Plus, Bob Iger stepped down as Disney’s CEO, Ford’s COO says there’s a sense of urgency and crisis at the automaker, and Lowe’s reported mixed Q4 results.
Stocks were higher to start Wednesday with the Dow gaining 408 points, or 1.5%. The S&P 500 added 1.6%, while the Nasdaq traded 1.8% higher.
Total coronavirus cases now top 81,000 worldwide, while the death toll has reached at least 2,764. The World Health Organization announced today that the number of new cases of the virus outside of China exceeded those inside the country for the first time yesterday. There are now 2,790 cases across 37 countries, including 44 deaths. South Korea reported 284 new cases overnight, bringing the country’s total to 1,261 infected, including an American soldier stationed at Camp Carrol in Waegwan, 12 miles outside of Daegu, the city at the center of South Korea’s outbreak. In Europe, Greece reported its first case, France reported its second death from the virus, while Italy reported 374 confirmed diagnoses and its twelfth death from the outbreak. And Brazil’s Health Ministry confirmed the first case of COVID-19 in Latin America. “The sudden increases of cases in Italy, the Islamic Republic of Iran and the Republic of Korea are deeply concerning,” said WHO director-general Tedros Adhanom Ghebreyesus. “Yesterday, the number of new cases reported outside China exceeded the number of new cases in China for the first time.”
Bob Iger has stepped down as CEO of Disney, the company announced yesterday afternoon. Bob Chapek, who has served as chairman of Disney parks, experiences and products, will succeed Iger as CEO, effective immediately, while Iger will transition to Executive Chairman. Iger said in an interview this morning, “I don’t want to run the company anymore,” adding that after 20 years and 81 earnings calls, he’s eager to concentrate on the creative pipeline of the company. “I should spend as much time as possible on the creative side of our businesses,” Iger said in a conference call Tuesday. “I could not do that if I were running the company on a day-to-day basis.” Iger also said of Chapek, that he “not only knows the company very well—having run a few of our important businesses—he is also someone that we know.” Though Citigroup analyst Jason Bazinet said in a note, “We suspect investors will have a difficult time believing any successor with be able to match Mr. Iger’s results.”
Ford’s incoming chief operating officer said there’s a sense of urgency and crisis at the automaker that is reminiscent of the near-bankruptcy it experienced during the Great Recession. “Everyone at Ford Motor Co. knows the situation we’re in,” Jim Farley said at the Wolfe Research conference in New York today. “I can see it on the face of my colleagues and it takes me back to about 10 years ago. I’ve seen the look before.” Ford was the only Detroit automaker to avoid the bailouts and bankruptcies that befell General Motors and Chrysler in 2009. However, the tables have since turned as Ford has let its product lineup lapse, has had a string of disappointing earnings, as well as the botched launch of its redesigned Explorer SUV last year. “We have to fix a number of things,” Farley said, citing delayed product launches and the Ford’s recent $5 billion in expenses to cover warranties. “We have to accelerate the sense of urgency. I think it’s there for natural reasons because of the stock price, our financial performance, the personnel moves we’ve made… but it’s not enough.”
Beyond Meat shares are up more than 6% at the time of writing after news broke that Starbucks will bring the company’s plant-based meat to its menus across Canada. Starbucks will be adding a sandwich with Beyond Meat’s sausage, egg, and cheddar cheese to its Canadian stores’ spring menu, which launches next Tuesday. Beyond Meat products are already in more than 58,000 retail and food-service outlets, including partnerships with Subway, Del Taco, KFC, Dunkin’ Brands, Denny’s, and McDonald’s.
And in earnings news, Lowe’s shares are down -2% this morning after it reported mixed fourth-quarter results. The home improvement retailer reported earnings per share of $0.94 on revenue of $16.03 billion, compared to expectations of earnings per share of $0.91 on revenue of $16.15 billion. Comparable-store sales rose 2.5% but fell below analysts’ estimates for 3.5% growth. Lowe’s is undergoing a multi-year turnaround plan under CEO Marvin Ellison where it will focus on expanding e-commerce and attracting more professional homebuilders and contractors, while also working to better capitalize on existing strengths, including appliance deliveries. “Though we are only one year into a multi-year plan,” Ellison said, “we made significant progress transforming our company and believe we are well positioned to capitalize on solid demand in a healthy home improvement market.” Ellison added that the company was entering 2020 in a “position of strength,” however, guidance for the year was lighter than expected with the company saying it expects earnings per share of $6.45 to $6.65, which is below the consensus target of $6.67.
Stocks We’re Watching
Nemaura Medical Inc (NASDAQ: NMRD): Nemaura Medical shares are up nearly 34% this morning after the medical technology company announced it is planning to initiate a user study comparing its sugarBEAT glucose monitor against the major incumbent CGM sensor. “Our decision to go head-to-head vs. a hugely successful CGM sensor was based on positive feedback we received from recent meetings with public health insurers in key territories in Europe,” said CEO of Nemaura Dr. Faz Chowdhury. “We believe that most people with diabetes do not currently use any continuous glucose monitoring system due to the high costs and the invasiveness of current products. We believe that sugarBeat changes this paradigm and is the first non-invasive CGM to provide the [masses] an option for daily monitoring whenever they choose at an affordable price point. We believe that this level of flexibility is a better option than any alternative CGM devices with either 7 day, 10 day, or 14 day sensor wear time currently available.”