Stock Analysis & Ideas

Thursday’s Pre-Market: Here’s What You Need to Know Before the Market Opens

U.S. stock futures were mixed on Thursday as investors await data related to consumer prices. That data will provide information about the rate of inflation as the economy recovers from the pandemic. Notably, data on initial jobless claims for the recent week is also set to be released today.

S&P futures were relatively flat, while Dow futures were trading around 0.2% higher, at the time of writing. Meanwhile, Nasdaq futures were trading around 0.2% lower, at the time of writing.

Companies that are expected to report earnings before the market opens include AstroNova (ALOT), BlueCity Holdings (BLCT), and Signet Jewelers Limited (SIG). Beyond Air Inc (XAIR), Dave & Busters Entertainment (PLAY), and Navigator Holdings (NVGS) are expected to report after the market close.

Ocugen Inc (OCGN) was the most actively traded stock in pre-market trading as well as the biggest laggard, as the stock plummeted 30% at the time of writing.  

Recently, the biopharmaceutical company revealed the U.S. Food and Drug Administration’s (FDA) proposal to the company to submit a biologics license application (BLA) for its COVID-19 vaccine candidate, COVAXIN, instead of an Emergency Use Authorization (EUA) for COVAXIN for now.

Based on the U.S. regulator’s feedback related to the Master File that Ocugen had submitted, Ocugen now needs to pursue a BLA submission instead of a EUA application for its vaccine candidate, and probably provide additional information and data as well. It is expected that additional clinical trial data might be required to support the BLA submission, the company said.

Ocugen CEO Dr. Shankar Musunuri commented, “Although we were close to finalizing our EUA application for submission, we received a recommendation from the FDA to pursue a BLA path. While this will extend our timelines, we are committed to bringing COVAXIN to the US. This differentiated vaccine is a critical tool to include in our national arsenal given its potential to address the SARS-CoV-2 variants, including the delta variant, and given the unknowns about what will be needed to protect US population in the long term.”

Medley Management (MDLY) was the biggest gainer as the stock jumped 81.3% at the time of writing. The capital market company has no fundamental news in support of the trading sentiment.

In earnings news, United Natural Foods (UNFI), the distributor of organic and specialty foods in the United States and Canada, posted lower-than-expected fiscal third-quarter revenues.

Revenues of $6.62 billion missed the consensus estimate of $6.82 billion and declined 5.9% year-over-year.

Meanwhile, the company reported adjusted earnings of $0.94 per share, surpassing analysts’ expectations of $0.88 per share, but dropped 29.3% from the same quarter last year.

United CEO Steven L. Spinner said, “We continue to focus on helping our customers operate their businesses and meet the needs of their shoppers through our differentiated business model. As the industry and economic backdrop continue to evolve, UNFI remains well positioned for future growth. Fiscal 2020 was a record year for UNFI and fiscal 2021 is on-track to set another record. Looking ahead, we fully expect fiscal 2022 to be even better than this year.”

Meanwhile, the American processed food and snack company Campbell Soup Company (CPB) recorded weak fiscal Q3 results. Net sales of $1.98 billion slumped 11% year-over-year, missing analysts’ expectations of $2 billion. Additionally, adjusted earnings came in at $0.57 per share, lower than the consensus estimates of $0.66 per share, and down 31%.

Campbell CEO Mark Clouse said, “While we recognized the third quarter would be challenging due to the onset of the COVID-19 pandemic a year ago, we faced additional headwinds. Our results were impacted by a rising inflationary environment, short-term increases in supply chain costs, and some executional pressures as we continued to advance our transformation agenda, primarily in our snacks division. We are confident that these are all addressable, and we are taking appropriate actions, including putting pricing in place for the next fiscal year.”

In M&A news, nVent Electric (NVT), a global provider of electrical connection and protection solutions inked a cash deal to acquire CIS Global LLC for $200 million. The deal, which awaits certain customary conditions and regulatory approvals, is likely to close by the third quarter of this year. CIS Global provides power and server rack-mount slide products to data centers and networking industries.

nVent’s Enclosures President Joe Ruzynski said, “We are excited about the strong team, technology and innovation at CIS Global. Combined with our Enclosures solutions, we can help data centers across the world improve operational efficiency and optimize energy utilization with leading technologies in heat and power management, both critical for electrical resiliency.”

Meanwhile, Entravision Communications (EVC), a global media, marketing, and technology company, has agreed to snap up the digital marketing and branding company MediaDonuts. Headquartered in Singapore, MediaDonuts operates in seven countries in the Asia-Pacific region and caters to over 500 technology and consumer brand clients. The transaction is expected to close on or around July 1. The Southeast Asian market represents a major opportunity for Entravison, as 400 million of its 700 million consumers are digitally connected.

Entravision CEO Walter Ulloa said, “This acquisition is a natural fit with the overall digital and global transformation strategy of our business. Entravision has always focused on providing advertising solutions in high growth markets and partnering with the strongest media and technology platforms in the world. We believe that the incorporation of MediaDonuts into the Entravision platform adds leadership, sales operations, and digital offerings that will further propel our digital efforts.”

In other news, United Parcel Service, Inc. (UPS) revealed the company’s Strategic Priorities, 2023 financial targets, and new ESG Targets at its investor conference. UPS is the largest global package delivery company and provider of supply chain management solutions.

United Parcel’s Customer First, People Led, Innovation Driven strategy reflects its target of a Net Promoter Score (NPS) of 50 or higher by 2023, its intention to rise in the “likelihood to recommend” target to 80% or more, and the company’s goal to consistently enhance shareholder value through dividend payouts and share buybacks.

Furthermore, the company’s fiscal 2023 financial targets include expected total revenue in the range of $98 – $102 billion, total adjusted operating margin of 12.7% to 13.7%, cumulative Capex (from 2021 to 2023) of $13.5 – $14.5 billion, and adjusted return on invested capital (ROIC) of 26% to 29%. Additionally, per the newly established ESG targets, UPS undertakes to be carbon neutral across scope 1, 2, and 3 emissions in its global operations by 2050.

United Parcel CEO Carol Tome commented, “We are creating a new UPS, rooted in the values of the company. Our strategic priorities are evolving to reflect the changing needs of our customers and our business, and what matters most to our stakeholders.”

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