April 27th - The Week Ahead

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Welcome back!

Harry here. For anyone new joining us, you can expect our newsletters every Sunday evening and Thursday morning. We’ll debrief you on the latest markets commentary, summarize the latest earnings, give you the headlines you need to know, provide you with a very detailed M&A blotter, and share some memes at the end of our newsletter. Our goal is to synthesize information similar to how a group of Analysts would share information to their PM in a Bloomberg group chat.

Let’s get into it.

Futures are down slightly with S&P and Nasdaq futures off around 30bps, but are coming off of a solid prior week following news of potential trade war de-escalation and better than expected earnings reports thus far.

The Week Ahead Of Us 🔍

Here’s a look at earnings this week. 180 of the Companies within the S&P 500 are reporting this week:

• Tuesday: Visa, Coca-Cola, Booking Holdings, S&P Global, Pfizer, Honeywell, Spotify, American Tower, Altria, Starbucks, Mondelez, Sherwin-Williams, UPS, PayPal, Snap, SoFi

• Wednesday: Microsoft, Meta, Qualcomm, Caterpillar, ADP, Robinhood, Yum! Brands

• Thursday: Apple, Amazon, Eli Lilly, Mastercard, McDonald’s, Linde, Amgen, Stryker, KKR, MicroStrategy, CVS, AirBnB, Motorola, Monster Beverage, Duolingo

• Friday: Exxon Mobil, Chevron, Apollo

Here’s a look at economic data this week.

• Tuesday: Consumer confidence (87.7), Job openings (7.4M)

• Wednesday: ADP employment (110K), GDP (0.4%), Employment cost index (1%), Consumer spending (0.5%), Personal income (0.4%), PCE index (0% m/m, 2.2% y/y), Core PCE index (0.1% m/m, 2.5% y/y)

• Thursday: Initial jobless claims (226K)

• Friday: U.S. nonfarm payrolls (130K), U.S. unemployment rate (4.2%), U.S. hourly wages (0.3%), Factory orders (3.4%)

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Earnings Corner 📜 

Trending Up 📈 

Alphabet (GOOG): Alphabet reported earnings that beat estimates, as search and advertising showed strong growth, despite competition surrounding AI. Revenue of $90.23B was up 12% y/y (vs. $89.12B expected), and EPS was $2.81 (vs. $2.01 expected). Advertising brought in $66.89B (up 8.5% y/y), while search brought in $50.7B (up 9.8%), with 1.5B people using Google’s AI overviews (vs. 1B in October). Cloud computing revenue was $12.26B, up 28% y/y, with margins expanding to 17.8%, vs. 9.4% a year ago. The stock was up 1.5%

Charter (CHTR): Charter’s better than expected numbers surprised the street, with revenue of $13.74B slightly beating expectations and sub losses narrowing to 181k, down from 405k y/y due to a revised tv packaging strategy. Adj. EBITDA of $5.8B was +4.8% y/y. FCF jumped up to $1.56B (vs. $358mm last year). Shares ended Friday up 11.4%

Trending Down 📉 

T-Mobile (TMUS): T-Mobile beat on the top and bottom lines, but a slight miss on new postpaid phone customers caused a steep sell-off. The company added 1.34MM postpaid net customers (vs. 1.18MM expected), but postpaid phone customers came in at only 495K (vs. 505K expected) – less than the 532K from the same period in 2024. The postpaid churn rate of 0.9% also exceeded expectations. The stock was down 11.2%

Intel (INTC): Intel reported earnings that beat estimates, but the stock fell on disappointing guidance. Revenue of $12.67B was down 0.5% y/y (vs. $12.3B expected), and EPS was -$0.19. Mgmt. projected Q2 revenue of $11.8B (vs. $12.82B expected), with breakeven EPS (vs. $0.06 expected). This outlook reflects uncertainty driven by the macroeconomic climate. Mgmt. also expects to cut operational and capital expenses through 2025 under new CEO Lip-Bu Tan. The stock was down 6.7%

PepsiCo (PEP): Pepsi reported earnings that missed estimates but beat on the top line, with mgmt. cutting its forecast due to tariff concerns and a cautious consumer. Net sales fell 1.8%, with the North American beverage unit down 3%. Mgmt. noted that they are “taking actions” to improve North American performance – these have included the recent acquisition of prebiotic soda brand Poppi and initiatives to reach GLP-1 users. The stock was down 6%

Comcast (CMCSA): Comcast reported earnings that beat estimates but outlined changes to its broadband strategy as the segment continues to lose customers. Domestic broadband revenue grew 1.7%, but Comcast shed 199K users due to tough competition. The legacy cable business lost 427K customers in the quarter; however, the high growth Peacock, mobile, business services, residential broadband, and studios and theme park segments all helped hold revenue nearly steady y/y. The stock was down 1.5%

Robert Half (RHI): Robert Half, a staffing provider, missed on earnings, showing pressure in the part-time staffing space (an easy cost for firms to cut in uncertain times). The stock was down 5.3%

Today’s Headlines 🍿 

• Trump’s gameshow styled negotiating strategy: On Friday, the WSJ revealed that the Administration is planning a framework where the U.S. focuses on 18 major trading partners over a rotating basis. This means, 6 nations would meet for talks for one week, then another group of 6, followed by the last group of 6 that would continue on a rolling basis until the July 8th “90-day pause” deadline is reached

  • Meanwhile, Scott Bessent spoke to ABC this morning, saying he thinks there is a path to an agreement with China. Bessent conceded that he doesn’t know whether Xi Jinping and Trump are speaking directly, and offered a time frame of “months” to figure out a deal

  • On the flip side, Gary Cohn, who was an economic advisor in the first Trump Administration, warned on Face the Nation that the impact from tariffs will start in a few weeks and that poorer people will be hurt the most

• How are Consumers and Firms responding to Tariffs? Apollo put together a 40-page deck with their analysis:

  • Key Takeaways: 1) Corporate capex plans are falling, 2) New orders are collapsing, 3) Inventories rose in advance of tariff announcements 4) US & China trade is grinding to a halt 5) Consumers are worried 6) Travel demand is declining and 7) Apollo is worried about a period of stagflation

• Is the sun setting on the Golden Age? The IMF warned in a new report that private credit loans are increasingly questionable. At the end of last year, more than 40% of borrowers had businesses generating negative free cash flow, up from 25% at the end of 2021. Regulators are concerned that cracks in the $1.6T industry could threaten the stability of traditional bank lenders which now have more than $500B in exposure to the asset class

• Harvard is trying to divest $1B of private equity stakes. The largest fund in US higher education is working with Jefferies to offload part of its $53B endowment to Lexington Partners, a secondaries heavyweight. With 40% of its portfolio allocated to PE, Harvard has come under pressure as its sponsors have struggled to provide the school with liquidity

• Apple is bouncing from Beijing to India. Apple announced that it “aims to source all U.S. iPhones from India” by the end of next year. The move away from China comes after Trump tariffs wiped $700B from Apple’s market cap. After decades of investment in the country, the company manufactures the majority of its devices via Chinese third parties like Foxconn

• xAI is in talks to raise $20B. The deal would value the company at $120B, with potential use of proceeds to pay down some of the debt Elon used to take Twitter private. If successful, the valuation would mark the second-largest startup funding round of all time, though still well below OpenAI’s $40B financing

• Boots is preparing to sell $4.25B of debt. GS is leading the deal for the UK Pharmacy part of Sycamore’s acquisition of Walgreens. Loan and bond markets slowed after Trump announced tariffs, but transactions like Boots’ signal acceleration of some activity

• Toyota may complete a $42B buyout of a key supplier. Toyota Motor Corp.’s Chairman proposed a purchase of Toyota Industries (a textile and car parts manufacturer) at a roughly 40% premium. The possible acquisition could be the latest in a wave of M&A in Japan

• Republicans may scrap the US audit regulator. Hoping to deliver on Trump’s deregulatory agenda, GOP members of the House Committee on Financial Services proposed shutting down the Public Company Accounting Oversight Board and folding its responsibilities into the SEC. The PCAOB formed two decades ago after Enron collapsed

• U.S. Stock Uncertainty: Franklin Templeton’s CEO warned that institutional investors are ditching U.S. equities. Meanwhile, Norway’s sovereign wealth fund is looking to double down on U.S. equities

• Jersey Mike’s has a new Chef. Former CEO of Wingstop Charlie Morrison is taking the reins at the Blackstone backed sandwich chain. Jersey Mike’s currently operates 3,000 locations and is looking to expand abroad

• Clearlake is in the market. Clearlake has extended fundraising of its latest PE fund, raising $13B thus far vs. a target of $15B. The extension until November is another indication of PE firms struggle to fundraise right now, but also representative of the portfolio company specific issues Clearlake has faced

• Saks is weighing a new debt raise. Struggling with economic uncertainty and tariffs, the retail chain is evaluating a $300mm FILO. Saks Fifth Avenue acquired Neiman Marcus for $2.7B only a handful of months ago. The 11% bonds due in ‘29 now trade at a 6-handle (around 65 cents)

• Harvey Schwartz’s Carlyle plans to use their DC HQ to their advantage: Schwartz is moving key meeting back to DC, and is making a renewed push towards defense investing

• GTCR may sell Cedar Gate Technologies. The data platform for the healthcare industry is hoping to earn a valuation of >$1B. Recently, the Chicago-based sponsor has launched a series of successful exits, breaking from rivals who have held onto assets for longer, fearful of reduced valuations

• MSG Networks restructures: The Knicks and Rangers broadcaster has agreed with lenders to restructure its debt with a new $210mm TL due 12/29, avoiding a near bankruptcy. The deal is a lifeline for MSG which failed to pay off its existing facility in October

• TA Associates is exploring taking a large stake in Kline Hill Partners. Kline Hill manages $4.2B. Sixth Street, Bridgepoint, First Eagle, and Tikehau were all also interested in buying a stake in the Connecticut-based secondaries-focused firm

• Axonic Capital is exploring strategic options. Specializing in residential and commercial MBS, “mispriced, overlooked or distressed” CRE, ABS, and systematic fixed income, the $6.3B fund may sell a controlling stake

M&A Transactions💭 

Splash Car Wash received an undisclosed amount of development capital from AEA Investors. The transaction was supported by $202.5M of debt financing.

Pacific Premier Bank (NAS: PPBI), provider of banking products, has reached a definitive agreement to be acquired for $2.281B by Columbia Banking System (NAS: COLB). EV/Net Income was 15.65x and EV/Revenue 4021x. Keefe, Bruyette & Woods advised on the sale.

Infocom, provider of information technology services, has reached a definitive agreement to be acquired for $374.18M by NS Solutions (TKS: 2327). UBS Group advised on the sale.

The Rapid Solutions Business of Amentum Services (NYS: AMTM) has reached a definitive agreement to be acquired for $360.0M by Lockheed Martin (NYS: LMT).

Yox Net-a-Porter Group, retailer of clothing, was acquired for $612.31M by Mytheresa.com (NYS: MYTE). Goldman Sachs advised on the sale.

HarborOne Bank (NAS: HONE), a bank holding company, reached a definitive agreement to be acquired for $490.0M by Eastern Bank (NAS: EBC). EV/Net Income was 19.14x and EV/Revenue was 2.91x.

Andlauer Healthcare Group (TSE: AND), an investment holding company, has reached a definitive agreement to be acquired for $1.557B by United Parcel Services of America (NYS: UPS). EV/EBITDA was 12.97x and EV/Revenue was 3.28x.

AEON Delight, a Japanese provider of facility management services, was acquired for $744.93M by Aeon (TKS: 8267).

The North American School Bus Business of National Express has entered into a definitive agreement to be acquired for $608.0M by I Squared Capital. EV/EBITDA was 4.98x.

Markforged (FRA: 4WL0), 3D metal manufacturing, was acquired for $168.41M by Nano Dimension (NAS: NNDM). EV/Revenue was 1.98x. Evercore Group advised on the sale.

Private Placement Transactions💭 

Westfield Capital Management, provider of investment advisory and management services, received $103.0M of financing from Monex Group. J.P. Morgan advised on the transaction.

Hexin Medical, manufacturer and developer of magnetic levitation artificial heat,, raised over $100.0M of Series D venture funding led by Prosperity7 Ventures, Co-Stone Capital, and Loyal Valley Capital.

Flow Life, an Adam Neumann backed operator of a real estate company, raised $100.0M of Series B venture funding led by Andreesen Horowitz at a pre-money valuation of $2.4B.

Electra, developer of alternative steelmaking technology, raised $186.0M through a combination of Series B and Series B-1 Venture funding led by Temasek Holdings and Capricorn Investment Group at a pre-money valuation of $240.0M.

Yangtze Memory, developer of 3D NAND flash memory chips, raised CNY 1.6B of venture funding from Wenming Investment at a pre-money valuation of CNY 160.02B.

Odds of the Day 🍒 

Kalshi traders are pricing in 3 rate cuts in 2025.

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Noteworthy Chart 🧭

Meme Cleanser 😆 

Until next time!

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