Valuentum Exclusive Analysis for the Discerning Investor

Symbol Keyword

Visa Expects Low Double Digit Earnings Growth for Fiscal 2026
Image Source: Visa. For the 12 months ended September 30, Visa hauled in $23.1 billion in cash flow from operations and spent $1.5 billion in property, equipment, and technology, resulting in free cash flow of $21.6 billion, or 53.9% of total revenue. Visa ended the year with cash and cash equivalents and investment securities of $19 billion and total debt of $25.2 billion. The company returned $6.1 billion in share buybacks and dividends in the quarter, and the board of directors increased its quarterly cash dividend 14%, to $0.67 per share. For full year fiscal 2026, management expects low-double-digit growth in net revenue, operating expense, and diluted earnings per share. We continue to like Visa as an idea in the Best Ideas Newsletter portfolio.

Thinking Slow: 3 Research Blind Spots That Changed the Investment World
Image Source: EpicTop10.com. We have to be on high alert about how our minds work. PBS recently delivered a four-part series examining how easily our minds are being hacked, and why it is so important to "think slow." When it comes to the active versus passive debate, does the analysis suffer from parameter risk? With respect to empirical, evidence-based analysis, does the analysis have the entire construct wrong? When it comes to short-cut multiples, are we falling into the behavioral trap of thinking on autopilot?

Your Role as a Choice Architect
Image: Impact Hub Global Network. Richard Thaler in his groundbreaking book Nudge, co-written with Cass Sunstein, talked about the role of the choice architect. A choice architect is basically someone or some organization that has the responsibility for organizing the context and content in which people make decisions. At Valuentum, we can never provide personalized buy/sell advice, but in providing publishing services, we've opted for the healthy option for members, and that sometimes means you won't find a large selection of dessert options. This isn't a shortcoming of our service (i.e. we know desserts are tempting), but rather a key positive attribute. As we've shown time and time again, you don't need to look far to beat the market return (or, by comparison, to have a healthy diet). If something is not on the menu at Valuentum, it means the chef has something better cooking in the kitchen. Here's to your long-term financial health!

AT&T Expects Strong Free Cash Flow in Coming Years
Image Source: TradingView. AT&T reiterated its full year 2025 financial guidance. Consolidated service revenue is targeted to grow in the low-single-digit range, while adjusted EBITDA is expected to grow 3% or better. Free cash flow is expected in the low-to-mid $16 billion range, while adjusted earnings per share is targeted in the higher end of the $1.97-$2.07 range. The company also reiterated its 2026-2027 financial outlook. Consolidated service revenue growth is expected in the low-single-digit range annually from 2026-2027, with adjusted EBITDA growth of 3% or better annually from 2026-2027. Adjusted earnings per share is expected to accelerate to double-digit percentage growth in 2027. Free cash flow is targeted at $18+ billion and $19+ billion for 2026 and 2027, respectively. We like the free cash flow growth expectations at AT&T, but its huge net debt position keeps us on the sidelines. Shares yield 4.3% at the time of this writing.

Netflix Reports Mixed Third Quarter Results
Image Source: Netflix. Looking to the fourth quarter, Netflix expects revenue growth of 17% (16% on a currency-neutral basis) thanks in part to growth in members, pricing, and ad revenue. The company projects an operating margin of 23.9%, representing a two percentage-point improvement year-over-year. For 2025, it expects to record $45.1 billion in revenue (16% growth, 17% on a currency-neutral basis), a level that is in line with the company’s prior expectations calling for 15%-16% revenue growth (16%-17% on a currency neutral basis). Though revenue growth remains robust, Netflix now forecasts a 2025 operating margin of 29%, which is below prior expectations calling for a 30% reported operating margin due to the impact of the Brazilian tax matter. Management expects 2025 free cash flow of roughly $9 billion (+/- a few hundred million dollars), up from its prior forecast of $8-$8.5 billion. It ended the quarter with gross debt of $14.5 billion and cash of $9.3 billion.

Key Comments from the Banks This Earnings Season
Image: The banks continue to perform well. Let's read through key comments from banking executives this earnings season.

Nike Has Posted 23 Consecutive Years of Increasing Dividend Payouts
Image Source: TradingView. During the first quarter of fiscal 2026, Nike returned $714 million to shareholders, consisting of dividends of $591 million, up 6% from the prior year, and share repurchases of $123 million. Nike has repurchased 124.4 million shares under its $18 billion program approved by the board in June 2022 for a total of approximately $12.1 billion. At the end of the quarter, inventories at Nike were $8.1 billion, down 2% compared to the prior year, while cash and short-term investments were $8.6 billion, down approximately $1.7 billion from last year. Nike continues to face pressure in its footwear division, though apparel sales were strong in the quarter. Footwear revenue fell 12% on a constant currency basis in China. Looking to the fiscal second quarter, revenues are expected to be down low single digits, while gross margins are expected to fall 300-375 basis points, including a net headwind of 175 basis points from tariffs.

Costco’s Shares Are Not Cheap
Image Source: Costco. In the fourth quarter of fiscal 2025, Costco’s gross margin expanded 13 basis points, while SG&A as a percentage of sales dropped 17 basis points, bolstering operating income. Net income for the fourth quarter was $2.61 billion, $5.87 per diluted share, seven cents better than expected and compared to $2.354 billion, $5.29 per diluted share in last year’s quarter. Long-term debt totaled $5.7 billion at the end of the quarter, while cash and short-term investments were $15.3 billion. Merchandise inventories fell to $18.12 billion from $18.65 billion at the end of last year’s quarter. We like the fundamental momentum at Costco and its outlook remains bright, but its valuation is quite stretched at the moment. We remain on the sidelines.

Dividend Increases/Decreases for the Week of October 3
Let's take a look at firms raising/lowering their dividends this week.

Albemarle Targets Positive Free Cash Flow for 2025
Image Source: TradingView. For the first half of 2025, Albemarle’s cash flow from operations increased $73 million to $538 million, and as management noted, the company expects to achieve positive free cash flow for the full year 2025 assuming current lithium market pricing persists. Albemarle reduced its capital expenditure outlook to the range of $650-$700 million. Assuming $9/kg LCE average lithium market price for 2025, net sales is targeted in the range of $4.9-$5.2 billion, with adjusted EBITDA in the range of $0.8-$1 billion. Albemarle exited the quarter with estimated liquidity of approximately $3.4 billion. We like Albemarle’s upside potential from here, as operations remain depressed from low lithium pricing. The company remains an idea in the ESG Newsletter portfolio.