A roundup of some of the North American equities making moves in both directions today
On the rise
Recreational vehicle maker BRP Inc. (DOO-T) jumped 2.5 per cent on Wednesday after it raised its guidance for the year and reported higher third-quarter profit.
BRP posted profit in the quarter of $135.3-million or $1.49 a share, up from $90.2-million or 92 cents a year earlier. Revenue rose to $1.64-billion, up from $1.39-billion in the same quarter last year.
In its outlook, BRP says it now expects full-year revenue to grow 12 to 14 per cent compared with the earlier guidance of 10-to-13-per-cent growth. Full-year normalized earnings per diluted share are expected to come in between $3.70 and $3.80, up from earlier guidance for between $3.65 and $3.80.
Desjardins Securities analyst Benoit Poirier said: “Overall, we expect a positive reaction in the market today in light of the strong results (beats across the board), increased FY20 guidance and solid retail growth globally. Despite its recent price performance, we still see potential upside for the stock at current levels given the robust retail sales growth across all markets globally, which should support favourable earnings revisions.”
Hudson’s Bay Company (HBC-T) gained 11.3 per cent after The Catalyst Capital Group Inc. announced an offer to buy the retailer for $11 per share.
The bid from Catalyst, which says it has control of shares representing approximately 17.5 per cent of the company, is above the $10.30-per-share bid from HBC executive chairman Richard Baker to take the company private.
Catalyst, which says it's HBC's third-largest individual holder and the largest minority holder of equity securities of HBC, says it's "deeply concerned with the financial terms and structure of the company-sponsored share buyback," calling it "inadequate" and saying it "undervalues the company on multiple metrics." It also said the other bid also has "substantial negative tax consequences to a significant number of shareholders."
Catalyst says its offer is "a superior, independently financed, all-cash transaction that can be completed in a timely manner, subject to a short period to complete customary due diligence." Catalyst also said it's prepared to consider making a higher offer "based on the results of its due diligence and the cooperation of the special committee and is also prepared to allow other shareholders to be co-equity sponsors to join its offer."
See also: Hudson’s Bay shares fall to lowest point in five months, raising fears for privatization bid.
Tesla Inc. (TSLA-Q) shares were up 0.7 per cent after Chief Executive Officer Elon Musk suggested it has received 250,000 orders for its electric pickup truck unveiled five days ago.
Musk has been promoting the Cybertruck on Twitter and cryptically tweeting out updates to the number of orders the company has received since the launch late Thursday.
After more than 50 interaction on Twitter since the launch, he tweeted “250k” on Tuesday night in an apparent reference to the number of orders.
Tesla opened preorders immediately after the unveiling and allowed potential buyers to book the truck by depositing a fully refundable US$100, compared with the US$1,000 it charged for booking Model 3 sedans in 2016.
Not all orders translate into sales as many are likely eventually to be canceled and money refunded to depositors. Tesla plans to start manufacturing the truck around late-2021.
See also: Tough break for Tesla as Cybertruck’s divisive design drags on shares
Quebec-based convenience store giant Alimentation Couche-Tard Inc. (ATD-B-T) increased 2.4 per cent after posting higher profit in the most recent quarter but fell short of revenue forecasts.
Net income attributable to the company rose to US$578.6-million, or 51 US cents per share, in the second quarter ended Oct. 13 from US$473.1-million, or 42 US cents per share, a year earlier. Revenue fell to US$13.68-billion from US$14.7-billion a year earlier. Analysts had been looking for revenue of US$14.04-billion, according to IBES data from Refinitiv.
The results were released after Tuesday’s close.
Earlier this week, Couche-Tard sweetened its bid for Caltex Australia, Australia’s biggest retail fuel and convenience chain, as it looks to push into the region.
On the decline
Deere & Co. (DE-N) dropped 4.3 per cent on Wednesday in the wake of warning of lower earnings in the fiscal year 2020 after reporting a fall in quarterly profits, hurt by trade tensions as well as poor weather in the U.S. farm belt that have slowed equipment purchases by farmers.
The world’s largest farm equipment maker expects net income of US$2.7-billion to US$3.1-billion next year, lower than $3.25 billion in 2019. The forecast is lower than Refinitiv’s average analyst estimates of US$3.5-billion for the year.
The Moline, Illinois-based company blamed “continued uncertainties” in the farm sector for its travails.
“Lingering trade tensions coupled with a year of difficult growing and harvesting conditions have caused many farmers to become cautious about making major investments in new equipment,” said new chief executive officer John May.
See also: Deere workers grapple with fallout from Trump’s trade war
TMX Group Ltd. (X-T) slipped 4.7 per cent after announcing it is investigating allegations about the past conduct of Chief Executive Officer Lou Eccleston.
“While TMX Group has no comment on these specific allegations at this time, we take allegations of this nature seriously and the TMX Group Board is looking into this matter. Mr. Eccleston has informed the board that he supports this course of action,” the company said in a statement late Tuesday.
CannTrust Holdings Inc. (TRST-T) was down 1.8 per cent after revealing the Toronto Stock Exchange is reviewing the company’s eligibility for continued listing on the exchange.
The company, which has been under fire since it disclosed in July that Health Canada had discovered illicit cultivation in unlicensed rooms at its Pelham, Ont., greenhouse, says the TSX is reviewing the listing because of its failure to file its recent financial statements.
CannTrust says it has not filed its restated audited financial statements for 2018, its restated interim financial statements for the first quarter of 2019 and its interim financial statements for the second and third quarters of 2019 along with the corresponding management discussion and analysis.
The TSX has told the company if it is unable to make the disclosures by March 25, 2020, the company’s securities will be delisted 30 days following that point.
See also: CannTrust has a shot at redemption, but a company breakup is more likely
Dell Technologies Inc. (DELL-N) lost 5.3 per cent after it cut its full-year revenue forecast on Tuesday as its PC business grapples with a shortage of chips from Intel Corp. (INTC-Q).
Dell is the third-biggest PC maker after China’s Lenovo Group Ltd and HP Inc, with the business accounting for nearly half of its total revenue.
“Intel CPU shortages have worsened qtr-over-qtr, impacting our commercial PC and premium consumer PC Q4 forecasted shipments,” Chief Operating Officer Jeffrey Clarke said on a post-earnings call with analysts.
Intel said last month that demand for its processors used in PCs was outstripping its ability to add capacity, prompting it to rely on contract manufacturers to ease shortage.
Citi analyst Jim Suva said: “We are surprised that Dell reduced its 2020 sales guidance after only 2 months ago giving its 2020 outlook. That said the company did raise the lower end of its EPS for 2020 range thereby showing its strategy for profitable product placement. Dell’s storage grew 7 per cent year-over-year compared to both NTAP and HPE who each saw a 10-per-cent decline. We maintain our Buy rating on Dell with an unchanged target price of $65 and see the company hitting investment grade metrics after F21.”
MedMen Enterprises Inc. (MMEN-C) slipped 9.4 per cent with the release of weaker-than-anticipated quarter results.
The California-based cannabis company reported revenue of US$44-million for the first quarter ended Sept. 28 versus US$21.5-million for the same quarter last year. Analysts were expecting revenue of US$46.7-million.
Its net loss was US$82.6-million versus a loss of $66.5-million a year ago.
Canaccord Genuity analyst Matt Bottomley said: “MedMen reported FQ1/20 financial results (ended September) that were behind our top-line forecasts but slightly better than we had anticipated in the company’s ability to taper back its opex and capex spend given the stretched nature of its balance sheet.”
With files from Brenda Bouw, Terry Weber, staff and wires
David Leeder