June 22 - The Week Ahead

The Week Ahead Of Us 🔍

Welcome back!

Hope you all had a great weekend, we have a brutal heatwave coming up in the U.S, so be careful over the next couple days.

Let’s get into the big news immediately:

The U.S. struck Iran: Yesterday, the U.S. military bombed three Iranian nuclear sites in an attempt to destroy the country’s nuclear enrichment capacity. The U.S. worked closely with Israel on the attacks, but maintains that it will not be entering the war. All planes safely returned after severely damaging the sites, with Trump calling the attacks a “spectacular military success” and floating the idea of a potential regime change in Iran

• Iran’s Parliament has approved the closure of the Strait of Hormuz - about 20% of the world's oil supply passes through this waterway, although a closure may be an unlikely scenario and needs to be approved by Iran’s supreme leader. JPM Analysts have called a blockage a “worst-case scenario” that would send oil to $120/bbl, with the street broadly believing this measure would hurt Iran significantly, as opposed to being a retaliatory measure

• Futures are down slightly and Investors are bracing for a spike in oil prices, with a 2.5% to 4.25% bump over the past couple of hours, with levels of $75.74/bbl at time of writing.

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This Week’s Earnings:

• Monday: FactSet, Commercial Metals, KB Home

• Tuesday: FedEx, Carnival, TD SYNNEX

• Wednesday: Micron, Paychex, General Mills, Jefferies, Levi’s

• Thursday: Nike, Walgreens Boots Alliance, McCormick, Acuity Brands, Concentrix

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

• Wednesday: New home sales May (689K)

• Thursday: Initial jobless claims Jun 21: (248K), Durable goods orders May (6.5%), GDP Q1 second rev. -0.2%), Pending home sales May (0.0%), Advanced trade/inventories, Cleveland Fed President Hammack speaks

• Friday: Personal income May (0.3%), Personal spending May (0.2%), PCE index May (0.1%), Core PCE May (0.1%), PCE y/y (2.3%), Core PCE y/y (2.6%), Consumer sentiment final June (59.5)

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Earnings Corner 📜 

Accenture (ACN) $ACN ( ▼ 6.86% ) The firm had a top-line and EPS beat. Revenue rose to $17.70 billion (a 3.2% y/y increase) and EPS beat at $3.49, despite a 7% drop in bookings. FY guidance was raised for the second time this year and revenue growth of 6%–7% in local currency. Management cited slower GenAI momentum and announced leadership changes alongside a new AI-centric unit.

Darden (DRI) $DRI ( ▲ 1.36% ) The casual dining giant beat on both Revenue and EPS. Revenue rose 10.6% y/y to ($3.27B) and EPS came in just ahead at $2.98, driven by strength at Olive Garden and LongHorn. Same-store sales rose 4.6%, and FY26 guidance calls for 7%–8% revenue growth and EPS of $10.50–$10.70, including an extra week.

Kroger (KR) $KR ( ▲ 9.84% ) The grocery giant missed on revenue, coming in just shy of expectations at $45.1B. EPS had a $0.03 beat at $1.49, helped by strong label performance and a 15% jump in e-commerce. The company raised its FY identical sales outlook to 2.25%–3.25%, citing increased demand and at home meals.

Today’s Headlines 🍿 

• The U.S. wants to sell land: The GOP’s reconciliation bill proposes selling federal land west of the Rockies to build more housing - designating over $250mm acres of land, about 40% of federal holdings, as available for sale -and requires the Forest Service and BLM to sell 2.2 to 3.3mm acres from these areas within the next five years. The criticism has been heavy and harsh, with many Americans frustrated with the potential privatization scheme

• Apple held internal talks about buying Perplexity: This comes as Google’s status as the premier iPhone search engine is under pressure. The discussions are still at an early stage, and Apple has yet to discuss a bid with Perplexity’s management

  • Google Search trends have rapidly declined last month, showing that the growth of AI has created alternative ways to drive audiences to websites

• X is launching investing and trading directly in the app: CEO Linda Yaccarino has outlined a push into financial services for X as they strive to become the everything app. X has already partnered with Visa to make a peer-to-peer payment system, which could launch later this year, and is also exploring an X credit or debit card

• Waller says the Fed should cut in July: The Fed Governor might be jockeying for the Chair position, stating that tariffs will not boost inflation significantly so there is no reason to wait on the cuts

  • Meanwhile, SF Fed Governor Mary Daly, noted that employment and inflation risks are roughly in balance

• Mira Murati, the former OpenAI CTO, raised $2B at a $10B valuation for her six-month-old startup, Thinking Machines Lab. The Company is pre-product, and the work it does remains unclear

• Cluely has raised $15mm, led by A16z. The controversial AI-cheating app has been the talk of silicon valley due to the nature of the app & the team’s loud strategy of hiring a bunch of influencers within the growth team

• Credit Latest:

  • xAI loan and debt pricing widened out, with $3B of new issue bonds priced at a 12.5% yield and a $1B TL at S+725 @ 96

  • A Prudential unit is lending $500mm to Affirm, the BNPL provider

  • Howard Marks is now writing his memos with the help of Perplexity…this can’t be too hard given that the Oaktree founder has written the same thing for 20+ years…

  • An Online job platform conglomerate, that includes CareerBuilder and Monster, is evaluating bankruptcy. Apollo is the Sponsor

  • Redwood, Anchorage, and Farallon will hold a large amount of reorg equity in At Home Group, the troubled retailer that recently filed

• Home Depot submits bid for buildings-products distributor DBS, igniting a bidding war with Brad Jacobs and his home-improvement company QXO. Jacobs had submitted a cash offer of about $5B, noting he won’t raise his offer, while the value Home Depot’s offer is still to be determined. GMS shares rose almost 30% on the news, bringing its market cap to about $3.8B

• BNY Mellon approached Northern Trust on a potential merger: Northern Trust trades at a $21B+ market cap, while BNY ($65B+ market cap) may be looking to continue the theme of mid-cap banking consolidation

• JPMorgan to add bond trading to mobile app, adding flexibility for traders as the bank looks to grow its AUM

• Derek Thompson, the journalist who co-wrote Abundance, is leaving The Atlantic for Substack

• Reading passages on the SAT are getting shortened to a staggeringly low 25-150 words, vs. prior levels of 500-750 words. This is meant to help “students who might have struggled to connect with the subject matter”…

• Darden is weighing the sale of their Bahama Breeze restaurant chain, stating that the brand is “not a strategic priority for us.” Darden already closed 15 locations in May, and is also considering converting the restaurants to other Darden brands

M&A Transactions💭 

Playa Hotel & Resorts, owner, operator, and developer of all-inclusive resorts, was acquired for $2.6B by Hyatt Hotels (NYS: H). EV/EBITDA was 7.43x and EV/Revenue was 1.86x. PJT Partners advised on the sale.

Shift4 (NYS:FOUR) is acquiring Smartpay, an Australian payments leader for $180mm. The deal is expected to close in 4Q25.

PEC, a company that engages in the provision of mechanical engineering, was acquired for $165.0M by Liberty Energy Solutions. EV/EBITDA was 5.61x and EV/Revenue was 0.56x.

Guild Holdings (NYS: GHLD), a growth-oriented mortgage company, has entered into a definitive agreement to be acquired for $1.3B by Bayview Asset Management. EV/EBITDA was 29.06x and EV/Revenue was 1.25x. Morgan Stanley advised on the sale.

APA Solar, provider of solar racking and foundation solutions, has reached a definitive agreement to be acquired for $179.0M by Array Technologies (NAS: ARRY). $168.0M of which is upfront cash considerations and $42.0M of deferred consideration less $31.0M of net present value of tax benefits generated as a result of thee transaction. EV/EBITDA was 7.16x and EV/Revenue was 1.39x. Jefferies advised on the sale.

Twinset, manufacturer of apparel and other accessories, was acquired for EUR 225.0M by Borletti Group. EV/EBITDA was 7.9x and EV/Revenue was 1.19x. CASE Cassiopea advised on the sale.

Livensa Living, operator of student and flexible housing, has entered into a definitive agreement to be acquired for EUR 1.2B by Nido Living. Morgan Stanley and Eastdil Secured advised on the sale.

Burgundy Asset Management, operator of an asset management firm, has reached a definitive agreement to be acquired for CAD 625.0M by BMO Financial Group (TSE: BMO). PJT Partners and Origin Merchant Partners advised on the sale.

Senba Power, operator of power conversion and energy management systems, has reached a definitive agreement to be acquired for TDW 3.115B by Taiwan Cogeneration (TAI: 8926).

Downing Renewables & Infrastructure (LON: DORE), a closed-end asset management company, has reached a definitive agreement to be acquired for GBP 174.038M by Bagnall Energy. EV/Net Income was 36.99x and EV/Revenue was 25.6x. Singer Capital Markets advised on the sale.

Couchbase (NAS: BASE), a modern cloud database, has entered into a definitive agreement to be acquired for $1.5B by Haveli Investments. EV/Revenue was 6.99x. Morgan Stanley advised on the sale.

Capella Capital, developer of infrastructure, was acquired for AUD 235.0M by Sojitz (TKS: 2768).

Private Placement Transactions💭 

Okinawa, manufacturer of electric scooters, raised $600.0M of venture funding from Dhruv Khush Business Ventures.

Commure, developer of a cloud-based interoperable platform, raised $200.0M of venture funding from General Catalyst.

United Imaging Intelligence, developer of AI systems, raised CNY 1.0B of Series A venture funding from United-Imaging, Junnwei Venture, and Tsing Song Capital.

Odds of the Day 🍒 

Kalshi traders are pricing in a 32% chance of a new US-Iran nuclear deal this year

*New Traders on Kalshi receive a $20 bonus of trading credit when depositing $100+ with the code “HYH”.

Noteworthy Chart 🧭

Meme Cleanser 😆 

Until next time!

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