U.S. stock futures were mixed on Tuesday following positive news regarding Pfizer and BioNTech’s experimental COVID-19 vaccine. Dow Jones Industrial Average futures jumped 244 points, or 0.8%. S&P 500 futures were flat, while futures tied to the Nasdaq 100 dropped 1.6% as the rotation out of tech persisted.
On the deal front, VF Corporation announced that it had acquired Supreme Brands for $2.1 billion, with shares of the apparel and footwear company popping 11.1% on November 9 in reaction. As per the deal’s terms, Supreme’s current investors, private equity firms the Carlyle Group and Goode Partners, will also sell their stakes. According to VF management, Supreme’s DTC (direct-to-consumer) model, brand loyalty and global presence “complements the ‘street-inspired’ aspects of VF’s Vans shoes, The North Face, Timberland and Dickies brands.” After the news broke, Susquehanna analyst Sam Poser raised the stock’s price target to $100 from $90 and maintained a Buy rating, arguing, “VFC will benefit from Supreme’s ‘deep’ consumer knowledge, agile product model, and industry-leading scarcity model.”
Meanwhile, Alibaba and Swiss luxury brand group Richemont have joined forces to invest $1.1 billion in fashion retail platform Farfetch to meet the growing online demand for luxury brands in the China market. As part of the strategic partnership, Alibaba will launch Farfetch luxury shopping channels on its e-commerce sites, Tmall Luxury Pavilion and Luxury Soho, and also invest in the newly formed Farfetch China joint venture together with Richemont.
Shares of electric truck startup Nikola surged in after-hours trading on November 9 after it said it is continuing its discussions with General Motors on a $2 billion agreement. Although the strategic partnership transaction announced on September 8 has not closed, Nikola noted it will keep providing updates on the deal. According to the terms, GM would receive an 11% stake in the company as part of a partnership to build electric pickup trucks.
Lowe’s Companies, however, stated on November 9 that it’s not in talks to buy HD Supply, putting speculations to bed. Bloomberg reported earlier in the day that the two companies were discussing a deal. Lowe’s told investors, “While it is the Company’s practice to not comment on rumors or speculation, we believe it is important to note that Lowe’s is not in discussions with HD Supply and we have no plans to pursue a transaction with them.”
In other market news, General Motors revealed its plan to hire 3,000 engineering, design and IT employees on November 9, as it hopes to accelerate the production of electric vehicles (EVs). The hiring spree comes on the heels of GM’s announcement that it will invest $20 billion in the development of electric and autonomous vehicles by 2025. Wedbush analyst Daniel Ives recently reiterated a Hold rating on the stock, but pointed out that the GMC Hummer EV “could see relatively strong demand out of the gates given the initial specs and the massive market opportunity ahead on the EV front.”
Turning to corporate earnings, shares of Beyond Meat plummeted 22.4% in Monday’s extended trading session after it reported Q3 results that fell short of the Street’s expectations. The plant-based meat manufacturer reported an adjusted EPS loss of $0.28, compared to the $0.05 consensus estimate. Sales of $94.4 million also missed analysts’ $132.8 million call. In response to the print, Oppenheimer analyst Rupesh Parikh maintained a Hold rating, commenting, “We overall look quite favorably upon the…positioning to the very on-trend alternative meat category. In the near term, we expect coronavirus to weigh upon BYND’s restaurant and foodservice results. The more difficult foodservice conditions post Q1 coupled with a now elevated valuation keep us sidelined.”
On the other hand, Hain Celestial reported better-than-expected results for the first quarter of fiscal 2021 thanks to elevated at-home consumption of its products amid the COVID-19 pandemic. Sales increased by 3.4% year-over-year to reach $498.6 million, with adjusted EPS skyrocketing 237% year-over-year to $0.27. CEO Mark L. Schiller said, “The strength in adjusted earnings, in both the North America and International segments once again showcases our continued ability to execute against our transformational plan… While the current macro operating environment remains fluid, we remain confident and committed to sustainable long-term growth, including continued gross and adjusted EBITDA margin expansion and double-digit adjusted EBITDA growth in fiscal year 2021.”
