Mid-Morning Look

Thursday, April 24, 2025

U.S. stocks open the trading day in positive territory and push higher after a busy morning of earnings, ahead of GOOGL earnings tonight in Mag7 stocks, ahead of President Trump comments around noon and after a round of mixed economic data as the S&P looks to make it a 3-day win streak.  There are also a few Fed speakers so far this morning (Waller, Hammack) talking tariffs, the economy and rates. The S&P 500 hit highs of 5,469.69 on Wednesday before fading more than 100 points (but still held god gains) and the S&P trying an early push back to those levels. Big earnings movers to the upside from CACI, EW, HAS, LRCX, NOW, PI and TXN while downside early movers on earnings include ALK, CMCSA, FI, IBM, PEP, PG, RHI and TSCO among them. Overnight, China demanded that the US revoke all unilateral tariffs and said there were no talks on reaching a trade deal. There are also reports that the US is considering reducing certain tariffs targeting the auto industry. News reports also that the Trump White House is alerting Wall Street execs they are nearing an agreement in principle on trade with India. Oil and gold prices higher, while the dollar, Treasury yields and Bitcoin all lower.

• March Durables orders surged +9.2% (vs. consensus +2.0%) and vs Feb +0.9%; March Durables ex-transportation orders unchanged (cons +0.3%) vs Feb +0.7%; March Durables ex-defense orders +10.4% (consensus +0.2%) vs Feb +0.8%; March gen. Machinery orders +0.1%, electrical equipment -0.5%, defense aircraft/parts -9.4%; March nondefense cap orders ex-aircraft +0.1%, (cons +0.2%) vs Feb -0.3% (prev -0.2%).
• March Existing Home Sales fell -5.9% y/y to 4.02M unit rate (below consensus 4.13M), vs Feb 4.27M; U.S. March inventory of homes for sale 1.33M units, 4.0 months’ worth; U.S. March national median home price for existing homes $403,700, +2.7% from March 2024.

• In Utilities: several earnings as PCG Q1 core EPS came in 1c light on worst revenue/reaffirms core EPS guidance; XEL Q1 EPS came in light in quarter however reaffirms FY25 EPS at $3.75-$3.85 vs. est. $3.81; CMS Q1 EPS beat on better revenue while reaffirms FY EPS guidance and long-term EPS growth of 6-8%, with continued confidence towards the high end; FE Q1 EPS came in slightly light for quarter and reiterating 2025 guidance and long-term growth rate assumptions.
• In Food Sector: In research, UTZ was upgraded to Buy from Neutral at Davidson as sees a favorable risk-reward for Utz given that the company’s share of salty snacks is firming amid easing category promotion and the company’s strength in non-tracked channels; the firm downgraded shares of MDLZ to Neutral from Buy saying near-term results could underwhelm due to soft snacking demand in the U.S. as well as a mixed outlook at best across emerging markets. Nestle (NSRGY) Q1 organic sales growth, which excludes the impact of currency movements and acquisitions, rose 2.8% vs. est. 2.5%; reported sales increased by 2.3% to 22.6B Swiss francs ($27.28B), slightly ahead of analyst expectations of 22.5B francs; maintained its 2025 outlook.
• In Aerospace & Defense: CACI shares rise; Q3 adj EPS $6.23 vs. est. $5.60; Q3 revs $2.2B vs. est. $2.13B; raises FY25 EPS view to $24.24-$24.87 from $23.87-$24.76 (est. $24.45) and boosts FY25 revenue view to $8.55B-$8.65B, from $8.45B-$8.65B (lifting shares of gov’t IT defense service names like BAH, LDOS, PLTR early). PLTR and GOOGL cloud computing unit has expanded its partnership to target federal agencies with security-approved services, the companies said.

• EW +6%; upgraded to Overweight from Neutral at Piper and raised tgt to $80 from $73 after results; sees a better pathway back to double-digit growth in FY2026 (vs. its prior view of FY2027). This is driven by what Piper believes to be a healthier TAVR business (as evidenced by Q1 EPS and recent doc checks) and the TMTT ramp.
• HAS +14%; as Q1 EPS and sales top consensus ($1.04/$887.1M vs. est. $0.67/$770.6M) saying its shift toward higher-margin businesses was offsetting tariff pressures and also announced it has extended its long-running relationship with DIS to make toys for the popular Star Wars and Marvel brands.
• LRCX +5%; reported strong Q3 results slightly above expectations, as revenue from Taiwan and Foundry increased over 50% QQ; Q4 guidance was a good surprise, with the low-end of the company’s $4.7-5.3B revenue range exceeding consensus.
• MBLY +6%; Q1 revs $438M tops $435M estimate on smaller ES loss of (-$0.13) vs. (-0.27) y/y; now expects Q2 revenue to increase around 7% from the previous year, compared with analysts’ ests of a -2% fall
• NOW +14%; as posted a modest CC sub rev (+20% y/y) beat, and robust upside on CC cRPO (+22% y/y) and op mgn (30.9% vs. consensus of 30.1%) while the 2025 CC sub rev growth midpoint was trimmed to 19.5%.
• PI +16%; reported first quarter results, which exceeded expectations on both the top and bottom lines and also exceeded expectations for June guidance; Q1 adj EPS $0.21 vs est. $0.08, adj EBITDA $6.5Mm vs est. $2.478Mm on revs $74.277Mm vs est. $71.7Mm.
• TXN +6%; printed a 1Q25 revenue beat, with sales of $4.07B above ests and guided 2Q25 revenue to a midpoint of $4.35B (+6.9% q/q), in-line with Street, with the GAAP EPS guidance midpoint of $1.34 coming in above consensus; segment Results: Analog improved +1.1% q/q to $3.21B.

• CMG -1%; reported Q1 comp sales (-0.4%) compared to Street +1.6% and the first negative quarterly comp result since 4Q16, excluding COVID (2Q20) while reduced its full-year comp guidance to LSD (from L-MSD) and guided 2Q comps down roughly -3.0% (Street +1.3%).
• FI -16%; Q1 revs rose 5% y/y to $4.79B, which missed the $4.84B consensus estimate; while backed its FY adj EPS and FY25 organic rev growth figures but shares still tumbled.
• IBM -6%; as Q1 headline revs beat at $14.54B vs est. $14.4B with Software revs +9% y/y cc (vs +11.5% y/y cc last qtr) with Hybrid Cloud (Red Hat) +13% y/y cc (vs Red Hat +17% y/y cc last qtr); guides 2Q revs $16.4-16.75B vs cons $16.28B and reiterates FY Revs guide (prior at least 5% y/y cc) and FCF (prior about $13.5B).
• JACK -9%; confirms exploring strategic alternatives for Del Taco brand; will accelerate cash flow by selling a select number of owned real estate holdings, and direct proceeds towards debt paydown/leverage reduction; Jack in the Box will discontinue its dividend effective immediately.
• PG -4%; Q1 EPS $1.54 vs. est. $1.53 and sales $19.78B vs. est. $20.11B; now expects total net sales for fiscal 2025 to be roughly in line with the prior fiscal year, compared with its earlier target of 2% to 4% growth
• RHI -14%; shares fell sharply after Q1 results missed across the board as EPS $0.17 missed the est. $0.36 on revs $1.35B vs est. $1.408B; (weighed on MAN, KFY early).
• TSCO -4%; reported a 3c miss for Q1 EPS while sales rose 2% y/y to $2.47B but missed the $3.54B estimate while guided FY25 sales up 4%-8% vs the previous forecast of up 5%-7%, and projected adj EPS of $2.00-$2.18 is down from $2.10-$2.22 citing notable increase in uncertainty