March 9th - The Week Ahead

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The Week Ahead Of Us 🔍

Welcome back!

We had a chaotic past week, driven by zig-zagging on tariffs, inflationary warnings from Scott Bessent and Howard Lutnick, and a pool of Wall Street and Corporate CEOs voicing concern about business planning. It seems clear that the next few months are going to be highly volatile. The Wall Street Rollup team is here to guide you through this.

As of now, Nasdaq futures are -0.95%, S&P futures are off -0.75%, and Bitcoin is trading at $80.8k.

Let’s get into it.

Here’s a look at earnings this week.

• Monday: Oracle, StandardAero, Vail Resorts

• Tuesday: Viking Holdings, Dick’s Sporting Goods

• Wednesday: Adobe, Crown Castle, Lennar, Williams-Sonoma, UiPath, SentinelOne

• Thursday: Dollar General, Ulta Beauty, Docusign, ServiceTitan

Here’s a look at economic data this week.

• Tuesday: Jan. Job openings (7.6mm previously)

• Wednesday: Feb CPI (0.3% m/m est. 2.9% y/y est.) Feb Core CPI (0.3% m/m est. 3.0% y/y est.)

• Thursday: Initial jobless claims (220k est.), Feb PPI (0.3% est.)

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Earnings Corner 📜 

Trending Up 📈 

Kroger (KR): Better than expected earnings offset Kroger’s soft outlook. Revenue fell 7.4% y/y to $34.31B, slightly below expectations, but 4Q EPS of $1.14 exceeded forecasts of $1.11. Digital sales grew 11% in Q4 and 10% for the full year, totaling over $13B. Kroger projects FY25 EPS between $4.60-$4.80, indicating a potential return to growth. This is the first quarter since the proposed merger with Albertsons was called off, and last week their CEO and Chairman resigned after a personal conduct probe. Regardless, Kroger shares jumped 4.6% on Friday ​

Broadcom (AVGO): Chipmaker, Broadcom, saw solid AI demand, with Revenue of $14.92B, exceeding estimates of $14.62B and with Adj. EPS of $1.60 surpassing analyst expectations of $1.51. AI-related revenue surged 77% y/y to $4.1B. For 2Q, AVGO forecasts revenue of $14.9B, in line with estimates. Shares rose 8.6% post earnings.

Gap (GPS): Comparable sales increased across key brands with Gap up 7%, Banana Republic up 4%, and Old Navy up 3%. EPS was a nice beat at $0.54, vs. estimates of $0.38. The company reported minimal exposure to tariffs, with less than 10% of products sourced from China. Their 2025 guide of 1%-2% revenue growth was solid. Shares surged 19% post-earnings. ​

Trending Down 📉 

Costco (COST): Costco, which has notoriously traded at a high PE, was hit hard after mixed 2Q results and caution around consumer spending and tariffs. Net sales reached $62.53B, up 9.1% y/y, slightly above expectations, while EPS was $4.02, missing estimates of $4.09. Comparable sales grew 6.8%, surpassing the anticipated 6.4% increase. E-commerce sales saw a robust growth of 20.9%. Despite these figures, COST shares declined 5% post-earnings after their CFO called shoppers “very choiceful” and said he expected the trend to ramp up due to inflation and potential tariffs

Hewlett Packard Enterprise (HPE): 1Q earnings and 2Q guidance fell short of Wall Street expectations due to competitive server market dynamics. HPE expects 2Q EPS between $0.28-$0.34 on revenue of $7.2B-$7.6B, below analyst projections of $0.50 EPS on $7.92B of revenue. The company announced a cost-cutting program, aiming to reduce headcount by about 5% (3,000 jobs). Shares declined 12% following the announcement.

Today’s Headlines 🍿 

• “There aren’t enough desks for everyone.” JPMorgan’s 5-day return to office policy is not going well, with employees complaining about not having enough desks, spotty Wi-Fi, and sick co-workers

• Scott Bessent defended tariffs, stating that “access to cheap goods is not the essence of the American Dream.” The Treasury Secretary’s comments come after the 25% tariffs on imports from Mexico and Canada went live. However, there’s a one-month exemption on certain agricultural products and automobiles

• Elon Musk is calling for the US to quit NATO. Demanding America stop paying for the defense of Europe, the DOGE Chief has ramped up the Trump Administration’s criticism of the mutual defense organization, especially of countries not meeting their defense spending benchmark of 2% of GDP

• Chinese investors are backing Musk. After Elon joined the inner circle of the White House, Beijing-based asset managers have been plowing tens of millions into the X owner’s non-public ventures including xAi, Neuralink, and SpaceX. These investors have attempted to shield their identities with unique financial vehicles

• CEOs are worried. Former Walmart US Chief Executive Bill Simon Odland joined a panel on Friday to share that C-Suites across the country are concerned about uncertainty from tariffs and are pulling back on investments and hiring as a result

• Indian stocks lag. After an unprecedented sell-off brought down Indian equities by $1.3T, global hedge funds are reluctant to return to the country, waiting on accelerating consumer spending and increasing corporate investment

• Cursor may fetch a $10B valuation. Anysphere Inc., the startup behind the AI coding tool, is in talks to raise hundreds of millions of dollars led by Josh Kushner’s Thrive Capital. Cursor reached $100mm in ARR in a year, making it one of the fastest-growing startups ever

• SBF live on air. Sam Bankman-Fried appeared on a podcast with Tucker Carlson where he shared that Diddy is apparently a pretty nice guy behind bars. The disgraced crypto mogul was sent to solitary confinement as punishment for doing the podcast from prison

• Employbridge nets 100% participation in a fully pro rata LME that was made possible by ‘Mitel-like’ docs. An ad-hoc group of lenders advised by Gibson Dunn and Lazard offered all lenders pro rata participation in a $325mm new money super priority TL, with an exchange offer of 94.5

• A recent IPO fell 40%: Shares of LNG Exporter, Venture Global, fell 40% after earnings. This comes after releasing results that show slowing sales and export volumes, as well as an unexpected $1.3B increase in new terminal construction costs.

• Equities in Dallas: Goldman Sachs is strongly suggesting Managers join the Salt Lake City or Dallas offices. The push comes amidst a broader cost-cutting campaign and focus on cultivating talent outside Manhattan

M&A Transactions💭 

GardaWorld, provider of security and cash services, was officially acquired for $9.44B by HPS Investment Partners, Oak Hill Advisors, One Investment Management, Mr. Stephan Cretier, and its management. Bank of America, Jefferies, and UBS advised on the sale.

York Holdings Company, operator of a holding company, has reached a definitive agreement to be acquired for $5.39B by Bain Capital. Mitsubishi UFJ Morgan Stanley Securities advised on the sale.

Potomac Energy Center, provider of energy generation services, has entered into a definitive agreement to be acquired for $1.0B by Blackstone.

GreenSquareDC, operator of sustainable, affordable, and scalable hyperscale and GPUaaS Data Centre cloud solutions, was acquired for $756.0M by Partners Group.

Arcadium Lithium, a pure-play lithium producer, was acquired for $6.7B by Rio Tinto (ASX: RIO). EV/EBITDA was 21.32x and EV/Revenue was 6.65x. Gordon Dyal & Co Advisory Group, Teneo Holdings, and UBS advised on the sale.

Walgreens Boots Alliance (NAS: WBA), one of the largest retail pharmacy chains in the US, has entered into a definitive agreement to be acquired for $23.7B by Sycamore Partners Management. Total considerations consists of $11.45 per share in cash and additional potential value of up to $3.00 in cash per WBA share from future monetization of VillageMD businesses.

Lucero Energy, an independent oil company, was acquired for $222.0M by Vitesse Energy. EV/EBITDA was 2.89x and EV/Revenue was 1.55x. Peters & Co., RBC Capital Markets, and Richardson Barr advised on the sale.

Private Placement Transactions💭 

Zetwerk, operator of a global manufacturing platform, raised $430.0M of venture funding led by Oriental Biotech and ARC Investment.

Flex, operator of a financial platform, raised $225.0M of venture funding through a combination of debt and equity. $25.0M of equity was led by Titanium Ventures. The transaction was supported with $200.0M of debt.

Turing, developer of a talent platform, raised $111.0M of Series E venture funding led by Khazanah Nasional at a pre-money valuation of $2.09B.

Shield AI, operator of a defense technology company, raised $240.0M of Series F1 venture funding led by Hanwha Aerospace Company and L3 Harris Technologies at a pre-money valuation of $5.06B.

Odds of the Day 🍒 

Where’s GDP going to shake out?

Kalshi traders are pricing in 1.1% growth in GDP in 1Q25.

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

Noteworthy Chart 🧭

Equity investors are getting increasingly bearish, with S&P 500 put volume nearing record levels

Meme Cleanser 😆 

Finance Merch Referrals ☕️ 

Until next time!

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