A roundup of some of the North American equities making moves in both directions today
On the rise
Tesla’s stock, which traded at US$1,475 after the announcement, is among the highest priced on Wall Street, and the Palo Alto, California-based company said in a press release it was looking to make its shares more accessible to employees and investors.
Tesla’s stock has surged over 200 per cent this year, while shares of General Motors and Ford Motor declined on fallout from the coronavirus pandemic.
Stock splits are a way for companies to make shares more accessible to retail investors, potentially attracting individual investors who make small trades. However, brokerages increasingly let customers buy parts of shares, making the benefit of share splits less clear than in the past.
Tesla said stock holders of record on Aug. 21 would receive four additional shares after the close of trading on Aug. 28, with the stock trading on a split-adjusted basis beginning Aug. 31.
The Toronto-based miner announced revenue and adjusted earnings per share of US$208.9-million and a loss of 15 US cents, topping the consensus projections of US$182.3-million and an adjusted loss of 20 US cents per share.
RBC Dominion Securities analyst Sam Crittenden said: “We expect a positive reaction to Q2 results that were above our forecast and consensus, and revised guidance due to the COVID shutdown in Peru puts copper guidance in line with our estimate. ... The stronger than expected results were due to higher sales volumes in all metals and lower operating costs. HBM reinstated its 2020 guidance, reiterating prior forecasts for Manitoba and lowering estimates for Peru (details below). We expect the focus to be on operational execution with Constancia back running at full capacity and execution on the company’s New Britannia refurbishment and eventual mining from Pampacancha (now expected at the beginning of 2021).”
The Mississauga-based company report revenue of $282.8-million and adjusted earnings per share of 15 cents, exceeding the Street’s expectations of $243.9-million and a 2-cent loss.
National Bank Financial analyst Maxim Sytchev: “When we asked management during Q1/20 conference call whether they thought BDT would be EBITDA-positive in the upcoming Q2 (given all the moving parts due to COVID-19), we got a coy ‘we expect positive EBITDA.’ That certainly was an understatement; there also appears to be a much more confident tone around 2020 profitability vs. prior years, boding very well for the rest of the year. The results are also a function of materially scaled-down expectations. Before the onset of the pandemic (i.e., around Q4/19 results), we were modeling $10.5-million for Q2/20. The fact that the expectations bar has been lowered to $4.3-million also explains the degree of uncertainty that was hard to gauge externally (even though this of course is a backlog-driven business). Regardless of how one slices this, it was a very strong operational quarter. We are also looking forward to Stuart Olson results in order to get a better sense of how that asset has performed during these tumultuous times.”
Metro Inc. (MRU-T) gained 1.1 per cent after reporting a profit of $263.5-million in its latest quarter, up from $222.4 million a year ago, while its sales rose more than 10 per cent as Canadians stayed and cooked at home due to the pandemic.
The grocery and pharmacy store retailer, which owns the Jean Coutu Group, says the profit amounted to $1.04 per share for the 16-week period ended July 4, up from 86 cents per share a year ago.
Sales totalled $5.84-billion, up from $5.23-billion. Food same-store sales rose 15.6 per cent, while pharmacy same-store sales edged up 1.0 per cent.
Metro says expenses related to COVID-19 totalled $107-million in the quarter.
On an adjusted basis, Metro says it earned $1.08 per share for what was the company’s third quarter, up from an adjusted profit of 90 cents per share a year ago.
Analysts on average had expected an adjusted profit of $1.07 per share, according to financial markets data firm Refinitiv.
AutoCanada Inc. (ACQ-T) reversed course and gained 8 per cent after it reported second-quarter revenue of $727.4-million compared to $945.8-million in the prior-year quarter. Analysts were expecting revenue of $656.4-million.
ATB Capital Markets analyst Chris Murray said: “Results were materially better than expected, on both a sales and earnings front. With an improving sales and earnings trend outperforming the broader market and strengthening balance sheet, we see the Company as well positioned to move to becoming more acquisitive, which we believe creates an additional catalyst for share prices and continue to be positively biased.”
Chevron Corp. (CVX-N) was higher by 1.3 per cent in the wake of a proxy filing on Tuesday showing a US$5-billion offer to acquire Noble Energy Inc. (NBL-Q) emerged after the U.S. oil major first proposed taking a stake of at least 50 per cent in Noble’s Eastern Mediterranean natural-gas fields.
Shares of Houston-based Noble finished up 0.6 per cent.
If consummated, the all-stock merger will boost Chevron’s U.S. shale oil holdings and give it vast natural gas assets off the coast of Israel. Noble’s Leviathan, one of the world’s biggest offshore gas discoveries of the last decade, already is supplying gas to Israel, Egypt and Jordan.
Last year, Noble sought a partner to help finance the multibillion-dollar investment required for Leviathan, according to Tuesday’s Securities and Exchange Commission filing.
The company denied Chevron an opportunity to visit the Leviathan facility in February, but weeks later agreed to a confidentiality agreement to begin discussing their operations in the region, according to the filing.
As global energy markets collapsed that month and Noble reported a first-quarter loss of nearly US$4-billion, its board opted for a sale of the company rather than a regional partnership, according to the filing.
The Calgary-based company said its Buildings Group has been awarded a large construction management project at a post-secondary institution in Ontario, while its Industrial Group has been awarded a four-year maintenance and turnaround contract with a repeat client at a new oil sands site.
These two awards will be added to backlog in the third quarter of 2020.
ATS Automation Tooling Systems Inc. (ATA-T) gained 13.4 per cent after its quarterly results largely met the expectations of the Street.
National Bank Financial’s Maxim Sytchev said: “As social distancing measures ease, so will restrictions for site access. Inefficiencies that impacted FQ1 results should therefore start to dissipate. Shares have weakened heading into the quarter (see below for a glaring divergence vs. Rockwell Automation) and the relatively clean results / in-line outlook this quarter should alleviate short-term concerns around clients’ capital commitment / global PMIs. Thematic exposure to healthcare, EV, nuclear and supply reshoring is a very unique setup; and we are still in the early innings of these transitions hence time is on our side.”
Shares of Moderna Inc. (MRNA-Q) increased 0.8 per cent on Wednesday after the company signed a US$1.5-billion deal with the U.S. government for the supply of its experimental coronavirus vaccine.
Moderna will provide about 100 million doses, with the price coming to around US$30.50 per person for a two dose regimen.
The company’s vaccine candidate, mRNA-1273, is one of the few that have already advanced to the final stage of testing and is on track to be completed in September, the company said this month.
The deal confirms that Moderna’s experimental vaccine is one of the leading contenders, said BMO analyst George Farmer, who has an “outperform” rating on the stock.
Effective vaccines and treatments are seen as essential in halting the COVID-19 pandemic, with the United States and the UK spending billions to reserve supplies of experimental vaccines.
Other countries, including Japan and EU members, have also signed deals for potential vaccines from AstraZeneca Plc and Pfizer Inc.
Minto Apartment Real Estate Investment Trust (MI.UN-T) was 1.3 per cent higher after it announced a 3.4-per-cent increase to its monthly distribution and reported second-quarter revenue was $31.3-million up from $24.8-million a year ago. Analysts were expecting revenue of $30.6-million.
Desjardins Securities analyst Michael Markidis said: “This stock has been under pressure for the past two months (price-only return of negative 12 per cent vs the simple average of negative 2 per cent for the primary multifamily peers), largely due to increasing pessimism related to MI’s furnished suite business and centrally located assets in Toronto. The decline in furnished suite revenue was consistent with our expectations and sequential occupancy erosion in the unfurnished business was minimal. The average rent increase realized on new leases was 9 per cent during 2Q. Finally, investors are being rewarded with a 3.4 per cent distribution increase. We believe the stock should react favourably.”
Under the deal, Zenabis will provide between 300 and 1,000 kilograms of cannabis flower per calendar quarter.
On the decline
CAE Inc. (CAE-T) lost 1.1 per cent after it said it’s in advanced discussions with airlines about doing more training of their pilots after the company reported a bigger than expected quarterly loss due to COVID-19.
The world’s largest civil aviation training company is cutting costs and counting on the easing of travel restrictions to bolster demand for pilot-training services.
Revenues from civil training, CAE’s largest business unit, dropped due to travel restrictions and lower customer demand during the quarter ended June 30, with a center utilization rate averaging 33 per cent compared with 76 per cent during the same three months a year earlier.
Chief Executive Marc Parent told analysts he sees opportunities to win outsourced training business from airlines, which are struggling to conserve cash.
“We’re currently in advanced discussions with a number of airline customers to potentially do more for them,” he said.
Montreal-based CAE said deliveries of flight simulators declined on an annual basis from five to two units during the quarter. CAE would make most of its anticipated 35-40 simulator deliveries during the back half of its fiscal year.
With files from Brenda Bouw, staff and wires