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The Week Ahead Of Us 🔍 |
Welcome back! |
Peak earnings season is under way, so let's get right into it. |
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Earnings Corner 📜 |
Trending Up 📈 |
Tesla (TSLA) reported earnings that missed estimates, with revenue of $25.71B up 2% y/y (vs. $27.26B expected) and EPS of $0.73 (vs. $0.76 expected). Automotive revenue fell 8% y/y to $19.8B, with $692MM of that total coming from regulatory credits. These declines were due to falling volumes, as 2024 saw the first annual drop in Tesla deliveries, as well as discounting of flagship vehicles. Amid these challenges, Elon Musk has encouraged investors to focus on the company's strides in autonomous driving and robotics. The stock initially fell but was up 4% in after-hours trading |
Meta (META) reported earnings that beat estimates, with revenue of $48.39B up 21% y/y (vs. $47.04B expected) and EPS of $8.02 (vs. $6.77 expected). Meta AI saw monthly chatbot users jump to 700MM (vs. 600MM in December), and the company reiterated its commitment to investing $60B-$65B into AI development. Mgmt. projected Q1 revenue of $39.5B-$41.8B (vs. $41.73B projected). The stock was up 2.4% after Wednesday's close |
AT&T (T) reported earnings that beat estimates. Wireless subscriber growth also outpaced expectations, as the company added 482K new customers (vs. 424K expected). A key growth driver was the company's new discounted premium plans, which bundle 5G mobile and high-speed fiber services. AT&T added 307K new fiber customers (vs. 226K the previous quarter). The stock was up 6.7% at Wednesday's close |
Starbucks (SBUX) reported earnings that beat estimates. Although revenues were flat y/y, same store sales fell 4% (vs. the 5.5% drop expected), driven by a 6% decline in traffic. Discounted transactions were down by 40%, as the company's new CEO has cut back deals and promotions. Mgmt. noted that they will open fewer new stores and perform limited renovations in 2025, to free up capital for the ongoing turnaround effort. The stock was up 8.1% at Friday's close |
T-Mobile (TMUS) reported earnings that crushed estimates. The wireless provider added 903K monthly phone customers (vs. 865K projected). Mgmt. projected a gain of 5.5MM-6MM new customers in 2025. The CEO noted: "2025 is poised to be even more exciting, and because of this, we're issuing the strongest start-of-year postpaid net additions guide in our history." The stock was up 6.3% at Wednesday's close |
IBM (IBM) reported earnings that beat estimates. Software revenues were up 10% y/y, due to AI demand and solid performance of the Red Hat Linux operating system. Mgmt. noted that IBM has recorded $5B in generative AI bookings. Consulting revenues were down 2%. The stock was up 8.9% at Wednesday's close |
Trending Down 📉 |
Microsoft (MSFT) reported earnings that beat estimates, with revenue of $69.23B up 12.3% (vs. $68.78B expected) and EPS of $3.23 (vs. $3.11 expected). The Intelligent Cloud segment, including Azure cloud, saw $25.54B in revenue, up 19% y/y but missing estimates of $25.83B. Mgmt. revenue guidance was below the street's expectation, coming in at $67.7B-$68.7B (vs. $69.78B expected). The stock was down 4.6% after Wednesday's close |
Boeing (BA) reported earnings that missed estimates. The beleaguered plane manufacturer burned through $14B of cash in 2024, including $3.5B in Q4, making for its sixth consecutive annual loss. Mgmt. noted that they are working to streamline operations and may sell the firm's Jeppesen navigation business. CEO Kelly Ortberg projected that Boeing would flip cash flow positive in the second half of 2025, as the company aims to produce 38 737 Max aircraft a month. The stock was down 1.1% at Wednesday's close |
General Motors (GM) reported earnings that beat estimates. Mgmt.'s FY 2025 guidance also exceeded expectations, with projected EPS of $11-$12. Yet, the stock fell 10.3% as investors remain pessimistic on the U.S. automotive industry, due to cooling EV demand and uncertainty surrounding the impact of import tariffs |
Three major defense firms reported earnings this week, with General Dynamics (GD) and Raytheon (RTX) beating estimates, but Lockheed Martin (LMT) falling short. The former two saw strong growth across their aerospace and marine units. However, Lockheed Martin recognized a $410MM loss on classified programs – including $100MM related to missiles and fire control systems – due to falling short of technical milestones. GD stock fell 4.2%, RTX fell 2.5%, and LMT fell 9.9% |
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Today's Headlines 🍿 |
The Fed unanimously held interest rates at 4.25%-4.5%, with Fed Chair Powell saying they weren't in a hurry to make any adjustments. President Trump was quick to criticize this, and we expect he will continue pushing the Fed to try to cut too soon A Jefferies Associate passed away over the weekend. On Tuesday morning, it was announced 28-year TMT IB Associate in the Dallas office passed away. It has been heavily inferred this was due to intense working conditions. The Analyst community has been in uproar over the news, with renewed calls to improve working conditions in the industry. Submit any news, or anonymous submission, to our Wall Street Gossip page and we'll continue to work towards pushing for better working conditions in Finance Post DeepSeek fallout has continued, with even Sam Altman calling DeepSeek's R1 model "impressive". However, OpenAI, backed by White House AI & Crypto Czar David Sacks, shared that it has discovered evidence suggesting that DeepSeek used OpenAI's proprietary models to train their own open-source competitor X is looking for larger institutions to buy a portion of $3B in debt from the banking syndicate. Credit shops Darsana Capital and Diameter are believed to have acquired a large part of a $1B piece of debt that banks were offloading. PIMCO and Apollo are among the firms evaluating a deal. Given this is non-rated debt, this isn't being syndicated out to CLOs. Most notably though, a claim to xAI, Elon's AI startup, is part of the collateral package. However, X is apparently "barely breaking even" Clearing (the White) House: Trump offered severance packages worth 8 months of salary to any of the 2mm government employees who is willing resign by February 6. The offer extends to all federal workers except those involved in the armed forces, immigration enforcement, and US Postal Service Lutnick goes to the Hill: Billionaire Howard Lutnick faced a senate hearing on Wednesday for his nomination as Commerce Secretary. The Cantor Fitzgerald CEO, tapped to lead Trump's "tariff and trade agenda," has met accusations of conflict of interest Chili's is surprisingly having a great turnaround, with the chain seeing 19% traffic growth, and the parent company, Brinker International, seeing shares soar post earnings results DoubeLine's Jeff Gundlach says his base case is one rate cut this year, due in part to stability in the unemployment rate Gold rush, or panic? Traders in New York amassed an $82B stockpile of bullion this week, fearing fallout from President Trump's promised tariffs. As a result, liquidity in the London market has become seriously strained Boom! Boom Technology Inc. launched a supersonic jet on Tuesday. The plane, designed as a successor to the Concorde, broke the sound barrier for the first time. Flying at 34,000 feet, the XB-1 is limited to flying overseas and as of now will like only have transatlantic range Nvidia Bears cashed in: Traders shorting AI-related stocks made out like bandits this week. Bets against Jensen Huang's giant netted $6.6B after the stock dropped by the most ever in a single day Was the Street fooled by randomnness? Author of The Black Swan Nassim Taleb warned investors on Monday that the AI sellloff was just the "beginning of an adjustment of people to reality.'" Apparently, there's a realization that next-gen tech is "no longer flawless" Unions are weakening: American union membership fell to a record low in 2024. Dropping from 10% in 2023, only 9.9% of US workers are represented by unions. Notably, union membership rates among government workers are 5x the private sector Everything's bigger in Texas, including disposable income. According to a new report, only 18% of the 100 largest US counties have a median income high enough to support a family of two adults and one child. Four of the top ten counties where families earning the median household income have most left over after basic expenses are in Texas Super (expensive) Bowl: 30-second ads for most-watched American TV event are fetching a record $8mm this year. Streamed on Fox, this year will feature the Chiefs & Eagles rematch Microsoft may acquire TikTok. President Trump announced on Monday, that Satya Nadella is discussing an acquisition of the platform Blackstone expects CLO sales to rise in 2025 due to an improving M&A environment
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M&A Transactions💭 |
Dains Accountants, provider of accounting services, was acquired for $309.18M by IK Partners and its management. Rothschild & Co. advised on the sale. |
Superior Midstream Appalachian, operator of a full service midstream company and a subsidiary of Superior Midstream, was acquired for $120.0M by Pine Run Gathering. |
A 2.71% stake in Shenzhen Rural Commercial Bank, provider of financial banking services, was acquired by DBS Bank for $218.36M. |
RLS Radiopharmacies, operator of a radiopharmacy network, was acquired for $230.0M by Telix Pharmaceuticals (ASX: TLX). Lincoln International advised on the sale. |
Moser Energy Systems, manufacturer of industrial natural gas power generation, has reached a definitive agreement to be acquired for $220.0M AESI Holdings (NYS: AESI). Tudor, Pickering Holt & Company Securities advised on the sale. |
Maverick Natural Resources, operator of oil and gas assets, has reached a definitive agreement to be acquired by Diversified Energy Company for $1.3B. EV/EBITDA was 3.42x and EV/Revenue was 1.44x. Jefferies advised on the sale. |
The Vietnam and India Business of Logos Asia was acquired by Mr. Trent Iliffe, Mr. Mehul Shah, Mr. Glenn Hughes, and Mr. Aaron Murray for $100.0M. |
Kranze Technology Solutions, manufacturer of hardware and software development, was acquired for $350.0M by SPX Technologies (NYS: SPXC). |
Hellenic Healthcare, operator of a chain of private hospitals, reached a definitive agreement to be acquired for $1.38B by Pure Health (ADS: PUREHEALTH). The transaction values the company at an estimated $2.3B. |
Forum Estates, operator of a real estate investment firm, was acquired for $214.92M by Cibus Nordic Real Estate (STO: CIBUS). |
Dropsuite (ASX: DSE), is a cloud-based software service provider, has reached a definitive agreement to be acquired for $252.0M by NinjaOne. Canaccord Genuity advised on the sale. |
Barnes Group, industrial and aerospace manufacturer and service provider, was acquired for $3.6B by Apollo Global Management. EV/EBITDA was 16.37x and EV/Revenue was 2.23x. Jefferies and Goldman Sachs advised on the sale. |
Aquarion Water Company, provider of water supply services, reached a definitive agreement to be acquired for $2.4B by Aquarion Water Authority. Citgroup and Morgan Stanley advised on the sale. |
Apex Energy II, operator of an upstream oil and gas company, was acquired for $505.0M by CNX Resources (NYS: CNX). Piper Sandler advised on the sale. |
Walmart Advanced Systems and Robotics, operator of a robotics automation company, was acquired for $520.0M by Symbotic (NAS: SYM). Citigroup advised on the sale. |
Resco Products, manufacturer of refractory products, was acquired for $410.0M by RHI Magnesita (WBO: RHIM). Jefferies advised on the sale. |
Piovan (MIL: PVN), an Italy-based company engaged in supplying ancillary equipment, was acquired for $503.97M by Investindustrial. The transaction values the company at $777.49M. Mediobanca advised on the sale. |
Paragon 28 (NYS: FNA), a medical device company, has reached a definitive agreement to be acquired for $1.199B by Zimmer Biomet Holdings (NYS: ZBH). EV/ Revenue was 4.89x. Piper Sandler advised on the sale. |
Monga Strayfield, manufacturer of radio frequency heaters and dryers, was acquired for $1.23B by Kilburn Engineering (BOM: 522101). |
Evergreen Theragnostics, operator of contract development and manufacturing platform, has reached a definitive agreement to be acquired for $250.0M by Lantheus Medical Imaging. Centerview Partners advised on the sale. |
Aspen Properties sold A Prime Parcel of 16200 Square Meters to Arkade Group for $165.0M. |
AGS Airports, provider of airport operation services, was acquired for $1.89B by AviAlliance. Solomon Partners advised on the sale. |
Jellinbah Group, operator of a coal mining company, was acquired for $995.52M by Zashvin. Morgan Stanley advised on the sale. |
Intermonte (MIL: INT), an independent investment bank, was acquired for $101.61M by Banca Generali (MIL: BGN). |
Private Placement Transactions💭 |
Meesho, operator of an online retail platform, raised $550.0M of venture funding led by Softbank Investment Advisors at a pre-money valuation of $3.45B. |
VEIR, developer of an evaporative cryogenic cooling technology, raised $125.0M of Series B venture funding led by Munich Re Ventures and Tyche Partners. |
TravelPerk, developer of an automated business travel management platform, raised $200.0M of Series E venture funding led by EQT and Atomico at a pre-money valuation of $2.5B. |
Helion, developer of a patented plasma accelerator technology, raised $425.0M of Series F venture funding led by Nucor, Lightspeed Venture Partners and Mithril Capital Management. |
UVeye, developer of vehicle inspection systems, raised $191.0M of venture funding through a combination of debt and equity. $41.0M of equity was led by Woven Capital. Trinity Capital provided the $150.0M loan. |
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Odds of the Day 🍒 |
Kalshi traders are starting to expect an OpenAI ad during the Super Bowl. |
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Noteworthy Chart 🧭 |
Here's a look at what legendary investor Seth Klarman's portfolio looks like. |
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Meme Cleanser 😆 |
 | High Yield Harry @HighyieldHarry |  |
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| |  | | | 1:11 PM • Jan 27, 2025 | | | | | | 314 Likes 13 Retweets | 7 Replies |
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 | junkbondinvestor @junkbondinvest | |
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Private credit MD at quarter end: "Just fund it, we'll do diligence after close" | |  | | | 6:48 PM • Jan 28, 2025 | | | | | | 62 Likes 0 Retweets | 0 Replies |
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Finance Merch Referrals ☕️ |
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