A roundup of some of the North American equities making moves in both directions today
On the rise
Canopy Growth Corp. (WEED-T) increased 3.7 per centon Thursday after revealing lifestyle icon Martha Stewart has joined the company in an advisory role to “assist with developing and positioning a broad new line of product offerings across multiple categories.”
“With decades of success in publishing, broadcasting, online and merchandising, Martha Stewart has firmly cemented herself as one of the most well-respected businesswomen in the United States,” the company said in a release. “Along with a deep understanding of what consumers in the United States and around the world want, Martha has been one of the most vocal advocates for animals, championing the health and wellness of pets and farm animals alike. With several clinical trials underway, Canopy Growth will be leaning on Martha’s vast knowledge of consumer products while exploring the effectiveness of CBD and other cannabinoids as they relate to improving the lives of both humans and animals.”
Encana Corp. (ECA-T) jumped 6.7 per cent after reporting better-than-anticipated quarterly results on the back of a 20-per-cent jump in output from the previous year.
The Calgary-based producer said total production during the fourth quarter increased to 403,400 barrels of oil equivalent per day from 335,200 during the same period year ago. Excluding one-time items, it earned 32 cents per share, exceeding the Street’s 16-cent consensus estimate.
"Encana delivered in 2018, posting another strong year of performance," said president and chief executive officer Doug Suttles in a release. "Our results demonstrate the strength of our portfolio and the ability of our people to continually innovate to drive industry leading performance in all areas where we operate. Our business model is sustainable and capable of generating a unique combination of profitable liquids growth and free cash flow that can be returned to shareholders in today's commodity price environment."
Jamieson Wellness Inc. (JWEL-T) rose 10.5 per cent after an equity analyst at BMO Nesbitt Burns raised his rating for its stock following the release of its fourth-quarter results.
On Wednesday after market close, the Toronto-based vitamin maker reported year-over-year increases in revenue and adjusted EBITDA of 18 per cent and 22 per cent, respectively.
“During the quarter and full year, we saw tremendous strength in our core Jamieson brand, both domestically and internationally, and robust growth in the Strategic Partners segment of the business,” said Jamieson president and CEO Mark Hornick in a release.
AltaGas Ltd. (ALA-T) rose 7.5 per cent after topping the Street’s expectations for its fourth-quarter results before market open. The energy copmpany reported adjusted earnings per share of 44 cents, topping the consensus analyst estimate by 2 cents.
It also reaffirmed its 2019 outlook and balanced funding plan.
Industrial Alliance Securities analyst Elias Foscolos said: " Overall, the announcements today came largely in line with our estimates with some slight lumpiness and seasonality in WGL contributions. We anticipate the stock will receive a small lift today but overall we maintain our Neutral impression as we don’t view this as a material change to our fundamental outlook, but the market may view this as positive since the results were in line."
On the decline
Shares of both Toronto-Dominion Bank (TD-T) and Canadian Imperial Bank of Commerce (CM-T) dipped on Thursday after the pre-market release of weaker-than-anticipated first-quarter results.
Hurt by weakness in its wholesale bank division, TD reported earning per share, excluding special items, of $1.57, up 1 cent year-over-year but below the $1.72 expectation on the Street.
CIBC’s profit was hurt by declines in personal and small-business banking as well as capital markets. It reported earnings of $3.01 per share, excluding special items. That was represents a 17-cent decline from the same period a year ago and missed the Street’s expectation by 7 cents.
Shares of Air Canada (AC-T) erased early gains and sat 3.4 per cent lower after raising its long-term profit margin goals.
Before market open, the airline announced it is targeting an annual EBITDA margin (earnings before interest, taxes, depreciation, amortization and impairment, as a percentage of operating revenue) of 19-to-22 per cent and an annual return on invested capital (ROIC) of 16-to-20 per cent between 2019 and 2021. It is projecting cumulative free cash flow of $4.0-to-$4.5-billion over the same period.
In a separate release, it announced a 10-year agreement with American Express to participate in Air Canada’s new loyalty program, which is scheduled to launch in 2020.
Following Wednesday’s release disappointing quarterly results, Laurentian Bank of Canada (LB-T) was down 2.5 per cent. An equity analyst at TD Securities downgraded his rating for its stock, while several firms moved their target prices lower.
“The seven-year transformation plan has been a lot bumpier than we had initially expected, and the ride is not over yet," said Desjardins Securities’ Doug Young.
Cascades Inc. (CAS-T) dropped 9.6 per cent after announcing plans to close a pair of Ontario tissue paper plants.
The Whitby and Scarborough sites produce 44,000 tons annually and employ 68 workers.
“Their unprofitability and the current market conditions have convinced us that it is better to source externally to supply our needs. It is important to note that this decision will have no impact on our ability to serve our customers," said Jean Jobin, President and Chief Operating Officer of Cascades Tissue Group, in a release.
At the same time, the Kingsey Falls, Que.-based company released fourth-quarter results that largely fell in line with expectations. It reported a fourth-quarter loss of $65-million or 69 cents per share, versus a profit of $57-million or 60 cents per share during the same period a year ago.
Maple Leaf Foods Inc. (MFI-T) was down 2.9 per cent after its fourth-quarter results fell short of expectations. The company reported earnings per share of 29 cents, excluding items, which missed the consensus projection on the Street by 5 cents.
The company pointed to “adverse fresh market conditions” as weak pork prices continue to weigh.
Maple Leaf raised its quarterly dividend by 1.5 cents, or 11.5 per cent, to 14.5 cents per share.
Calfrac Well Services Ltd. (CFW-T) fell 3.7 per cent on lower-than-anticipated fourth-quarter results. Revenue of $498.9-million was a rise of 4 per cent from the previous quarter, but below the expectation of $534.8-million from analysts. The company reported a loss of 2 cents per share, while the Street was projected a 2-cent profit.
“During the quarter, Calfrac pumped approximately 560,000 tons of sand in the United States and 290,000 tons in Canada, representing growth of 15 percent and 33 percent, respectively, from the prior year. However, the larger job sizes were offset by lower pricing and job mix. The number of cementing jobs decreased by 7 percent due to lower cementing activity in northern Argentina,” the company said.
HP Inc. (HPQ-N) plummeted 17.4 per cent after its quarterly revenue fell result fell short of expectations on the Street, due largely to weaker-than-anticipated sales in both its personal computer and printing business.
Net revenue rose 1.3 per cent year-over-year to US$14.7-billion, missing the US$14.86-billion expectation, while earnings per share, excluding items, of 52 US cents fell in-line with estimates.
In a research note, Citi analyst Jim Suva said: “Though not a smooth quarter by historical standards, we believe the company should be able to execute corrective actions satisfactorily. HPQ shares trade at a discount to the peer group. So overall valuation is attractive and could represent a buying opportunity for investors.”
Meanwhile, Bank of American Merrill Lynch analyst Wamsi Mohan downgraded HP stocks by two levels to “underperform” from “buy.”
“HPQ remains a leader in PC and Print and despite appropriate steps taken by management to address structural issues (will take time), we are downgrading shares of HPQ to Underperform from Buy. Our prior thesis was predicated on stability in high margin print supplies which we have lower confidence in post this quarter. Key reasons for our downgrade include (1) Too much volatility in supplies growth driven by different factors leading to lower confidence in predictability, (2) A guidance bar (unchanged) that looks high given the shortfall in supplies, (3) The omni-channel purchasing dynamic that takes significant time and investments to recoup share, (4) Cash flow headwinds from higher restructuring, investments and future non repeat of F19 working capital benefits, (5) Risk of incremental PC slowdown given weaker macro outlook (also negative to FCF), (6) a longer term downshift in high margin print supplies from other regions and (7) Lower confidence in longer term targets especially print margins of at least 16 per cent."
With files from staff and wires
David Leeder