May 19, 2022


Travelling Tomorrow

Hot Stocks: Travel sell-off; JPM new low; CVX new high; GDRX plunges on earnings

Stocks dropped on Tuesday, as ongoing fighting in Ukraine sparked a massive rise in oil prices. The S&P 500 retreated nearly 1.6%, retracing some of the gains posted late last week.

The impact of the Russian invasion of Ukraine rattled large swaths of the market. This included the travel sector, where airlines were dragged down by the spike in fuel prices. Ryanair (NASDAQ:RYAAY), United Airlines (NASDAQ:UAL), JetBlue (NASDAQ:JBLU), American Airlines (NASDAQ:AAL) and Southwest (NYSE:LUV) all lost ground, with TripAdvisor (NASDAQ:TRIP) and Expedia (NASDAQ:EXPE) also posting notable declines.

Meanwhile, sanctions from the conflict, as well as a decline in bond yields, dragged financial stocks lower. JP Morgan (NYSE:JPM) offered a high-profile example, dropping to a fresh 52-week low.

On the other side of the spectrum, Chevron (NYSE:CVX) received a boost from the continued advance in crude prices. With the additional support from an increased share repurchase program, the stock rose to a 52-week high.

Some stocks moved on their own headlines, not driven by the unfolding crisis in Europe. This category included TaskUs (NASDAQ:TASK), which posted a double-digit percentage gain in the wake of its quarterly report.

Earnings news had the opposite impact on GoodRx (NASDAQ:GDRX). Shares plunged nearly 40% following the release of disappointing results and a weak forecast.

Sector In Focus

Travel stocks slumped as the ongoing conflict in Ukraine raised concerns about overall geopolitical tensions and sent oil prices higher. The sharp increase in fuel prices put particular pressure on companies like airlines, which are still trying to get back on their feet following the pandemic.

Ireland-based Ryanair (RYAAY) was among the biggest losers among the airlines, falling by nearly 11%. United Airlines (UAL), JetBlue (JBLU) and American Airlines each dropped 6%. Southwest (LUV) retreated 4%.

Among other travel stocks, TripAdvisor (TRIP) recorded a loss of 7%, while Expedia (EXPE) slipped 4%.

Standout Gainer

The release of earnings news sparked a 16% rally of TaskUs (TASK). The outsourcing company recorded better-than-expected Q4 revenue and provided an upbeat forecast.

TASK reported quarterly revenue of $226.8M, beating expectations and showing year-over-year growth of 63%. The company’s adjusted EBITDA jumped 71% to $56.2M.

The firm’s Q1 forecast also surpassed expectations. TASK targeted a revenue figure between $229M and $232.2M. Analysts were looking for a result of around $217M.

TASK ended Tuesday’s trading at $33.37, a rally of $4.65 on the day. Even with the gain, the stock remains within a trading range that has held it since mid-January, hovering off its 52-week low of $25.12.

The stock reached a 52-week high of $85.49 in September. Shares are now off about 61% since hitting that peak.

Standout Loser

GoodRx (GDRX) cratered nearly 39% after the company reported disappointing results for its latest quarter and offered soft guidance for the current fiscal period.

The operator of a prescription drug price tracking app reported revenue growth of 39% compared to last year. However, the top-line figure of $213M came in shy of analysts’ consensus. Similarly, the firm’s non-GAAP EPS figure of $0.09 missed projections by a penny.

Looking ahead, GDRX predicted Q1 revenue of around $200M. This was well short of the more than $227M that analysts had estimated.

GDRX posted a decline of $10.66, closing the session at $16.74. Shares also established a new intraday 52-week low of $15.91.

With the slide, GDRX dropped below recent support to resume a decline that began in October. Shares have fallen about 58% over the past six months.

Notable New High

Chevron (CVX) extended its recent gains, driven higher by a surge in oil prices and a colossal stock buyback plan. The 4% rally took the stock to a new 52-week high.

CVX said it was increasing its previous buyback plan, which will now allow the repurchase of up to $10B per year. Previously, the high end of the company’s potential buybacks sat at $5B.

Meanwhile, oil prices spiked Tuesday as Russia continued to press its invasion of Ukraine. Crude jumped nearly 9% to top $104 per barrel — its highest mark since 2014.

CVX finished Tuesday at $149.72, a gain of $5.72 on the session. The stock also reached an intraday 52-week high of $149.96.

With oil prices pushing higher recently, CVX has been steadily gaining in recent days. The stock has climbed in four of the past five sessions.

Longer-term, shares have been driving higher since September. CVX has climbed about 53% in the last six months.

Notable New Low

Russia’s invasion of Ukraine prompted a long list of sanctions against Vladimir Putin’s country, with most of the measures coming in the form of financial restrictions. At the same time, the conflict has suppressed bond yields, with the yield on the 10-year Treasury falling 12 basis points to 1.72% on Tuesday.

As a result of these dynamics, financial stocks have suffered selling pressure lately. The sector represented the worst performer among the 11 S&P market segments during Tuesday’s action, dropping by 3.7%.

JPMorgan (JPM) was among the victims of this decline. The stock fell 4% amid news that it has halted trading of funds with exposure to Russian assets. The slide also took the stock to a new 52-week low.

JPM declined $5.35 to close at $136.45. Shares recovered a bit in the final hours of trading but reached an intraday 52-week low of $133.58 earlier in the session.

The stock reached a 52-week high of $172.96 in October and saw choppy trading into January. The stock has seen bouts of selling pressure since, falling about 19% since Jan. 13.

For more of the day’s biggest winners and losers, click over to Seeking Alpha’s On The Move section.

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