Raphael Stevens

A person enters a Bed Bath & Beyond store on October 01, 2021 in the Tribeca neighborhood in New York City.
Michael M. Santiago | Getty Images

Check out the companies making headlines in midday trading.
Bed Bath & Beyond — Shares rose 34.2% on news that GameStop’s Chairman Ryan Cohen had a nearly 10% stake in the retailer through his investment company RC Ventures. He said that the home goods retailer should explore selling itself to a private equity firm and spinning off its BuyBuy Baby chain.

United Airlines, American Airlines – Air carriers were lower after fuel costs rose 32% to their highest level in more than 13 years last week, amid concerns about global oil supplies during the war between Russia and Ukraine. United Airlines slid about 15% while Delta and America fell 12.8% and 12%, respectively.
Ralph Lauren, PVH — The retail stocks fell 12.2% and 15.4%, respectively. Wedbush downgraded Ralph Lauren and PVH due to concerns about the companies’ exposure to Europe amid the Russia-Ukraine war.
Schlumberger, Halliburton and Baker Hughes — Energy stocks were elevated, buoyed by surging oil prices from the Russia-Ukraine conflict. Overnight, the U.S. benchmark West Texas Intermediate crude briefly topped $130 per barrel. On Monday, Schlumberger’s stock soared 8.1%, Halliburton surged 6.2%, and Baker Hughes jumped 4.7%.
Archer-Daniels-Midland — Shares in the agricultural company surged 1.4%. Investors are eyeing increases in wheat prices amid fears of supply shortages after Russia’s invasion of Ukraine.
Visa and Mastercard — Shares in both financials tumbled after the U.S. payments companies said they were suspending operations in Russia over the weekend. Visa’s stock declined 4.8%. Mastercard fell 5.4%.

Occidental Petroleum – Shares fell 1.4% after an SEC filing Friday revealed Berkshire Hathaway has taken a $5 billion stake in the oil giant. More than 61 million of the 91.2 million common shares in its portfolio were purchased last week at prices ranging from $47.07 to $56.45.
Citigroup — The bank’s stock dipped 1.8% after a downgrade to hold from Jefferies. The investment firm said Citi was unlikely to hit the financial targets laid out by management at last week’s investor day. Bank stocks were also down broadly Monday.
Philip Morris — Shares of the tobacco company fell 6.6% after JPMorgan downgraded the stock to neutral from overweight. The firm said Philip Morris could be hurt by Russia’s invasion of Ukraine, as the two countries are key markets for the company.
Palantir — Shares rose 1.4% after Morgan Stanley upgraded the stock to equal weight from underweight. The firm said Palantir’s risks are largely priced in now.
NextEra Energy — The stock rallied 5% after KeyBanc upgraded NextEra Energy to overweight from sector weight. The firm said the company could be set for a rebound amid elevated oil prices.
DraftKings — The sports betting stock sank 12.8% after Argus downgraded DraftKings to hold from buy. The investment firm said in a note that DraftKings would see slowing revenue growth this year as fewer new states would legalize sports gambling.
— CNBC’s Sarah Min, Tanaya Macheel, Samatha Subin and Jesse Pound contributed reporting

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Just months after he took on the role, Joshua Schulman will step down as CEO of the Michael Kors brand, parent company Capri Holdings said.
Chairperson and CEO John D. Idol will remain in his position as part of a move to “execute growth initiatives” at the luxury fashion company, whose brands also include Jimmy Choo and Versace.
Schulman, the former CEO of Coach, took over the Kors CEO role from Idol in September. Schulman was slated to become CEO of Capri later this year.

Joshua Schulman is seen at Michael Kors intimate Cocktail Party in Celebration of his 40th Anniversary on September 23, 2021 in Milan, Italy.
Victor Boyko | Getty Images

Capri Holdings has ditched its CEO succession plan.
Just months after he took on the role, Joshua Schulman will step down as CEO of the Michael Kors brand, parent company Capri said Monday. Schulman was slated to become CEO of Capri later this year.

Shares of the company, whose brands also include Jimmy Choo and Versace, slipped 15% Monday.
Chairperson and CEO John D. Idol will remain in his position as part of a move to “execute growth initiatives” at the luxury fashion company.
Schulman, the former CEO of Coach, took over the Kors CEO role from Idol in September.
“Michael Kors has a talented management team in place that will continue to execute on its strategic initiatives,” said Idol. “The Board and I remain extremely optimistic about the future growth of Michael Kors and Capri Holdings. We are grateful to Josh for his contributions to our organization.”
Idol also said that Capri Holdings is seeing strong results and is well positioned to achieve long-term revenue. The company has recently reported increases in earnings and revenue.

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Kohl’s issued fresh long-term financial targets for its business, including growing sales by a low-single-digit percentage annually.
The retailer, which is facing pressure from activist investors, announced that it aims to grow its Sephora business to more than $2 billion in annual sales
Kohl’s also said it aims to open 100 smaller-format shops over the next four years.

The Kohl’s logo is displayed on the exterior of a Kohl’s store on January 24, 2022 in San Rafael, California.
Justin Sullivan | Getty Images

Kohl’s, facing activist pressure to consider a sale, wants investors to realize the progress it is making on its own terms to refresh its brick-and-mortar stores and to find ways to lure new and younger shoppers to the business.
“Make no mistake, this is a transformation,” Chief Executive Michelle Gass said as she kicked off a virtual investor meeting on Monday morning. “It is a complete reinvention of our business model and our brand.”

Ahead of the Monday meeting, Kohl’s issued fresh long-term financial targets, including growing sales by a low-single-digit percentage annually.
Shares of Kohl’s closed Monday down nearly 13%, as some investors were disappointed with the longer-term forecast. Others had hoped the company would more concretely discuss a sale process.

Gordon Haskett analyst Don Bilson said he didn’t see anything in Kohl’s updated financial targets that was going to be a “knockout” for the retailer. “Today’s margin guide matches previous guidance so this isn’t a game changer,” he said.
Kohl’s also announced that it aims to grow its Sephora business to more than $2 billion in annual sales. Kohl’s has opened about 200 of the Sephora shop-in-shops inside its brick-and-mortar locations, so far, and is on track to hit 850 by next year. The company hasn’t previously broken out Sephora revenue on its earnings reports.
Meantime, Kohl’s is on pace to open more than 100 smaller-format shops over the next four years, in a bid to attract new customers. Gass said in an interview that the smaller stores are about 35,000 square feet, on average, with one of the first being tested in the Seattle area. For comparison, the typical Kohl’s store can span around 80,000 square feet.

“This year is a big year for us,” she said over the phone. “The framework that we’ve put out there for investors … it’s a very thoughtful guide for us.”
In addition to the longer-term revenue goal, Kohl’s said it will be targeting operating margins of between 7% and 8% annually; per-share earnings growth of a mid-to-high single-digit percentage; and operating cash flow of over $5.5 billion, with roughly $2.5 billion of free cash flow between 2022 to 2024.
Key to Kohl’s transformation is training customers to think of the company unlike mall-based department stores that are chock-full of women’s apparel and home goods. Instead, the company said it wants to be known as a top destination for athletic clothing, such as sneakers, hoodies and leggings, from brands such as Nike, Adidas, Champion and its own FLX label.
“We’re evolving our position from a department store to a more focused lifestyle concept, centered around the active and casual lifestyle,” Gass said during the investor meeting. “This is unique and we can own this space.”

Activists push for change

Monday’s meeting with investors and analysts is under a bigger spotlight as the retailer faces amplified pressure from activist groups, one of which is seeking to take control of the retailer’s board.
Last month, Kohl’s rejected the takeover offers that were on the table, which it said undervalued its business. In recent weeks, though, Kohl’s said it has been working with bankers and other financial advisors to consider unsolicited bids and also to make some proactive outreach to potential buyers.
Activists Macellum Advisors and Engine Capital have argued that Kohl’s has underperformed other off-mall retailers such as Target and TJ Maxx, and even some department store chains including Macy’s. Kohl’s shares are only up about 6% over the past 12 months, compared with Macy’s stock, which is up about 65%. The firms also have urged Kohl’s to consider selling some of its real estate and leasing it back, in order to unlock capital.
On Friday, Macellum called Kohl’s recently released fiscal fourth-quarter results disappointing, saying it remained skeptical of the retailer’s future given the current board of directors and management configuration.
“Why were sales uniquely hampered by supply chain issues compared to many other retailer peers?” asked Macellum Managing Partner Jonathan Duskin.
For the three-month period ended Jan. 29, Kohl’s reported revenue of $6.22 billion, which was slightly short of analysts’ estimates, but it issued a more upbeat revenue outlook for 2022 despite ongoing supply chain obstacles. The retailer also said it planned to double its annual dividend and buy back at least $1 billion of its stock this year.

All-in on active

On Monday, Kohl’s emphasized its plans to keep growing its assortment of active merchandise, which it said accounted for about 24% of total revenue in 2021 compared with 14% in 2016.
According to Gass, the Covid-19 pandemic spurred a desire among consumers to dress more comfortably, and even as people return to offices and other social settings the trend is here to stay.
“I think we can all personally relate to this … while you may dress up a bit more than you were when you were taking a Zoom call from your home office, you may still want to wear sneakers into the office versus dress shoes,” the CEO said during the investor meeting. “This creates big opportunities for Kohl’s.”
Still, Kohl’s said it also hopes to significantly grow its women’s dress business, while expanding outdoor and swim wear, and broadening its selection of inclusive sizes.
Chief Merchandising Officer Doug Howe explained that the company’s women’s assortment was disproportionality impacted by supply chain obstacles last year. This year, in a bid to drum up interest in dresses and other apparel items for women that aren’t activewear, he said Kohl’s will be testing “dress destinations” in some stores.
To make the in-store check-out experience smoother for customers, Kohl’s also said it will be rolling out a self-service buy online, pick up in store option to all locations this year, while it continues to test self-service returns and check-out offerings.
Over the long term, Kohl’s is projecting its digital business to bring in $8 billion in annual revenue, in part thanks to its ongoing efforts to make it easier for visitors to find brands and shop on its website. Kohl’s total revenue in fiscal 2021 amounted to $19.4 billion, up from $16 billion a year earlier.
“We’ve demonstrated that we have a very strong agenda of growth drivers that are going to have a long tailwind ahead of us, so that gives us confidence,” Gass said.
Find the full press release from Kohl’s here.

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OPEC Secretary-General Mohammed Barkindo speaks during the opening ceremony of the Abu Dhabi International Petroleum Exhibition and Conference in Abu Dhabi on November 11, 2019.
– | AFP | Getty Images

Mohammad Barkindo, secretary general of OPEC, said Monday that in the face of skyrocketing energy prices the group’s mission remains to act as a reliable supplier.
He said the oil-producing alliance has “no control over current events” and that geopolitics have now taken over and are “dictating the pace of the market.”

Barkindo’s comments, made at CERAWeek by S&P Global, come as the energy industry is roiled after Russia invaded Ukraine, prompting supply concerns and sending prices to record highs. Oil broke above $130 Sunday evening for the first time since 2008, and European natural gas prices are now trading at record highs.
Still, OPEC and its allies, a group known as OPEC+, have opted to keep production steady.
The group last met on March 2, deciding to stick to a previously agreed-upon schedule to increase output by 400,000 barrels per day in April. The move is part of the group’s unwinding of the almost 10 million barrels per day it pulled from the market in April 2020 as the pandemic sapped demand for petroleum products.
Russia, which is part of OPEC+, is one of the world’s largest oil-producing nations and the world’s second-largest producer of natural gas. Financial sanctions against the country by the U.S. and Western allies have had indirect consequences on the country’s energy complex, and officials have said more sanctions could be coming.
Barkindo did not mince words when describing the lasting impact of Russia’s invasion.

“We are facing what is likely to be a global game-changer in terms of the energy transition,” he said.
He added that he was hesitant to appear at CERAWeek, before saying that it’s “important to keep communication lines open, especially in times of crisis like the one the world is facing today.”
“All we can do is to stay the course,” he said.

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Wholesale used-car prices fell 2.1% in February from an all-time high in January.
Prices of used vehicles are still far above historical norms amid a shortage of new cars and trucks.
Russia’s invasion of Ukraine could extend the new-car shortage for at least several more months.

A pedestrian walks past a certified pre-owned car sales lot in Alhambra, California on January 12, 2022.
Frederic J. Brown | AFP | Getty Images

Wholesale used-vehicle prices fell in February from January, a sign that while prices remain near record levels, the surge in U.S. used-car prices may be easing.
Cox Automotive said on Monday that its Manheim Used Vehicle Value Index, which tracks prices of used vehicles sold at Manheim’s U.S. wholesale auctions, declined 2.1% in February from January.

Still, on average, used vehicles are historically expensive. The index is down from its record high in January, but it remains up 36.7% from the year-earlier period.

Covid-related supply chain disruptions — in particular, an ongoing global shortage of semiconductor chips used in cars, trucks and SUVs — have forced automakers to limit their production of new vehicles. That, in turn, has triggered a surge in used-vehicle demand and prices over the past year.

While nearly all used vehicles are more expensive than they were a year ago, the increases haven’t hit all categories equally. Cox’s data shows that while prices of compact cars and vans soared 44.9% and 48.4%, respectively, in February year over year, prices of used pickups were up just 24.8%.
The discrepancy between trucks and compact cars reflects the state of new-vehicle inventories. Automakers including Ford Motor, General Motors, and Chrysler parent Stellantis have prioritized production of their highly profitable (and huge-selling) pickup trucks over less-profitable compact models amid the chip shortage.  That means consumers hoping to buy a new compact car or SUV are more likely to be out of luck, and are more likely to seek a similar model on the used market than shoppers looking to buy a new truck.
But even pickup-truck production hasn’t been immune from disruptions. All three of the big Detroit automakers have had to trim production of trucks at times over the past year. And it’s not over: Ford last week confirmed that it has once again been forced to cut production of its Super Duty pickups and large SUVs because of semiconductor shortages.

Efforts are underway to boost production of chips in the U.S. and around the world. Chipmakers including Intel and TSMC began building new semiconductor plants in the U.S. last year.
Some automakers aren’t waiting for those factories to get up and running, though. Ford said in November that it will partner with chip supplier GlobalFoundries to boost its product access. And General Motors has begun working with several chipmakers on new designs that will greatly reduce the product need in future vehicles.
Supplies of automotive semiconductors should begin to improve later in the year as new factories begin operating, which is expected to having the knock-on effect in reducing demand and prices for used vehicles.
In the near team, though, Russia’s invasion of Ukraine may exacerbate the chip shortage. The countries are significant suppliers of neon gas and palladium, two commodities critical to chip manufacturing.

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Secretary of State Anthony Blinken said United States will come to the aid of Lithuania and the other Baltic nations of Estonia and Latvia if they are attacked by Russia.
Blinken’s promise came amid fears Russia will retaliate against the Baltic countries for support given Ukraine, which is battling a Russian invasion.
Blinken said there has been no decision yet on whether to put U.S. troops permanently in the Baltics, which are members of NATO.

U.S. Secretary of State Antony Blinken delivers remarks to U.S. Embassy staff at the Vilnius Rotuse in Vilnius, Lithuania March 7, 2022.
Olivier Douliery | Reuters

Secretary of State Anthony Blinken on Monday promised fellow NATO member Lithuania the U.S. will act to repel any Russian military aggression against that country and other Baltic nations.
“The United States commitment to [NATO’s] Article 5 – an attack on one is an attack on all,” Blinken said, “that commitment is sacrosanct.”

Blinken was speaking at a news conference in Lithuania’s capital city of Vilnius with that country’s foreign minister, Gabrielius Landsbergis. He made similar remarks in Latvia, another Baltic country that belongs to NATO.

“We will defend every inch of NATO territory if it comes under attack,” Blinken said, reiterating comments made by President Joe Biden in his State of the Union address last week. “No one should doubt our readiness; no one should doubt our resolve.”
But Blinken said in Latvia that there has been no decision yet on whether to put U.S. troops permanently in the Baltics.
Lithuania, Latvia and the third Baltic nation, Estonia, with fellow NATO members and other Western countries have provided aid to Ukraine and harshly sanctioned Russia since it invaded the neighboring country.
That in turn has raised concerns that Russia will target the Baltic states, which had been part of the Soviet Union, along with Russia, before its breakup three decades ago.

Blinken is due to visit Estonia on Tuesday.
Lithuanian President Gitanas Nauseda told Blinken at a press event that the “worsening security situation in the Baltic region is of great concern to … all of us and around the globe.”
Nauseda said that “Russia’s reckless aggression against Ukraine once again proves that it is a long-term threat to the European security, the security of the entire alliance, no matter how and when the war in Ukraine ends.”
The Lithuanian leader said the invasion is “a very good opportunity to rethink” how NATO responds to and prepares for threats.

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Foreign Minister Landsbergis said, “The United States, Lithuania, and other partners of the alliance are doing a lot, but we cannot stop.”
“We cannot afford for Ukrainian cities to become another Srebrenica, Grozny, or Aleppo,” he said, referring respectively to the site of the massacre of more than 8,000 Muslims in 1995 in Bosnia and Herzegovina, the Chechen city destroyed by Russian forces in late 1999 and early 2000, and a city devastated during the Syrian civil war.

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Advice and the Advisor

You can kick-start education funding with a larger, upfront contribution to a 529 savings plan.
“The earlier you get money into a college plan, the more it will grow,” said certified financial planner Mari Adam of Mercer Advisors.
However, you’ll generally pay a 10% penalty and income taxes on earnings if you tap the account for noneducation expenses.

Kevin Winter | Getty Images

If you’re eager to jump-start an education fund, you may consider a larger, upfront contribution to a 529 college savings plan.
While the average account balance was $30,287 in 2021, according to the College Savings Plans Network, depositing and investing sooner may pay off, experts say.

“The earlier you get money into a college plan, the more it will grow,” said certified financial planner Mari Adam, senior wealth advisor at Mercer Advisors in Boca Raton, Florida.

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A 529 plan allows you to grow money tax-free for qualified education expenses, such as college, vocational school or up to $10,000 of K-12 tuition per year. 
While there’s no federal tax deduction for contributions, you may qualify for a write-off at the state level, depending on where you live, Adam said.
Plan contribution limits vary by state, ranging from $235,000 to $550,000, according to Saving for College.
Front-loading contributions may also avoid missing future deposits since only 37% of 529 plans currently receive automated savings.

The best time to invest is when you have the money available.

owner at The Wealth Planner

“The best time to invest is when you have the money available,” said John Loyd, a CFP and owner at The Wealth Planner in Fort Worth, Texas, pointing to upward stock market trends over time.
Of course, there’s a risk of overfunding a plan if the beneficiary doesn’t need funds for education. You’ll owe income taxes and a 10% penalty on earnings for nonqualified withdrawals. However, there may be other options for the money.
“These plans have tremendous portability,” said Philip Herzberg, a CFP and lead financial advisor at Team Hewins in Miami, explaining you can change the beneficiary to another family member or even a future child after they are born.

Super funding 529 plans

Another technique, super funding a 529 plan, may appeal to wealthy families trying to reduce future estate taxes through gifting.
You can give away $16,000 per gift in 2022 without owing federal gift tax. And many won’t owe levies for larger amounts, either.
“Most people don’t have any kind of gift tax issues,” Loyd said.
That’s because the federal estate and gift tax lifetime exemption is currently $12.06 million per person in 2022. But it reverts to $5 million adjusted for inflation in 2026 when part of former President Donald Trump’s signature tax law sunsets. 

If you expect your estate to be larger than either of those amounts when you die, you may avoid gift tax by “super funding” a 529 plan with five years of contributions at once, removing that money from your estate.
For example, if you’re single with an estate over the lifetime exemption, you may contribute $16,000 times five years or $80,000 in 2022 without paying gift tax (or $160,000 if your spouse agrees to “split” gifts.)
“This is really a fabulous opportunity to get money into college plans,” Adam said.
And recent stock market volatility may present opportunities, Herzberg explained. “You want to take advantage of those depressed prices with a lump sum investment.” More

Moderna plans to invest $500 million to produce messenger RNA, the technology underlying its Covid vaccines, at the facility in Kenya.
It could fill Covid vaccine doses at the Kenya facility as early as 2023 subject to demand, according to the company.
Moderna has faced criticism from groups such as Oxfam International and Doctors Without Borders for not sharing its vaccine technology with middle and lower income countries.

A health official prepares a syringe with the Moderna Covid-19 vaccine prior to administering it during a mass Covid-19 vaccination drive in Nairobi on September 17, 2021.
Simon Maina | AFP | Getty Images

Moderna has reached a memorandum of understanding with Kenya to build a Covid vaccine manufacturing plant in the East African nation, the company announced Monday.
Moderna plans to invest $500 million to produce messenger RNA, the technology underlying its Covid vaccines, at the facility with the goal of manufacturing 500 million doses annually. Moderna could fill Covid vaccine doses at the Kenya facility as early as 2023 subject to demand, according to the company.

The biotech company reached the agreement with the support of the U.S. government. As the coronavirus pandemic eases in the U.S., the Biden administration has made increasing vaccination globally a central priority.
Moderna has faced criticism from activist groups such as Oxfam International and Doctors Without Borders for not sharing its vaccine technology with middle- and lower-income countries so they can produce Covid vaccines locally. The company said in October 2020 it would not enforce Covid-related patents during the pandemic and was willing to license its vaccine after the pandemic.

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Moderna has pledged 650 million doses of its vaccine to COVAX through 2022, an international alliance backed by the World Health Organization to deliver shots to low- and middle-income countries. The WHO has repeatedly criticized wealthy nations and vaccine makers for not doing enough to make sure people in poorer nations have access to Covid vaccines.
The company received U.S. taxpayer money under Operation Warp Speed to develop the vaccine. Moderna is currently locked in a patent dispute with the National Institutes of Health over the technology underlying the vaccine. White House chief medical advisor Dr. Anthony Fauci, in a call with reporters last week, suggested the NIH would license the technology globally if it wins the dispute with Moderna.
“Whatever it is that we can do, we will do,” Fauci said.
Moderna delivered 807 million Covid vaccine doses worldwide in 2021. The shot is the company’s only commercially available product. It sold $17.7 billion of its vaccine in 2021, which represents virtually all of its $18.5 billion in revenue for the year. Moderna soared to profitability during the pandemic, booking $12.2 billion in net income for 2021 after a net loss of $747 million in 2020 while the vaccine was under development.

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