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Wednesday’s Pre-Market: Here’s What You Need To Know Before The Market Opens

After the Dow Jones Industrial Average broke above 30,000 for the first time on Tuesday, U.S. stock futures were mixed in pre-market trading on Wednesday. Pointing to an opening loss of 60 points, Dow Jones futures fell 0.2%. S&P 500 futures dipped 0.1%, while Nasdaq 100 futures traded in positive territory.  

Shares of Dollar Tree climbed 14.1% on Tuesday after the company reported strong growth across both of its banners, Family Dollar and Dollar Tree, in the third quarter. The retailer posted sales of $6.18 billion, beating analysts’ estimate of $6.13 billion and reflecting a 7.5% year-over-year gain. In response, J.P. Morgan analyst Matthew Boss upgraded Dollar Tree to Buy from Hold and bumped up the price target to $130 from $111, arguing Dollar Tree can return to a double-digit EPS “compounder,” and that top- and bottom-line drivers are in place at the Dollar Tree banner. 

Best Buy, however, dropped 7% on Tuesday despite its strong Q3 results, with investors reacting negatively to a warning from the company. Management didn’t issue any guidance for Q4, but cautioned that it does not believe sales trends will remain at the levels witnessed in the most recent quarter. Following the Q3 earnings release, Wells Fargo analyst Zachary Fadem reiterated a Hold rating, commenting, “All in, BBY has performed admirably during the pandemic and is innovating at warp speed to reposition its business and stores for rapidly changing consumer preferences… That said, softening demand trends appear inevitable, increasingly difficult compares loom (in CY21), and rising investments (services, health, stores, etc.) likely pressure margins from current peak levels. And with valuation (NTM P/E) +20% vs. 5- yr avg., we see few reasons to step in here.” 

Autodesk fared better in its third quarter, thanks to strong subscription sales. The software company’s EPS of $1.04 handily beat the Street’s $0.96 call and increased 33.3% year-over-year. Revenue jumped 13% year-over-year to $952.4 million and surpassed the $942.2 million consensus estimate, with subscription plan sales growing by 24% to $884 million year-over-year. “We are executing with strength, with current remaining performance obligations growing 16 percent year-over-year despite uncertain macro-economic conditions. The business model transition we have made leaves us well positioned as the secular-industry shift to the cloud accelerates,” CFO Scott Herren said. 

Meanwhile, Anaplan shares ended Tuesday’s session up 8% after it posted better-than-expected Q3 results and raised its fiscal 2021 outlook. Revenue increased 28% to $114.9 million year-over-year and exceeded the $109.6 million consensus estimate, with it reporting an adjusted loss per share that was narrower than the analysts forecasted. In response, Monness analyst Brian White raised the stock’s price target to $80 (19% upside potential) from $74 and reiterated a Buy rating, explaining that the pandemic “has proven to be a catalyst for accelerated digital transformation and we expect Anaplan to begin to benefit over the next 12-18 months.” 

On the coronavirus front, Moderna has reached an agreement with the EU to supply up to 160 million doses of its COVID-19 vaccine candidate. The deal comes on the heels of the biotech’s announcement that its vaccine candidate has an efficacy of 94.5% in preventing COVID-19, with the Phase 3 trial also meeting the statistical criteria pre-specified in the study protocol. “According to the results of clinical trials, this vaccine could be highly effective against COVID-19… Once the vaccine is indeed proven as safe and effective, every Member State will receive it at the same time, on a pro-rata basis, at the same conditions,” European Commission President Ursula von der Leyen noted. 

In other news, Kingfisher has acquired European online marketplace NeedHelp in a deal worth €10 million (£8.9 million) as part of the home improvement retailer’s efforts to expand its digital services. Per the deal’s terms, NeedHelp founder Guillaume de Kergariou has reinvested sale proceeds to keep a 20% stake, while Kingfisher will own 80%. NeedHelp has seen demand accelerate since the pandemic’s onset, with its monthly revenue doubling after the first lockdown period. 

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