Nike, Micron, Cleveland-Cliffs, and Madrigal Pharmaceuticals: Weekly Digest (19-23 December)
Last week, our attention was drawn to such companies as Nike, Micron Technology, Cleveland-Cliffs, and Madrigal Pharmaceuticals. Let's take a look at how their stocks reacted to the latest events.
Madrigal Pharmaceuticals shares skyrocketed 268%
On Monday 19 December, American biopharma company Madrigal Pharmaceuticals Inc. announced positive results of the stage three tests of resmetirom – a drug against non-alcoholic steatohepatitis (NASH) that causes liver fibrosis.
Resmetirom-treated patients had improvements in NASH on liver biopsy compared with placebo. 30% of the patients taking higher doses of resmetirom had a higher incidence of NASH resolution and liver fibrosis reduction. Moreover, the disease did not progress. The company reported it planned to address the Food and Drug Administration (FDA) in the first half of 2023 and seek accelerated approval of the new drug. Resmetirom may become the market's first drug against non-alcoholic steatohepatitis to be approved by the FDA.
On Monday, the stock quotes of Madrigal Pharmaceuticals Inc. (NASDAQ:MDGL) skyrocketed 268.07% to $234.83. Thereafter, the shares kept growing on Tuesday and Wednesday, rising by 23.3% to a total of $289.43.
Nike report: revenue increased by 17%
On Tuesday 20 December, Nike's financial report for Q2, financial 2023 was presented by the American manufacturer of sportswear, shoes, and accessories. Compared to the statistics of September-November 2021, revenue recorded a 17% growth to $13.3 billion, exceeding expectations by 11%.
Net profit reached $1.33 billion, similar to one year ago. EPS increased by 2% to $0.85, exceeding expert expectations by 22%. Direct sales grew by 16%, online sales by 25%, and wholesale sales by 19%. As a result, the cost of goods in stock dropped from $9.7 billion to $9.3 billion over the quarter.
On Wednesday, after such a good financial report, the shares of Nike Inc. (NYSE:NKE) grew by 12.18% to $115.78, which became the best overnight rally since June 2021.
Micron Technology report: revenue dropped by 47%
On Wednesday 21 December, American maker of memory chips Micron Technology Inc. published its financial report for Q1, financial 2023. Revenue in September - November dropped by 46.9% to $4.09 billion. Analysts had forecast $5.71 billion.
Net loss amounted to $195 million, and the loss per share to $0.18. As you may recall, in Q1 of the last financial year, the net profit was $2.31 billion and EPS was $2.04.
Due to the largest imbalance of the market supply and demand in the semiconductor market in 13 years, and following its weak financial report, Micron Technology Inc. shared its plans to reduce its headcount by 10% in 2023. Note that on 1 September, the company was employing 48,000 people.
Moreover, Micron Technology Inc. paused its stock buyback programme, cut down the wages of its management by 15-20%, also freezing bonus payments. However, it still pays out dividends.
The management expects this quarter's revenue to reach $3.6-4 billion, and the loss per share to be $0.52-0.72. Analysts forecast a loss per share of $0.3 and $3.92 billion in revenue.
On Thursday, the shares of Micron Technology Inc. (NASDAQ: MU) lost 3.44%, reaching $49.43. The report and the forecast influenced the stocks of other members of the branch. The stock price of Taiwan Semiconductor Manufacturing (NYSE: TSM) dropped by 2.41% to $75.28, Qualcomm Incorporated (NASDAQ: QCOM) fell 3.41% to $110.68, NXP Semiconductors NV (NASDAQ: NXPI) dropped by 3.62% to $157.51, and Marvell Technology Group Ltd (NASDAQ: MRVL) plummeted 4.63% to $37.07.
Cleveland-Cliffs lifts steel prices
On Thursday 22 December, the shares of Cleveland-Cliffs Inc. (NYSE: CLF) which specialises in iron ore mining and steel production, grew by 11.83% to $16.92. The company reported that the price for certain steel types for the car industry, which are sold by fixed price contracts, would be increased in 2023.
For example, the price of carbon steel next year will grow from $1,300 to $1,400 per ton. Fixed price contracts will account for 40-45% of the total number of Cleveland-Cliffs Inc. contracts. Moreover, spending on steel production is expected to drop in 2023 thanks to the optimisation of technical processes.
This week, Madrigal Pharmaceuticals Inc. reported positive results of clinical tests of a new drug – and this news sent its quotes surging 268%.
Nike Inc. and Micron Technology Inc. presented their quarterly reports – Nike's stocks recorded 12% growth, while Micron Technology's stocks lost 4%.
Cleveland-Cliffs Inc. announced an increase in its products and a cut down on production expenses – this led to its stock price growing by 12%.