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

Pointing to a third straight day of gains for the Dow Jones Industrial Average, U.S. stock futures climbed in Wednesday’s pre-market trading session after Pfizer said its experimental COVID-19 vaccine is over 90% effective. Dow futures ticked up by 0.7%, or 209 points, with S&P 500 and Nasdaq 100 futures up 0.7% and 0.9%, respectively. 

Shares of Ulta Beauty popped 7.4% on Tuesday November 10 after the company revealed its strategic partnership with Target, with it making its debut in over 100 Target stores nationwide and on Target.com beginning next year. As per the terms of the deal, Ulta Beauty stores will operate within Target locations through a “shop-in-shop” concept and offer established and emerging prestige brands, with the two retailers planning to scale the concept to additional locations over time. In response, Oppenheimer analyst Rupesh Parikh said he is “surprised by the partnership given the overlap in brands on the mass side and the risk of losing traffic to TGT locations,” but pointed out that “details are very limited.”    

Additionally, GameStop announced an early redemption of its senior notes due in 2021, with the world’s largest video game retailer saying “it will redeem $125 million in principal amount of its 6.75% Senior Notes due 2021 on December 11, 2020.” This voluntary redemption represents about 63% of its outstanding notes at a price of 100% of their principal amount coupled with accrued and unpaid interests. GameStop’s CFO, Jim Bell, said the move is “consistent” with its strategy to shore up its balance sheet. 

On the deal front, Apollo Global Management announced it will purchase Great Canadian Gaming for a total enterprise valuation exceeding C$3.3 billion ($2.53 billion). Based on the agreement’s terms, Apollo will buy all of the outstanding shares of Great Canadian common stock for C$39 per share. The purchase price represents a premium of about 35% as of Tuesday’s close and a 59% premium to the 30-day VWAP as of November 9. Last month, Evercore ISI analyst Glenn Schorr upgraded the stock to Buy, commenting, “Apollo is one of only a handful of phenomenal franchises in the alternatives space.” 

In air travel stock news, American Airlines extended its losses in pre-market trading on Wednesday on its plan to sell 38.5 million shares of its common stock in an underwritten public offering. Although specific details weren’t provided, the company stated it has priced the stock offering and hired BofA Securities to sell the shares in one or more transactions on the Nasdaq. “The Company expects to use the net proceeds from the offering for general corporate purposes and to enhance the Company’s liquidity position,” the airline noted. 

Meanwhile, Boeing told investors that aircraft deliveries declined in October, while order cancellations for its 737 MAX aircraft continued as travel restrictions tied to the coronavirus pandemic have hampered demand. According to management, last month, 12 of its 737 MAX aircraft orders were cancelled. It delivered a total of 13 planes in October, down from 11 in September and 20 during the same month last year. Recently, Cowen & Co’s Cai Rumohr reiterated a Hold rating with a $150 price target, pointing out that Boeing’s deliveries lagged Airbus’. 

Turning to earnings results, shares of homebuilder DR Horton rose 9.1% on Tuesday after the company posted better-than-expected results for the fourth quarter of fiscal 2020. Revenue gained 27% to $6.4 billion, ahead of the $5.88 billion consensus estimate. Net sales orders soared 81% year-over-year to 23,726 homes and 4Q EPS increased 66% year-over-year to $2.24, surpassing the Street’s $1.76 call. What’s more, the company bumped up its quarterly dividend.