ALKS Alkermes plc (ALKS) announced positive topline results from FORWARD-5, the third phase 3 efficacy study to read out from the FORWARD pivotal program for ALKS 5461, a once-daily, oral investigational medicine with a novel mechanism of action for the adjunctive treatment of major depressive disorder (MDD) in patients with an inadequate response to standard antidepressant therapies. The study met its prespecified primary endpoint showing treatment with ALKS 5461 significantly reduced symptoms of depression in patients with MDD compared to placebo. ALKS 5461 was generally well tolerated. The most common adverse events observed for ALKS 5461 were nausea, dizziness and fatigue. Based on these results, along with the substantial data collected to date on the efficacy and safety of ALKS 5461 for the treatment of MDD, the company plans to request a meeting with the U.S. Food and Drug Administrations (FDA) Division of Psychiatric Products to discuss the filing strategy for this Fast Track designated medicine.
APOL Apollo Education Group (APOL) Q4 EPS of $0.21, $0.26 better than estimate of ($0.05). Revenue for the quarter came in at $492.5 million versus the consensus estimate of $471.57 million.
ARIA ARIAD (ARIA) weakness creates buying opportunity, says SunTrust. SunTrust analyst Yatin Suneja says that ARIAD’s stock has been weak following media reports and a letter from Congress regarding the prices of the company’s Iclusig drug. But the analyst says that the company has a “highly innovative pipeline addressing significant unmet needs in subsets of cancer patients,” Suneja reiterates a $22 price target and Buy rating on the stock.
CHK Chesapeake (CHK) upgraded to Neutral from Underperform at BofA/Merrill. BofA/Merrill analyst Doug Leggate upgraded Chesapeake to Neutral and raised its price target to $10 from $6 following yesterday’s analyst day. said management addressed several issues and specifically the “reveal” of substantial acreage in the Powder River and Anadarko basins which will augment the Eagleford. Leggate said the immediate move to develop Powder River and competitive Oswego returns are key drivers for accelerating oil growth over the next 5 years.
CFG Citizens Financial (CFG) reports Q3 adjusted EPS 52c, consensus 49c. Reports Q3 revenue $1.38B, consensus $1.32B. Reports Q3 efficiency ratio of 63%; Adjusted efficiency ratio of 63% improved 140 basis points. Provision for credit losses of $86M decreased $4M, as the impact of a $17M increase in commercial net charge-offs, driven largely by previously reserved for losses in the energy portfolio, was more than offset by continued improvement in underlying credit quality.
COH Coach (COH) works with Evercore on potential $20B Burberry deal, Betaville says. According to sources, Betaville reports that Coach is working with Evercore on a potential $20B merger with Burberry.
ETFC ETRADE Financial (ETFC) Q3 EPS of $0.51, $0.11 better than estimate of $0.40. Revenue for the quarter came in at $486 million versus the consensus estimate of $470.96 million.
KLAC KLA-Tencor (KLAC) Q1 EPS of $1.16, $0.13 better than estimate of $1.03. Revenue for the quarter came in at $751 million versus the consensus estimate of $733.8 million.
MAN Manpower (MAN) reports Q3 EPS $1.87, consensus $1.71. Reports Q3 revenue $5.1B, consensus $4.99B. Manpower sees Q4 EPS $1.65-$1.73, consensus $1.64. Includes an estimated unfavorable currency impact of 2c per share.
MCD McDonald’s (MCD) reports Q3 diluted EPS $1.50, consensus $1.49. Reports Q3 revenue $6.42B, consensus $6.28B. Global comparable sales increased 3.5%, reflecting positive comparable sales in all segments.
MSFT Microsoft (MSFT) Q1 EPS of $0.76, $0.08 better than estimate of $0.68. Revenue for the quarter came in at $22.3 billion versus the consensus estimate of $21.71 billion.
PYPL PayPal (PYPL) Q3 EPS of $0.35, in-line with estimate of $0.35. Revenue for the quarter came in at $2.67 billion versus the consensus estimate of $2.65 billion. GUIDANCE: PayPal sees Q4 2016 EPS of $0.40-$0.42, versus the consensus of $0.42. PayPal sees Q4 2016 revenue of $2.92-2.99 billion, versus the consensus of $2.97 billion. PayPal sees FY2016 EPS of $1.48-$1.50, versus the consensus of $1.50. PayPal sees FY2016 revenue of $10.78-10.85 billion, versus the consensus of $10.82 billion.
PFPT Proofpoint (PFPT) Q3 EPS of $0.19, $0.14 better than estimate of $0.05. Revenue for the quarter came in at $99.8 million versus the consensus estimate of $94.27 million. GUIDANCE: Proofpoint sees Q4 2016 EPS of $0.10-$0.14, versus the consensus of $0.06. Proofpoint sees Q4 2016 revenue of $103-105 million, versus the consensus of $99.85 million. Proofpoint sees FY2016 EPS of $0.28-$0.33, versus the consensus of $0.09. Proofpoint sees FY2016 revenue of $371.7-373.7 million, versus the consensus of $363.06 million.
PTCT PTC Therapeutics, Inc. (PTCT) announced that its joint development program in Spinal Muscular Atrophy (SMA) with Roche (OTC: RHHBY) and the SMA Foundation (SMAF) initiated a Phase 2 study in pediatric and adult Type 2/3 SMA patients. The study, named SUNFISH, is a two-part study investigating the safety, tolerability and efficacy of RG7916, an oral small molecule survival motor neuron 2 (SMN2) splicing modifier. The first part of the study will evaluate safety and tolerability through escalating doses of RG7916. After dose selection, the study will transition into the pivotal second part evaluating the efficacy of RG7916. Initiation of the pivotal second part of the study is expected to begin in 2017 and will trigger a $20 million milestone payment to PTC from Roche. A similarly designed two-part study to evaluate RG7916 in Type I SMA patients is expected to begin in the coming months. SMA is a rare genetic disorder that results in neuromuscular disability beginning in infancy and is the leading genetic cause of mortality in infants and young children.
RAI Reynolds American (RAI) British American Tobacco (BTI), which owns 42.2% of Reynolds American (RAI), has made a proposal to merge with Reynolds through the acquisition of the remaining 57.8% in the company. U.S. securities laws require BAT to announce its merger proposal promptly after it was made to the Board of Reynolds. As a result, BAT has been unable to have prior negotiations with Reynolds regarding the proposal. BAT’s proposal to merge with Reynolds values Reynolds at $56.50 per share, of which $24.13 would be in cash and $32.37 would be in BAT shares and represents a premium of 20% over the closing price of Reynolds common stock on October 20. This is a premium offer, supported by modest cost synergies, with a significant share consideration enabling participation in the long-term benefits. It is earnings accretive in the first full year. It is expected to be accretive to dividends per share. The proposed transaction would be effected through a US statutory merger in which Reynolds shareholders, other than BAT, would receive $24.13 in cash and 0.5502 BAT shares for each of their Reynolds shares.The total consideration for the remaining 57.8% of Reynolds would be $47B, of which approximately $20B would be in cash and $27B in BAT shares.
SAP SAP (SAP) increases its outlook for FY16. SAP now expects FY16 non-IFRS cloud subscriptions and support revenue guidance to EUR 3B-EUR 3.05B. The company now expects FY16 non-IFRS cloud and software revenue to increase by 6.5%-8.5% at constant currencies. The company now expects FY16 non-IFRS operating profit to be in a range of EUR 6.5B- EUR 6.7B at constant currencies. While the company’s FY16 business outlook is at constant currencies, actual currency reported figures are expected to continue to be impacted by exchange rate fluctuations. If exchange rates remain at the end of September 2016 levels for the rest of the year, the company expects its non-IFRS cloud and software revenue growth rate to experience a currency impact in a range of -3 to -1 percentage points for Q4 and FY16 and its non-IFRS operating profit growth rate to experience a currency impact in a range of -2 to 0 percentage points for the fourth quarter and the full year 2016.
SYF Synchrony (SYF) reports Q3 net interest income increased 12% to $3.5B. Provision for loan losses increased $284M to $986M due to higher loan loss reserve build and loan receivables growth. Return on assets was 2.8% and return on equity was 17.4%. Net interest margin increased 30 basis points to 16.27%. Efficiency ratio was 30.6%, a 362 basis point improvement from the third quarter of 2015, driven by positive operating leverage arising from strong revenue growth that exceeded expense growth.
VRSN VeriSign (VRSN) extends registry pact with ICANN. On October 20, Verisign and the U.S. Department of Commerce entered into Amendment Number Thirty-Three to the Cooperative Agreement between Verisign and the DOC. Except as modified by Amendment 33, the terms and conditions of the Cooperative Agreement, remain unchanged. Amendment 33 relieves, releases and discharges Verisign from all root zone operation, management and maintenance responsibilities, obligations or requirements under the Cooperative Agreement, including but not limited to, those contained within Amendments 11 and 31. Following this release, the RZMA between Verisign and ICANN became effective. On October 20, Verisign and the DOC entered into Amendment Number Thirty-Four to the Cooperative Agreement between Verisign and the DOC. Except as modified by Amendment 34, the terms and conditions of the Cooperative Agreement, remain unchanged. Under the terms of Amendment 34, the DOC approves the amendment to the Registry Agreement as in the public interest, which extends the term of the Registry Agreement to coincide with the eight-year term of the RZMA. In addition, the DOC retains the right to conduct a public interest review for the sole purpose of determining whether the DOC will extend the term of the Cooperative Agreement before it expires on November 30, 2018. Verisign agrees to cooperate with such a review and to work in good faith to reach mutual agreement with the DOC to resolve issues identified in such review and to work in good faith to implement any agreed upon changes as of the expiration of the current term of the Cooperative Agreement.
XENE Xenon Pharmaceuticals (XENE) initiated with a Buy at Stifel. Stifel analyst Stephen Willey initiated Xenon Pharmaceuticals with a Buy and an $18 price target.
AMD AMD (AMD) Citi analyst Christopher Danely keeps a Sell rating on AMD following the company’s Q3 results. AMD continues to lose money despite improving fundamentals with estimated net debt of $353.3M, Danely tells investors in a research note. He raised his price target for the shares to $3.50 from $2.50.
ATHN athenahealth (ATHN) reported Q3 EPS of $0.60, $0.13 better than estimate of $0.47. Revenue for the quarter came in at $276.7 million versus the consensus estimate of $280.72 million. GUIDANCE: athenahealth sees FY2016 EPS of $1.65-$1.85, versus the consensus of $1.77. athenahealth sees FY2016 revenue of $1.085-1.115 billion, versus the consensus of $1.1 billion.
SAM Boston Beer (SAM) cuts FY16 EPS view to $6.30-$6.70 from $6.40-$7.00, consensus $6.46. Full-year 2016 capital spending is now estimated to be between $55M-$65M, a decrease of the range from the previously communicated estimate of $60M-$70M. Jim Koch, Chairman and Founder of the Company, commented, “Our total company depletion trends declined in the third quarter at a slightly faster rate as we lapped new beer launches from last year, and we saw a further slowdown in growth across the Craft brewing industry. I am energized by our team’s plans to return Samuel Adams to growth, that include investments in new packaging, new beers, a fifth seasonal and enhanced drinker communication. We continue to believe that we are well positioned to meet the challenges of this competitive environment, because of the quality of our employees, our beers, our innovation capability and our sales execution strength. Our strong financial position enables us to invest in growing our brands and creating new growth opportunities. A major packaging update for Samuel Adams Boston Lager has already shipped, to be followed by new Seasonal and Rebel packaging by the end of the fourth quarter, and we also expect to complete the national draft launch of Samuel Adams Rebel Juiced, a tropical IPA featuring citrusy hops in late October. In the early part of 2017, we are reimagining our seasonal program by adding two new beers; Samuel Adams Hopscape, a 30 IBU wheat ale with four types of West Coast hops for January and February 2017, and Samuel Adams Fresh as Helles, a helles lager with orange blossom petals for February and March 2017. We remain confident about the long-term outlook for the craft category and our Samuel Adams brand.”
DXPE DXP Enterprises, Inc. (DXPE) announced the commencement of a primary public offering of 2,700,000 shares of its common stock. In connection with the offering, DXP intends to grant the underwriters a 30-day option to purchase an additional 405,000 shares of its common stock.
EEFT Euronet (EEFT) reports Q3 adjusted EPS $1.35, consensus $1.34. Reports Q3 revenue $524M, consensus $534.43M.
GST Gastar Exploration (GST) downgraded to Market Perform from Outperform at FBR Capital. FBR Capital analyst Chad Mabry downgraded Gastar Exploration to Market Perform citing valuation after the stock rallied 25% yesterday to $1.39.
LZB La-Z-Boy (LZB) sees Q2 EPS 37c-39c, consensus 46c. Anticipate sales for the fiscal 2017 second quarter to be 1.0% to 2.5% lower than last year’s second-quarter sales of $382.9M, consensus $397.65M.
MMLP Martin Midstream Partners (MMLP) for $93M. NuStar Energy (NS) announced that it has signed an agreement to purchase crude oil and refined product storage assets in the Port of Corpus Christi from Martin Midstream Partners (MMLP) for a net $93M. The acquisition, which is expected to close by the end of the Q4, is expected to be immediately accretive to NuStar’s earnings based on the terminal’s current, actual volumes. It also reflects an approximate seven times multiple based on the forecasted four-year average earnings before interest, taxes, depreciation and amortization attributable to the assets of $13.5M annually. When combined with NuStar’s existing terminal operations in Corpus Christi, the acquisition will give NuStar over 3.6M barrels of total storage in the Port of Corpus Christi, including 3.1M barrels of crude oil storage and 577,000 barrels of refined product storage.
PPG PPG Industries (PPG) downgraded to Neutral from Buy at Goldman. Goldman Sachs analyst Robert Koort downgraded PPG Industries to Neutral citing a lack of catalysts following the company’s first negative preannouncement in eight years. finds the valuation attractive but highlights moderating global auto sales and “lackluster” growth in Europe.
RRGB Red Robin Gourmet Burgers, Inc., (RRGB) announced preliminary results for its fiscal third quarter ended October 2, 2016. The Company also revised its outlook for fiscal year 2016. The Company expects to report the following estimated financial results for the fiscal third quarter 2016: Total revenues of approximately $297 million (The Street sees revenue of $301.2 million.) Comparable restaurant revenue decrease of 3.6% Net loss of approximately $3.0 million or $0.23 per diluted share Adjusted net income of approximately $5.1 million or $0.38 per diluted share (excluding restaurant impairment and closure costs of $8.1 million, net of tax, or $0.61 per diluted share) (Consensus estimates called for EPS of $0.49.
SKX Skechers USA (SKX) Q3 EPS of $0.42, $0.05 worse than estimate of $0.47. Revenue for the quarter came in at $942.4 million versus the consensus estimate of $954.38 million. GUIDANCE: Skechers USA sees Q4 2016 revenue of $710-735 million, versus the consensus of $799.9 million.
SGY Stone Energy (SGY) to file chapter 11 bankruptcy under restructuring support agreement. Stone Energy last night announced entry into a comprehensive restructuring support agreement and a purchase and sale agreement for its properties in the Appalachia basin. As previously disclosed, Stone Energy has been involved in discussions with certain of its stakeholders in respect of a possible restructuring of the indebtedness and capitalization of Stone and certain of its subsidiaries. On October 20, the company entered into a restructuring support agreement, or RSA, with certain holders of the company’s convertible notes and senior notes to support a restructuring on the terms of a pre-packaged plan of reorganization. The RSA contemplates that the company will file for voluntary relief under chapter 11 of the United States Bankruptcy Code in a United States Bankruptcy Court on or before December 9 to implement the plan in accordance with the term sheet annexed to the RSA. Stone CEO David Welch said, “The agreement with our Noteholders will provide value to all of our stakeholders, improves our liquidity and better positions us to be profitable during a historically difficult time in our industry. Importantly, this agreement will allow all stakeholders to share in potential valuation growth if commodity prices improve.” Stone Energy shares have dropped 47% to $5.13 in pre-market trading following last night’s announcement.
TWLO Twilio (TWLO) 7M share Secondary priced at $40.00. Goldman and JPMorgan acted as joint book running managers for the offering.
Unusual Put Activity
6:36 BUY +1,262 BAC 100 17 FEB 17 17 PUT @1.24 LMT
6:43 BUY +2,093 GE 100 21 OCT 16 28 PUT @.04 LMT
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8:31 BUY +3,000 GGP 100 18 NOV 16 24 PUT @.25 LMT
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