A roundup of some of the North American equities making moves in both directions today
On the rise
A coronavirus-led plunge in demand for crude and related products had forced companies to shut-in production this year. However, with fuel demand having rebounded and prices hovering at about US$50 a barrel, producers have started restoring their shut-in drilling.
Enbridge said it also expects rates for gas transportation to rise and a growing customer base for gas distribution and storage.
The company forecast 2021 EBITDA (earnings before interest, taxes, depreciation, and amortization) to be in the range of $13.9-billion to $14.3-billion, higher than 2020 forecast of about $13.7-billion.
The Calgary-based company also forecast 2021 distributable cash flow per share to be between $4.70 and $5.00 compared with its 2020 forecast of $4.50 to $4.80.
Enbridge raised its dividend by 3 per cent to 83.5 cents per quarter or $3.34 annually, effective March 1, 2021.
Shares of Pfizer Inc. (PFE-N) were higher as it cleared the next hurdle in the race to get its COVID-19 vaccine approved for emergency use on Tuesday after the U.S. Food and Drug Administration (FDA) released documents that did not raise any new issues about its safety or efficacy.
Data on the vaccine submitted to the agency was in line with its guidance on emergency use authorization, FDA staff said in documents released ahead of Thursday’s meeting of outside experts.
The experts will discuss whether the shot developed with German partner BioNTech SE (BNTX-Q) should be authorized for emergency use.
A two-dose vaccination was highly effective in preventing confirmed cases of COVID-19 at least seven days after the last dose, FDA staff said.
The FDA said there was currently insufficient data to make conclusions about the safety of the vaccine in those less than 16 years of age, pregnant women and those whose immune systems were compromised.
The FDA is expected to decide on whether to authorize the vaccine within days or weeks.
Top gold producer Newmont Corp. (NGT-T) was up in the wake of forecasting higher production of the precious metal next year at lower costs, hoping to build on a surge in demand seen during the COVID-19 pandemic.
The attraction of gold as a safe-haven asset pushed prices up nearly 23 per cent this year as global economies reeled under lockdowns designed to curb the spread of the coronavirus outbreak.
The company forecast 2021 gold output of 6.5 million ounces, compared with the 6 million ounces it expects to report this year.
While output was hit in some regions this year due to infections and governmental restrictions, Newmont said its forecast assumes operations will continue without major coronavirus-related interruptions next year and beyond.
Output through 2023 is expected to be between 6.2 and 6.7 million ounces and rise to as much as 7 million ounces through 2025.
The company’s all-in sustaining cost (AISC), a closely watched industry benchmark, is expected to be around US$970 per ounce of gold mined next year, below this year’s forecast of US$1015 per ounce. The cost is expected to further decrease through 2025.
Satellite radio service provider Sirius XM Holdings Inc. (SIRI-Q) saw gains after announcing it had signed a new five-year deal with celebrity Howard Stern to continue to produce and host his popular “Howard Stern Show”.
Under the deal, Stern’s archive of audio and video will continue to be licensed to SiriusXM for an additional seven years.
After decades of being on traditional radio, Stern began airing his show on Sirius’s satellite radio in 2006 when he signed a five-year deal worth US$500-million with the company.
U.S. weapons manufacturer Northrop Grumman Corp. (NOC-N) rose in reaction to news it is selling its federal IT and mission support services business to private-equity firm Veritas Capital for US$3.4-billion in cash.
Northrop Grumman said it expects to use the cash for share buybacks and to pay off debt. The company had net long-term debt of US$14.26-billion at the end of September.
The business, which is expected to generate US$2.3-billion in revenue in 2020, will be combined with Peraton - a company owned by Veritas that provides intelligence, cyber and homeland security services to federal agencies and commercial entities.
The deal is expected to close in the first half of 2021.
Platinum Group Metals Ltd. (PTM-T) shares were rocketing higher for a second day, benefiting from recent strength in platinum and palladium prices. Investors are waiting on news of whether the company will get a permit for its South African PGM project. If granted, the company is a likely acquisition target, analysts suggest.
- Niall McGee
Tesla Inc. (TSLA-Q) reversed course and rose after it unveiled a US$5-billion capital raise on Tuesday, its second such move in three months as the electric-car maker cashes in on a meteoric rally in its shares this year.
The company’s shares touched a record high on Monday, pushing Tesla’s market capitalization above US$600-billion and further cementing its position as the most valuable auto company in the world despite production that is a fraction of rivals such as Toyota Motor, Volkswagen and General Motors.
The interest in its shares got another boost when S&P Dow Jones Indices said in late November that Tesla would be added to the S&P 500 index, making it one of the most valuable companies ever to be join the benchmark.
Ten major banks, including Goldman Sachs, Citigroup Global Markets and Morgan Stanley, will conduct the sale, the carmaker said in a filing, giving no timeline for its completion.
In September, Tesla said it would raise US$5-billion to ease its future debt pressures as the company seeks to massively expand production of its existing vehicles and build new factories near Berlin, Germany and Austin, Texas.
The company also plans to launch new lines of vehicles, including a semi-truck called the Tesla Semi and its futuristic Cybertruck.
Many investors believe Tesla’s stock is in a bubble, and some have warned against adding it to the S&P 500 at current levels.
On the decline
U.S. pipeline operator Kinder Morgan Inc. (KMI-N) was lower after it said on Tuesday it expects to generate higher income in 2021 and raised its annual dividend, as the pipeline operator cost cuts this year in the face of oil demand destruction.
Earnings at Kinder Morgan and across much of the oil industry were hit hard this year by massive asset write-downs as the pandemic crushed fuel demand, pushing crude prices to historic lows.
As the world prepares for a vaccine rollout, fuel demand has rebounded and prices are now hovering at around US$50 a barrel, and producers are resuming their shut-in drilling, improving the prospects for pipeline companies.
Kinder Morgan, which expects net income to be just about US$100-million this year due to large impairments, said it estimates to generate around US$2.1-billion in profit attributable to it next year.
The company expects core earnings of around US$6.8-billion next year and distributable cash flow of US$4.4-billion, it said.
Kinder Morgan said it plans to invest about US$800-million next year on expansion projects and joint ventures, which is lower than expected, according to Credit Suisse analysts.
The company raised its dividend by about 3 per cent to US$1.08 per share on an annualized basis, with US$450-million set aside for share repurchases.
Uber Technologies Inc. (UBER-N) was down amid reports it will sell its self-driving-car division to Aurora Innovation Inc., a California company co-founded by Canadian-born robotics expert Chris Urmson.
The San Francisco-based ride-sharing company had invested billions into self-driving technologies in recent years, competing with giants such as Alphabet Inc. and Tesla Inc. Toronto was one of Uber’s key cities for research and development, testing its self-driving vehicles there and hiring dozens of employees, including chief scientist Raquel Urtasun, a renowned artificial-intelligence specialist hired away from the University of Toronto.
Reuters reported Monday that the deal valued the division, Advanced Technologies Group (ATG), at US$4-billion. Uber will also invest US$400-million in Aurora, giving it a total 26-per-cent stake in the company, which itself is valued at US$10-billion, Reuters said.
- Josh O’Kane
With files from staff and wires