Research Calls
- Upgrades:
- ADC Therapeutics (ADCT) upgraded to Neutral from Underweight at JP Morgan
- Deciphera Pharmaceuticals (DCPH) upgraded to Buy from Hold at Stifel; tgt raised to $20
- Essex Property (ESS) upgraded to Equal Weight from Underweight at Wells Fargo; tgt raised to $247
- Global Payments (GPN) upgraded to Buy from Hold at Jefferies; tgt raised to $145
- GoodRx (GDRX) upgraded to Buy from Neutral at DA Davidson; tgt $9.50
- Mirati Therapeutics (MRTX) upgraded to Buy from Neutral at Citigroup; tgt lowered to $48
- Gulfport Energy (GPOR) upgraded to Overweight from Sector Weight at KeyBanc Capital Markets; tgt $145
- Kornit Digital (KRNT) upgraded to Overweight from Equal-Weight at Morgan Stanley; tgt $29
- Roblox (RBLX) upgraded to Equal-Weight from Underweight at Morgan Stanley; tgt raised to $30
- Southern (SO) upgraded to Equal-Weight from Underweight at Morgan Stanley; tgt raised to $69
- Downgrades:
- Atea Pharmaceuticals (AVIR) downgraded to Underweight from Neutral at JP Morgan
- Bancolombia S.A. (CIB) downgraded to Underweight from Neutral at JP Morgan; tgt $30
- Magnolia Oil & Gas (MGY) downgraded to Sector Weight from Overweight at KeyBanc Capital Markets
- NeoGames (NGMS) downgraded to Hold from Buy at Deutsche Bank; tgt $29.50
- Nuvei Corporation (NVEI) downgraded to Neutral from Buy at Goldman; tgt lowered to $22
- OneSpan (OSPN) downgraded to Neutral from Buy at DA Davidson; tgt lowered to $12
- Sylvamo (SLVM) downgraded to Sector Perform from Outperform at RBC Capital Mkts; tgt lowered to $44
- TaskUs (TASK) downgraded to Neutral from Overweight at JP Morgan; tgt lowered to $12
- TaskUs (TASK) downgraded to Sector Perform from Outperform at RBC Capital Mkts; tgt lowered to $16
- Thoughtworks (TWKS) downgraded to Market Perform from Outperform at TD Cowen; tgt lowered to $6
- Agiliti (AGTI) downgraded to Mkt Perform from Outperform at Raymond James
- Certara (CERT) downgraded to Mkt Perform from Outperform at William Blair
- Ceva (CEVA) downgraded to Neutral from Buy at ROTH MKM; tgt lowered to $20
- Crown Castle (CCI) downgraded to Neutral from Buy at BofA Securities; tgt $115
- Cryoport (CYRX) downgraded to Equal-Weight from Overweight at Stephens; tgt $15
- Eagle Pharma (EGRX) downgraded to Underweight from Neutral at Piper Sandler; tgt lowered to $17
- Enerflex (EFXT) downgraded to Market Perform from Outperform at BMO Capital Markets; tgt lowered to $11
- Galera (GRTX) downgraded to Neutral from Overweight at Piper Sandler; tgt lowered to $0.50
- Kulicke & Soffa (KLIC) downgraded to Hold from Buy at Craig Hallum; tgt $55
- PENN Entertainment (PENN) downgraded to Hold from Buy at Craig Hallum; tgt lowered to $30
- PENN Entertainment (PENN) downgraded to Hold from Buy at Truist; tgt lowered to $30
- Petrobras (PBR) downgraded to Hold from Buy at HSBC Securities; tgt $13
- Petrobras (PBR) downgraded to Neutral from Buy at Citigroup; tgt lowered to $14
- SBA Comm (SBAC) downgraded to Neutral from Buy at BofA Securities; tgt $245
- Stantec (STN) downgraded to Hold from Buy at Canaccord Genuity
- Tricon Residential (TCN) downgraded to Sector Perform from Outperform at National Bank Financial
- Others:
- Cormedix (CRMD) initiated with an Outperform at RBC Capital Mkts; tgt $6
- SLB (SLB) initiated with a Buy at William O'Neil
- Zai Lab (ZLAB) initiated with an Overweight at Cantor Fitzgerald; tgt $70
Gapping down
In reaction to earnings/guidance:
- ORGN -54.3%, ORGO -30.4% (also withdraws FY23 guidance), WWW -20.4%, PAR -15.9%, TASK -14.9%, CERT -14.6%, STKL -13.3%, PLUG -12.2%, MGNI -9.2%, PRPL -7.3%, DNA -5.7%, WEST -5.5%, MXCT -5.5%, MLTX -5%, CYRX -4.8%, DNUT -4.5%, DDS -4.5%, ILMN -4.4%, QNST -3.8%, PLBY -3.6%, HIMX -3.4%, HBI -3.4%, UHAL -3%, PLRX -3%, JBI -2.6%, INFN -2.4% (also files $100 mln convertible senior notes; files mixed shelf securities offering), NVO -2.2%, OEC -2.1%, HCCI -2.1%, CLNE -2%, SIX -2%, BRP -1.8%, G -1.7%
Other news:
- INVZ -17.5% (prices offering of 26.0 mln ordinary shares at $2.50 per ordinary share)
- TNGX -8.5% (announces agreement to sell approx. 15.5 mln shares in private placement at $5.15/share)
- FLYW -6.4% (prices offering of 8.0 mln shares of common stock at $32.00 per share)
- BXSL -5.3% (prices offering of 6.5 mln shares of common stock at $27.33 per share)
- SWAV -3.8% (announces proposed private offering of $500 million of convertible senior notes due 2028)
- TPR -3.4% (Tapestry (TPR) confirms definitive agreement to acquire Capri Holdings (CPRI) for $57.00 per share in cash for a total enterprise value of approximately $8.5 billion; expected to be immediately accretive)
- ARMK -3.1% (prices secondary offering of 21262245 shares of its common stock by a selling stockholder at $39.75 per share)
- BLNK -3.1% (received SEC subpoena relating to various matters)
- ENVX -2.2% (files $1 bln mixed shelf securities offering)
- MRUS -1.8% (prices offering of 6818182 common shares at $22.00 per share)
- SPNT -1.8% (enters standstill agreement with Dan Loeb)
Analyst comments:
- OSPN -10.1% (downgraded to Neutral from Buy at DA Davidson)
- SBAC -2.9% (downgraded to Neutral from Buy at BofA Securities)
- PENN -2.4% (downgraded to Hold from Buy at Craig Hallum; downgraded to Hold from Buy at Truist)
- CCI -1.3% (downgraded to Neutral from Buy at BofA Securities)
- AGTI -1% (downgraded to Mkt Perform from Outperform at Raymond James)
- KLIC -1% (downgraded to Hold from Buy at Craig Hallum)
- NVEI -0.8% (downgraded to Neutral from Buy at Goldman)
Gapping up
In reaction to earnings/guidance:
- APP +24.9%, ALRM +9.9%, CPRX +8.4%, HLLY +8.1%, RAMP +7.5%, FLNC +7.4%, YETI +6.9%, MNTK +6.1%, CYBR +5.6%, CARG +5.2%, AOSL +5%, ODD +4.9%, PRMW +4.5%, SONO +4.4%, AQN +4.4%, KGS +4.1%, VERV +4%, BABA +3.5%, AVPT +3.3%, HROW +3%, LAW +2.9%, MFC +2.8%, JAZZ +2.8% (also resumes repurchases under previous program), CENX +2.8%, IDYA +2.8%, UTZ +2.7%, CPA +2.3%, WYNN +2.3%, FREY +2.2%, VSAT +2%, LGF.A +2% (also plans to exit Latin America), EGY +2%, IMVT +2%, WKME +1.9%, DIS +1.5% (also to boost Disney+ and Hulu prices; also to launch ad-supported offering in several countries across Europe and Canada), TSM +1.5% (July revs), USFD +1.4%, NDLS +1.1%
Other news:
- CPRI +57.5% (Tapestry (TPR) confirms definitive agreement to acquire Capri Holdings for $57.00 per share in cash for a total enterprise value of approximately $8.5 billion; expected to be immediately accretive)
- YELL +7.6% (got alternative financing offers according to Bloomberg)
- DWAC +7.2% (reaffirms commitment to merger)
- SABR +4.3% (several executives disclose insider purchases)
- ARAY +4.2% (receives FDA Clearance for VitalHold on the Radixact System; Breast cancer treatment option will also be available in the EU market)
- ATSG +3% (to offer $350 mln in convertible notes)
- SILV +2.6% (to repurchase ~5% of shares)
- PTN +2.4% (initiates clinical program for Bremelanotide co-formulated with a PDE5i for the treatment of ED in patients non-responsive to PDE5i treatment) MRTX +2.3% (Cancer Discovery publishes data for MRTX1719)
- KVUE +1.9% (to join S&P 500)
- LAZR +1.6% (stock offering by selling shareholders)
- BMY +1.5% (enters into $4 bln aggregate accelerated share repurchase agreements)
- BEN +1.3% (reports July AUM)
Analyst comments:
- DCPH +5.6% (upgraded to Buy from Hold at Stifel)
- KRNT +3.5% (upgraded to Overweight from Equal-Weight at Morgan Stanley)
- ADCT +2.7% (upgraded to Neutral from Underweight at JP Morgan)
- GDRX +2.6% (upgraded to Buy from Neutral at DA Davidson)
- RBLX +2% (upgraded to Equal-Weight from Underweight at Morgan Stanley)
- GPN +1.7% (upgraded to Buy from Hold at Jefferies)
Early premarket gappers
- Gapping up:
- APP +24.3%, ALRM +14%, SONO +9.8%, YELL +8.8%, DWAC +7.1%, FLNC +7.1%, ARAY +6.9%, CARG +6%, RAMP +5.3%, BLBD +5%, AOSL +5%, SABR +4.9%, AVPT +4.2%, ADMA +4.2%, KGS +4.1%, CPRX +4.1%, FREY +3%, WYNN +2.9%, LAW +2.9%, MFC +2.8%, JAZZ +2.8%, CENX +2.8%, LGF.A +2.8%, BABA +2.8%, CYRX +2.6%, YETI +2.5%, MRTX +2.4%, OR +2.4%, CPA +2.3%, ODD +2.1%, EYE +2.1%, VSAT +1.8%, DIS +1.6%, KVUE +1.5%, TSM +1.4%, BEN +1.3%, NDLS +1.1%, LAZR +1%
- Gapping down:
- ORGN -53.3%, ORGO -33.6%, STKL -20.8%, INVZ -17.2%, TASK -13.3%, PAR -12.5%, MGNI -11.5%, PLUG -10%, FLYW -6.4%, ILMN -6.2%, CERT -5.6%, DNA -5.5%, WEST -5.5%, BXSL -5.4%, PLBY -5.4%, PRPL -4.8%, SIX -4.8%, INFN -3.8%, QNST -3.8%, HIMX -3.4%, UHAL -3.1%, PLRX -3%, ARMK -2.9%, BLNK -2.8%, ATSG -2.6%, NVO -2.2%, HCCI -2.1%, IDYA -2.1%, CLNE -2%, ENVX -1.8%, SPNT -1.8%, BRP -1.8%, MRUS -1.7%, G -1.7%, OEC -1.5%, CDE -1.5%, MXCT -1.4%
At least 36 people have been killed as a result of the wildfires that have torn through Maui, devastating the popular tourist town of Lahaina, authorities said.
Three wildfires started on the Hawaiian island earlier this week and had been fanned by the arrival of Hurricane Dora on Tuesday. The cause of the wildfires hasn’t been determined.
More than 271 structures have been damaged or destroyed and at least 1,000 acres of Maui’s Upcountry, an agricultural inland area that includes Haleakala National Park, have been charred. Power has been knocked out across the west of Maui.
Search-and-rescue efforts are under way, bolstered by a federal team, and evacuations have been ordered in 13 communities and towns. Helicopters have been dropping water over Lahaina to contain the blazes. State and county authorities have urged tourists to stay away or leave if they can.
Smoke and fire caused people to flee to the ocean on Wednesday, Maui County officials said.
Wildfires and other forms of extreme weather have ravaged several regions of the world this summer. Blazes have swept across Greece, Portugal and Canada, while China has contended with extreme flooding and a searing heat wave. July was the world’s hottest month on record.
Videos of the Maui blazes posted online show flames on both sides of a single lane of fleeing vehicles. Buildings, palm trees and cars are engulfed in flames. Others show wind-whipped walls of fire and smoke spreading through Lahaina.
Lt. Gov. Sylvia Luke issued an emergency proclamation Wednesday encouraging the suspension of all nonessential air travel to Maui. Luke, who is serving as acting governor while Gov. Josh Green returns from a trip, activated Hawaii’s National Guard to help with response efforts.
Three wildfires were also burning on the island of Hawaii on Wednesday, though authorities didn’t report any deaths there.
Authorities said they had prepared for the arrival of Hurricane Dora on Tuesday but not for the wildfires that followed.
Maj. Gen. Kenneth Hara, adjutant general of Hawaii’s Department of Defense, said the wildfires were fueled by long-running dry conditions, low humidity and high winds.
Maui is the second-most visited Hawaiian island, after Oahu. There were nearly 1.5 million visitors to Maui in the first half of the year, up 5.7% from the same period in 2022, according to the state’s Department of Business, Economic Development and Tourism. Total visitor spending during that time was $3.47 billion, up about 25% from last year.
“It will be a long road to recovery,” Luke said in a press conference. “We are just so deeply saddened by the tragedy on Maui, especially for individuals who lost family and friends.”
Coach Owner Near Deal to Take Over Parent of Michael Kors, Versace
Deal would be one of the biggest fashion tie-ups in recent years
Coach owner Tapestry TPR -0.87%decrease; red down pointing triangle is in talks to buy Capri Holdings CPRI -1.70%decrease; red down pointing triangle, parent of well-known fashion brands Michael Kors, Jimmy Choo and Versace, in a move that could help the new company better compete with the European fashion giants.
The deal, which has been under discussion for months, could be announced as soon as Thursday barring any last-minute snags, according to people familiar with the matter.
Capri has a market value of $4 billion; Tapestry’s is around $10 billion. Including a typical premium, a deal could value Capri in the high single-digit billions.
The U.S. companies have been scooping up fashion brands in a bid to take on LVMH and Gucci parent Kering, but are still dwarfed by the European giants, which have been striking deals of their own. Kering last month said it was purchasing a stake in Valentino, bringing another large fashion label under its tent. Kering had tried last year to acquire Tom Ford, but the French company lost out in a heated auction to cosmetics giant Estée Lauder, which paid more than $2 billion for the high-end fashion label.
LVMH in 2021 completed a blockbuster deal to buy luxury jewelry retailer Tiffany, bolstering the French company’s diverse stable of high-end brands.
Capri had been set to report its fiscal first-quarter earnings on Tuesday before pushing them back to Thursday morning without providing a reason.
Capri’s market value has dropped steeply from a peak of $20 billion in early 2014 as it has struggled with an oversaturation of its Michael Kors brand and acquisitions that have delivered mixed results. London-based Capri’s U.S.-traded shares are down about 40% this year after the company warned of disappointing sales.
The company was founded more than two decades ago by fashion designer Michael Kors, with the backing of two investors who had previously turned Tommy Hilfiger into a household name. In 2011, the company, then known as Michael Kors Holdings, went public.
Under CEO John Idol, Capri grew rapidly by practicing a version of so-called luxury populism. Rather than restricting access to its goods to maintain an aura of exclusivity, it made them widely available through its own stores, independent boutiques and department stores, while also launching lower-priced lines.
In 2017, the company bought designer footwear label Jimmy Choo, followed in 2018 by Versace, the Italian fashion house. When the Versace deal closed, the company changed its name to Capri, after the Italian Island known to attract the jet set.
Tapestry, meanwhile, has attempted to create its own house of brands to rival the European luxury conglomerates. Besides Coach, its brands include Kate Spade and the much smaller Stuart Weitzman.
Japanese and South Korean shares surge on return of Chinese tour groups
Markets cheer Beijing’s move to scrap pandemic-era restrictions on overseas travel to 78 countries
Tourism-related stocks in Japan and South Korea surged on Thursday after China said it would relax pandemic-era restrictions on tour groups travelling to dozens of countries, as investors anticipated the lucrative return of the mass-market visitor.
China’s tourism ministry said on Thursday it was lifting restrictions on group travel to 78 countries with immediate effect. The list included Japan and South Korea — favourite destinations of Chinese tour groups before 2020 — as well as Australia, Germany, the UK and the US.
Before the coronavirus pandemic, Chinese group tours were a boon to multiple sectors and economies. Travellers spent on everything from the highest-end luxury goods to electronic rice cookers, making them among the most powerful forces in retail sales.
In Tokyo, shares in department stores climbed sharply on Thursday, while those of Japan Airport Terminal, which operates the capital’s newly expanded Haneda airport, rose more than 9 per cent. Kyoritsu Maintenance, which runs a hotel chain favoured by mainland Chinese tourists, gained more than 11 per cent.
The term “inbound” jumped to the most searched on Japanese online trading platform Kabutan, displacing “semiconductors” and “generative AI”, in an indication of retail investor excitement.
In Seoul, the impact was even more striking, with shares in Lotte Tour Development surging nearly 30 per cent and those in Paradise Group, which runs casinos that cater exclusively to foreigners, rallying more than 18 per cent. Cosmetics conglomerate AmorePacific rose 7 per cent.
Airline stocks in China, Japan and South Korea, which analysts said were likely to be longer-term beneficiaries of the move, rose between 1 and 5 per cent.
China mostly closed its borders to international travel for almost three years during the pandemic. It has since resumed flights to 62 countries, 10 fewer than before, according to the country’s Civil Aviation Administration.
In a statement, South Korea’s culture and tourism minister Park Bo-gyoon said the resumption of Chinese tour groups would “breathe new life” into the airline and retail sectors damaged by Covid-19.
Despite the euphoria, investors said it was probably too early to expect Chinese tourists to return to pre-pandemic levels and added their spending was likely to be reduced.
“The Chinese are not spending that strongly in their own country right now, as the numbers are showing. I think it may be a stretch to hope they will suddenly resume spending abroad,” said one Tokyo-based fund manager who owns Japanese airline and hotel stocks.
Chinese travel group Trip.com and airline China Southern added 3.5 per cent and 3 per cent, respectively, but the country’s equities were broadly downbeat, with shares focused on domestic travel tumbling on the prospect of increased competition. China Tourism Group Duty Free fell as much as 6.6 per cent.
Prior to the pandemic, mainland Chinese led an unprecedented tourism boom in Japan. At its peak in July 2019, Japan welcomed just under 3mn overseas visitors a month, more than a third of them from mainland China. While arrivals from Hong Kong, South Korea and Taiwan have rebounded, the Chinese figure has languished, creeping just above 200,000 in June.
While only about 20 per cent of Chinese visitors to South Korea in 2019 were on group tours, which were unofficially banned in 2017 as part of an economic blockade, they are highly valued for outspending their American or Japanese counterparts. According to the Korea Tourism Organisation, the average Chinese visitor spent 42 per cent more than that from the US and more than double that from Japan.
But Steve Cochrane, chief Asia-Pacific economist at Moody’s, warned that spending habits in China had changed during the pandemic as more consumers began buying luxury goods domestically and that confidence remained weak amid underwhelming economic growth.
“The bottom line is we’re probably not going to get back to pre-pandemic levels that quickly,” he said.