Several companies were making headlines in premarket trading. Ulta Beauty saw its stock slip more than 1% following a downgrade to hold from buy by Jefferies analyst Ashley Helgans. This was attributed to mounting pressure from competitor Sephora and a perceived lack of newness. Netflix shares dropped nearly 6% after the company shared a weaker full-year revenue growth outlook than expected and announced that it would no longer report quarterly subscriber gains. However, Netflix did post a first-quarter earnings and revenue beat. On the other hand, Canada-based e-commerce stock Shopify jumped 3% after Morgan Stanley upgraded it to an overweight rating, citing confidence in its growth potential and operating leverage upside.
First Solar’s stock gained 1.5% after Wells Fargo upgraded it to overweight, noting several potential upside catalysts, including expectations that the Biden Administration will revoke tariff exemptions. On the flip side, Sunnova Energy saw its stock slip nearly 4% following a Wells Fargo downgrade to equal weight due to concerns about a higher-for-longer rate environment impacting the company’s debt maturities and liquidity. Energy stock SLB dipped 1.7% despite reporting first-quarter earnings largely in line with expectations. Intuitive Surgical, a robotic surgery company, saw its shares rise 3% after posting a first-quarter earnings and revenue beat.
Western Alliance’s shares slipped 2% after the firm missed earnings expectations in its latest quarter. Conversely, homebuilding stock KB Home climbed 1.6% after announcing a share repurchase plan of up to $1 billion and a 25% increase in its quarterly cash dividend. Media stock Paramount soared 10% following reports that Sony Pictures Entertainment and Apollo Global Management were discussing a joint bid to acquire Paramount amid its talks to merge with production firm Skydance Media.
Software stock Bentley Systems received a boost after French energy management and automation firm Schneider Electric confirmed preliminary talks regarding a potential strategic transaction. Proctor & Gamble reported mixed results for its latest quarter, with earnings beating estimates but revenue slightly missing expectations. American Express posted a first-quarter earnings and revenue beat above estimates, with reaffirmed full-year guidance, but saw its shares slide 1.5% in premarket trading.
Overall, the premarket activity showcased a mix of movement among various companies, with some receiving upgrades or positive news leading to stock gains, while others faced downgrades or missed earnings expectations resulting in stock declines. Investors were closely monitoring these developments as they awaited the opening bell to see how these companies would fare throughout the trading day.
