US indices hit more new highs this week after Donald Trump was declared the winner of the race to become the next US president.
As well as tech stocks, which rallied on the belief a Trump administration would be less likely to impose strict regulations on the sector, energy companies and financial stocks registered strong gains.
Trump’s mantra of ‘drill baby, drill’ implies he favours increasing US crude oil production, which is good for sector margins, while financial stocks climbed on a presumed ‘light-touch’ approach to bank regulation.
Electric vehicle-maker Tesla (TSLA:NASDAQ) was the stand-out industrial stock, rallying 15% the day after the election once the outcome became known as investors bet on the Elon Musk-steered company receiving favourable treatment from the administration he backed during the campaign.
ELF BEAUTY
Shares in gen Z-focused cosmetics retailer Elf Beauty (ELF:NYSE) rallied 15% to $121.6 this week after raising (6 November) full year sales and earnings guidance, with chief executive Tarang Amin drawing confidence from a forecast-beating 40% surge in second quarter sales to $301.1 million.
This marked the California-based company’s 23rd consecutive quarter of sales growth and market share gains and the mass market cosmetics brand now expects annual sales to come in between $1.32 billion and $1.34 billion, above the $1.30 billion analysts previously expected.
Adjusted earnings per share are now seen in the $3.47 to $3.53 range, up from prior guidance of between $3.36 and $3.41.
Growing like topsy thanks to its viral marketing and success luring in young shoppers with cut-price versions of prestige favourites, the makeup firm’s exposure to markets outside the US should help cushion the blow from any tariff hikes that emerge under President-elect Donald Trump.
WARNER BROS DISCOVERY
Shares in Warner Bros Discovery (WBD:NYSE) skyrocketed this week, gaining 16% as the media giant reported record third quarter subscriber numbers for streaming platform Max.
The company added 7.2 million global customers, bringing its total subscriber base to 110.5 million, while the streaming business’ revenue increased by 8% to $2.63 billion, driven by higher advertising revenue and global average revenue per user.
Max has been the media giant’s ‘jewel in the crown’ since inception last May, expanding internationally in the first half of the year in Latin America and Europe making up for a $9.1 billion write down on its TV networks last quarter and a softer US advertising market.
Before the bell on 7 November, Warner Bros Discovery swung into profit of $135 million, or 5 cents per share in the third quarter compared to a loss of $417 million, or 17 cents per share, in the same period last year.
Studio revenues came in at $2.68 billion down 17% year-on-year as box-office takings from Beetlejuice Beetlejuice and Twisters were lower than last year’s mega-hit Barbie.
MODERNA
Biotechnology firm Moderna (MRNA:NASDAQ) posted a surprise profit on Thursday (7 Nov) driven by better than expected third quarter sales of its Covid-19 vaccine.
The shares initially jumped more than 10% in the pre-market before analysts realised Moderna had benefitted from an earlier launch of its seasonal vaccine which brought forward expected sales from the final quarter.
‘When is a beat not a beat’ wryly asked analyst Mani Foroohar at Leerink Partners.
The shares subsequently sank into the red, dropping 2% and taking year-to-date losses to 55% after the embattled company revealed sales of its recently approved RSV (Respiratory Syncytial Virus) vaccine fell short of expectations.
‘We were not able to compete during the heart of the contracting season because (mRESVIA) got approved in May. Many of the contracts were already in place, as well as a substantial amount of inventory with customers already,’ explained chief financial officer James Mock.
Moderna’s RSV vaccine only raked-in $10 million of sales falling way short of the $110 million expected by analysts.
The company maintained full year revenue guidance of between $3 billion and $3.5 billion.
