A roundup of some of the North American equities making moves in both directions today
On the rise
Nike Inc.'s (NKE-N) shares opened at a record high on Wednesday after the world’s largest sports shoemaker posted stellar quarterly results, driven by online sales.
The brand’s digital sales, especially in North America, helped offset fall in sales at traditional brick-and-mortar stores due to COVID-19 restrictions and social-distancing measures.
At least seven brokerages raised their 12-month price targets on the stock with the biggest bump coming from Jefferies analysts, who raised their target to $117 from $95.
Jefferies analyst Randal Konik said that improvement in North America is the “biggest positive surprise” from Nike’s results, and expects the Beaverton, Oregon-based company to do well in the long term, as consumers focus more on health and wellness.
Nike’s results should come as a relief to investors after the company, just a quarter ago, reported a surprise loss of US$790-million as retailers canceled orders and people kept away from Nike stores in key markets including North America, Europe and China
“Nike offered its clearest signal yet that a higher digital mix and improving margins within the digital segment will push consolidated margins above historical levels,” Credit Suisse analyst Michael Binetti said.
Johnson & Johnson (JNJ-N) jumped on Wednesday as it kicked off a final 60,000-person trial of a single-shot COVID-19 vaccine that potentially would simplify distribution of millions of doses compared with leading rivals using two doses.
The company expects results of the Phase III trial by year end or early next year, Dr. Paul Stoffels, J&J’s chief scientific officer, said in a joint press conference with officials from the National Institutes of Health and the Trump administration.
Rival vaccines from Moderna Inc, Pfizer Inc and AstraZeneca all require two shots separated by several weeks, which make them much more difficult to administer.
“The benefits of a single-shot vaccine are potentially profound in terms of mass immunization campaigns and global pandemic control,” Dr. Dan Barouch, a Harvard vaccine researcher who helped design J&J’s COVID-19 vaccine, said in a telephone interview.
Stoffels said J&J would publish a detailed study protocol for its phase 3 trial Wednesday on the company’s website, joining the three other vaccine makers that have made these study plans available in recent weeks after calls for increased transparency in the trials.
On Twitter, U.S. President Donald Trump said:
Lululemon Athletica Inc. (LULU-Q) was up after announcing in a filing its intention to restart his stock repurchase program.
The Vancouver-based company said the remaining value of common shares authorized to be repurchase is US$263.6-million.
See also: Lululemon sees holiday-quarter profit plunging on higher marketing costs
AGF Management Ltd. (AGF.B-T) increased after it announced total assets under management (AUM) of $37-billion as of its third quarter ended Aug. 31 compared to $37.4-billion in the same period in 2019.
It said average daily mutual fund AUM remained flat at $18.9-billion compared to the same period in 2019.
Net mutual fund redemptions of $22-million compared to net redemptions of $103-million a year ago, the company said.
Income was $138.7-million, compared to $107.4-million in the prior year and above expectations of $113.4-million.
Net income of $47.3-million or 60 cents per share compared to $14.4-million or 18 cents a year ago. Adjusted net income was $14.8-million or 19 cents versus $14.6-million or 18 cents a year ago. Analysts were expecting adjusted EPS of 14 cents.
On the decline
Shopify Inc. (SHOP-T) lost ground after it said on Tuesday data of customers who shopped at fewer than 200 merchants listed on the company’s e-commerce platform was likely exposed after two employees tried to steal transaction records.
The data exposed includes email, name, and address, as well as order details, but does not involve complete payment card numbers or financial information, the Ottawa-based company said.
Shopify said it immediately terminated the access of the individuals, who were part of its support team, to its network and was working with the Federal Bureau of Investigation and other international agencies in the investigation.
On Wednesday, Shopify announced the closing of the underwriters’ over-allotment option in connection with its offering of Class A subordinate voting shares.
The sale brings the aggregate gross proceeds from the Offering to US$1.14-billion before underwriting discounts and offering costs.
See also: RBC claims small piece of Shopify’s underwriting bounty as Wall Street banks dominate
Fortis Inc. (FTS-T) slid in afternoon trading after announcing the retirement of President and CEO Barry Perry, effective Dec. 31.
David Hutchens, currently Chief Operating Officer of Fortis and CEO of UNS Energy, will succeed Mr. Perry.
Before the bell, the St. John’s-based company also announced a hike to its five-year capital investment plan to $19.6-billion, up $800-million.
It increased its quarterly dividend by 5.8 per cent to 50.5 cents per share and extended its average annual dividend per common share growth of approximately 6 per cent to 2025 based on a 2020 annualized dividend of $1.91.
Shares of Tesla Inc. (TSLA-Q) slid after a receiving a mixed reaction from the Street for its highly anticipated “Battery Day” event on Tuesday.
Investors had expected two big announcements from Chief Executive Officer Elon Musk: the development of a “million mile” battery good for 10 years or more, and a specific cost reduction target - expressed in dollars per kilowatt-hour - that would finally drop the price of an electric vehicle below that of a gasoline car.
They got neither from the event and analysts from Swiss banking group UBS said the innovations he did unveil and the promise to deliver a sub-$25,000 mass market model within three years also came with risks attached.
“By the time (the car) arrives, there will be significant competition in the segment, from VW group, amongst others,” the bank’s analysts wrote in a note to clients.
“The market is (also) likely to take it negatively that it will take at least another year to see (some of) these (battery) innovations in a real product.”
See also: Asian suppliers' shares slip on Tesla’s cheaper battery plan
In response to Tesla’s cheaper battery plan, lithium producers also fell on Wednesday.
Lithium Americas Corp. (LAC-T), American Lithium Corp. (LI-X) and Albemarle Corp. (ALB-N) were among the companies seeing share price drops.
Aurora Cannabis Inc. (ACB-T) plummeted in the wake of forecasting first-quarter revenue below analysts' estimates.
The coronavirus outbreak has made it harder for the cash-strapped cannabis industry to get investor dollars and has forced companies to shut their stores.
To survive the challenging times, Aurora has laid off hundreds of employees this year, shut five facilities and amended its loan agreements.
However, the pot producer on Tuesday reiterated its expectation to post an adjusted profit for the first time in the second quarter, as it attempts to turn its fortunes around.
For most weed producers in Canada, which legalized recreational cannabis in October 2018, profits have proven to be elusive due to fewer-than-expected retail stores, cheaper rates on the black market and slow overseas growth.
Aurora forecast first-quarter cannabis net revenue to be between $60-million and $64-million, below estimates of $79.62-million, according to Refinitiv IBES data.
The company also posted fourth-quarter revenue of $72.11-million, compared with analysts' estimates of $72.08-million.
In a research note released Wednesday morning, Desjardins Securities analyst John Chu said he thinks Aurora remains “a show-me story” as it pivots to focus on the “smaller but substantially more lucrative premium markets.”
China has no reason to approve the “dirty and unfair” deal based on “bullying and extortion” that Oracle Corp. (ORCL-N) and Walmart Inc. (WMT-N) said they struck with ByteDance, the state-backed English-language China Daily newspaper said on Wednesday.
Oracle shares slid lower.
“What the United States has done to TikTok is almost the same as a gangster forcing an unreasonable and unfair business deal on a legitimate company,” it said in an editorial.
The three firms have issued conflicting statements over the terms of an agreement they hope will allow ByteDance’s video app TikTok to continue to operate in the United States, where the government plans to ban the app on security grounds.
ByteDance has said it will establish a U.S. subsidiary called TikTok Global of which it will own 80 per cent.
Oracle and WalMart, however, have said majority ownership of TikTok Global would be in American hands, complying with an Aug. 14 executive order by U.S. President Donald Trump that ByteDance relinquish ownership of TikTok within 90 days.
Industrial conglomerate 3M Co. (MMM-N) declined in response to a Bloomberg report that it is working with advisers on the sale of its food safety business.
The unit, which makes products for pathogen testing and allergen detection, could fetch about US$3.5-billion.
The company missed Wall Street estimates for second-quarter profit and revenue in July as demand across its business units plunged due to the coronavirus crisis.
Its shares have fallen about 8 per cent so far this year.
Nikola Corp.’s (NKLA-Q) talks with energy firms including BP PLC to build hydrogen-refueling stations have been stalled following a short-seller’s allegations that the electric automaker misled investors, the Wall Street Journal reported, sending its shares lower
Potential partners have been reluctant to move forward amid the heightened scrutiny, but a deal could still come together, the report said on Wednesday, citing people familiar with the matter.
Chief Financial Officer Kim Brady said on Tuesday the electric-truck maker has the backing of all of its automotive partners even after the departure of founder and Chairman Trevor Milton.
“We feel very confident about due diligence that has been performed by our partners, and as you can see, our partners have been 100% supportive and behind us,” Mr. Brady told investors at a virtual conference organized by Evercore ISI.
General Mills Inc. (GIS-N) beat sales and profit estimates for the first quarter on Wednesday, as people stuck at home due to the COVID-19 pandemic stocked up on its baking products and cereals.
Shares of the Yoplait yogurt maker fell despite the company raising its quarterly dividend by 4 per cent.
With people working from home and students taking online classes, there has been a surge in demand for breakfast cereals and yogurt in kitchens across North America.
A wave of new amateur bakers has also boosted sales of the company’s Pillsbury and Betty Crocker lines of dough, and cake and brownie mixes. This pushed the company’s sales in North America up 14 per cent.
General Mills said it expects second-quarter at-home demand to remain elevated compared to pre-pandemic levels, with high single-digit retail sales growth estimated in North America.
With files from staff and wires
David Leeder