Financials Lead Europe Higher | Morning News

FEBRUARY 25, 2016
US futures point to a modestly higher opening at this 7AM hour with European markets, led by financials, trade firmly in the green. Asian markets closed mostly lower with the Shanghai plunging 6.4% as surging money-market rates signaled tighter liquidity and the offshore yuan weakened for a fifth day. For today, traders will have to digest Fed's Bullard comment that rate hikes could threaten inflation target, as well as today's economic calendar which includes durable goods data and weekly jobless claims.

NEWS:

• RH: warns and announces preliminary Q4 earnings
• AAL: awarded $125.92M government contract modification
• BA: Boeing, Aeromexico, Mexican Government collaborate on sustainable aviation biofuel R&D
• DRII: announces formation of a committee to explore strategic alternatives to maximize shareholder value
• SPAR: awarded contract to supply pumpers to City of Toronto
• BT: evades breakup but should unbundle telecom network, reports FT

THE ECONOMIC CALENDAR:

• 8:30AM: Weekly Jobless Claims
• 8:30AM: Durable Goods
• 9AM: FHFA House Price Index
• 9:45AM: Bloomberg Consumer Comfort Index
• 10:30AM: EIA Natural Gas Inventory
• 11AM: Kansas City Fed Manufacturing Survey
• 1PM: $28B, 7 Year Note Auction
• 4:30PM: Money Supply and Fed Balance Sheet

SOME NOTABLE EARNINGS REPORTED YESTERDAY AFTER THE CLOSE:

• VIPS: Q4 EPS of RMB1.18 beats by RMB0.12: revenue of RMB13.9B beats by RMB1.6B: revenue +64.7% y/y: guides Q1 revenue RMB11.8B-RMB12.3B
• HPQ: FQ1 EPS of $0.36 in-line: revenue of $12.25B beats by $50M: revenue -12.0% y/y: guides FY16 adjusted EPS $1.59-$1.69 vs consensus $1.60: Q1 desktop units down 13%
• TUMI: Q4 EPS of $0.38 beats by $0.06: revenue of $167.66M beats by $3.29M: revenue +2.3% y/y: guides FY16 EPS $0.93-$0.97 vs consensus $1.00: sss down 4.6%
• NTES: Q4 EPS of RMB17.78 beats by RMB2.99: revenue of RMB7.9B beats by RMB210M: revenue +128.3% y/y: raises dividend
• WLL: Q4 EPS of -$0.43 misses by $0.13: revenue of $423.5M misses by $69.97M: revenue -39.2% y/y
• LB: Q4 EPS of $2.15 beats by $0.10: revenue of $4.4B beats by $30M: revenue +8.1% y/y:weak guidance
• IMAX: Q4 EPS of $0.39 misses by $0.04: revenue of $119.33M beats by $3.5M: revenue +16.5% y/y
• MMLP: Q4 EPS of $0.38 beats by $0.05: revenue of $254.4M misses by $43.55M: revenue -32.5% y/y
• AVG: Q4 EPS of $0.47 beats by $0.02: revenue of $109.52M beats by $1.68M: revenue +9.3% y/y: guides FY16 adjusted EPS $1.90-$1.96 vs consensus $1.90
• CRM: Q4 EPS of $0.19 in-line: revenue of $1.81B beats by $20M: revenue +25.7% y/y: guides Q1 above consensus: guides FY16 in-line
• GDOT: Q4 EPS of $0.06 beats by $0.03: revenue of $151.05M beats by $1.56M: revenue -1.3% y/y: guides EPS above consensus

SOME NOTABLE EARNINGS REPORTED TODAY BEFORE THE OPENING:

• GTLS: Q4 EPS of $0.19 beats by $0.17: revenue of $260.76M beats by $34.99M: revenue -20.0% y/y: guides FY16 EPS $0.50-$1.00 vs consensus $0.63: guides FY16 revenue above consensus
• SDRL: Q4 EPS of $0.54 beats by $0.08: revenue of $959M misses by $17.11M: revenue -23.9% y/y: will announce refinancing plan to address its $10B debt in 1H16
• VALE: Q4 EPS of -$0.20 misses by $0.19: revenue of $5.9B misses by $340M: revenue -35.0% y/y: sees continued challenges for FY16
• CHS: Q4 EPS of $0.07 beats by $0.07: revenue of $627.4M beats by $2.41M: revenue -4.5% y/y: 
• DPZ: Q4 EPS of $1.15 beats by $0.04: revenue of $741.2M beats by $34.15M: revenue +15.3% y/y: raises domestic sss growth from 2-4% to 2-5%
• PF:Q4 EPS of $0.70 beats by $0.01: revenue of $722.48M misses by $5.72M: revenue +2.4% y/y:  guides FY16 adjusted EPS $2.08-$2.13 vs consensus $2.10
• KSS: Q4 EPS of $1.58 beats by$0.02: revenue of $6.39B in-line: revenue +0.8% y/y: guides FY16 EPS $4.05-$4.25 vs consensus $4.24: sss up 0.4%: raises quarterly dividend 11% to $0.50/share: 
• BBY: Q4 EPS of $1.53 beats by $0.14: revenue of $13.62B in-line: revenue -4.2% y/y: raises regular dividend 22% to $0.29/share: announces special dividend of $0.45/share: announces $1B buyback authorization
• MPG:Q4 EPS of $0.29 may not be comparable to consensus of $0.41: revenue of $735.3M: misses by $2.65M: revenue -3.5% y/y: guides FY16 revenue $2.75B-$2.95B vs consensus $2.93B: announces $25M share repurchase authorization
• CRI: Q4 EPS of $1.40 beats by $0.11: revenue of $867M beats by $12.31M: revenue -0.3% y/y: raises quarterly dividend 50% to $0.33: announces new $500M share repurchase authorization
• SHLD: Q4 EPS of -$1.70 misses by $0.34: revenue of $7.3B beats by $40M: revenue -9.9% y/y: comparable store sales fell 7.1% in Q4
• ZBRA: Q4 EPS of $1.51 beats by $0.04: revenue of $952.74M misses by $7.52M: revenue +20.5% y/y: guides Q1 EPS $1.19-$1.34 vs consensus $1.37
• RRD: Q4 EPS of $0.48 beats by 0.04: revenue of $2.93B misses by $10M: revenue -4.6% y/y: guides FY16 revenue $11.3B-$11.5B vs consensus $11.42B
• PWR: Q4 EPS of $0.30 beats by $0.02: revenue of $1.9B beats by $120M; revenue -7.3% y/y: guides FY16 adjusted EPS $1.58-$1.78 vs consensus $1.68
• VWR: Q4 EPS of $0.47 beats by $0.05: revenue of $1.11B beats by $20M: revenue +0.9% y/y: guides FY16 adjusted EPS $1.62-$1.70 vs consensus $1.68

SOME NOTABLE EARNINGS TO BE REPORTED TODAY AFTER THE CLOSE:

• ADSK, AEGR, AGO, AHT, AL, AMH, BGS, BIDU, BLOX, BMRN, CBI, CLVS, CSU, CVT, DGI, DK, DLR, ENV, EOG, EVC, GG, GPS, GSAT, HK, HLF, HWAY, IM, IMMR, INTU, KBR, KHC, KND, MACK, MAIN, MDVN, MELI, MHK, MNST, MTZ, NDLS, NNI, NTRI, OLED, OUT, OVAS, PANW, PBA, PEGA, RARE, RBA, RPTP, RRC, RRMS, RTRX, SEM, SEMG, SPLK, SSRI, STAG, STMP, SWN, TSRO, TXMD, UHS, WIFI, WPG, WTW, ZOES

ANALYSTS' RATINGS CHANGES:

UPGRADES:

• MRD: upgrade: outperform to strong by: Raymond James: pt cut from $22 to $20
• XRAY: upgrade: sell to neutral: UBS: pt raised from $50 to $60
• BIN: upgrade: sell to neutral: Credit Suisse: $32
• KEYW: upgrade: neutral to buy: Chardan Capital: $8.50
• MSCC: upgrade: outperform to Top Pick: RBC Capital: pt raised from $45 to $46
• CTB: upgrade: sell to neutral: Goldman
• ABCO: upgrade: hold to buy: Deutsche Bank: pt cut from $53 to $43
• BIN: upgrade: underperform to neutral: Credit Suisse: pt raised from $21 to $32
• CHTR: upgrade: neutral to oveweight; JP Morgan: $210

DOWNGRADES:

• LQ: downgrade: buy to hold: Stifel
• SLCA: downgrade: buy to neutral: Ladenburg: $16
• CNL: downgrade: neutral to sell: Ladenburg: pt cut from $55 to $44
• KGC: downgrade: buy to neutral: UBS
• MRC: downgrade: buy to neutral: Longbow
• RH: downgrade: outperform to neutral: Baird: pt cut from $92 to $52
• EQT: downgrade: buy to neutral: SunTrust
• POWR: downgrade: buy to hold: Canaccord
• RATE: downgrade: outperform to sector perform: RBC Capital: pt cut from $16 to $9
• ECA: downgrade; sector perform to underperform: CIBC
• TILE: downgrade: overweight to equal weight: Barclays: $17
• CVG: downgrade: outperform to market perform: Wells Fargo

INITIATIONS:

• GILD: initiated: buy: Citi: $110
• CELG: initiated: buy: Citi: $130
• REGN: initiated: buy: Citi: $480
• BIIB: initiated: buy: Citi: $345
• KITE: initiated: buy: Citi: $67
• AMGN: initiated: neutral: Citi: $165
• ALXN: initiated: neutral: Citi: $165
• MGNX: initiated: equal weight: Morgan Stanley: $20
• MLNX: initiated: overweight: Barclays: $58
• MCFT: initiated: buy: B Riley: $25
• BSX: initiated: buy: SunTrust: $21
• PSXP: initiated: overweight: Morgan Stanley: $69
• VLP: initiated: overweight: Morgan Stanley: $60
• CPPL: initiated: overweight: Morgan Stanley: $21
• ENBL: initiated: underweight: Morgan Stanley: $6

PRICE TARGET CHANGES:

• GDOT: pt raised from $19 to $22: Compass Point
• CRM: pt raised from $81 to $87: Citi
• CONE: pt raised from $41 to $45: Stifel
• MTDR: pt raised from $17 to $20: Stifel
• PE: pt raised from $24 to $26: Topeka Capital
• PE: pt raised from$26 to $27: RBC Capital
• SHOO: pt raised from $38 to $40: Telsey Advisory Group
• SLCA: pt cut from $27 to $22: Cowen
• CJES: pt cut from $5.50 to $2.25: Cowen
• TJX: pt cut from $79 to $78: Telsey Advisory Group
• TJX: pt cut from $82 to $80: Wolfe Research
• CRM: pt cut from $88 to $82: FBR Capital
• PGRE: pt cut from $18 to $16: Mizuho
• LB: pt cut from $98 to $93: FBR Capital
• DEPO: pt cut from $19 to $16: Mizuho
• BLUE: pt cut from $125 to $117: Piper Jaffray
• TOL: pt cut from $35 to $29: RBC Capital
• SM: pt cut from $24 to $15: RBC Capital
• SSTK: pt cut from $38 to $35: RBC Capital
• MRD: pt cut from $17 to $15: RBC Capital
• GIL: pt cut from $33 to $30: RBC Capital
• GIL: pt cut from $36 to $32: Stifel
• FIG: pt cut from $10 to $9: RBC Capital
• CHK: pt cut from $5 to $4: RBC Capital
• FLTX: pt cut from $62 to $56: RBC Capital
• RH: pt cut from $85 to $60: Deutsche Bank
• RIG: pt cut from $10 to $5: Credit Suisse
• ESPR: pt cut from $105 to $64: Stifel