A roundup of some of the North American equities making moves in both directions today
On the rise
TSX-listed cannabis stocks jumped on Wednesday after the United Nations Commission on Narcotic Drugs (CND) voted to accept a World Health Organization (WHO) recommendation to remove cannabis from a category of the world’s most dangerous drugs.
The Montreal-based is spending US$430-million for U.S. restaurant and management software company Upserve Inc.
In a research report released Wednesday, CIBC World Markets’ Todd Coupland, one of several analysts to raise their target prices for Lightspeed shares, said: “Upserve’s customer base of complex restaurants in the U.S. is a fitting acquisition for Lightspeed from a product fit and geographic expansion perspective.
“In particular, Upserve’s robust analytics platform is a highly significant module for high-end restaurants due to the transparency it provides into inventory and workforce management. This will help differentiate Lightspeed’s platform as one of the most competitive hospitality platforms in the market.”
Sun Life Financial Inc. (SLF-T) was narrowly higher after it said on Wednesday Chief Executive Officer Dean Connor would retire in August next year after a decade at the helm.
Mr. Connor will be replaced by Chief Financial Officer Kevin Strain, and the company will appoint a new finance boss in the first half of 2021, Sun Life said.
Mr. Strain joined Sun Life in 2002 when it acquired smaller peer Clarica and led the company’s Canadian individual insurance and investments business during the global financial crisis in 2008.
The leadership change comes at a time when Sun Life is considering a range of options to expand in Asia, including buying insurance and asset management firms and taking bigger stakes in existing joint-venture partners.
The insurer is also seeking opportunities to add group benefits and stop-loss businesses in the United States to expand on its offerings in those areas.
Prime Minister Boris Johnson touted the greenlight from the UK’s medicine authority as a global win and a ray of hope amid a pandemic, though he recognized the logistical challenges of vaccinating an entire country of 67 million.
Britain’s move raised hopes that tide could soon turn against a virus which has killed nearly 1.5 million people, hammered the world economy and upended normal life for billions.
Britain’s Medicines and Healthcare products Regulatory Agency (MHRA) granted emergency use approval to the Pfizer-BioNTech vaccine, which they say is 95 per cent effective in preventing illness, just 23 days since Pfizer published the first data from its final stage clinical trial.
U.S. drugmaker Merck & Co. (MRK-N) was up after it said on Wednesday it has sold its equity investment in Moderna Inc. (MRNA-Q), after benefiting from a surge in the stock price of the vaccine developer this year.
Merck did not disclose the details of the sale proceeds, but said it expects to record a small gain from the sale in the fourth quarter of 2020.
Moderna’s shares have risen more than seven-fold this year, valuing the company at US$55.80-billion as of Tuesday’s closing price.
Moderna is one of the front-runners in the race to develop a coronavirus vaccine, and on Monday filed for U.S. emergency use authorization of its vaccine.
Merck, which had invested US$50-million in Moderna in 2015, said it would retain exposure to the company indirectly through its investment in venture funds.
Separately, Moderna Inc’s COVID-19 vaccine could get emergency use authorization within 24 to 72 hours after U.S. Food and Drug Administration’s advisory committee meeting, Chief Executive Officer Stéphane Bancel said on Wednesday.
The FDA will hold an advisory committee meet to discuss company’s request for emergency authorization for its COVID-19 vaccine on Dec. 17.
Speaking at an event conducted by Piper Sandler, Bancel said Moderna currently had millions of doses of vaccines that can be shipped as soon as its request is granted.
Fairfax Financial Holdings Ltd. (FFH-T) finished narrowly higher after agreeing to sell its interests in the RiverStone Europe insurance business to a fund managed by CVC Capital Partners.
Fairfax says it will receive US$750-million for its stake on Riverstone Europe, once the deal closes, and it is entitled to up to an additional US$235.7-million after closing.
The Ontario Municipal Employees Retirement System has also agreed to sell its entire stake in RiverStone Europe as part of the deal.
RiverStone Europe managing director Luke Tanzer will remain in his role and Nick Bentley, CEO of the RiverStone Group, will continue to serve on the board of RiverStone Europe once the deal closes, Fairfax said in a statement.
Cloud data service provider NetApp Inc. (NTAP-Q) jumped after it provided current quarter profit above expectations after topping estimates in the second quarter.
On a per-share basis, the Sunnyvale, California-based company said it had net income of 61 US cents. Earnings, adjusted for non-recurring costs and stock option expense, came to US$1.05 per share.
The results exceeded Wall Street expectations. The average estimate of 11 analysts surveyed by Zacks Investment Research was for earnings of 72 US cents per share.
The data storage company posted revenue of US$1.42-billion in the period, which also topped Street forecasts. Nine analysts surveyed by Zacks expected US$1.31-billion.
On the decline
Shares of Royal Bank of Canada (RY-T) was lower on Tuesday after it announced its profit rose modestly in the fiscal fourth-quarter, as the bank set aside less money to cover potential loan losses and clamped down on costs.
The bank’s earnings were stronger than expected, bolstered in part by a surge in returns from capital markets. But as with two rival banks that also outperformed analysts’ expectations on Tuesday, a decline in provisions for credit losses - the money banks set aside to cover loans at risk of defaulting - was the driving force.
For the three months that ended Oct. 31, RBC earned $3.25-billion, or $2.23 per share, compared with $3.21-billion, or $2.18 a share, in the same period a year earlier.
Adjusted for certain items, RBC said it earned $2.27 per share, well ahead of the consensus estimate of $2.05 per share among analysts, according to Refinitiv.
- James Bradshaw
Net income excluding specific items rose to $615-million in the three months through October, from $612-million, although earnings per share remained flat at $1.69. Analysts had expected $1.52 a share.
Provisions for credit losses of $110-million were lower than the expected $158.4-million. They were up 24 per cent from a year earlier, although improved from $143-million in the previous quarter.
Brazilian miner Vale SA (VALE-N) fell in the wake of saying on Wednesday it expects to produce 315-335 million tons of iron ore in 2021 after producing 300-305 million tons this year, missing a previously lowered 2020 target of at least 310 million tons.
Vale said in a filing ahead of its annual investor day that it plans to set aside an additional US$670-million in fourth quarter earnings to improve safety at its dams. That would bring total provisions for that purpose to US$2.7-billion following the deadly Brumadinho dam collapse last year.
Cash flow to those safety improvements should rise from US$400-million next year to US$500-million in 2022 and then stabilize at US$300-million in the following three years, it said.
The miner sees its copper production rising from 390,000 tons next year to around 500,000 tons in 2025, averaging 455,000 tons in the years between. Nickel output should average 200,000 tons over the next three years, Vale said.
The company expects total capital spending will rise to US$5.8-billion in 2021 from US$4.2-billion this year and average US$5.5-billion in subsequent years.
The deal enables Salesforce to provide a unified platform for businesses to connect their employees, customers and partners with each other and the apps they use, bolstering its enterprise portfolio.
For Slack, the deal comes as it struggles to fully capitalize on the switch to remote working during the COVID-19 pandemic.
Slack changed workplace communications by focusing on real-time messaging that could be broken into conversations with groups assembled on the fly, a more nimble platform than email.
But the messaging style that Slack helped create has become an extremely competitive space, with larger, older competitor Microsoft Corp aggressively promoting its similar Teams product with integrated video and voice calling.
With files from staff and wires