Mid-Morning Look

Tuesday, April 22, 2025

U.S. stocks with an early rebound, trying recover after tumbling yesterday as investors focus turns to Q1 earnings results, as tariff headlines and trade deal agreements have yet to materialize, leaving markets with uncertainty. President Donald Trump’s mounting criticism of Federal Reserve Chair Jerome Powell caused a sharp selloff on Monday. After all S&P 500 sectors ended sharply lower on Monday, all eleven sectors are currently higher this morning, led by the biggest bounces in Consumer Discretionary (XLY) ahead of TSLA earnings tonight as well as Financials (XLF) and Utilities (XLU). Bitcoin prices rise more than 3%, popping above $90,000 for the first time since March 7^th and giving some life to Bitcoin miners and other crypto related plays/assets. June gold prices hit all-time highs above $3,500 this morning for the first time but seeing a little profit taking since. In stock news, defense contractors NOC, RTX, LMT under pressure early after earnings and guidance disappoint; in Medtech, DGX, DHR shares rally on results/guidance; GE, MMM, PNR among early leaders in industrials after their results; KMB slides on lower outlook for year in consumer products; VZ slides on subscriber losses in telecom and solar stocks surging (FSLR, SEDG, ENPH) after U.S. trade officials finalized steep tariff levels on most solar cells from Southeast Asia. In macro news, the IMF cut its 2025 global GDP growth forecast to 2.8% from 3.3%.

• In Retail: OXM said it expects less than 35% of goods from China in fiscal 2025 and expects less than 10% of goods from China in fiscal 2026; in research, Goldman Sachs downgraded Macy’s (M) to Neutral with $12 PT and CURV downgraded to Sell with $4 PT as the firm reduces its outlook for the US apparel and Softlines sector to reflect a more cautious macro backdrop as their economists have reduced their US GDP growth outlook to 0.5% in 2025 from 2.5% in 2024 on a Q4/Q4 basis and now see a 45% probability of recession. The firm said they continue to view TJX and BURL as attractive in a more defensive environment and see brands with momentum and pricing power as relatively attractive, such as TPR (Buy), AS (Buy), and RL (Buy).
• In Casinos/Online gaming: Stifel previewed Q1 results saying forecast Q1 earnings beat for AGS, misses for LNW , and inline for IGT which remains their top pick given dislocated risk-reward into Italian Lotto selection & flight-to-safety support. In online gaming, lowers ests for DKNG and FLUT as forecast Q1 Adj. EBITDA misses for its U.S. OSB/iCasino pure-play operator coverage, following another stretch of unfavorable game outcomes in March (but still are two favorites longer-term they say). SRAD was double upgraded to Buy from underperform at Bank America citing higher confidence in SRAD’s revenue outlook, increasing cost visibility and margin leverage and option value from the IMG Arena transaction and AI adoption.
• In Banks: BOKF 1Q25 earnings missed consensus primarily on lower fee income, though partially offset by lower provisioning due to loan shrinkage. 2025 guidance was mostly unchanged except for the fee income outlook, which was adjusted slightly lower; CADE posted a good PPNR beat, stable credit and forward guidance is unchanged; DCOM Q1 EPS topped views and net interest margin increased to 2.95% for the first quarter of 2025 compared to 2.79% for the prior quarter; WAL Q1 lower credit costs offset a modest PPNR shortfall, resulting in a modest beat to consensus. Little change to 2025 guidance, which actually points to modest PPNR upside to consensus; ZION shares dipped following mixed earnings results.

• CALX +14%; shares rallied on earnings as Q1 EPS $0.19 topped the est. $0.13; Q1 revs $220.2M vs. est. $206.9M; announces additional $100M share repurchase program; forecasts Q2 adj EPS $0.18-$0.24 vs. est. $0.16 and revs $221M-$227M vs. est. $211M.
• DGX +7%; Q1 adjusted EPS $2.21 tops ests $2.15 on better revs $2.65B, saying delivered strong revenue growth of approximately 12%, including nearly 2.5% in organic growth
• EFX +11%; Q1 EPS of $1.53 topped the $1.40 estimate and unveiled a $3 billion buyback program, while only maintaining its full-year 2025 outlook despite the strong first-quarter results.
• FSLR +13%; solar shares jump (SEDG, ENPH) after U.S. trade officials finalized steep tariff levels on most solar cells from Southeast Asia. The case was brought last year by Korea’s Hanwha Qcells, Arizona-based First Solar; Tariffs target major Chinese firms like Jinko Solar and Trina Solar; tariffs go as high as 3,500%.
• GE +3%; as Q1 adj EPS $1.49 vs. est. $1.27; Q1 revs $9B in-line with consensus; Q1 orders $12.3B; kept its 2025 profit and revenue forecasts unchanged but said they now assume the impact of announced tariffs.
• MMM +7%; as Q1 EPS $1.88 vs. est. $1.77 and sales $5.8B, down 25% y/y from $7.72B but above ests. $5.75B; now expects a tariff-related negative impact of $0.20-$0.40 on its full-year adj profit forecast of $7.60 to $7.90; said increasing full-year share repurchases to about $2B, board authorization at $7.5B.
• PNR +7%; Q1 sales of $1.01B topped ests $988.9M on better EPS ($1.11 vs. est. $1.01) helped by robust demand for its aftermarket pool maintenance and repair services; narrowed its profit outlook for 2025 from continuing operations to approximately $4.27-$4.42 per share, vs. previous view $4.37-$4.52 per share.

• KMB -2%; Q1 adj EPS $1.93 tops consensus $1.89 on lighter sales of $4.8B vs. consensus $4.89B; Q1 organic sales -1.6%, below est. +1.4%; forecast Q1 slowdown in North America consumption.
• MEDP -8%; reported a mixed 1Q, with Revenue and EPS Ahead, while guidance was raised for Rev + EPS as well, with the bottom line also benefitting from lower interest/tax/share count, while EBITDA guide was maintained. Focus centered around the booking miss, with Net New Business of $500M (-7% vs. est.)
• NOC -11%; shares fell after Q1 revs $9.47Bmiss the est. $9.95B; cuts FY25 adjusted EPS view to $24.95-$25.35 from prior $27.85-$28.25 (est. $28.05) while backs FY25 revenue view $42B-$42.5B.
• VZ -2%; Q1 EPS and revs topped consensus ests, but noted lost -289K monthly bill-paying wireless subscribers in Q1, more than the estimated loss of -166K subscribers by analysts and said saw a higher churn as it raised monthly prices for its customizable myPlan accounts by more than $3 per line