Author: Vitaliy Dadalyan

Callon Petroleum Climbs 4% As 3Q Sales Surge 74%; Street Sticks To Hold

Callon Petroleum Climbs 4% As 3Q Sales Surge 74%; Street Sticks To HoldShares of Callon Petroleum are rising 4.4% in Tuesday's pre-market trading after the natural gas company saw 3Q revenues jump 73.6% to $269.7 million year-on-year, exceeding the Street consensus of $248.9 million. The crude petroleum extraction company’s third-quarter earnings of $0.64 per share crushed analysts’ estimates of $0.09. EPS declined by 66.8%.Callon (CPE) delivered higher-than-expected average production of approximately 102.0 Mboe [million barrels of oil equivalent]/day in 3Q.Callon’s CEO Joe Gatto said that “our focus on cost control and operational efficiency through scaled development is pushing us towards even lower cost thresholds that should generate improved cash flow and lower break-even pricing over time."For 2020, the company expects total production in the range of 100.0 – 101.0 Mboe/day. As for 2021, the company lowered the guidance for average daily production in the range of 90.0 – 92.0 Mboe/day from its August 2021 forecast of 90.0 – 95.0 Mboe/day.The lower guidance reflected “the combined effect of the recent ORRI [overriding royalty interest] transaction and non-operated properties sale, offset partly by improved well performance and operational efficiency gains,” the company said. (See CPE stock analysis on TipRanks).On Oct. 2, RBC Capital analyst Brad Heffern lowered the stock's price target to $18 (230.9% upside potential) from $30. However, Heffern maintained a Buy rating, as he believes that the asset monetization measures have "effectively tripled" its available liquidity. The analyst added that the assets sold received a "reasonable price."Currently, the Street is sidelined on the stock. The Hold analyst consensus is based on 3 Holds, 2 Buys and 3 Sells. The average price target of $7.88 implies upside potential of about 45% to current levels. Shares have declined by about 89% year-to-date.Related News: Diamondback Energy Surges 6% In Print Buildup; Reports Beat Magellan Tops 3Q Profit As Refined Products Demand Improves Skyworks Sees Upbeat 2021 Guidance After A Blowout 4Q More recent articles from Smarter Analyst: * Tupperware Nabs $275M Loan To Boost Capital Structure; Stock Up 258% YTD * Humanigen Inks First Asia Licensing Deal For Its Covid-19 Treatment * Twitter Board Confident In Leadership Structure Post Review; Shares Rise * Estée Lauder Beats Q1 Forecasts On Strength in Skincare, Asia Pacific


AMC Sinks 8.5% On $47.7M Equity Offering; Street Sees 80% Upside

AMC Sinks 8.5% On $47.7M Equity Offering; Street Sees 80% UpsideShares in AMC Entertainment plunged 8.5% after the cash-strapped theater chain announced that it is looking to tap financial markets and raise as much as $47.7 million in fresh capital through a share offering.AMC (AMC) filed a shelf registration to offer up to 20 million shares of its class A shares at a maximum offering price of $2.39 each. According to the filing, the world’s largest theater chain will execute the offering from time to time.AMC has been grappling with the financial impact of the closure of movie theaters worldwide and the temporary suspension of operations due to the global lockdowns triggered by the coronavirus outbreak earlier this year. The theater chain operator said that during the third quarter ended September 30, its US theatres began to re-open following a five-month suspension of operations.The first domestic theaters opened in August and locations across the US have continued to open since then. As of September 30, AMC had resumed operations at 467 domestic theaters with limited seating capacities of between 20% and 40%, representing approximately 78% of domestic theaters and 73% of 2019 domestic same-theater revenue.However most recently, as a result of the resurgence of COVID-19 cases in some international markets, including Italy, Germany, Spain, and the UK, which have all announced or enacted plans to reinstitute lockdowns, AMC plans to close or has closed some of its previously reopened theaters in these countries.“Of paramount importance, as well, are our efforts to strengthen our liquidity profile. Starting in March, we raised approximately $900 million of gross proceeds from new debt and equity capital, secured more than $1 billion of concessions from creditors and landlords and raised more than $80 million from asset sales,” AMC CEO Adam Aron stated. “The duration and impact of this pandemic are still affecting us to this day and are certain to continue to affect our results going forward.”“The liquidity enhancing and leverage reducing actions that we already have taken and will further need to take, combined with our relentless focus on efficiency and cash management, are all crucial to navigating through this storm,” Aron added.Shares in AMC have been hit hard and have tanked more than 70% so far this year, with analysts taking a cautiously bearish outlook on the stock. The Moderate Sell consensus shows 4 recent Holds and 2 Sells. Meanwhile, the $3.88 average analyst price target implies a promising 80% upside potential over the coming year.Wedbush analyst Michael Pachter last month reiterated a Hold rating on the stock as he expects negative long-term impacts from the pandemic, while giving AMC credit for restlessly seeking ways to improve its net debt position to increase the likelihood of its survival.“We do not expect attendance levels to begin to normalize until mid-2021, which presents a real risk to the industry, and AMC in particular,” Pachter wrote in a note to investors. “We expect a slow recovery throughout AMC’s global footprint, with Europe currently at risk of a second round of closures, while AMC’s domestic footprint continues to expand re-opening with little new content.”“With that said, there may be a lot of pentup demand once the release slate normalizes, which would be incremental to our estimates,” the analyst summed up. (See AMC stock analysis on TipRanks)Related News: AMC Dives 13% On Share Sale, Liquidity Warning AMC Dips 6% Amid Cash Crunch Warning Visa Nabs Strategic Stake In UK Fintech Company GPS More recent articles from Smarter Analyst: * PayPal Shares Fall 4% As 4Q Earnings Outlook Lags Estimates * Northland Raises Intel To Hold, Sees Challenges Priced In The Stock * Tencent Music Deepens Merlin Partnership, Adding WeSing Karaoke * SolarEdge Sinks 16% In Pre-Market On Disappointing Sales Outlook


Nutrien Sinking 4% Despite Earnings Beat On Strong Potash Sales

Nutrien Sinking 4% Despite Earnings Beat On Strong Potash SalesShares in Nutrien (NTR) are falling 4% in Tuesday’s pre-market trading despite the Canadian fertilizer company posting solid results for the third quarter.Nutrien, the largest producer of potash and the third largest producer of nitrogen fertilizer in the world, reported Q3 Non-GAAP EPS of $0.23. That beat Street expectations by $0.11. However GAAP EPS of -$1.03 fell short of consensus by $1.12.Revenue of $4.21B sunk 11% from the same period last year, but nonetheless came in $380M above Street expectations. The Retail segment was slightly better than expected ($162M EBITDA), primarily due to better sales of higher-margin products in the Merchandise and Services sub-segments.Meanwhile Potash sales volumes were significantly higher than expected (3.7Mt) due to strong offshore shipments and higher US demand, and realized prices were also slightly better (at $167/tonne). Nitrogen sales were in line with expectations, with Phosphate EBITDA also in-line as lower realized prices were offset by lower costs.“Nutrien delivered another quarter of solid operating results with strong fertilizer sales volumes and exceptional growth of orders through our digital agriculture platform, surpassing $1 billion of sales” commented Chuck Magro, Nutrien’s CEO.“Market conditions are improving around the world with higher crop and fertilizer prices, lower expected inventories and strong demand for crop inputs as we finish the year and enter 2021,” he added.For the full year, NTR tightened 2020 adjusted net earnings guidance to $1.60 to $1.85 per share (from $1.50 to $1.90 per share previously) and adjusted EBITDA guidance to $3.5 to $3.7 billion (from $3.5 to $3.8B previously, and in-line with consensus). It lowered its Retail and Nitrogen segment EBITDA, offset by higher Potash segment EBITDA.Following the report RBC Capital’s Andrew Wong reiterated his NTR buy rating and $47 price target. “We view the quarter and updated guidance as in line with expectations; although EBITDA was higher than our estimate, this was mostly due to potash sales timing” he explained.Overall, Wong remains positive on Nutrien as a diversified ag input provider with strong execution and growing FCF generation. “We note better potash market conditions and improving farm economics due to strong crop prices, although the recent rise in natural gas input costs and relatively sluggish nitrogen market are partial offsets” the analyst told investors. (See NTR stock analysis on TipRanks)Shares in Nutrien are down 13% year-to-date, and the stock scores a cautiously optimistic Moderate Buy Street consensus. Six buy ratings are offset by three hold ratings. Meanwhile the average analyst price target of $48 indicates 8% upside potential lies ahead.Related News: Clorox Hikes 2021 Guidance Due To Cleaning Bonanza; Shares Rise 4% Skechers Falls 9% Despite Earnings Beat, Street Stays Bullish Dunkin’ To Be Taken Private By Inspire Brands In $8.8B Deal More recent articles from Smarter Analyst: * PayPal Shares Fall 4% As 4Q Earnings Outlook Lags Estimates * Northland Raises Intel To Hold, Sees Challenges Priced In The Stock * Tencent Music Deepens Merlin Partnership, Adding WeSing Karaoke * SolarEdge Sinks 16% In Pre-Market On Disappointing Sales Outlook


Magic Johnson Selling Gels Shows Why Alibaba Escaped Trump

Magic Johnson Selling Gels Shows Why Alibaba Escaped Trump(Bloomberg) -- For American brands struggling to survive the resurgent coronavirus, China is proving to be one of the few bright spots. As Alibaba Group Holding Ltd. prepares to host its biggest and most global shopping marathon ever, its position as a gateway to the world’s fastest-recovering economy is winning points with an increasingly hostile U.S. administration.Alibaba’s Singles’ Day event culminates annually Nov. 11, an online shopping phenomenon that with $38 billion of sales in 2019 easily dwarfed Black Friday and Cyber Monday. The festivities, which provide a snapshot of Chinese consumption, will feature the largest international presence since the company pioneered the format 11 years ago, including a number of U.S. merchants making their first forays into the Asian market.One such company, Uncle Bud’s, is targeting at least 1 million yuan ($150,000) of sales, all through its online store on Alibaba’s Tmall Global platform. The Los Angeles-based personal care goods maker has roped in former NBA superstar Magic Johnson to hawk its hemp and cannabis-based products like body gels and lotions to Chinese shoppers in a livestream ahead of Single’s Day.“Tmall really embraces finding brands that are emerging and bringing them to Chinese consumers,” Uncle Bud’s co-founder Bruno Schiavi said in an interview. “We wanted to have a big powerful company behind us. As an emerging brand from the U.S. to the China market, there are always many steps. But having Tmall behind you, to us that’s fantastic.”China’s largest annual online shopping fiesta is only the flashiest example of how American consumer brands have increasingly come to rely on the world’s No. 2 economy for growth. For them, Alibaba affords one of the biggest windows into China’s rising middle class -- American merchants commanded the second-highest sales after Japanese among importers in 2019’s edition. That’s especially true this year, with companies like Estée Lauder Cos. and Nike Inc. banking on the Chinese consumer to help recoup some of the sales lost in the pandemic-induced global economic slowdown.That fact is likely not lost on Washington. The online retail giant’s domestic focus -- international commerce accounts for just 7% of total sales -- means the company has limited access to potentially sensitive personal data, unlike fellow Chinese internet giants ByteDance Ltd. and Tencent Holdings Ltd.Donald Trump has attempted to ban ByteDance’s TikTok and the WeChat super-app, owned by Tencent, in the runup to the presidential elections and he may be emboldened by a second term to continue decoupling Washington from Beijing. Even if Trump loses in Tuesday’s election, a Biden presidency will likely not lead to a strategy overhaul, with the Democratic candidate shifting toward a more confrontational tone toward China over the past few years.Read more: This Is What Biden Has Said on Major U.S. Flashpoints With ChinaMany Americans will not have heard of Singles’ Day, a uniquely Chinese antidote to the sentimentality surrounding Valentine’s Day. Originating in college campuses across the country, it takes its name from the way the date is written numerically as 11/11, which resembles “bare branches,” a local expression for the unattached.This year, the promotional blitz has been expanded, with pre-sales starting on Oct. 21. U.S. merchants such as Nike, Apple Inc. and Estée Lauder were among 100 brands that achieved revenue of at least 100 million yuan in the first 111 minutes after sales promos commenced Nov. 1, Alibaba said.More than 2,600 new foreign brands will be featured on Tmall Global for the first time ever in 2020. Earlier this year, the company held its inaugural Go Global 11.11 Pitch Fest offering American merchants that have no physical operations in China a chance to be spotlighted during the event. Uncle Bud’s emerged as one of the winners, alongside eight other companies that will bring a range of products from vegan face creams to purple hairdye and drinking vinegars to the Chinese market for the first time.Alibaba is hoping its growing role as middleman to global merchants can help revive flagging growth. Its revenue is expected on average to increase 31% in the September quarter, the slowest pace on record for the period. The company is set to report results on Thursday.Read more: Trump Adds to Earnings Threat as Alibaba Challenged in China“For certain categories, like cosmetics, apparel and electronics, if you want to win in China, you have to win e-commerce,” said Jonathan Cheng, partner and head of China retail at Bain & Co. “And if you want to win e-commerce, you have to work with the leaders.”Nearly 800 million annual active shoppers frequent Alibaba’s wide array of platforms, ranging from the Ebay-style Taobao site to Amazon-like Tmall and grocery service Freshippo. That’s helped the company turn itself into Asia’s largest -- one that’s on its way to joining the trillion-dollar club after gaining almost $370 billion of market value since its Covid-19 trough in March. That’s roughly one Walmart Inc. or Tesla Inc.But its pole position is being challenged on multiple fronts. Upstart Pinduoduo Inc. is offering cheaper bargains, JD.com Inc. has expanded beyond its traditional strength in consumer electronics, while Tencent-backed Meituan is engaged in a fierce battle with Alibaba’s Ele.me food delivery app.While its core commerce business -- which accounted for 87% of revenue in the June quarter -- has been relatively unscathed by U.S.-China tensions, it is in cloud computing where Alibaba faces the most direct threat from the White house. As part of Trump’s broader campaign to prevent Chinese companies from accessing the private data of Americans, the so-called Clean Network Initiative unveiled by U.S. Secretary of State Michael Pompeo sought to stop U.S. firms from using cloud computing services offered by Alibaba, Tencent and Baidu Inc.More recently, people within the Trump administration are said to be exploring potential restrictions on Alibaba affiliate Ant Group, though that hasn’t dented enthusiasm for the fintech giant’s blockbuster IPO in Hong Kong and Shanghai.Still, Alibaba executives have repeatedly touted their role in connecting American merchants like Uncle Bud’s with Chinese buyers. “As the world’s largest e-commerce platform, Alibaba’s primary commercial focus in the U.S. is to support our American brands, retailers, small businesses and the farmers to sell to consumers and the trade partners in China,” Chief Executive Officer Daniel Zhang said in August.Read more: Alibaba Appeals to Trump, Says it Supports U.S. BusinessesIt’s this function that may give the next U.S. administration pause when it comes to Alibaba, said Paul Triolo, a former U.S. government official who specializes in global technology policy at risk consultancy Eurasia Group.“There is no indication that the U.S. government wants to go after Alibaba’s Taobao platform in the U.S., which targets small and medium sized US companies to allow them to access the China market,” Triolo said. Some politicians on Capitol Hill are “concerned about the market impact of any attempt to go after a large consumer-facing Chinese platform,” he added.What Bloomberg Intelligence SaysAlibaba’s long-term growth could be propelled by the company’s multi-pronged strategy to broaden its global presence beyond near-term geopolitical pressures. It’s capitalizing on worldwide consumption through export platform AliExpress, China import demand via Tmall Global, and pushing directly into local markets through subsidiaries such as Lazada.\-- Vey-Sern Ling and Tiffany Tam, analystsClick here for the research(Updates with Alibaba’s market cap gains in 13th paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.


Aurinia Tanks 10% As Dry Eye Trial Fails To Reach Primary Endpoint

Aurinia Tanks 10% As Dry Eye Trial Fails To Reach Primary EndpointShares in Aurinia Pharmaceuticals (AUPH) tanked 10% after-hours after the biopharma announced disappointing topline data from the Phase 2/3 Audrey clinical study evaluating voclosporin ophthalmic solution (VOS) for the potential treatment of dry eye syndrome (DES).The trial did not achieve statistical significance on its primary endpoint of a 10mm or greater improvement in the Schirmer Tear Test (STT) at four weeks between active dose groups of VOS compared to vehicle.As a result, Aurinia is now suspending the development program for VOS.“While surprised by these results, we remain focused on preparing voclosporin for lupus nephritis – which has a different formulation and delivery mechanism compared to VOS. As we approach our lupus nephritis PDUFA action date, the Aurinia team remains committed to our mission of developing novel treatments for people with debilitating and severe autoimmune disease” commented CEO Peter Greenleaf.The trial was a randomized, double-masked, vehicle-controlled, dose-ranging study evaluating the efficacy and safety of VOS in subjects with DES. A total of 508 subjects were enrolled.As well as the primary endpoint, secondary outcome measures evaluated in the trial included STT at other time points, Fluorescein Corneal Staining (FCS) at multiple time points, change in eye dryness, burning/stinging, itching, photophobia, eye pain and foreign body sensation at multiple time points, and additional safety endpoints.According to Aurinia, initial analysis of these secondary outcomes suggests dose-dependent activity and safety were observed across dose groups compared to vehicle. Further analysis will be conducted over the coming weeks, the company says. (See AUPH stock analysis on TipRanks).On a year-to-date basis, the stock is now trading down 23% yet the Street has a bullish Strong Buy consensus on Aurinia. That’s with 4 recent buy ratings. The average analyst price target indicates upside potential of over 60% lies ahead.Oppenheimer’s Justin Kim remains enthusiastic about the company’s prospects in lupus nephritis (LN). He reiterated his buy rating on AUPH with a $20 price target on November 2. Kim cites Aurinia’s “thoughtful and committed approach to launching this potential therapeutic in the LN space, supported by the drug’s highly differentiated product profile.”Related News: J&J Strikes Covid-19 Vaccine Manufacturing Deal With Aspen Moderna Scores $1.1B From Covid-19 Vaccine Deposits; Shares Rise 3% Opko Health Tanks 10% Despite Solid Q3 Covid Testing Revenue More recent articles from Smarter Analyst: * AMC Sinks 8.5% On $47.7M Equity Offering; Street Sees 80% Upside * Nutrien Sinking 4% Despite Earnings Beat On Strong Potash Sales * Mondelez Beats Q3 Estimates On Elevated Demand In Developed Markets * Vornado Flips To Loss in 3Q; Street Sees 29% Upside