| | | | | A fast food giant’s loyalty-driven sales surge is causing its stock to rise, an industrial automation leader is soaring 8% on a profit rebound, and a Swiss biotech firm is skyrocketing after announcing a major merger. Here’s what’s moving the markets today. | If you’re not looking for more emails from us, just click here to unsubscribe! | |
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| | | | | What to Watch | Earnings: | Vertex Pharmaceuticals Incorporated [VRTX]: Aftermarket Arch Capital Group Ltd. [ACGL]: Aftermarket Cincinnati Financial Corporation [CINF]: Aftermarket Credicorp Ltd. [BAP]: Aftermarket | Economic Reports: | None scheduled |
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| | Fast Food | McDonald's Falls Short on Q4 Earnings But Growth in Loyalty Sales Is Causing Stock to Rise | | McDonald's [MCD] wrapped up 2024 on a disappointing note. The fast food chain reported lower-than-expected earnings, sluggish sales, and the fallout from an E. coli outbreak today. | The company’s revenue for the fourth quarter is down 0.28% year-over-year to $6.39 billion, missing analyst expectations of $6.45 billion. Earnings per share are at $2.80, short of the anticipated $2.84. | Despite the weak performance, McDonald's is witnessing a surge in digital engagement. | Sales through its loyalty program are up 30% year-over-year to $30 billion, with 175 million active users across 60 markets. | The company aims to leverage this momentum by refining personalized promotions and optimizing its menu. The success in digital sales is causing its stock to rise 1.8% in premarket trade. | Global same-store sales are up 0.4%, defying forecasts of a 0.91% decline. However, U.S. same-store sales are down 1.4%, weighed down by the health crisis that hit in late October. | While foot traffic showed slight improvement, declining average spending per order remained a challenge. | Looking ahead, McDonald's is banking on its McValue platform to reinvigorate customer interest. | The lineup, expected to roll out in 2025, will feature affordable menu options like chicken tenders and snack wraps to attract budget-conscious diners. | Franchisees remain hopeful that higher customer volume will offset potential losses, though concerns persist over discount-driven business strategies. |
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| | Industrial Automation | Rockwell Automation Surging on Improved Profit Outlook as Orders Rebound | | Rockwell Automation’s [ROC] stock is soaring this morning, climbing over 8% on a stronger-than-expected earnings report for the first quarter of fiscal 2025. | The industrial automation leader’s adjusted earnings per share of $1.83 is better than analyst projections of $1.57. | However, revenue is slightly below expectations at $1.88 billion, reflecting an 8.4% decline from the previous year. | Despite the drop in revenue, Rockwell benefited from improved cost efficiency and operational discipline, leading to better-than-anticipated profit margins. | Orders increased approximately 10% year-over-year and saw mid-single-digit sequential growth, signaling a rebound in demand. | The company reaffirmed its adjusted earnings forecast for the fiscal year, maintaining a range of $8.60 to $9.80 per share, in line with market expectations. | However, projected sales growth is revised downward to reflect a greater impact from foreign currency fluctuations. | Annual Recurring Revenue (ARR) is up 11% compared to the previous year, demonstrating continued strength in Rockwell’s software and services division. | Positive order momentum is particularly notable in the U.S. market. | Although economic uncertainty continues to influence capital spending decisions, Rockwell is optimistic that its cost-cutting measures and focus on profitability will sustain earnings growth throughout 2025. |
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| | | | Retail | Loews' Q4 Earnings Down Due to Insurance Losses, Pipeline Business Gains | | Loews Corporation’s [L] stock is slipping today, down 1.81%, due to a significant drop in its fourth-quarter earnings. | The fall is driven by higher catastrophe-related losses and weaker investment performance at its insurance subsidiary, CNA Financial. | The company’s net income of $187 million, or $0.86 per share, for Q4 2024 is down sharply from $446 million, or $1.99 per share, in the same quarter last year. | Revenue, however, is up, reaching $4.55 billion from $4.26 billion year-over-year. | CNA Financial, Loews’ largest business unit, saw its net income shrink to $19 million from $336 million a year earlier, hurt by increased insurance claims and investment losses compared to prior gains. | A previously disclosed $265 million after-tax pension settlement charge also weighed on overall earnings. | Excluding this charge, Loews said that its net income would have been $452 million. | On a brighter note, Boardwalk Pipelines delivered stronger year-over-year results, benefiting from higher contract rates and completed expansion projects. | During the quarter, Loews repurchased 4.2 million shares for $349 million, bringing total buybacks for 2024 to 7.7 million shares worth $611 million. |
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| | Movers and Shakers | | NLS Pharmaceutics Ltd. [NLSP] - Last Close: $1.87 | NLS Pharmaceutics is a Swiss clinical-stage biotech company that develops therapies for neurological and metabolic disorders like narcolepsy, ADHD, and even diabetes. | Its shares are surging (50%+) in premarket after announcing a merger with Kadimastem to launch DOXA, a groundbreaking diabetes treatment platform. | My Take: DOXA is in a high-growth, high-competition market. If it delivers strong clinical results, it could redefine diabetes care. However, there are risks involved with clinical stage biotech firms which should not be ignored. |
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| monday.com Ltd. [MNDY] - Last Close: $258.24 | monday.com is a popular work management platform for businesses. Its shares are rising 23% in early trade after delivering strong Q4 results. | The firm’s revenue of $268 million is up 32% YoY. It also scored a record $40.3 million in operating income with a 15% margin. | Investors are also excited about the launch of its AI-powered Digital Workforce automation product. | My Take: monday.com’s AI push has the potential to position it for long-term growth. However its net margin fell to -4.8% in the third quarter which is a spot of concern. Keep a close eye on this stock. |
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| Axsome Therapeutics, Inc. [AXSM] - Last Close: $105.76 | Axsome Therapeutics is a biopharma company specializing in central nervous system (CNS) disorders. | Its stock is up 13% before the opening bell today on the announcement that it is settling a patent dispute related to its FDA-approved lead drug AUVELITY with Teva Pharmaceuticals. | The deal prevents a generic version of the drug from entering the market until at least 2038. | My Take: The settlement secures AUVELITY’s market dominance for over a decade, giving Axsome a stable revenue stream and making AXSM a good stock to keep your eye on for the future. |
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| | | | | | That’s all for today. Thank you for reading. If you have any feedback, please reply to this email. | Best Regards, | — Adam Garcia
Elite Trade Club |
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