Brian Nelson

Target Navigating a Highly Challenging Environment

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Image Source: TradingView By Brian Nelson, CFA On May 21, Target Corporation (TGT) reported weak first quarter results with both revenue and non-GAAP earnings per share coming in lower than expectations. Net sales dropped 2.8% on a comparable sales decline of 3.8%, while adjusted earnings per share of $1.30 compared to adjusted earnings per share of $2.03 in the first quarter of 2024. Management had the following to say about the retail environment: In the first quarter, our team navigated a highly challenging environment and focused on delivering the outstanding assortment, experience and value guests expect from Target. While our sales fell short of our expectations, we saw several bright spots in the quarter, including healthy digital growth, led by … Read more

3 Undervalued Stocks to Consider Buying Now

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Dear readers:   With the markets retracing most of their recent drawdown, we’re taking a victory lap as we didn’t panic, nor should have you. We highlighted our wait-and-see approach amidst the worst of the pullback, and we expect the Magnificent 7 (large cap growth and big cap tech) to continue to propel the markets higher, as they have done.   We’ve been busy rolling valuation models as we finetune our assumptions for a great number of companies under coverage. While doing so, we came across three undervalued stocks that are also included in the simulated newsletter portfolios. We think they’re prime for highlight.   The three stocks are UnitedHealth Group (UNH), Nvidia (NVDA) and Alphabet (GOOG). We spend a lot of time on discounted cash-flow valuation, … Read more

Walmart Talks of Higher Prices Due to Tariffs; Trump Takes Exception

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By Brian Nelson, CFA On May 15, Walmart (WMT) released first quarter fiscal 2026 results that showed revenue and non-GAAP earnings per share coming in ahead of expectations. Revenue grew 2.5%, up 4% in constant currency, while operating income advanced 4.3%, or 3% when adjusted for constant currency. Walmart U.S. comp sales increased 4.5% with particular strength in health & wellness and grocery. E-commerce grew 22% thanks in part to store fulfilled pickup & delivery and marketplace and achieved profitability in the U.S. and globally in the first quarter for the first time. Though Walmart’s performance was solid in the fiscal first quarter, the Street focused on the executive team’s commentary regarding tariffs on the conference call: We will do … Read more

Dividend Increases/Decreases for the Week of May 16

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Below we provide a list of firms that raised their dividends during the week ending May 16. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week                          Advanced Drainage Systems (WMS): now $0.18 per share quarterly dividend, was $0.16. Aimia Inc. PFD-1 (AIM.PR.A:CA): now CAD 0.3926 per share quarterly dividend, was CAD 0.3001. Bunge (BG): now $0.70 per share quarterly dividend, was $0.68. Caribbean Utilities (CUPUF): now $0.190 per share quarterly dividend, was $0.185. Chubb (CB): now $0.97 per share quarterly dividend, was $0.91. Curtiss-Wright (CW): now $0.24 per share quarterly … Read more

Dick’s Sporting Goods to Acquire Foot Locker

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Image: Dick’s Sporting Goods’ shares sold off on its announcement that it would acquire Foot Locker. By Brian Nelson, CFA On May 15, Dick’s Sporting Goods (DKS) announced that it would acquire Foot Locker (FL) in a transaction that implies an equity value of $2.4 billion and enterprise value of $2.5 billion. Foot Locker shareholders can elect to receive either $24.00 in cash or 0.1168 shares of Dick’s Sporting Goods common stock for each share of Foot Locker stock they own. Dick’s intends to finance the acquisition through a combination of cash on hand and new debt and is expected to close in the second half of 2025. Dick’s intends to operate Foot Locker as a standalone business unit within … Read more

Cisco Raises Fiscal 2025 Outlook Again

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Image: Cisco put up excellent fiscal third quarter results. By Brian Nelson, CFA On May 14, Cisco Systems (CSCO) reported better than expected third quarter fiscal 2025 results, with both revenue and non-GAAP earnings per share coming in higher than the consensus forecast. Revenue increased 11% year-over-year, while non-GAAP earnings per share increased 9% year-over-year, to $0.96 per share, above the high end of its guidance range ($0.90-$0.92). Product orders expanded 20% from the same period a year ago (9% excluding Splunk), while AI infrastructure orders taken from webscale customers exceeded $600 million. Management had the following to say about the quarter: Cisco once again had strong quarterly results with clear demand for our technologies. The momentum we are seeing … Read more

UnitedHealth CEO Steps Down; Company Suspends Guidance

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Image Source: TradingView By Brian Nelson, CFA On May 13, UnitedHealth Group (UNH) announced that its CEO Andrew Witty will step down for personal reasons. Taking his place is Stephen Hemsley, who served as the company CEO from 2006-2017. Hemsley had the following to say about the change in the executive suite: We are grateful for Andrew’s stewardship of UnitedHealth Group, especially during some of the most challenging times any company has ever faced. The Board and I have greatly valued his leadership and compassion as chief executive and as a director and wish him and his family the best. UnitedHealth Group has tremendous opportunities to grow as we continue to help improve health care and to perform to our … Read more

Energy Transfer’s Distributions Covered By Free Cash Flow

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Image Source: TradingView By Brian Nelson, CFA Energy Transfer (ET) recently reported mixed first quarter results with revenue coming up short of expectations, but GAAP earnings per share coming in line with the consensus forecast. The pipeline giant reported net income for the three months ended March 31 of $1.32 billion, which compares to $1.24 billion in the same three months last year. Adjusted EBITDA for the first quarter was $4.1 billion compared to $3.88 billion in the same period a year ago. On an operational basis, interstate natural gas transportation volumes increased 3%, setting a new partnership record. Crude oil transportation volumes were up 10%, while NGL transportation volumes were up 4% and NGL and refined products terminal volumes … Read more

Albemarle Continues to Navigate a Low Lithium Price Environment

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Image Source: TradingView By Brian Nelson, CFA Albemarle (ALB) recently reported mixed first quarter results, with revenue coming in slightly lower than forecast, but its bottom-line loss was less than feared. Net sales fell 20.9% in the quarter due to lower pricing in Energy Storage, while adjusted EBITDA fell 8.3% as lower net sales were mostly offset by lower average input costs and ongoing cost reduction efforts. Adjusted diluted loss per share swung to a loss of $0.18 from a gain of $0.26 in the same period last year. Management had the following to say about the quarter: Our business continues to perform in line with our outlook considerations, including first-quarter adjusted EBITDA of $267 million with strong year-over-year improvements … Read more

Magnificent 7 Earnings Reports Not Bad Thus Far

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By Brian Nelson, CFA   Shortly after Trump’s Liberation Day, where the President unveiled lofty tariffs on numerous countries, we released our wait-and-see outlook for the equity markets, which thus far has proven to be the right move, with the markets largely recovering from the depths reached in April. The S&P 500 (SPY), for example, is down just 3.3% year-to-date, excluding dividends.   A lot has happened since Liberation Day, including easing of tariffs to a 10% baseline for most, if not all, countries, with the key exception of China, where tariffs remain extremely elevated and prohibitive. Many countries are now reportedly negotiating trade agreements with the White House, and we expect China to be added to that list soon, even if … Read more