Morning Bites - May 17, 2023

🔮 Welcome back to Finsights, fellow financial wizard. Let’s get you up to speed on the market with a flick of your finger! 🪄

• 🕺And…. we’re up again!

• 🤝 All eyes are on Target and TJX earnings today (full summary below)

• 🕸️ WIX blows out the street 💣

📈 Morning Market Levels: The U.S. equity futures are like a kid on a trampoline, bouncing back this morning. The Eurozone indices are maintaining a zen-like calm, staying flat overall. Earnings are pushing and pulling stocks around, with Siemens, Aegon, and Sage Group strutting their stuff while Watches of Switzerland, Experian, JD Sports, Commerzbank, and British Land are slipping. Over in Asia, we saw a mixed bag with Japan enjoying a boost from a solid Q1 GDP report. Treasuries are chilling out, and the DXY is throwing a mini party, rallying 40bp. 🌍💹

🌞 What's Up This Morning: U.S. stocks are picking themselves up after yesterday's slump. The debt ceiling negotiations are taking baby steps in the right direction, and WAL's deposit update is helping regional stocks score some pre-market brownie points. Earnings were a mixed bag last night, with a retail hiccup from TCS but a healthy tech pulse from KEYS. Investors are waiting with bated breath for TGT and TJX earnings, hoping for some reassurances about the consumer's health. The after-bell Cisco report is set to be the crystal ball for enterprise tech demand. 📊🔮

🤔 How We're Thinking About Stocks: Home Depot's results weren't a disaster, but it's like seeing a crack in the dam, considering our optimism is deeply rooted in earnings outperformance. TCS/Container Store didn't help by reporting a horror show last night. Other Tuesday concerns include the FTC's lawsuit to block AMGN-HZNP and the market's poor breadth. Despite these, we're like the band on the Titanic, still playing our bullish tune. We're buoyed by earnings strength, the end of the Fed rate hike overhang, and favorable technical factors. 💪🐂

Consumers

🎯📉 TGT (Target), everyone's favorite one-stop shop, came out with their first-quarter results, which are looking a bit like a roller coaster ride. They scored a $2.05 Earnings Per Share (EPS — think of it as the profit per slice of the Target pie), breezing past Wall Street's guess of $1.77. Pretty cool, right? But then, their sales stayed as flat as a pancake, missing the Wall Street's hope for a 1% uptick. Bit of a party pooper, eh? On top of that, they're expecting losses of over a whopping $500 million this year due to 'shrink', a fancy term for losses from theft and such. If we did some quick math, that's about the cost of around 166 million of Target's popular $3 candles. Now that's a LOT of candles! 🎯📉

🏷️💪 TJX (TJX Companies), the parent company of bargain-lover's paradises like T.J.Maxx and HomeGoods, seemed to have a rosier first quarter. Their EPS came in at $0.76, beating Wall Street's prediction of $0.71. That's like finding a designer dress in your size on the clearance rack - always a nice surprise! However, it wasn't all roses and sunshine; their HomeGoods branch saw a 7% drop in sales. Maybe people are getting a little bored of artisanal soap and quirky kitchenware? Despite this, management has their chin up. They're feeling good about the second quarter and have even bumped up their predictions for the full year's profit margins and EPS. They're expecting earnings per share of $3.39 to $3.48 for the year, up from their previous prediction of $3.29 to $3.41. It's like they're saying, "You haven't seen anything yet!" 🏷️💪

Industrials

✈️💰 TGI (Triumph Group), a major provider of aerospace components, soared past Street estimates with an EPS of $0.39 (compared to the Street's $0.25 forecast). The company reported revenues of $393.3M, cruising above the Street's projection of $362.2M. However, their F24 revenue guidance seems a bit shy, projecting $1.41B against the Street's $1.427B. Still, the company's optimism shines through in its operational margin projections, aiming for 14% versus the Street's 11.4%. 📈

Tech

📊🔍 DT (Dynatrace), a leading software intelligence company, posted solid FQ4 results. The company reported revenues of $314M, surpassing the Street's $306M estimate, and an EPS of $0.31, which outperformed the Street's $0.22 prediction. The company is setting a steady pace for FQ1 with in-line guidance, but it's accelerating past the Street's estimates for F24. 🚀

💻🌐 WIX (Wix.com), the popular website building platform, delivered a powerful FQ1 performance. Their revenue grew by 10% to $374.1M, outperforming the Street's $369M estimate, and they reported an EPS of $0.91, which dramatically outshone the Street's $0.19 forecast. The company also raised its guidance for revenue, margins, and free cash flow, suggesting a strong outlook for the future. 📈

🌯 Wrap for earnings. Have a fantastic day! 🌯

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