Synopsys, Ansys talks, Constellation Brands: Trending tickers
Constellation Brands (STZ) stock rose after reporting mixed third-quarter results and cutting its full-year revenue guidance. Stronger beer sales help offset weaker wine and spirits sales.
Shares Medical Properties Trust (MPW), the largest hospital owner in the US, sank after it warned one of its largest tenants was falling behind on rent.
Synopsys (SNPS) shares fell after the Wall Street Journal reported it was nearing a roughly $35 billion deal to acquire Ansys (ANSS). The Journal reports an announcement could come as soon as next week.
Yahoo Finance’s Julie Hyman and Josh Lipton break down some of Friday's trending tickers.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
Editor's note: This article was written by Eyek Ntekim
Video Transcript
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JOSH LIPTON: Checking in on Sunday's top trending tickers, let's start out with shares of Constellation Brands rising today after reporting earnings. So stock popping in today's trade, Julie. It sounds like this is about beer sales, by the way. Yeah. Bat beer strong, and that helped offset. It looks like weaker kind of wine and spirits business. So specifically, beer division up 4%. And that includes brands like Modelo, Especial, that was apparently a standout in the quarter.
We know that import has been kind of gaining apparently, right? So basically, meanwhile, wine and spirits, though, that was actually down about 8%. And some changes in leadership there, too, we should point out. Vice president, it looks like, Robert Hansen, he kind of led the wine and spirits business there, stepping down effective February 29. And CEO Bill Newlands steps in at least interim responsibilities there.
JULIE HYMAN: Yeah. The numbers in wine are pretty lousy, right? For the full year, they're looking at-- and they're on a different fiscal year. Their fiscal year ends February 29. They say wine and spirits organic sales are going to fall 7% to 9%. Previously, they thought it would be a range of half a percent drop to a half a percent increase. So that's a big downgrade here. And it makes sense then that they're making that change at the top of the wine and spirits business here.
They own brands like Kim Crawford, beloved of one of our producers here for what it's worth. But obviously, not beloved by enough people for it to drive those numbers higher here. So it looks like that the Street is happy that they are making that move though at the top and obviously happy that beer is looking a little bit better for the company as well. And if you look at the comparable sales here, roughly in line with estimates, but it's really the beer thing, the beer business that saved it.
JOSH LIPTON: Yeah. Stocks have about 20% in the past 12 months. And the Street's still bullish on this name, by the way, 22 buys, four holds, no sells.
JULIE HYMAN: All right. Let's talk about another one here, Medical Properties Trust. It's falling today after the company said it would record about $350 million worth write-downs related to some of its largest tenants that have fallen behind on the rent. Now Medical Properties Trust is not a company we talk about every day, but it's actually the largest hospital owner in the United States.
It buys the properties and then sends the lease them back to the operators of these hospitals. And like many companies within the real estate business was very, very active when rates were low. And now the chickens are coming home to roost, so to speak, because it's some of its tenants are falling-- or its largest tenant in particular is falling behind on its rent. At the same time, MPT is also hiring a restructuring advisor to try and figure out what to do about all of this.
JOSH LIPTON: Yeah. That was the new, it's basically trying to recover unpaid rents right now outstanding loans to one of its tenants, which reportedly here, this is Steward Health Care System, which is dealing with some challenges. And so Medical Properties Trust decides, OK, we're going to provide you with this $60 million bridge loan. Per Bloomberg, that adds to $50 million of unpaid rent and about $250 million of transactions specific and working capital loans owed by Steward. And a company says, listen, we're going to ultimately reduce our exposure to Steward, but no insurance apparently it's going to be able to recover its claims stock, now down about 70% in the past 12 months.
JULIE HYMAN: Yeah. And it's interesting when we talk about the real estate investment trust business as not being a monolith that office is troubled but other parts of it are not. Obviously, this is another area of weakness here with this company.
JOSH LIPTON: And remember, about a year ago, there were some headlines flying about these guys. This short seller came out swinging and then lawsuits started flying around here. So tough 12 months for this stock for sure.
JULIE HYMAN: Yeah, definitely.
JOSH LIPTON: Finally, let's check out shares of Synopsys down today in a report. They are in advanced talks to acquire Ansys for around $35 million in a stock and cash deal so this one, apparently, again, we're going to pin this on the Wall Street Journal, they've got the story. Might come together as soon as the middle of next week, could be about $400 per share.
Talked about, we know, Julie, we actually talked about this on the show, because it first started getting reported I think in December, right?
JULIE HYMAN: Yes, yes.
JOSH LIPTON: Synopsys Office makes software, it kind of helps engineers design, test chips. Big customers, by the way, for a company, Nvidia, AMD, Intel.
JULIE HYMAN: Yeah. We've talked to the now CEO of the company Sassine Ghazi a couple of times, who took over from the founder of the company effective January 1st. And this is a company that aims to play eventually more in the AI space. But right now, it's pretty integral when you look at the semiconductor ecosystem because of the testing it does.
Ansys in a similar business here, does testing here. And they do have a partnership that they have had since 2017. By the way, I should mention, the company declined to comment on this report here. The Journal by the way also says Cadence Design Systems had approached Ansys with an unsolicited offer. And that sort of sparked this whole situation here between the three companies. So we'll see if anything more materializes.
