A roundup of some of the North American equities making moves in both directions today
On the rise
Tesla Inc. (TSLA-Q) rose after Chief Executive Officer Elon Musk told employees it has a chance at producing 500,000 cars this year.
Tesla said in January that 2020 vehicle deliveries should comfortably exceed 500,000 units, a forecast the company has left unchanged despite the COVID-19 pandemic.
“This all comes down to Q4. Please take whatever steps you can think of to improve output (while increasing quality),” Mr. Musk wrote to employees on Wednesday.
Last week, Tesla said it delivered 139,300 vehicles in the third quarter, an all-time record for the electric-car maker. The company will have to increase deliveries to nearly 182,000 in the fourth quarter to reach its ambitious year-end target.
Montreal-based CGI Inc. (GIB.A-T) rose on Wednesday after announcing it has been selected for an indefinite delivery/indefinite quantity (ID/IQ) contract to provide Mail and General Support Services (MGSS) to the U.S Department of Justice (DOJ).
It said the total contract value is approximately US$400-million and is a follow-on to a mission support services contract held by CGI for the past ten years.
Eli Lilly and Co. (LLY-N) rose after it said on Wednesday it had submitted a request to the U.S. Food and Drug Administration for emergency use of its experimental antibody treatment for COVID-19.
Separately, the U.S. drugmaker said data from a new study showed a combination of two of its antibody treatments helped reduce hospitalization and emergency room visits for COVID-19 patients.
Bristol Myers Squibb Co. (BMY-N) was up after it said on Wednesday its blockbuster cancer immunotherapy, Opdivo, met the main goal of pathologic complete response, or the absence of cancer cells, in a late-stage study in patients with a type of lung cancer.
Significantly more non-small cell lung cancer (NSCLC) patients receiving Opdivo and chemotherapy before surgery showed no evidence of cancer cells in their resected tissue, the company said.
The combination of Britol’s Opdivo and Yervoy is already approved for treating patients with non-small cell lung cancer.
Bristol said the trial is ongoing to assess the other main goal of evaluating the length of time after primary treatment that the patient remains free of complications.
Non-small cell lung cancer accounts for about 85 per cent of lung cancer cases, making it a lucrative market, which is currently dominated by Merck & Co’s rival drug Keytruda.
Levi Strauss & Co. (LEVI-N) soared higher in the wake of announcing late Tuesday it plans to expand its retail footprint and forecast a smaller-than-expected decline in current-quarter revenue after surging online sales helped the denim maker post a surprise profit.
Shares of Levi climbed after the company said it would sell its Red Tab jeans collection at 500 Target Corp stores by the fall of 2021, up from 140 currently. Levi also launched its products at some Dick’s Sporting Goods stores.
Many analysts had expected apparel makers to take a hit from coronavirus-driven closures of several department stores, but Levi now plans to open new stores and invest in its margin-driving online business, which grew 52 per cent in the third quarter.
“While growth in our direct consumer business will outpace that of our wholesale channel, we continue to see opportunities to reach new consumers with new and expanded wholesale distribution,” Chief Executive Chip Bergh said on an earnings call.
Levi has also benefited from branching out into tops and women’s clothing, as strong demand for blouses, shorts and jeans accounts for a major chunk of its online sales growth.
The company forecast a 14-per-cent to 15-per-cent decline in fourth-quarter revenue, while analysts on average were expecting a 19.62-per-cent fall. Levi projected profit per share to be between 14 US cents and 16 US cents, in line with estimates.
Excluding items, San Francisco, California-based Levi earned 8 US cents per share, versus estimates for a loss of 22 US cents.
Citi analyst Paul Lejuez said: “3Q was well ahead of expectations, with sales, GM and EPS all better than consensus forecasts. Trends continued to improve in Sept, though 4Q guidance overall includes some caution (or maybe cushion) about what the rest of the holiday season may bring. In addition to good results, the company announced an expansion of its partnership with [Target Corp.] and a new partnership with [Dick’s Sporting Goods Inc]. Expanding with partners that have traffic is key to LEVI stabilizing its wholesale business. We believe LEVI is a strong brand, and while trends may continue to be volatile as the pandemic plays out, we expect it to be stronger on the other side of the crisis.”
Brazilian miner Vale SA (VALE-N) increased after it said in a securities filing on Wednesday that its Canadian subsidiary Vale Canada Limited has completed the sale of a 20-per-cent stake in PT Vale Indonesia to PT Indonesia Asahan Aluminium.
The transaction was valued at about US$278-million, Vale said, and is part of a commitment signed with the government of Indonesia that will allow PT Vale Indonesia to operate in the country beyond 2025.
Boeing Co. (BA-N) gained after the Federal Aviation Administration issued a draft report on revised training procedures for the planemaker’s 737 MAX, a key milestone to the plane’s eventual ungrounding.
The FAA said the draft Flight Standardization Board report would be open for public comment through Nov. 2 before the procedures are finalized. The proposal adds new training requirements to deal with a key safety system called MCAS tied to two fatal crashes that killed 346 people and led to the plane’s grounding in March 2019.
MCAS, which was designed to help counter a tendency of the MAX to pitch up, could be activated after data from only a single Angle of Attack (AOA) sensor.
Faulty data that erroneously triggered MCAS to repeatedly activate played critical roles in fatal 737 MAX crashes in Indonesia and Ethiopia, a U.S. House report released last month said.
Lowe’s Cos Inc. (LOW-N) rose in the wake of saying it would give its hourly staff an additional US$100-million in discretionary bonuses, as the home improvement retailer prepares for the busy holiday season.
The company said hourly staff in its U.S. stores, distribution centers and store support centers will receive the bonus on Oct. 16. Full-time staff will receive US$300, while part-time and seasonal employees will be paid US$150.
The move brings the company’s total bonuses during the pandemic to more than US$775-million, it said.
After the bell on Tuesday, Sirius announced a quarterly cash dividend of 1.46 US cents per share of common stock, reflecting an increase of 10 per cent.
Credit Suisse analyst Brian Russo upgraded the stock before the bell, saying: “Just 6 months ago, 2020 consensus expectations called for SIRI to lose nearly 1m subscribers, Adj. EBITDA to fall 1 per cent year-over-year, and free cash flow to fall 6 per cent year-over-year. The business has since continued to deliver surprisingly better results, with consensus now looking for subscriber growth of 700k (in-line w/mgmt. guide) and Adj. EBITDA growth of nearly 2 per cent year-over-year. Despite this, shares have underperformed (down 21 per cent year-to-date), as competition fears manifested in the form of Spotify signing Joe Rogan, SIRI acquiring podcast network Stitcher, and the looming Dec 31 end of Howard Stern’s contract, while an unexpected management changeover added uncertainty. We now believe shares have absorbed much of these concerns and see an attractive risk/reward opportunity from current levels.”
Shares of Alphabet (GOOGL-Q), Amazon (AMZN-Q), Apple (AAPL-Q) and Facebook (FB-Q) were up after a U.S. House of Representatives panel looking into abuses of market power by four big technology companies found they used “killer acquisitions” to smite rivals, charged exorbitant fees and forced small businesses into “oppressive” contracts in the name of profit.
The antitrust subcommittee of the Judiciary Committee recommended that Alphabet Inc’s Google, Apple, Amazon and Facebook - with a combined market value of over US$5-trillion - should not both control and compete in related businesses.
The panel’s report also broadly recommended structural separations but stopped short of saying a specific company should be broken up.
The scathing 449-page report - the result of the first such congressional review of the tech industry - suggested expansive changes to antitrust law and described dozens of instances where the companies misused their power, revealing corporate cultures apparently bent on doing what they could to maintain dominance over large portions of the internet.
On the decline
DraftKings Inc. (DKNG-Q) continued to drop on Wednesday after announcing a stock offering priced at US$52 per share, an 8-per-cent discount on Tuesday’s close.
On Monday, the Boston-based fell after announcing an underwritten public offering of 32 million shares of its Class A common stock, consisting of 16 million shares being offered by DraftKings and 16 million shares being offered by certain selling stockholders.
It intends to use the proceeds for general corporate purposes.
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