A roundup of some of the North American equities making moves in both directions today
On the rise
Tesla Inc. (TSLA-Q) was up 0.1 per cent on Tuesday after brokerage JMP Securities upgraded the stock to “market outperform” from “market perform," seeing sustainable growth for the next 4-5 years.
“The recent market-driven pullback provides investors with a good opportunity to enter the stock in our opinion, and a perusal of offerings from competitors suggests that Tesla’s market position should continue to be dominant,” said analyst Joseph Osha, who set a target of US$1,060, exceeding the US$502 average."
Reuters reported earlier on Tuesday that Mr. Baker would take over from current CEO Helena Foulkes, according to a source familiar with the matter.
Ms. Foulkes, who has been at the helm since 2018, will step down effective March 13, Hudson’s Bay said in a statement.
“The company and I are grateful for Helena’s leadership and significant accomplishments over the last two years,” Baker said in the statement. “We are confident in our go-forward leadership team and our ability to drive HBC forward.”Executive Chairman Richard Baker will take over as chief executive officer.
The move comes just days after the company won shareholders’ approval to take the Canadian department store operator private by Mr. Baker.
The company declined to comment.
Thermo Fisher Scientific Inc. (TMO-N) was up 1.7 per cent after it agreed to buy German genetic testing company Qiagen (QGEN-N) in a US$11.5-billion deal as the U.S.-based group looks to bolster its health diagnostic business.
Qiagen, which has its main operations in Germany but is headquartered in the neighbouring Netherlands, is one of the world’s largest suppliers of products to prepare tissue and blood samples for advanced testing.
These genetic tests play a major role in research and treatment of cancer, infectious diseases and genetic disorders.
Last month it also began shipping a new rapid testing kit for the coronavirus to hospitals in China.
At 39 euros per share, the cash offer was pitched at a 23-per-cent premium to Qiagen’s closing price on Monday, Qiagen said, adding the bid valued the company at 10.4 billion euros (US$11.5-billion), including 1.26 billion euros in net debt.
Qiagen shares rose 14.8 per cent on the news.
On the decline
Tilray Inc. (TLRY-Q) plummeted 15.2 per cent after it missed analyst expectations as it reported revenues of US$46.9 million in its latest quarter, a roughly 8 per cent drop from the $51 million it announced the quarter before.
Analysts had expected the Nanaimo-based cannabis company to report a revenue of US$55.4-million in its fourth quarter ending Dec. 31., according to financial markets data firm Refinitiv.
Tilray says its revenues increased by 202 per cent from the same period last year and was largely driven by its acquisition of hemp foodmaker Manitoba Harvest and growth in international medical markets.
The company’s net loss for the quarter was US$219.1-million or US$2.14 per share compared to a loss of US$31.0-million or 33 US cents per share for the same quarter of the year prior.
Tilray attributed the increased net loss to higher operating expenses related to growth initiatives, the expansion of international teams, and the addition of its Manitoba Harvest and Natura.
The company said it has been unable to complete its financial statements for fiscal 2019 “due to a continuing review by the audit committee of the company’s board of directors, with the assistance of outside counsel and forensic accountants, of several bulk resin purchases and sales of products through the wholesale channel and the appropriateness of the recognition of revenue from those transactions.”
In response to the news, Cronos shares were downgraded by an equity analyst on Tuesday before the bell.
Village Farms International, Inc. (VFF-T) slid 4.9 per cent after it announced a settlement agreement with Emerald Health Therapeutics (EMH-X) related to all outstanding disputes over their Pure Sunfarms Corp joint venture.
Emerald Health shares jumped 28.9 per cent.
Under the terms of the settlement agreement, the 5,940,000 common shares of Pure Sunfarms that were placed in escrow pending Emerald’s $5.94 million equity contribution to Pure Sunfarms (originally due in November 2019) will be cancelled, effective Nov. 19, and Village Farms and Emerald will cease arbitration proceedings on the matter.
Other conditions see Emerald will forfeit and waive repayment by Pure Sunfarms of its outstanding $13.-million shareholder loan to Pure Sunfarms (plus accrued interest of $1.1-million) and Emerald will issue a promissory note to Pure Sunfarms in the amount of $952,237.
Pure Sunfarms will also release Emerald from all liability arising from their supply agreement, among other conditions. The result is that Village Farms will have owned 53.5 per cent of Pure Sunfarms and Emerald will have owned 46.5 per cent of Pure Sunfarms.
In addition, Village Farms has made an additional equity contribution to Pure Sunfarms of $8-million in 2020.
Chevron Corp. (CVX-N) was down 2.4 per cent after it said on Tuesday it could return as much as US$80-billion to shareholders over five years even if oil prices remained low.
Chevron and other energy companies have pledged to curb spending after the collapse in oil prices earlier this decade forced many to borrow to cover costs of long-term projects.
The oil major said it had the potential to distribute between US$75-billion and US$80-billion over the next five years and would maintain its capital spending in a range of US$19-billion to US$22-billion annually through the period.
“We remain focused on a returns-driven approach to capital allocation, investing in lower-risk projects,” Chief Financial Officer Pierre Breber said.
Reuters reported on Monday that the company is offering buyouts to reduce its U.S. oil exploration and production workforce as it moves to cut costs in the face of sharply lower oil and gas prices
Visa Inc. (V-N) fell 3.5 per cent in the wake of warning late Monday that its second-quarter revenue growth would be slower than its previous forecast, becoming the latest payments services provider to be affected by the coronavirus outbreak.
The company said it expects current-quarter revenue growth to be between 2.5 and 3.5 percentage points lower than its previous forecast of low double digit growth, when compared with the first quarter.
Rival Mastercard Inc and payments processor PayPal Holdings Inc have warned of slowing first-quarter revenue growth due to the outbreak.
Visa said the epidemic has impacted travel to and from Asia, and has driven a sharp slowdown at its cross-border business, a key source of revenue for the world’s largest payments network.
The company said slowing cross-border growth rates do not yet fully reflect the virus spreading outside of Asia. “We anticipate that this deteriorating trend has not bottomed out yet.”
Target Corp. (TGT-N) was down 3 per cent on Tuesday after the retailer forecast full-year earnings below analysts’ estimates and missed lowered expectations for holiday-quarter revenue, as it wrestled with falling demand for toys and electronics as well as slowing online growth.
Target’s sales figures and tepid forecast underscore the pressure brick-and-mortar retailers are facing in building their e-commerce operations to attract more shoppers amid fierce competition from Amazon.
Walmart Inc. posted its slowest increase in quarterly online sales in nearly two years last month and forecast growth to slow further this year. In contrast, Amazon logged record sales for the holiday season.
Target’s comparable digital sales rose 20 per cent in the fourth quarter, compared with 31-per-cent growth reported in the third quarter as well as in the year-earlier period.
“Clearly, it was not the quarter the company was hoping for,” said Ken Perkins, founder of research firm Retail Metrics.
The slowdown in growth comes even as Target, one of the bellwethers in the retail industry, spends billions of dollars on rolling out same-day delivery and in-store pickup services, while remodeling stores that are also used as hubs to serve online orders.
U.S. retailer Kohl’s Corp. (KSS-N) declined 2.9 per cent after beating Wall Street estimates for quarterly profit on Tuesday as partnerships with online retail giant Amazon and others brought in more shoppers to its stores.
Under its partnership with Amazon, the retailer accepts returns of orders made online. It has also tied up with fitness center operator Planet Fitness Inc to open workout centers near some stores.
The chain is battling competition from off-price and online retailers, as well as traditional retailers like Target and Nordstrom.
“We are encouraged by the acceleration of traffic and new customer acquisition in our stores and online driven by the unprecedented level of new brands and partnerships,” Chief Executive Officer Michelle Gass said.
The company, however, forecast 2020 earnings largely below Wall Street estimates, hurt by lower margins as it offers heavy discounts to bring in shoppers.
It expects earnings between US$4.20 per share and US$4.60 per share for fiscal 2020. Gross margin is expected to fall 10-20 basis points from last year.
U.S. drugmaker Eli Lilly and Co. (LLY-N) was lower by 1.9 per cent after it said on Tuesday it does not expect the coronavirus outbreak to result in shortages for any of its treatments, including all forms of insulin.
The company said it does not source active drug ingredients from China for any of its approved medicines and that its insulin manufacturing facilities in the United States and Europe have not been impacted by the outbreak.
U.S. officials last week raised concerns over the U.S. drug supply chain in the wake of the outbreak in China, where a significant portion of the ingredients used to make prescription drugs is made.
The U.S. drugs regulator had identified 20 drugs with shortage risks and on Thursday announced the first coronavirus-related drug shortage in the country, but declined to name the drug.
Lilly said it was in touch with suppliers to ensure supplies of raw materials and that its global manufacturing network was fully operational.
“As the global situation evolves, we will continue to take the steps necessary to safeguard the reliable supply of our medicines,” the company said in a statement.
With files from Brenda Bouw, staff and wires