August 10th - The Week Ahead

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The Week Ahead Of Us 🔍

Welcome back!

What selloff? The Nasdaq is already back to record highs after being initially spooked by last friday’s job numbers. But the big dialogue relates to our current advancements in AI - a significant amount of market participants were highly disappointed in OpenAI’s release of Chat GPT-5. So either Sam Altman falsely hyped it up, investors are missing the forest in the trees, OpenAI is dealing with company specific limitations, or there’s industry wide limitations and progress in advancing AI in its current form. It is hard to have 100% conviction in one specific path, and AI-related capex spend and VC fundraising will be the true indicator. We’ll continue to report on the direction this is heading.

Here’s a look at earnings this week.

• Monday: Barrick Mining Corporation, Franco-Nevada Corporation, Celanese Corporation, Plug Power, Dole, AMC Entertainment, GoPro, ZipRecruiter

• Tuesday: Cardinal Health, CoreWeave, On Holding, CAVA Group, H&R Block, Sea Limited

• Wednesday: Wendy’s Company, Cisco Systems, StoneCo, Krispy Kreme, Jack in the Box

• Thursday: Walmart, ConocoPhillips, Applied Materials, Tapestry, Canada Goose, Deere & Co.

• Friday: Flowers Foods

Here’s a look at economic data this week (estimates are in quotations).

• Tuesday: NFIB optimism index (99.0), Consumer price index (0.2%), CPI year over year (2.8%), Core CPI (0.3%), Core CPI year over year (3.1%), Monthly U.S. federal budget ($227.7B), Richmond Fed President Tom Barkin speaks, Kansas City Fed President Jeff Schmid speech

• Wednesday: Richmond Fed President Tom Barkin speaks, Chicago Fed President Austan Goolsbee speaks, Atlanta Fed President Raphael Bostic speaks

• Thursday: Initial jobless claims (229,000), Producer price index (0.2%), Core PPI (0.3%), PPI year over year, Core PPI year over year, Richmond Fed President Tom Barkin speaks

• Friday: U.S. retail sales (0.5%), Retail sales minus autos (0.3%), Empire State manufacturing survey (1.8), Import price index (0.0%), Import price index minus fuel, Industrial production (0.0%), Capacity utilization (77.6%), Business inventories (0.2%), Consumer sentiment prelim (62.5%)

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Earnings Corner 📈 📉

Warner Bros. Discovery $WBD ( ▼ 1.37% ) Revenue beat expectations and EPS beat, driven by a 55% jump in studio revenue on blockbuster releases and 3.4M streaming subscriber adds that swung the segment to profit. The core cable TV unit remained a weak spot, with ad sales down 12%, and investors remain focused on the TV decline and heavy debt load, despite the studios' wins.

Celsius $CELH ( ▲ 4.99% ) Beat on both revenue and EPS as the Alani Nu acquisition fueled a 129% retail sales surge and helped the brand claim a bigger share of the U.S. energy drink market. Core Celsius returned to growth after a slump, driven by strong momentum in North America and stable margins despite integration costs.

Under Armour $UAA ( ▲ 4.19% ) Revenue came inline with expectations at $1.13B, declining 4% y/y, and EPS came inline at $0.02, down from $0.03 last year. Weakness in North America and Asia-Pacific offset growth in Europe, the Middle East, and Africa, and the company expects $100M in tariff-related costs this year that could cut profit roughly in half.

Cheniere $LNG ( ▲ 0.34% ) Revenue and EPS beat with revenue up 43% y/y, but adjusted core profit missed. The energy company signed its first long-term supply deal with Japan’s JERA and raised the lower end of its full-year profit outlook, helped by a tax rate drop below 10% expected to cut $200M from this year’s burden.

Brookfield $BAM ( ▲ 0.14% ) Revenue and EPS both missed expectations despite double-digit y/y growth in fee-related and distributable earnings. They raised $22B in new capital across strategies and announced $55B in asset sales YTD, highlighting strong capital momentum and investor demand.

Monster $MNST ( ▲ 1.16% ) Revenue beat at $2.11B, EPS also beat at $0.52 on strong energy drink demand, with core Monster Energy sales up double digits and strategic brands up nearly 20%. The alcohol segment declined, but per capita consumption of energy drinks continued to grow.

Toyota $TM ( ▲ 0.42% ) Revenue beat at $84.82B, up 11.7% y/y, while EPS missed at $4.47, down 30% y/y. The company warned of a $9.5B profit hit from new U.S. auto tariffs this fiscal year and trimmed its annual earnings forecast, with quarter one operating income already taking a $3.1B tariff hit.

Constellation Energy $CEG ( ▲ 1.51% ) Beat on both revenue and EPS, driven by strong power demand from data centers and lower interest costs. The company secured major long-term power agreements with Meta and Microsoft, reaffirmed full-year EPS outlook, and moved closer to closing the $16.4B Calpine acquisition.

Ralph Lauren $RL ( ▲ 3.31% ) Revenue beat coming in at $1.72B, EPS also beat at $3.77 with strength across all regions, especially Asia and China. Raised full-year sales outlook but warned that tariffs could pressure costs in the second half.

Trade Desk $TTD ( ▲ 0.81% ) Revenue beat and EPS was in line, but shares plunged 38% after the CEO warned that tariffs are pressuring major brand advertisers. Growth slowed below Meta’s 22%, sparking concern that closed platforms are winning.

Tonight’s Headlines 🍿 

• Meta’s $29B private credit raise: Meta has tapped PIMCO and Blue Owl for a massive $29 billion financing deal to build new AI‑focused data centers in rural Louisiana. This includes $26B in debt led by PIMCO and $3B in equity from Blue Owl

• What the internet thinks of Chat GPT-5: Early reviews are largely negative, with many saying they want GPT-4o back. Users claim the model lacks the personality that 4o had and that it makes more mistakes, although CEO Sam Altman said that was due to a system issue, and GPT-5 “will seem smarter” now that it’s been fixed

• Gold Bullions: Trump announced that gold bars will be subject to tariffs, shocking traders who assumed they would be exempt and creating chaos in the market. Overnight futures surged to a record high before cooling after Trump suggested that gold actually wouldn't be tariffed. The White House plans to issue an executive order in the near future to clarify what’s going on

• Stephen Miran nominated to Fed: Trump plans to nominate CEA Chair Stephen Miran as a Fed governor. The move would install a short-term placeholder, with Miran’s term set to expire in January if confirmed

• Nvidia and AMD will pay the U.S government 15% of its China chip sales revenue: In exchange for receiving export licenses to sell chips to China, the chipmaker giants will give revenue directly to the U.S. government. This is a nice “art of the deal” instead of having to face 100% tariffs

• China says Nvidia H20 chips are outdated and unsafe, saying they pose security concerns for the country and are harmful to the environment. The chips, which Trump recently ruled Nvidia could resume selling to China, were developed specifically for the Chinese market

  • Meanwhile, Trump is considering hitting China with additional tariffs as a penalty for buying Russian oil, similar to what he did with India. China has responded by saying its imports are justified and will continue to happen

• Fed’s Bowman calls for three cuts this year: Fed Governor Michelle Bowman -one of the two officials who dissented in July - says that weaker-than-expected job data supports multiple cuts this year

  • The Bank of England has already begun to cut, voting to reduce rates by 25 basis points to 4.0%. This was in line with expectations, although four of the nine policymakers voted to keep rates steady as inflation has continued to remain high

• Consumer expectations on inflation rose in July, with one-year expectations increasing 0.1% to 3.1% according to a survey by the Fed. Consumers are beginning to feel slight price increases due to tariffs, although lower gas prices have helped to limit that effect

  • Agriculture is an industry that has been affected the most - machinery prices are climbing, fertilizer and nutrient imports are plunging, and crop purchases are starting to slow. Higher costs come at a bad time for farmers, as a benchmark for corn, soybean, and wheat prices has fallen to its lowest level since the pandemic

• Wall Street is divided on what’s behind the hiring slowdown: Some point to a reduced labor supply, citing deportations and reduced immigration, while others view the latest BLS report as a sign of weak labor demand

• What the new American mall looks like: According to CNBC, the new American shopping mall is less about department stores and more about church, bowling, and Barnes & Noble

• Viasat has an activist investor: Carronade Capital is pushing the satellite broadband provider to separate its Defense and Advanced Technology segment through a spin-off or IPO. Carronade believes their core space-based broadband services business overshadows the defense segment and estimates that the split could unlock $11B in value to both businesses

• Trinseo in trouble: Chems manufacturer Trinseo saw 2Q EBITDA of $42mm, down from $67mm due to lower volumes, due to tariffs

M&A Transactions💭 

Wheeling & Lake Erie Rlwy Co, operates as a regional railway, has entered into a definitive agreement to be acquired for GBP 1.05B by FTAI Infrastructure.

Aris Water Solutions (NYS: ARIS), an environmental infrastructure and solutions company, has reached a definitive agreement to be acquired for $2.508B by Western Midstream Partners (NYS: WES). EV/EBITDA was 14.02x and EV/Revenue was 5.54x. Citigroup and Houlihan Lokey advised on the sale.

Rail, developer of payments-as-a-service platform, was acquired for $200.0M by Ripple.

Paramount Skydance, operates in three global business segments: TV media, filmed entertainment, and direct to consumer, was acquired by Skydance Productions for $26.71B. EV/EBITDA was 16.73x and EV/Revenue was 0.93x. BDT & MSD Partners, Centerview Partners, and Rothschild & Co advised on the sale.

Melinta Therapeutics, manufacturer of novel small-molecule antibiotics, has reached a definitive agreement to be acquired for $300.0M by Cormedix (NAS: CRMD). EV/Revenue was 2.22x. Evercore advised on the sale.

Frauscher Sensortechnik, manufacturer of railway sensing systems, was acquired for $800.0M by Westinghouse Air Brake Technologies (NYS: WAB). Banque Hottinguer and BDO Austria advised on the sale.

Epwin Group (LON: EPWN), manufacturers low-maintenance building products, has reached a definitive agreement to be acquired for EUR 269.6M by Laumann Group. Shore Capital Group advised on the sale.

Dcinside, operator of a community portal, has reached a definitive agreement to be acquired for $200.0M by an undisclosed investor.

Continental Disc Corporation, manufacturer of rupture discs, was acquired for $540.0M by Baker Hughes (NAS: BKR). EV/Revenue was 15.43x. Robert W. Baird & Co. and William Blair & Company advised on the sale.

WithSecure (HEL: WITH), a cyber security products and service company, has entered into a definitive agreement to be acquired for $299.0M by CVC Capital Partners and Mr. Risto Siilasmaa. EV/EBITDA was 17.56x and EV/Revenue was 2.19x.

RetireAustralia, operator of retirement villages, has entered into a definitive agreement to be acquired for AUD 846.0M by Invesco. EV/Net Income was 6.89x. Jefferies advised on the sale.

Private Placement Transactions💭 

Decart, developer of an AI infrastructure platform, raised $100.0M of Series B venture funding from Sequoia Capital, Zeev Ventures, and Regah Ventures at a pre-money valuation of $3.0B.

Apreo Health, developer of investigational medical devices, raised $130.0M of Series B venture funding led by Bain Capital Life Sciences and Norwest.

beatBread, developer of a financing platform, raised $124.0M of venture funding through a combination of debt and equity. Citigroup, Mucker Capital, Advantage Capital, and Deciens Capital provided the equity investment. Debt funding was provided by GMO Venture Partners and undisclosed lenders.

Caturus, producer of natural gas, received $615.0M of financing from Mubadala Energy. The transaction values the company at an estimated $2.5B.

Odds of the Day 🍒 

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Noteworthy Chart 🧭

Meme Cleanser 😆 

Until next time!

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