The Week Ahead - Feb 10th

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The Week Ahead Of Us 🔍

Welcome back!

We delayed Sunday Night’s piece to Monday morning given the Super Bowl. What an absolute trashing by the Eagles! Hope you don’t mind. But that gives us a lot more to cover today! Let’s get into it.

Here’s a look at earnings this week.

• Monday: McDonalds

• Tuesday: Coca-Cola, S&P Global, Shopify, Marriott International, DoorDash, Super Micro Computer, Lyft

• Wednesday: Cisco, CVS Health, Robinhood, Reddit, Restaurant Brands International

• Thursday: Applied Materials, Palo Alto Networks, John Deere, Duke Energy, AirBnB, Coinbase, GE Healthcare, DraftKings, Fannie Mae

Here’s a look at economic data this week.

• Wednesday: CPI (0.3%, 2.8% y/y), Core CPI (0.3%, 3.1% y/y)

• Thursday: Initial jobless claims, PPI (0.3%), Core PPI

• Friday: U.S. retail sales (0.0%), Industrial production (0.3%), Business inventories (-0.1%)

Earnings Corner 📜 

Trending Up 📈 

Eli Lilly (LLY) reported mixed results, with strong EPS, but revenue falling short of estimates. GLP-1 weight loss drug Mounjaro underperformed expectations for the second consecutive quarter, with sales of $3.53B (vs. $3.62B expected). Mgmt. attributed the shortfall to lower realized prices. However, Eli Lilly also noted that Zepbound is the leading drug in the U.S. GLP-1 market and moved up the timeline several months for its next-gen weight loss drug Retatrutide. Mgmt. released a Q1 outlook in line with expectations. The stock was up 5.1% at Friday’s close

Affirm (AFRM) reported earnings that beat estimates. Gross merchandise volume was up 35% y/y, while revenue managed to outpace at 47%. Affirm’s consumer base grew 23% to 21MM, as partnerships with Apple, Amazon, and Shopify helped draw users to its buy now, pay later services. Affirm also saw success with its debit card, growing active users 136% to 1.7MM. The stock was up 21.8%

Pinterest (PINS) reported earnings that beat estimates, with revenue of $1.15B up 18% y/y and exceeding $1B for the first time. Monthly active users rose 11% y/y to a new high of 553MM. Q1 revenue guidance of $837MM-$852MM also exceeded analysts’ expectations of $836MM. The stock was up 19.1%

Cloudflare (NET) reported earnings that beat estimates. Mgmt. noted the firm is well-positioned to profit from the AI inference market and is showing early signs of traction with enterprise customers. The stock was up 17.8%

Peloton (PTON) reported mixed results, as revenue beat estimates, but net losses were larger than expected. Mgmt. announced it will cut costs through 2025 but hopes to see sales growth return in the long term. Adj. EBITDA of $58.4MM blew away expectations of $26.7MM, as Peloton cut sales and marketing costs by 34% y/y and total operating expenses by 25%. Mgmt. projects Q3 adj. EBITDA of $70MM-$85MM (vs. $50.4MM expected). The stock was up 10%

Philip Morris International (PMI) reported earnings that beat estimates. Mgmt. projected U.S. ZYN shipmentsto grow 34%-41% in 2025, and guided to FY EPS above estimates. The stock was up 9.5%

Hershey (HSY) reported earnings that beat estimates, as it was able to offset rising cocoa commodity prices with price increases. The stock was up 6%

Trending Down 📉 

Amazon (AMZN) reported earnings that beat estimates, with revenue of $187.79B up 10% y/y (vs. $187.3B expected) and EPS of $1.86 (vs. $1.49 expected). AWS revenue was in line with expectations at $28.8B, while advertising came in at $17.3B (vs. $17.4B expected). Mgmt.’s Q1 guidance fell significantly short of expectations, projecting sales of $151B-$155.5B (vs. $158.5 estimated), due to the large, unfavorable impact of foreign exchange rates. The stock was down 4.1% at Friday’s close

Honeywell (HON) reported earnings that beat estimates. Mgmt. also announced the conglomerate will be breaking into 3 entities – aerospace, automation, and advanced materials – 3 months after activist hedge fund Elliot Management began pushing for the separation. Analysts expect the first two units could be valued at $104B and $94B respectively, with the separation taking place in the second half of 2026. Mgmt. released downbeat 2025 EPS guidance of $10.10-$10.50 (vs. $10.93 expected). The stock was down 7.6%

Bristol Myers Squibb (BMY) reported earnings that beat estimates. Mgmt. announced it will be cutting $2B in costs by the end of 2027, as a part of BMY’s path to long-term growth. The stock was down 5.3%

ConocoPhillips (COP) reported earnings that beat estimates. However, despite high volumes, EPS fell due to lower oil prices in 2024. The stock was down 2.2%

Today’s Headlines 🍿 

• President Trump will announce reciprocal tariffs this week and is planning 25% tariffs on steel and aluminum imports effective today. It’s unclear what these reciprocal tariffs will entail, but it will presumably impact “every” U.S. trading partner and marks a major escalation of his campaign to shift the balance of the global economy. As for the aluminum imports, these mainly come from Canada, the Untied Arab Emirates, and China

• Trump has made some questionable remarks regarding U.S. treasury payments. Trump noted, "It could be that a lot of those things don't count. In other words, that some of that stuff that we're finding is very fraudulent, therefore maybe we have less debt than we thought." Critics initially thought this was in reference to U.S. treasuries, which drew confusion over a potential default

• Trump is looking into ending carry and expanding SALT. The White House’s latest tax proposal includes an expansion of state and local tax deductions, an elimination of the PE favorite carried interest tax break, and an end to taxes on Social Security payments, tips, and overtime

• Consumer Financial Protection Bureau staff have been told to work remotely as their headquarters is closed through the 14th. All work has been suspended, including supervising financial firms. This comes as Elon Musk’s DOGE is taking a hard look at the agency

• January job gains were soft but solid. The U.S. added 143k jobs in January driving the unemployment rate down to 4%. The growth pales in comparison to the 307k December jump

• Were Super Bowl commercials even funny this year? Here’s the live tracker and here’s the recap on Super Bowl ads, as critics and viewers digest what they liked and what they hated

• Alaskan plane crash has been recovered. A week after 67 people were killed in a midair collision between an American Airlines jet and an army helicopter in Washington, the US Coast Guard announced that the wreckage of small commercial plane were found in Alaska. Three bodies were found and the remaining 7 individuals are presumed dead

• Oaktree is subbing in for Nomura: Howard Marks investment firm is reportedly in talks to become the main lender to B. Riley. The L.A.-based financial services firm has been struggling to stay afloat for nearly two years and owes roughly $125mm to the Nomura led lender group

• KKR calls out private credit’s “iPhone moment”: According to the firms top credit managers, 2025 marks a seismic shift in the lending market with the convergence of public and private markets

• Citi is bucking the trend of 5 days in the office, a move that CEO Jane Fraser coordinated due to the success in her career. She previously had time to have kids through flexible workplace conditions, so has instituted this same policy in order to make Citi a magnet for ambitious working moms

• Judge blocks DOGE access to Treasury: A New Year federal court temporarily blocked Elon Musk’s agency from accessing payments data over concerns that it would lead to the disclosure of sensitive information. The ruling was a response to action brought by 19 Democratic state attorneys-general

• DeepSeek is limiting access following a large jump in demand. The Chinese AI startup announced that limitations to its server capacity will require it to restrict access to its programming. The company’s services have been overwhelmed since it unveiled its competitor to OpenAI’s ChatGPT in January

• Amazon Prime will have NFL playoff rights through 2033. Three years into its tenure with Thursday Night Football, the company hit a record 13.2mm viewers in 2024. The NFL has the right to opt-out of other existing media contracts after the 2029, when the league might consider expanding its relationship with Amazon

• Roblox is under “active investigation” by the SEC. The blockbuster multiplayer video-game service has faced scrutiny over children’s safety on the platform. Hindenburg Research published a report in October which reiterated such concerns and suggested the company was juicing its numbers

• Nippon has given up on US Steel: Trump announced that the Japanese firm had dropped its plan to by the Pittsburgh producer but had plans to “invest heavily” in the company. Trump said he will “be there to mediate and arbitrate” negotiations

• Bloomberg calls out Pimco: A recent piece warned that the fund giant has been slow to tap into the private credit boom and the firm now risks getting left in the dust by rivals

M&A Transactions💭 

H.I.G. Capital is acquiring Converge Technology Solutions in a $908mm deal that will merge it with Mainline Information Systems, an H.I.G. portfolio company. The deal will close in 2Q25.

Shibaura Electronics Company (TKS: 6957), produces and sells glass-encapsulated NTC thermistors, has reached a definitive agreement to be acquired for $427.53M by Yageo (TAI: 2327). EV/EBITDA was 9.21x and EV/Revenue was 1.95x.

Northern Superchargers, operator of a sports team based in London, was acquired for $123.43M by Sunrisers Hyderabad.

Milacron Holdings, manufacturer and distributor of plastic processing equipment, has entered into a definitive agreement to be acquired for $287.0M by Bain Capital. EV/EBITDA was 8.79x and EV/Revenue was 2.2x.

Mattress Firm, operator of a chain of retail stores, was acquired for $5.0B by Tempur Sealy International (NYS: TOX). Barclays, Jefferies, and Goldman Sachs advised on the sale.

Generation Genius, developer of a streaming video platform, was acquired for $100.0M by Newsela.

FICT, manufacturer of optical interconnects and components, has entered into a definitive agreement to be acquired for $638.99M by FormFactor. BDA Partners advised on the sale.

CB Group Management (TKS: 9852), engaged in trading of daily necessities, reached a definitive agreement to be acquired for $112.42M by C Holdings. EV/EBITDA 3.71x and EV/Revenue was 3.11x. Daiwa Securities Group advised on the sale.

Avid Bioservices, a clinical-stage biopharmaceutical company, was acquired for $1.1B by GHO Capital and Ampersand. EV/Revenue 7.31x. Moelis & Company advised on the sale.

SamyRoad, developer of a marketing platform, entered into a definitive agreement to be acquired for $310.61M Bridgepoint Group.

Revance Therapeutics, a biotechnology company, was acquired for $383.0M by by Crown Laboratories. EV/Revenue was 1.49x. Leerink Partners and PJT Partners.

Radio Fuels Energy, a mineral resource company, was acquired for $120.0M by Palisades Goldcorp. EV/EBITDA was 47.15x and EV/Net Income was 41.63x. Fort Capital Partners advised on the sale.

QBurst Technologies, provider of product development and consulting services, has entered into a definitive agreement to be acquired for $2.0B by Multiples Alternate Asset Management and Other Undisclosed Investors. BDA Partners advised on the sale.

One Grove, a ultra large complex in 165 Airport-aero, was acquired for $1.58B by National Pension Service. In a deal that valued the company at $3.95B.

Evidentia Group, operator of an asset management firm, has reached a definitive agreement to be acquired for $199.32M by Generation Development Group (ASX: GDG).

ITC (NES: ITC) reached a definitive agreement to acquire a 43.8% stake in Ample Food for $1.31B.

Altus Power (NYS: AMPS), a developer, owner, and operator of large-scale photovoltaic and energy storage systems, entered into a definitive agreement to be acquired for $2.2B by The Rise Fund. EV/EBITDA was 17.88x and EV/Revenue was 11.83x. Moelis & Company advised on the sale.

Registered Agent Solutions, provider of legal services, reached a definitive agreement to be acquired for $415.0M by Wolters Kluwer (AMS: WKL). EV/Revenue was 7.89x.

Morrison Express, provider of logistics services, has reached a definitive agreement to be acquired for $900.0M by SG Holdings (TKS: 9143).

Mitsubishi Tanabe Pharma, manufacturers of pharmaceuticals, has entered into a definitive agreement to be acquired for $4.3B by Bain Capital.

Encore Fire Protection, provider of fire protection services, entered into a definitive agreement to be acquired for $1.8B by Permira.

Converge Technology Solutions (TSE: CTS), building a platform of regionally focused hybrid IT infrastructure providers, has entered into a definitive agreement to be acquired for $897.9M by Mainline Information Systems. EV/Revenue was 0.48x. Houlihan Lokey advised on the sale.

Private Placement Transactions💭 

Semgrep, developer of a coding platform, raised $100.0M of Series D venture funding led by Menio Ventures.

Leading Mark, operator of an online hiring platform, raised $1.04B of venture funding through a combination of debt and equity led by Femto Partners.

X Energy, a leading developer of advanced SMR and fuel technology, raised $700.0M of Series C venture funding led by The Climate Pledge and Amazon.com.

Wealthon, operator of a fintech company, raised $129.52M of venture funding through a combination of debt and equity led by 3TS Capital Partners.

Nhi Dong 315, operator of a chain of pediatric clinics, raised $135.0M of venture funding from GIC Private.

Odds of the Day 🍒 

Prompt

Kalshi traders are pricing in a 4.1% unemployment rate.

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

Noteworthy Chart 🧭

Meme Cleanser 😆 

Finance Merch Referrals ☕️ 

Until next time!

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