
Before the bell, the Ottawa-based e-commerce firm said its merchants logged US$4.1-billion in sales through Black Friday, up 22 per cent year-over-year.
“From the crack of dawn in New Zealand through the final minutes in California, our merchants drove a 22-per-cent increase in sales over last year,” it said in a release. “Shopping peaked when collective sales reached $4.2 million per minute at 12:01 p.m. EST on Friday.”
Through Friday’s close, Shopify’s U.S.-listed shares have doubled year-to-date, including 49-per-cent surge this month.
U.S. shoppers looking for steep discounts are set to boost Cyber Monday online sales to a record US$12-billion to US$12.4-billion, splurging on products like Barbie dolls and headphones, data from Adobe Analytics showed.
The midpoint of the range represents a jump of nearly 8 per cent, better than Adobe’s initial forecast of a 6.1-per-cent rise to US$12-billion, easing concerns of a lacklustre 2023 holiday shopping season.
Salesforce also predicted Cyber Monday online sales would grow in the high-single-digit percentage range, both globally and in the United States
Vancouver’s Xenon Pharmaceuticals (XENE-Q) said on Monday its experimental drug to treat major depressive disorder (MDD) had failed to significantly reduce the severity of the condition in a mid-stage study.
Shares of the company were higher by over 17 per cent after briefly tumbling 24 per cent in premarket trading.
Xenon said the study tested two doses of XEN1101 in 168 patients with moderate to severe MDD, with the drug candidate showing a clinically meaningful, but not statistically significant, reduction in depressive symptoms compared with a placebo.
Stifel analyst Paul Matteis, however, said in a note that he believed the data showed the drug held some promise as a treatment for MDD despite not showing statistical significance.
“We think there’s value to be unlocked for XEN1101 in MDD,” Matteis added.
Xenon said it was actively exploring future development of the drug as a treatment for MDD. It is also testing XEN1101 in a late-stage study as a treatment for epilepsy.
The U.S. health regulator last month rejected Sage Therapeutics (SAGE-Q) and partner Biogen’s (BIIB-Q) pill, Zurzuvae, as a treatment for major depressive disorder, which according to the National Institutes of Health, is one of the most common chronic mental disorders in the United States.
Activist investor Elliott Investment Management is seeking new executive and board changes at Crown Castle Inc. (CCI-N) in a letter released on Monday, after disclosing a US$2-billion stake in the real estate investment trust.
Shares of Crown Castle were up 3.5 per cent in Monday trading.
The hedge fund in a letter released on Monday said the company needs “comprehensive leadership change.” It said it was ready to appeal to other shareholders to make changes to the 12-member board, signaling a possible proxy fight next year.
It also wants the company to review its fiber strategy, including considering a possible sale of the business.
It is the second time the U.S. hedge fund is publicly pressuring the company after it urged management to rethink its fiber infrastructure strategy and criticized the company’s returns in 2020.
Elliott, which said it now owns a US$2-billion stake in the real estate investment trust, said operational underperformance and flawed capital allocation contributed to a sagging share price.
“We are prepared and intend to make our case directly to shareholders with a majority slate of alternative directors at the company’s 2024 annual meeting,” Elliott managing partner Jesse Cohn and senior portfolio manager Jason Genrich said in the letter.
“Crown Castle suffers from a profound lack of oversight by the Board, which has contributed to its irresponsible stewardship and flawed financial policy,” Elliott said.
The hedge fund criticized Crown Castle for having “disregarded our data-driven analysis” and said “our recommended changes were neither made nor taken seriously.”
On the decline
Transat AT Inc. (TRZ-T) fell 3.2 per cent after the Canadian Union of Public Employees (CUPE) said on Monday more than 2,000 flight attendants at Air Transat unanimously voted to authorize a strike mandate following negotiations since April.
In the event of a strike, which would become legal as of Jan. 3, 2024 under the Canadian Labour Code, it should be anticipated that all flights will be canceled, the union said in a statement.
Pilots and other workers at carriers such as Southwest Airlines (LUV-N) and Delta Air Lines (DAL-N) have pushed for better pay and working conditions while negotiating new contracts with company managements at a time when public support for unions is still on the rise.
The strike mandate comes after 33 negotiation sessions and reflects the flight attendants’ exceptionally high level of dissatisfaction with their working conditions, particularly with wages and purchasing power, according to the statement.
“More than 50 per cent of them (the members) have been forced to take on a second or even a third job to make ends meet, and their starting salary is only $26,577 per year,” said Dominic Levasseur, president of the Air Transat Component of CUPE.
The collective agreement for 2,100 flight attendants based at airports in Montreal and Toronto expired on Oct. 31, 2022, CUPE said.
The move mimics recent labor unrest by unions at various other industries such as casinos, logistics and automotives.
Canada-listed tour operator Transat AT Inc offers air travel under the Air Transat brand.
As of July 31, 2023, Air Transat’s permanent fleet consisted of 13 Airbus A330s, 14 Airbus A321LRs and eight Airbus A321ceos.
As oil prices continued to weigh, Suncor Energy Inc. (SU-T) dipped 1.6 per cent after it said on Monday it has restarted the Terra Nova floating oil production and storage offloading vessel in Canada and production is expected to ramp up over the coming months.
Terra Nova is an oilfield located offshore Newfoundland and Labrador.
The site has restarted after the completion of the Terra Nova Asset Life Extension project. In 2021, Suncor and the Terra Nova joint venture owners finalized this project to extend production life by about 10 years.
Suncor, Terra Nova’s operator, owns 48 per cent, and Cenovus Energy Inc. (CVE-T) and Murphy Oil Corp. (MUR-N) own smaller stakes.
First Quantum Minerals Ltd. (FM-T) slipped 4.3 per cent after it said on Monday two people died at its Zambian operations last week.
The miner said a worker from its contracting partner, Reliant Drilling, died at First Quantum’s Kansanshi operations following a fall of ground due to an underground dewatering decline on Thursday.
In a separate incident on Friday, a contractor was killed in a light-vehicle accident at Sentinel mine, First Quantum added.
On Sunday, the company said it intends to start arbitration against Panama as the country’s top court considers annulling a copper contract that opponents call unfair.
On Oct. 20, Panama’s government approved a contract for First Quantum to operate the copper Cobre Panama mine. It included a 20-year mining right with an option to extend for another 20 years. In return the miner agreed to pay Panama $375-million a year.
Opponents claim the contract favours the miner too much as the mine represents about 5 per cent of the country’s GDP and some 1 per cent of global copper output. Protesters have demonstrated over the mine’s environmental and economic impacts and allege corrupt practices in its approval.
Baytex Energy Corp. (BTE-T) declined 1.2 per cent after saying it has signed a deal to sell some of its Viking assets in southwest Saskatchewan for $153.8-million.
Production from the assets located at Forgan and Plato is about 4,000 barrels of oil equivalent per day of light and medium crude oil.
The company says the net proceeds from the sale will be used to reduce bank debt.
The sale is expected to close before the end of the year.
Baytex has operations producing oil and natural gas in Western Canada and the Eagle Ford region in the United States.
The Lion Electric Co. (LEV-T) declined 3.5 per cent after saying it is cutting 150 jobs or about 10 per cent of its total workforce in a move to reduce costs and improve its ability to reach its profitability objectives.
Lion Electric chief executive and founder Marc Bedard says it was a difficult decision, but the right thing to do for the business.
The cuts affect workers in production overhead, manufacturing, product development and administrative functions, both in Canada and the United States.
Montreal-based Lion Electric designs and builds all-electric trucks, buses and minibuses.
Earlier this month, the company reported a loss of US$19.9-million or 9 US cents per diluted share in its third quarter compared with a loss of US$17.2-million or 9 US cents per diluted a year earlier.
Revenue for the quarter ended Sept. 30 totalled US$80.3-million, up from US$41-million in the same quarter last year.
Shares of Foot Locker Inc. (FL-N) dropped almost 1 per cent after an equity analyst at Citi downgraded its shares to “sell” from “neutral” ahead of the release of its third-quarter results on Wednesday, seeing “tough positioning and timing for a turnaround.”
“We anticipate 3Q EPS of $0.10 (vs consensus $0.23) based on weaker comps (down 11 per cent vs consensus down 10 per cent) and weaker gross margins (down 510 basis points vs consensus down 460 basis points),” said Paul Lejuez. “We believe a weakening macro/still elevated inventory levels are driving FL to be more promotional than plan this fall/holiday. Our 4Q [EPS] estimate of $0.16 is below cons $0.33 based on weaker sales/margins.
“We believe FL will sacrifice margin near-term to get clean on inventory by year-end. With 64 per cent of sales coming from NKE product, FL is not completely in control of its own destiny. As we look to F24, a complex macro backdrop makes it tough to execute a turnaround. Our F24 [EPS] estimate of $1.15 is below cons $1.98 based on weaker comps (down 2 per cent vs consensus up 2 per cent). At current levels, we believe the risk/reward skews to the downside.”
With files from staff and wires
David Leeder