It was never a decided, huge effort, but the bulls got right to work on Wednesday to overcome the slightly bearish start. Inspired by a better-than-expected payroll growth number from ADP, the S&P 500 advanced 0.41% today to end the trading session at 1,986.45.
Not every stock pulled their fat out of the fire on Wednesday, however. Monsanto Company (NYSE:MON), VMware, Inc. (NYSE:VMW) and Dollar Tree, Inc. (NASDAQ:DLTR) all still ended their day rather deep in the red. Here’s the deal.
Monsanto Company (MON)
Most shareholders of Monsanto Company went to bed on Tuesday night not expecting anything horrible to happen on Wednesday. But, it did. The company sees trouble lingering all the way through 2016, sending MON shares 8% lower today.
The announcement was made today — seed company Monsanto now foresees a per-share profit of between $4.40 and $5.10 this year, versus December’s outlook of $5.10 to $5.60 per share of MON.
CFO Pierre Courduroux explained:
“Today the macro-environment is proving to be even more challenging, yet we still see strong long-term growth opportunities for our business. However, entering the fiscal year, the company indicated that there were several variables creating significant headwinds, namely: weak foreign currencies, generic glyphosate pricing, and compressed grower margins coming from lower commodity prices.”
Dollar Tree, Inc. (DLTR)
Deep-discount retailer Dollar Tree was also a victim of an abnormally strong dollar last quarter. Although same-store sales were up 1.3%, the pros were calling for a 2.1% improvement on that front. Earnings of $1.01 per share and sales of $5.37 billion also missed estimates for a profit of $1.07 per share of DLTR and a top line of $5.41 billion.
Dollar Tree added it was expecting a 2016 profit of between $3.35 and $3.65 per share, falling well short of the average analyst estimate of $3.78 per share of DLTR.
The bad news was enough to prompt a downgrade from Raymond James, which now rates DLTR an “underperform.” Raymond James also set a target price of $70 on the stock.
Dollar Tree shares ended the day at $78.77, down 4%.
VMware, Inc. (VMW)
Last but certainly not least, not that it wasn’t an easy target already, but VMware shares were sent more than 3% lower when the media was more than glad to point out the company was losing much of its top talent as the pairing of EMC Corporation (NYSE:EMC) and Dell looms.
The proposed merger has been a contentious one, largely spurred by questions of who-gets-what.
EMC currently owns a little more than 80% of VMW shares, so a merger of EMC and Dell makes it unclear how, or even if, that stake in VMware is fairly accounted for. Several ideas have been floated, including issuing a tracking stock of the shares in question. None of the solutions have thrilled the market, however.
The uncertainty of how the merger will be handled has left many VMware employees looking for — and finding — other jobs, not knowing if they’ll have one after the deal is done (and not knowing if they’ll like their job after Dell is integrated). By the time the merger is consummated, VMware may be neck-deep in problems stemming from the leadership exodus.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
