TD:CC - Hot Stocks: FHN plunges on broken merger deal; PARA drops on earnings; ITRI SHOP climb

2023-05-04 18:37:53 ET

U.S. stocks dropped again on Thursday, dragged down by concerns about the regional banking space. The S&P 500 declined 0.7%, marking its fourth consecutive day of losses.

The renewed troubles in the banking sector included a massive drop in shares of First Horizon ( NYSE: FHN ), which lost about a third of its value after its merger deal with TD Bank ( TD ) was terminated.

Meanwhile, earnings news remained a key catalyst as well. Paramount Global ( PARA ) ( PARAA ) plunged on disappointing results and a reduced dividend. Meanwhile, the release of financial figures prompted a surge in Itron ( ITRI ) and Shopify ( SHOP ).

Standout Gainer

Shopify ( SHOP ) soared 24% following the release of its quarterly report , buoyed by a surprise profit and faster-than-projected revenue growth.

The e-commerce platform reported Q1 non-GAAP EPS of $0.01, surprising analysts, who had generally projected a loss. Revenue jumped 26% to $1.51B. Meanwhile, SHOP announced that it would sell its Shopify Logistics business to Flexport.

SHOP climbed $11.03 to close at $57.30, touching an intraday 52-week high of $59.82 along the way. Overall, shares have climbed 61% in 2023.

Standout Decliner

Paramount Global ( PARA ) ( PARAA ) endured a wave of selling following the release of its Q1 earnings report and the announcement that the entertainment giant had slashed its dividend. PARA dropped 28% on the news.

The company missed expectations with both its earnings and revenue figures. This included a 1% slide on the top line, with that total reaching $7.27B.

At the same time, PARA slashed its quarterly dividend to $0.05 per share. Previously, the firm had a dividend rate of $0.24 per share.

PARA finished Thursday's trading at $16.40, a drop of $6.49 on the day. With the slide, the stock reversed gains posted earlier in the year. Shares are now down 4% for 2023, dropping to their lowest finish since late December.

Notable New High

Better-than-expected quarterly results sparked buying in Itron ( ITRI ), sending the stock to a new 52-week high. Shares of the provider of energy and water resource management services jumped 21%.

ITRI easily breezed past projections with its Q1 profit. Meanwhile, revenue climbed 4% to $494.6M, with adjusted EBITDA that more than doubled from last year.

Bolstered by the earnings news, ITRI finished at $65.60, rising $11.58 on the day. During the session, shares touched an intraday 52-week high of $65.80.

Notable New Low

First Horizon ( FHN ) cratered after the regional bank's deal to merge with TD Bank Group ( TD ) fell apart . The news sent shares lower by more than 33%, taking the stock to a new 52-week low.

The companies reported that concerns about regulatory approvals scuttled the deal. The termination deal calls for TD to pay $200M in cash to FHN, as well as a $25M fee reimbursement.

"TD informed First Horizon that TD does not have a timetable for regulatory approvals to be obtained for reasons unrelated to First Horizon," the companies said in a joint statement. "Because there is uncertainty as to when and if these regulatory approvals can be obtained, the parties mutually agreed to terminate the merger agreement."

News of the broken merger deal sent FHN to an intraday 52-week low of $8.99. Shares rebounded a bit from there, eventually closing at $10.06, a decline of $4.99 from the previous day's finish.

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