Mid-Morning Look

Thursday, August 07, 2025

U.S. stocks off to another strong start, building on yesterday’s gains as sentiment remains strong following another bump in technology and utilities today while healthcare continues to tumble, hit hard today by sharp declines in LLY after weigh loss data disappointed investors. Global equities rose, with Japanese shares hitting a record high, as upbeat earnings, growing hopes for a ceasefire in Ukraine and expectations for U.S. rate cuts boosted sentiment. Markets largely shook off U.S. President Trump’s latest tariff headlines, including an additional 25% tariff on U.S. imports from India over purchases of Russian oil and a threatened 100% duty on U.S. imports of chips (though the chip news boosting US chip stocks today). The Bank of England lowered interest rates but in a split vote, with four voting to keep rates unchanged. Plans for a meeting between U.S. President Trump and Russian President Vladimir Putin over the war in Ukraine also helped sentiment in European equities and underpinned the euro, though AP reported that they are unlikely to meet this week. The US dollar got a little bounce after Bloomberg reported Federal Reserve Governor Christopher Waller is emerging as a top candidate to serve as the Central bank’s chair among President Donald Trump’s advisers as they look for a replacement for Jerome Powell, according to people familiar with the matter. Trump advisers are impressed with Waller’s willingness to move on policy based on forecasting, rather than current data, and his deep knowledge of the Fed system. We are through 426 of the S&P 500 earnings results with an 83% beat vs 82% Last year, avg beat 16% vs 13% LY, avg miss -22% vs -21% LY and avg yr/yr earnings growth 16% vs 9% LY. Bitcoin prices rising, gold staying strong and Treasury yields flat.

• Weekly Jobless Claims climbed to 226,000 from 219,000 and above consensus 221,000; the 4-week moving average fell to 220,750 from 221,250 prior week; continued claims climbed to 1.974M from 1.936M and vs. consensus 1.950M; the insured unemployment rate unchanged at 1.3%.
• June wholesale inventories revised to +0.1% vs. consensus +0.2%; June wholesale sales +0.3% (consensus +0.1%) vs May -0.4% (prev -0.3%); U.S. June stock/sales ratio 1.30 months’ worth vs May 1.30 months.

• In Solar: RUN rises as reported Q2 contracted value and increased fiscal 2025 guidance significantly above expectations due to record storage attach rate, higher volumes, and lower operating costs; SEDG Q2 revenue rises 32% to $289.4M, beating analyst expectations of $274M and adjusted EPS beats consensus (-$0.81 vs. -$0.86 loss), indicating improved operational performance as co faced GAAP net loss due to increased operating expenses and tariff impact; SHLS upgraded from Neutral to Buy at Roth and raise tgt to $10 from $5 after the co delivered a Q2 beat/raised 2025 revenue guide/showed strong bookings/backlog.
• In Utility/Nuclear: CEG Q2 operating EPS $1.91 tops consensus $1.82 on better revs $6.1B vs. est. $4.88B; VST shares slumped after posting lower Q2 profit on higher operating and interest costs as net income of $327M was down from $467M y/y and said interest costs rose 25.7% to $303M, while total operating expenses increased about 17% to $733M; LEU was downgraded from Buy to Neutral at Bank America and raise tgt to $285 from $210 on valuation, while noting posted Q2 beat mainly driven by stronger performance of the low-enriched uranium (LEU) segment.
• In Managed care: Mizuho lowered tgts on several names, CNC to $28 from $40, CI to $330 from $384, ELV to $342 from $505, HUM to $300 from $316, MOH to $228 from $330 and UNH to $300 from $350 and lowering estimates saying although elevated cost trends were a concern heading into Q2:25, the key incremental post earnings is the lack of conviction for 2026 EPS due to shifting risk pools in both the individual health exchange (HIX) and Medicaid. Unexpected, continued pressure from Medicaid Redeterminations drove the shift in the underlying risk Pool, which resulted in increased acuity in Medicaid. This, coupled with higher utilization in HIX and Medicaid, reduces EPS visibility.
• In Chemicals: CF posted Q2 adjusted EBITDA of $761M (1% Y/Y) vs $785M consensus on positive sales volume (+3% Y/Y) and modestly higher prices; CTVA posted 2025 EBITDA guide midpoint raised to $3.80B ($3.75-$3.85B range) from $3.7B ($3.6-$3.8B) and mid-point EPS to $3.10 ($3.00-$3.20 range) from $2.82 ($2.70-$2.95) – reported 2Q25 EBITDA of $2.16B vs consensus, with an upside in Seeds (+$129M), Crop Protection (+$59M) partially offset by a shortfall in Corporate; NTR delivered an EBITDA and EPS beat, while top line was modestly below Street expectations; 2Q EBITDA of $2.49M vs $2.33B consensus as beats in Nitrogen (+$214M) and Potash (+$63M) while Phosphate (-$4M) and Retail (-$89M) fell short. 2Q25 EPS of $2.65 (+ 13% Y/Y) vs $2.45 consensus; IFF was downgraded to Hold at Oppenheimer citing the moderated 2H outlook and drag from Health headwinds extending into 2026.

• BROS +20%; as Q2 comparable store sales growth came in ahead of expectations at 6.1% and increased FY25 guidance as see adj EBITDA $285-290Mm vs est. $273.57Mm.
• CELH +24%; as the energy drink company beats estimates for Q2 results, helped by gains from its Alani Nu acquisition (reported Q2 revs $739M vs. est. $651M on better EPS $0.47 vs. est. $0.23).
• DUOL +231%; after the language learning app delivered better-than-expected revenues and paid subscribers; said daily active users jumped 40% from a year ago, to 47.7M; raised its outlook for the third quarter and full-year.
• GLW +2%; shares rose after AAPL plans to onshore 100% of iPhone and Watch cover glass production to the US as part of an expanded $2.5 billion partnership with the Gorilla Glass maker.
• NVO +8%, along with gains in VKTX and other obesity drug makers after LLY oral drug disappointed.
• PODD +11%; rises on results as beat Q2 profit and revs on strong demand for its wearable insulin pump (Omnipod revs $639M vs. est. $606M) while projects annual Omnipod revenue growth of 25% to 28%, up from a 20% to 23% growth forecast previously.
• SRPT +12%; after the US biotech reported revenue that beat estimates, which analysts attributed in part to a milestone payment for its controversial gene therapy Elevidys

• EXAS -11%; shares fell as Cologuard Sales growth drove a strong beat and raise in 2Q25, with screening growth of 18% well above Street estimate for 13% growth but shares fell amid disappointment with EXAS’ blood-based CRC strategy.
• FTNT -26%; on mixed results (prompts at least 5 analyst downgrades) after Q2 billings grew 15% Y/Y to ~$1.78B, above the Street’s $1.72B estimate (+12%), while product revenue growth of 13% Y/Y surpassed the Street’s +10% forecast, but Services revenue missed, and guidance disappoints.
• LLY -14%; shares slide as its oral GLP-1, orforglipron, delivers up to about 12% of their body weight after more than a year of treatment, a new study found, short of what some analysts were predicting: 13% to 15% or more.
• RDW -27%; shares tumble after 2Q revenue widely missed estimates ($61.8M vs. est. $80.4M), with management saying it continued to see delays in the US government’s budget approval processes; also guided FY25 revenue $385M-$445M, below consensus $430.49M.
• RL -7%; raised its annual revenue forecast after beating top/bottom line for Q1, but shares fell after the CEO said the company remains cautious about the global operating environment in the back half of the fiscal year.
• TNDM -26%; put up a +$2M top-line beat driven by OUS outperformance, while adjusted EBITDA came in -$4M below expectations; updated FY2025 sales guidance was left roughly the same but with shifting geographic expectations; saw FY25 US guide move lower to ~$700M (prior $725-730M).