A roundup of some of the North American equities making moves in both directions today
On the rise
Lowe’s Companies Inc. (LOW-N) jumped 3.9 per cent on Wednesday after announcing it will close 34 underperforming stores across six provinces as part of a restructuring of its Canadian business.
The stores include 26 Ronas, six Lowe’s and two Reno-Depots spread across British Columbia, Alberta, Saskatchewan, Ontario, Quebec, and Nova Scotia.
Meanwhile, the company raised its full-year earnings forecast on Wednesday, as the home improvement chain’s increased assortment of industrial products like drills and power saws attracted more high-spending building contractors and handymen.
Lowe’s also retained its full-year revenue and comparable sales forecasts, a day after larger rival Home Depot Inc cut its expectations for sales.
Excluding items, the company earned US$1.41 in the third quarter, beating estimates of US$1.35, according to IBES data from Refinitiv.
Lowe’s raised its 2019 adjusted earnings forecast to US$5.63 to US$5.70 per share, from prior expectations of US$5.45 to US$5.65.
However, Lowe’s missed same-store sales expectations. They rose 2.2-per-cent in the third quarter ended Nov. 1, below expectations of a 3.1-per-cent increase.
The results came a day after rival Home Depot Inc. (HD-N) fell 5.4 per cent after it said its efforts to integrate online and in-store shopping were taking longer than expected to pay off, prompting the retailer to cut its 2019 sales forecast.
On Wednesday, Home Depot was down 2.2 per cent.
Target Corp. (TGT-N) jumped 14 per cent after it raised its full-year earnings forecast on Wednesday, signaling a strong holiday season as the retailer benefits from its investments in same-day delivery services and store revamps.
The big-box retailer’s better-than-expected quarterly results and forecast also helped allay fears about the health of the U.S. consumer that were spurred by outlook cuts by a handful of retailers on Tuesday.
The company has posted strong sales growth in the past few years, winning over customers by speeding up delivery through same-day services such as drive-up, click-and-collect and Shipt.
Target’s investments in its same-day delivery services accounted for 80 per cent of its digital comparable sales growth, which surged 31 per cent in the third quarter. Its store traffic was up 3.1 per cent.
“Target is taking share in the discretionary side of its assortment, feasting on the department store and specialty channel, while also having superior consumables prices to Amazon,” J.P. Morgan analyst Christopher Horvers said.
Shares of Canopy Growth Corp. (WEED-T) jumped 15.7 per cent after an equity analyst at Bank of America Merrill Lynch upgraded its stock, claiming “the worst looks over.”
See also: The time has arrived for investors to give pot stocks another look
Metro Inc. (MRU-T) was up 1.3 per cent after its fourth-quarter results, released before the bell, largely fell in line with expectations on the Street.
The company also announced it is renewing its normal course issuer bid program and plans to buy back 7 million common shares, or 2.75 per cent of issued and outstanding shares as of Nov. 12.
Village Farms International, Inc. (VFF-T) increased 13.9 per cent after it announced that it has exercised its rights to increase its ownership position in Pure Sunfarms and advanced an equity payment to Pure Sunfarms of $5.94-million.
In accordance with agreements, Village Farms says Emerald was obligated to pay that sum to Pure Sunfarms on November 1, "Following Emerald's failure to make this equity payment, Pure Sunfarms issued a default notice to Emerald. Emerald nonetheless remained in default following the expiration of the contractual cure period earlier today," the company stated.
Village Farms said if the equity contribution is accepted by Pure Sunfarms, it will receive an increased equity interest in Pure Sunfarms effective Nov. 19. “The calculation of the precise increased equity interest requires a determination of the fair market value of Pure Sunfarms pursuant to an appraisal process,” the company stated, adding that, “In light of Emerald’s recent pattern of initiating disputes relating to Pure Sunfarms, no assurance can be given that Emerald will not similarly initiate a dispute in respect of the VF Additional Equity Contribution.”
U.S. tobacco companies rose on Wednesday after Bloomberg reported the U.S. Department of Health and Human Services has shelved a proposal to drastically cut the level of nicotine in cigarettes, citing a regulatory document.
The U.S. government proposed cutting nicotine in cigarettes to “non-addictive” levels in 2017 in a regulatory shift that was designed to move smokers toward potentially less harmful e-cigarettes.
Altria Group Inc. (MO-N) and Philip Morris International Inc. (PM-N) were 3.2 per cent and 0.1 per cent higher, respectively.
Bristol-Myers Squibb Co. (BMY-N) finished up 0.4 per cent after it said on Wednesday a late-stage trial testing a combination of its cancer drugs missed a main goal of preventing skin cancer from recurring in a certain group of patients.
The company said the trial will continue unchanged as per the recommendation of a data monitoring committee.
The trial was testing Bristol-Myers’ drugs Opdivo and Yervoy, against Opdivo alone, in patients with advanced melanoma.
On the decline
McEwen Mining Inc. (MUX-T) dropped 14.1 per cent after it announced a plan to offer shares of its common stock and warrants “to purchase its common stock in a registered underwritten public offering, subject to market and other conditions.”
The company said it intends to use the net proceeds to advance its current mining and exploration prospects, for additional operating capital and for general working capital purposes.
Apparel retailer Urban Outfitters Inc. (URBN-Q) fell 15.2 per cent after reporting lower-than-expected quarterly sales after the bell on Tuesday, hit by weaker demand for its namesake brand.
Net sales rose 1.4 per cent to US$987-million, below the average analyst expectations of US$1-billion, according to IBES data from Refinitiv.
Fiat Chrysler Automobiles NV (FCAU-N) dropped almost 4 per cent after General Motors Co. (GM-N) on Wednesday filed a racketeering lawsuit against , alleging that its rival engaged in bribery over many years to corrupt the bargaining process with the United Auto Workers (UAW) union and gain wage and work practices advantages over GM.
GM said it will seek “substantial damages” from FCA, but did not specify an amount. FCA could not immediately be reached for comment.
The lawsuit also names as defendants three former FCA executives who have pleaded guilty in an ongoing federal probe into the UAW and FCA.
GM shares lost 3.1 per cent.
With files from staff and wires
David Leeder