A roundup of some of the North American equities making moves in both directions today
On the rise
Wells Fargo & Co. (WFC-N) rose 3.8 per cent on Friday after naming banking veteran Charles Scharf as chief executive officer on Friday, the lender’s third CEO since a wide-ranging sales scandal erupted three years ago.
Mr. Scharf will take over from interim CEO Allen Parker, who was thrust into the position in March when former CEO Tim Sloan resigned abruptly. Mr. Sloan had said increased pressure from politicians and regulators had become a distraction in running the scandal-plagued bank.
On the decline
Eldorado Gold Corp. (ELD-T) slid 0.1 per cent after it announced an at-the-market equity program that will allow it to issue up to US$125-million worth of common shares from treasury to the public “from time to time at prevailing market prices.” It also said the volume and timing of distributions “will be determined at the company’s sole discretion, subject to applicable regulatory limitations.”
If it proceeds, Eldorado intends to use the net proceeds for various capital investments at its projects and to repay debt.
Canopy Growth Corp. (WEED-T) fell almost 4 per cent after it was downgraded to “neutral” from “buy” by Bank of America Merrill Lynch, which thinks the Canadian industry is set to take a pause in the second half of the year and potentially flatten.
Transcontinental Inc. (TCL-A-T) was down 4 per cent after announcing renewal of its normal course issuer bid plan.
The Montreal-based company has been authorized to purchase for cancellation up to 1,000,000 of its Class A subordinate voting shares and up to 190,560 of its Class B shares, representing approximately 1.36 per cent of the 73,360,754 issued and outstanding Class A subordinate voting shares and of the 13,979,626 issued and outstanding Class B shares.
See also: Transcontinental selling majority of publications to Newcom Media, Contex Group
Apple Inc. (AAPL-Q) dipped 0.5 per cent following a Wall Street Journal report that it plans to take a different path to streaming rival Netflix and allow theatrical releases for some of the feature-length films it has begun producing for its new Apple TV+ service.
Citing people familiar with the matter, the Journal said that by pursuing traditional releases for major projects, the iPhone maker hopes to make it easier to attract big-name directors and producers to its projects.
See also: Netflix shares on pace for worst quarter since 2012 with streaming competitors on the horizon
Micron Technology Inc. (MU-Q) plummeted 10.9 per cent after its first-quarter profit projection fell below Wall Street targets, saying it was “mindful” of economic and trade uncertainty even though there were signs of an uptick in memory chip demand..
The long-drawn U.S.-China trade war has impacted chipmakers already reeling under a saturated smartphone market, especially after the Trump administration blocked access to Huawei , the world’s largest telecoms equipment maker and Micron’s single largest customer.
RBC Dominion Securities analyst Mitch Steves said: “After a large intra-quarter move, Micron reported results ahead of expectations at $4.87B/$0.56 however, the guidance was lighter than expected due to a gross margin miss (we think most expected EPS closer to $0.50+ vs. guide of $0.46 at the mid-point). Combined we think investors were looking for August and November to add up to around $1.10-1.15 vs $1.02 according to the mid-point of Nov. quarter. Given this dynamic we think the stock will settle at around $45-46 and potentially trade higher if investors become more comfortable around Nov-qtr representing a bottom. Net Net: we remain positive on Micron but keep our price target unchanged as we think the pricing flow through will take a quarter or two longer than expected (fundamentally, we think investors over-shot the near-term but the long-term could exceed new models). Positively, we think we’re past the bottom on NAND and DRAM is beginning to bottom.”
A day after its stock slipped 7.3 per cent in its market debut, shares of fitness startup Peloton Interactive Inc. (PTON-Q) dropped a further 1.9 per cent.
See also: Wall Street skeptics poke at startup bubble
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Delta Air Lines Inc. (DAL-N) was down 0.9 per cent following Thursday’s announcement that it would buy a 20-per-cent stake in LATAM Airlines Group for US$1.9-billion, creating a major new airline partnership and ending the Chilean carrier’s ties with American Airlines.
The surprise deal with Latin America’s largest carrier will give Delta a much bigger footprint in the region, a key growth market in which LATAM flies to dozens of destinations including cities in Argentina, Peru and Brazil.
Citi analyst Stephen Trust said: “We continue to view GOL as a valuable asset in Latin America’s largest and most attractive domestic market. However, one of the challenges with a Delta/GOL joint business agreement (JBA) was GOL’s lack of wide-body, long-haul service. Antitrust immunity that typically accompanies JBAs, means that the partners can optimize wide-body capacity on joint long-haul routes. GOL does not fit this profile. Moreover, as Delta having stakes in two Brazilian carriers could be problematic, Delta is exiting its 10% investment in GOL. Still, today’s GOL code shares with 13 carriers and has another ca. 77 interline agreements. We estimate that Delta passengers have accounted for less than 0.5% of GOL’s revenue.”
With files from staff and wires
David Leeder