US OPEN: Lyft disappoints with earnings

2:55 PM February 12, 2020
  • Wall Street futures point to a green open

  • Lyft disappoints with lack of profit guidance change

  • CVS Health reported better-than-expected earnings

In spite of solid start to yesterday’s session, Wall Street indices finished trading just slightly higher. However, indices are set for another solid launch as S&P 500 futures point to an over 0.4% bullish gap at the open. Lyft and CVS Health are on watch after releasing Q4 2019 earnings.

Dow Jones (US30) can be seen as a Wall Street laggard as it has not painted a new all-time high since February 6. The index closed flat yesterday after a failed attempt of breaking above the resistance marked by 78.6% Fibo. However, Dow is making another attempt of breaking today ahead of the session open. A break above the 29380 pts hurdle may be followed by acceleration in an upward move and a possible test of the ATH at 29470 pts. Source: xStation5

Lyft (LYFT.US) released Q4 2019 earnings yesterday’s after session closed. The company generated revenue of $1.02 billion in the final three-month period of the previous year, marking a 52% YoY increase.Adjusted net losses narrowed from $238.5 million in Q4 2018 to $121.4 million in Q4 2019. Number of active riders increased 23% and reached 22.9 million, slightly above the median estimate of 22.8 million. The company issued somewhat lacklustre forward guidance. In fact, the biggest disappointment was that it did not change the guidance. Lyft said at the end of the previous year that it will achieve profitability by the end of 2021. However, it was expected that Lyft will update its target after Uber said it aims to become profitable by the end of this year. No such revision took place and shares moved 5% lower in pre-market.

Lyft (LYFT.US) has been enjoying strong gains since the beginning of Q4 2019 and managed to break above the 50% retracement of the downward move started in mid-July 2019. However, the stock is set to open around 5% lower today ($51 area). Having said that, the recently broken price zone at 50% Fibo level may once again come into play. Source: xStation5 

CVS Health (CVS.US) reported Q4 2019 earnings ahead of today’s session open. The US healthcare company showed EPS of $1.73, 19% YoY lower but 3% higher than expected. Revenue increased 22.9% YoY to $66.89 billion. Solid revenue increase can be to some extent ascribed to addition of Aetna sales following late-2018 merger. Same store sales increased 3.2% YoY. The company said it expects full-2020 EPS to fall in the $7.04-7.14, slightly below market consensus of $7.15.

Micron Technology (MU.US) received the fifth analyst upgrade in 2020. This time it was UBS, who raised the rating from “neutral” to “buy”. Analyst reasoned the decision saying that Micron should trade at higher multiple due to improving competitive position and improving fundamentals in the whole memory-chip sector. Price target was raised from $47 to $75.

Micron Technology (MU.US) has almost doubled in value over the previous 12 months. However, analysts still think that the stock should be valued higher and keep boosting recommendations. The stock is set to open near last week’s high of $51.06 and may eye a test of 20-month high at $60.53. The nearest support can be found at $53.00. Source: xStation5

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