Earnings Season Highlights

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A collection of noteworthy post-earnings reactions
Published on Apr 18, 2024 at 9:12 AM
  • Analyst Update
 
Published on Apr 17, 2024 at 4:29 PM
  • Market Recap
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Published on Apr 17, 2024 at 3:11 PM
  • Buzz Stocks

Depending on who you ask, a recession is either right around the corner or the stock market is ready to rattle off a seismic bull run. As always, the answer is likely somewhere in the middle of those two extremes. But due to the uncertainty surrounding the Federal Reserve’s rate cuts, traders are stuck in a holding pattern until more data defines the country's fiscal path.

Since bargains become popular when times are uncertain, we’d like to introduce a new weekly segment: Cheap Seats. Every week, we will profile two stocks under $20 with a market capitalization of at least $2 billion.

These are not outright "buy" recommendations, but interesting names – with cheap overhead – that are worth adding to your watch list. This week, we're taking a look at retailer Children's Place Inc (NASDAQ:PLCE) and biotech name Sage Therapeutics Inc (NASDAQ:SAGE)

Children's Place today announced a new loan deal with majority shareholder Mithaq Capital. The $90 million loan will be used to repay an existing $50 million loan under a restated agreement, and is part of the $168.6 million in funding it has has been getting since February. At last glance, PLCE was up 17.6% at $8.36, gapping away from last session's record low of $6.98. Since the start of the year, the equity is down roughly 64%. 

This announcement comes ahead of retailer's latest earnings report, due out before the open tomorrow. Options traders are ramping up activity ahead of the event, as PLCE's options pits have seen eight times the average daily options volume so far today. Puts are outweighing calls, with the most activity at the April 7.50 put, where new positions are being bought to open. 

Sage Therapeutics stock, on the other hand, is down 19.9% at $12.52 at last glance, trading at record lows after the company's Parkinson's treatment failed in a mid-stage trial. On the short sell restricted (SSR) list amid the volatility, SAGE is down 41.5% in 2024. 

Options bulls appear to be betting on a bounce, however, as SAGE calls are running at six times the intraday average volume. Most popular is the May 17.50 call, followed by the January 2025 37.50-strike call, with new positions opening at the latter. 

Published on Apr 17, 2024 at 10:40 AM
Updated on Apr 17, 2024 at 2:11 PM
  • Analyst Update

Eli Lilly And Co (NYSE:LLY) stock was last seen up 2.8% at $767.65, after the pharmaceutical giant said data from two late-stage trials showed its weight loss drug Zepbound helped reduce irregular breathing in patients with obstructive sleep apnea.

The security is on track to snap a four-day losing streak, and sports a whopping 106.1% year-over-year lead. Shares notched a March 4, all-time high of $800.78, with support from the $730 level, which has acted as a floor since early February.

Short-term options traders are already overwhelmingly bullish. In fact, Eli Lilly stock's Schaeffer's put/call open interest ratio (SOIR) of 0.62 ranks in the low 9th percentile of annual readings. 

Options volume is today running at double the intraday average, with 10,000 calls and 6,250 puts across the tape so far. The most active contract is the April 750 put, but the 470 call in that series is not too far behind in terms of popularity, both of which expire later this week.  

Published on Apr 17, 2024 at 12:58 PM
  • Quantitative Analysis

Crispr Therapeutics AG (NASDAQ:CRSP) is 2.8% lower at $56.35 this afternoon, continuing a pullback from a Feb. 22, more than two-year high of $91.10. Over the last month, CRSP has erased 20.8% and now sports a 9.6% year-to-date deficit.

For those looking to buy in on the dip, however, the recent pullback puts Crispr Therapeutics stock within one standard deviation of its 320-day moving average, a trendline with historically bullish implications. According to Schaeffer's Senior Quantitative Analyst Rocky White, the equity saw two similar signals in the past three years, after which it was higher one month later each time, averaging an impressive 13.3% gain. A move of similar magnitude would put the shares at roughly $63.85.

CRSP Chart April 172024

Crispr Therapeutics stock's 14-day relative strength index (RSI) of 18.2 is deep in "oversold" territory, which is typically indicative of a short-term bounce. Plus, short interest represents 17.6% of the stock's available float, and would take eight days to cover at CRSP's average pace of trading. 

Plus, its Schaeffer's Volatility Scorecard (SVS) stands at a high 86 out of 100, indicating the stock exceeded option traders' volatility expectations in the past 12 month -- a boon for premium buyers.

Published on Apr 17, 2024 at 11:58 AM
Updated on Apr 17, 2024 at 12:02 PM
  • Midday Market Check

         

Published on Apr 17, 2024 at 11:02 AM
Updated on Apr 17, 2024 at 11:07 AM
  • Buzz Stocks

The shares of Travelers Companies Inc (NYSE:TRV) are sliding today, after the insurance company's first-quarter earnings miss. Severe storms in the U.S. drove up catastrophe losses, though investment income and strong underwriting help offset the damage. At last glance, TRV was down 7.3% at $206.88, earlier as low as $202.60 -- coming close to erasing its January post-earnings bull gap. 

This negative price action has the stock tearing below recent support at its 60-day moving average, which it hasn't closed below since late October. Several long-term moving averages linger below as potential layers of support, however, including the 120-day trendline. Since the start of the year, the equity is up 7.7%. 

In the options pits today, Travelers Companies stock has already seen 5.1 times its average daily options volume. The April 220 put is the most popular, with new positions opening at the April 200 put. 

 

Published on Apr 17, 2024 at 10:16 AM
  • Buzz Stocks
  • Analyst Update

Urban Outfitters, Inc. (NASDAQ:URBN) stock is 2.9% lower to trade at $36.94 this morning, following a bear note from Jefferies. The analyst downgraded the apparel retailer to "underperform" from "hold," while lowering its price target by $10 to $32, citing slowing foot traffic at the company's branded stores.

URBN is trading at its lowest level since Jan. 8, but the shares' 200-day moving average is keeping today's pullback in check. Over the last month, Urban Outfitters has shed nearly 15%, and is close to breaching its year-to-date breakeven level.

More analysts could follow suit, considering that heading into today, eight of the 11 brokerages in coverage maintain tepid "hold" ratings, with not a single "sell" on the books.

premium-selling strategy could be the move for the retailer. URBN sports a Schaeffer's Volatility Scorecard (SVS) of 3 out of 100. In other words, both equities has consistently realized lower volatility than its options have priced in.

Published on Apr 17, 2024 at 9:26 AM
  • Opening View

Stock futures are higher Wednesday morning, as investors parse through yet another batch of quarterly reports and digest Federal Reserve Chairman Jerome Powell's latest hawkish comments. The Dow Jones Industrial Average (DJI) yesterday snapped a six-session skid, and now it appears to be the S&P 500 Index's (SPX) turn to break free from its three-day losing streak. Meanwhile, Nasdaq-100 Index (NDX) futures are modestly above fair-market value.

Continue reading for more on today's market, including: 

Futures Chart April 172024

5 Things You Need to Know Today

  1. The Cboe Options Exchange (CBOE) saw more than 1.1 million call contracts and 820,649 put contracts exchanged Tuesday. The single-session equity put/call ratio jumped to 0.73, while the 21-day moving average stayed at 0.71.
  2. Shares of United Airlines Holdings Inc (NASDAQ:UAL) sport a 6.5% premarket lead, after the company reported a first-quarter loss of 15 cents per share -- much better than the estimates of 57 cents -- on revenue of $12.5 billion. In addition, the airline name lifted its second-quarter earnings forecast. UAL sports a slim 0.6% gain for 2024.
  3. Up 30% over the last six months, Alcoa Corp (NYSE:AA) is on track to rise even more after it was last seen up 2.8% before the bell. Alcoa stock is rising alongside other metal producers, following U.S. President Joe Biden's calls for tariffs to triple on imported Chinese steel and aluminum.
  4. Jefferies downgraded Urban Outfitters, Inc. (NASDAQ:URBN) to "underperform" from "hold" and lowered its price target to $32 from $42. In its bear note, the analyst said the apparel retailer is facing a significant slowdown in foot traffic. In response, URBN is down 4.5% ahead of the open, pulling back to its year-to-date breakeven mark. 
  5. The Fed's Beige Book and speeches from central bank presidents are coming this week.

buzzapr17

European Investors Take In Inflation Data

Asian markets were mostly lower today, as investors keep a close eye on U.S. Fed inflation comments. Japan’s Nikkei shed 1.3% and breached 38,000, after business optimism fell for the month of April and exports in the region rose 7.3% year-over-year in March. South Korea’s Kospi gave back 1%, while Hong Kong’s Hang Seng finished flat. China’s Shanghai Composite added 2.1%, after the Securities Regulatory Commission offered clarity on delisting rules.

In Europe, stocks are inching higher as investors weigh inflation data with retail earnings. London’s FTSE 100 is up 0.7%, after inflation in the U.K. increased to 3.2% in March, less than expected and putting the onus on the Bank of England (BoE) going forward. The French CAC 40 is up 1.3% thanks to a post-earnings pop from luxury retailer LVMH, while Adidas’ beat-and-raise is driving the German DAX to a 0.5% lead, at last check.

Published on Apr 17, 2024 at 8:00 AM
  • Indicator of the Week
 
Published on Apr 16, 2024 at 4:25 PM
  • Market Recap
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Published on Apr 16, 2024 at 2:49 PM
  • Quantitative Analysis

The shares of oil and gas stock Chevron Corp (NYSE:CVX) are pulling back from their recent five-month peak, now on track for a fourth-straight daily loss. In fact, most of the energy sector is sliding today, as concerns regarding tensions in the Middle East ease and crude prices slip. 

CVX April16

For those curious about buying the dip, however, this recent pullback has CVX within one standard deviation of its 50-day moving average, a trendline with historically bullish implications. Per Schaeffer's Senior Quantitative Analyst Rocky White, the security has seen six similar signals over the past three years, after which it was higher one month later 83% of the time, averaging a 5% gain.    

Puts outweigh calls in the options pits today -- running at double the intraday average amount. An unwinding of this pessimism could give CVX a boost. The most popular contract by far is the June 115 put, followed by the April 155 put expiring this week. 

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