[TY DRAFT] Morning Bites - May 9, 2023

Good morning! In today’s edition:

• 📉 Equity Futures Stumble

• "💥 Earnings Season Surprises"

• "⏳ Debt Ceiling Drama Looms"

• "🏢 Commercial Real Estate Woes"

• "🕊️ Fed's Dovish Inflection Point"

📉 Market Summary: Today's narrative seems to be written by bears with a grumpy pen, as US equity futures and major Eurozone indices are trading lower. While some sectors like media, banks, and insurance are enjoying a bit of a party, others like chemicals, tech, real estate, energy, luxury, and utilities are nursing a hangover. Asian stocks had a mixed day, and treasuries are enjoying a small bid. Bears seem to be having a field day with disappointing news, including China's import numbers, some negative earnings results, debt ceiling jitters, and a gloomy commercial real estate outlook.

🤔 Our Take: We're still more optimistic than most, like a cheerful friend at a bear's picnic. Our reasons: strong earnings, the dovish inflection in global monetary policy and inflation, and extremely negative sentiment. While the SPX's chances of breaking 4200 seem like a coin toss, we're leaning towards an upside break. However, we're keeping an eye on the debt ceiling, valuations, and Fed expectations – like a cautious driver on a foggy road.

🗓️ Today's Focus: Investors will be keeping their ears open for Fed speakers (Jefferson and Williams), debt ceiling updates (Biden's meeting with Congressional leaders), and earnings reports from various companies. It's like tuning into the financial radio station with a mixed playlist!

Consumer

🍴 ARMK (Aramark) exceeded expectations with 19% organic revenue growth and 38% EPS growth. The company now expects >13% organic revenue growth and ~32% adjusted op. income growth. Bon appétit!

💄 COTY (Coty) posted a solid FQ3 with an EPS beat at $0.19 (vs. the Street $0.04) and EBITDA slightly ahead of expectations. The company raised its full-year revenue and EPS outlook. Smelling good, Coty!

🪒 EPC (Edgewell) reported a sharp FQ2 with 11.4% organic revenue growth and adjusted EPS of $0.56, slicing through the Street's expectations. The company now sees revenue/EBITDA at the high-end of the prior range.

🌱 HAIN (Hain Celestial) reported wilted FQ2 results, missing EPS and revenue expectations, and cutting its full-year guidance. Time for some pruning?

🍼 HNST (Honest Company) posted solid revenue but weak GMs and EBITDA. The full-year revenue range is increased, and the EBITDA guide (ex-transformation costs) is slightly improved. Keep it honest!

👠 SHOO (Steven Madden) strutted its way to Q1 upside with 50c EPS and $463.8MM revenue, and the full-year guidance is reiterated. Walking tall, Steve!

🛏️ TPX (Tempur Sealy Int'l) announced the acquisition of Mattress Firm for approximately $4.0 billion. Sweet dreams are made of deals!

👟 UAA (Under Armour) reported FQ4 upside but provided a soft F24 guidance with lower op. income and EPS than the Street's expectations. Running a bit slow, eh?

👓 WRBY (Warby Parker) posted decent Q1 upside with $172MM in revenue and $17.7MM EBITDA, maintaining full-year guidance due to uncertain macroeconomic outlook. Keep an eye on the future, Warby!

Financials

💰 APO (Apollo) reported a small miss on adjusted net income per share at $1.42, but inflows of $57B soared high, way ahead of the Street's ~$30B forecast. Apollo, ready for liftoff!

🏦 CRBG (Corebridge) nailed Q1 with adjusted EPS of $0.97, beating the Street's $0.82 forecast. With strong performance across key KPIs, Corebridge is standing firm!

Healthcare

🐾 ELAN (Elanco) had a healthy Q1, beating EPS and revenue expectations. However, guidance is only tweaked modestly, with Q2 guidance falling short. A little bark and a little bite!

😷 HSIC (Henry Schein) reported a modest Q1 shortfall and adjusted the EPS guidance lower due to acquisition dilution. Time for a checkup, Henry?

💉 NVAX (Novavax) reported lower-than-expected Q1 revenue and a huge net loss, but anticipates total 2023 revenue of $1.5B, far above the Street's forecast. Hang in there, Novavax!

✂️ NVAX (Novavax) announced a global restructuring and cost reduction plan, cutting 25% of its headcount. Trimming down for a more focused approach!

💊 PRGO (Perrigo) posted Q1 upside, with rising gross margins and strong consumer demand. The company is also announcing a CEO transition. A healthy dose of good news!

🔬 WAT (Waters) reported weak Q1 results and Q2 guidance. Despite weakness in China and the U.S, the full-year EPS range remains unchanged. Stay afloat, Waters!

Industrials

🌬️ APD (Air Products) reported impressive FQ2 results, with EPS and revenue rising, and guidance is tweaked upwards. Full steam ahead, Air Products!

🏗️ J (Jacobs) delivered FQ2 upside and keeps guidance largely unchanged. They also plan to separate their Critical Mission Solutions business, aiming to complete the separation by the second half of FY2024. Double the fun!

✈️ TDG (TransDigm) reported strong FQ2 results, beating expectations and raising guidance. With improvements in major market channels, TransDigm is ready to soar!

Real Estate

🏙️ WE (WeWork) reported a miss on Q1 EBITDA and weak Q2 guidance. With a slight decline in memberships, it's time for WeWork to roll up its sleeves and get to work!

Tech

📺 AMCX (AMC Networks), the entertainment powerhouse, Q1 EPS was a smashing 2.62, and revenues reached $717.5MM, beating Street expectations. The world of TV shows is alive and well! 🌟📈

📡 CCO (Clear Channel), advertising giant, reported an EBITDA of $52.5MM, with revenues in line with expectations. The company keeps shining bright in the world of billboards! 🌃🌟

🦊 FOX (Fox), media giant, FQ3 revenue soared to $4.08B, and its EPS hit 94c. Fox continues to score big with sports events and hit TV programming! 🏈🎬

🏭 GFS (GlobalFoundries), semiconductor titan, reported an EPS of 52c, while EBITDA reached $655MM. The company is chipping away at success in the semiconductor market! 🔌📈

💡 LITE (Lumentum), optical and photonic product manufacturer, reported small upside in FQ3 EPS, but a weak FQ4 guide. Time to shed some light on their future strategies! 🔦⚡

🖥️ SQSP (Squarespace), a website building leader, enjoyed Q1 revenue of $237MM and an EBITDA of $30.9MM. The company is building momentum, one website at a time! 🌐💻

🎵 WMG (Warner Music), the music industry giant, saw revenue reach $1.399B, while adjusted OIBDA hit $286MM. Warner Music keeps hitting the high notes in the world of tunes! 🎶🎤

Travel

🏨 CHH (Choice Hotels), lodging firm, reported a solid quarter with an EPS of 1.12 and EBITDA of $106.4MM. Guests are checking in for a comfortable stay! 🛏️📈

🐳 SEAS (SeaWorld), the theme park operator, enjoyed Q1 EBITDA of $72.4MM and revenue of $293.3MM. Get ready for a splash of success in their future attractions! 🎢💦

✈️ YOU (Clear), the travel security company, reported an adjusted EPS of 6c and revenue of $132.4MM. Soaring high with strong travel trends and membership growth! 🛫🌍

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Fin-specto Revelio!