Track market-moving stories before they get noisy

Apple has become only the second company to pass the $5tn valuation mark, as it benefited from investors fleeing AI and semiconductor stocks amid a wider tech sell-off.

The iPhone maker’s shares hit a session high ⁠of $342.89 on Tuesday, giving it a market ⁠capitalisation of $5.04tn (£3.78tn), then eased back to 0.8% up at $339.68 – around the $4.99tn mark.

Apple became the world’s most valuable company earlier this month, overtaking the chip giant Nvidia, which had been ⁠at the top since June 2025 and became the first company ever to breach the $5tn threshold last October.

The US consumer electronics company’s rally has been driven ⁠as much by strong demand for its products as its decision to sit out the ​AI spending race that is sapping cash ‌flows at big tech ‌rivals.

Its fresh valuation high came amid an intensifying sell-off of AI stocks around the world driven by rising concerns about AI companies’ borrowing to fund datacentre expansion.

US chip stocks extended their recent losses when Wall Street opened on Tuesday, with Intel, Advanced Micro Devices, Sandisk, Western Digital and Seagate Technology all down by more than 4%.

The Nasdaq 100 index of leading tech stocks fell by as much as 1.8% at one point, meaning since its early June record high it had fallen more than 10% – the technical definition of a market correction.

Meanwhile South Korea’s stock market slid to its lowest level since mid-April, with semiconductor companies SK Hynix and Samsung Electronics falling by more than 10%.

Analysts attributed the sell-off to renewed worries over AI investment spending, and competition from cheaper Chinese companies, after a report by the Information that China had begun mass production of homegrown deep ultraviolet (DUV) chip-making tools.

Apple’s decision to hold iPhone prices steady, despite increases last month for MacBooks and iPads, has bolstered demand. Photograph: Lucas Jackson/ReutersInvestors may also be growing jittery about the “circular funding” at the heart of the AI industry, through which artificial intelligence companies finance one another.

They have also been spooked by the announcement by Google last week that it was further increasing capital spending this year to as much as $205bn to fund its AI plans, while reporting negative free cashflow for ​the first time in its history, burning through $5.9bn in the three months to the end of June.

Apple has been shielded somewhat by being somewhat of an AI laggard. Its difficulties in developing in-house models meant it has instead relied on Google’s ‌technology to power new services such as a revamped Siri. That has spared it the hefty infrastructure costs that have left big tech investors wary.

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Apple’s decision to hold iPhone prices steady last month when it announced increases for MacBooks and iPads has also bolstered demand as buyers scooped up the company’s flagship device ahead of expected ‌price hikes later this year, analysts have said.

To aid demand, Apple on Tuesday also launched a device leasing programme in the US through the payments ​firm Klarna, under which monthly payments start at $17.99 for an iPhone, $11.99 for an Apple Watch or iPad, and $24.99 for a Mac.

“Apple has resisted the AI spending race, betting that customer experience – not infrastructure investment – will ultimately determine the winners,” said Dipanjan Chatterjee, a vice-president and principal analyst at Forrester. “The ⁠new leasing programme is a clever response: it doesn’t reduce the price ​of an iPhone, but ​it changes how consumers perceive the cost ​by replacing sticker shock with a predictable monthly payment.”

Including session gains, Apple ​stock has jumped ‌24% so far this year, ​widely outperforming the ​other six of the “Magnificent Seven” cohort of US technology stocks.

Apple is to report its third-quarter earnings after the market close on Thursday, with analysts expecting a more than 15% jump in revenue for the period compared with a year earlier.

Reuters contributed to this report

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At $593.87, Meta (NASDAQ:META | META Price Prediction) is a Hold heading into its July 29 earnings report. Options markets are pricing in an approximately 8% binary move, or a $49 swing, which makes buying the day before the report a bet on event risk rather than the business.

Meta runs the largest advertising franchise on the internet through Facebook, Instagram, WhatsApp, Threads, and Messenger, alongside Reality Labs. The stock has been range-bound for months as investors weigh a booming ad engine against rapidly escalating AI infrastructure costs. Shares are down 8.05% in the past week and 16.4% over the last year, setting up a report that could break either direction.

Why the Ad Engine Justifies a Bid Q1 2026 was strong. Revenue jumped 33.08% year over year to $56.31 billion, with ad impressions up 19% and price per ad up 12%. Family of Apps daily actives reached 3.56 billion. Operating cash flow of $32.23 billion funds the AI buildout without straining the balance sheet.

Valuation looks reasonable. Meta trades at 21x trailing earnings and 19x forward earnings, well below most mega-cap peers. Polymarket traders assign a 94.7% probability that Meta beats Q2 consensus, and July 31 call open interest is running nearly 2.5x put open interest.

Why the CapEx Bill Could Sink the Stock Meta raised full-year capital expenditure guidance to $125 billion to $145 billion, up from a prior $115 to $135 billion range, citing higher component pricing and more data center capacity. Q1 capex alone rose 46.8% year over year, and total expenses climbed 35%. Reality Labs continues to bleed roughly $4.03 billion per quarter.

The market has already punished a good report. After the Q1 blowout, shares fell from $671.77 at filing to $608.75 the next day. Q3 2025 fell 11.33% on earnings day despite a beat, and Q1 2026 dropped 8.55%. Youth-related litigation trials scheduled for 2026 add another overhang.

Why Patience Beats Conviction Right Now The fundamentals support holding, and the setup argues for patience. Ad revenue is compounding at a 30%-plus clip, but every dollar of upside is being reinvested into GPUs and data centers whose returns are unproven. Reddit sentiment swung from bearish 22 mid-week to bullish 72 by earnings eve, signaling uncertainty.

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The trigger to reassess is the Q2 earnings report itself. Any further capex revision above $145 billion, or Q3 revenue guidance below the current $58 billion to $61 billion Q2 range, likely delivers a dip. A clean beat with steady spending discipline flips the verdict to Buy.

What the Targets Show Meta currently trades at $593.87 against a consensus analyst target of $825.84, implying 28.6% upside if targets are met. Coverage is heavily positive with 8 Strong Buy, 49 Buy, 6 Hold, and 0 Sell ratings.

The stock is off 9.88% year to date while the S&P 500 proxy SPY has moved from $718.66 at Meta’s Q1 filing to roughly $739.09 currently, meaning Meta has meaningfully underperformed the broader market. Shares sit below both the 50-day moving average of $606.07 and the 200-day at $638.07.

Why Waiting Is the Right Call At $593.87, Meta is a Hold. The July 29 earnings report is a binary event with a pre-priced $49 swing. Buyers today absorb the risk that management raises the $125 to $145 billion capex band again. Every quarter over the last year, capex guidance has ratcheted higher, and the Q1 stock reaction of negative 8.55% shows how the market treats those revisions even when earnings crush estimates.

A pullback into the $540 to $560 zone would compress the forward multiple to roughly 17x and restore a margin of safety consistent with prior post-earnings entry points. A capex revision above $150 billion combined with deceleration in ad pricing would materially change the risk profile. Both will be knowable when the earnings report lands.

Patience risks missing a possible 8% gap higher. Impatience risks buying the top of a range that has held for a full year. Waiting one week to see the earnings report and the capex line specifically offers the clearest read on risk versus reward at this price.

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Key Takeaways NIKE's weak demand in Sportswear, Jordan and digital channels continues to weigh on revenues. NKE is advancing its "Win Now" strategy through innovation, inventory discipline and wholesale partnerships. Performance categories are gaining traction, but lifestyle weakness remains a near-term earnings challenge. NIKE, Inc. (NKE - Free Report) has been facing demand headwinds, with weakening consumer demand for its products weighing on sales. NIKE highlighted that consumers are becoming more cautious about discretionary spending amid an uncertain macroeconomic environment, leading to lower store traffic and slower retail sales trends.

Consequently, NIKE’s fourth-quarter revenues fell 4% on a currency-neutral basis. Revenues for the NIKE Brand were flat on a reported basis and down 3% on a currency-neutral basis. The weakness was mainly due to declines in Greater China and EMEA, somewhat offset by growth in North America. NIKE Direct revenues declined 7% on a reported basis, owing to a 12% decline in NIKE Brand Digital and a 7% fall in NIKE-owned stores.

The company also continues to face weak demand for its Sportswear and Jordan Streetwear businesses, where sell-through remains soft and promotional activity is elevated. Management cited that Sportswear and Jordan Streetwear are expected to continue to be negative in fiscal 2027, with improvement likely in the back half. Although performance categories such as Running, Training and Global Football are gaining momentum, these gains are not yet sufficient to offset weakness in the larger lifestyle categories.

Although NIKE expects these demand headwinds to continue weighing on revenue growth in the near term, it is focusing on product innovation, marketplace enhancements and stronger consumer engagement to revive demand and support growth. NIKE is streamlining inventory, reducing promotional activity and investing in its wholesale network. It is executing its "Win Now" turnaround strategy, which focuses on strengthening culture, accelerating product innovation, reinforcing brand strength and enhancing consumer engagement.

Looking ahead, investors will closely monitor whether NIKE's turnaround initiatives, including innovation, a stronger sport-focused strategy and an enhanced consumer experience, can revive demand. While these investments may pressure near-term earnings due to higher spending, they are expected to strengthen brand engagement, restore healthier demand, improve full-price sales and support sustainable earnings growth.

NKE’s Competitionlululemon athletica inc. (LULU - Free Report) continues to benefit from the progress with its Power of Three X2 growth strategy. LULU remains focused on its long-term growth strategy, which centers on continuous product innovation, enhancing the guest experience and expanding its international presence to drive sustainable growth. lululemon is experiencing robust international momentum, with China and other global markets driving faster growth.

adidas AG (ADDYY - Free Report) is focused on strengthening its brand appeal through continuous product innovation, operational excellence and strategic growth initiatives. ADDYY remains committed to enhancing profitability and long-term competitiveness by maintaining inventory discipline, improving operational efficiency and advancing its sustainability efforts. In addition, adidas is expanding its global footprint through localized market strategies, increased digital investments and an ongoing expansion of its retail store network.

NKE’S Price Performance, Valuation and EstimatesShares of NIKE have lost 32.7% in the past six months compared with the industry’s decline of 27.3%.

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From a valuation standpoint, NKE trades at a forward price-to-earnings ratio of 22.94X compared with the industry’s average of 19.96X.

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The Zacks Consensus Estimate for NKE’s fiscal 2027 and fiscal 2028 earnings implies year-over-year growth of 10.1% and 35.1%, respectively. The company’s EPS estimate for fiscal 2027 and fiscal 2028 has moved south in the past 30 days.

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Key Takeaways ExxonMobil is due to report Q2 results July 31, with EPS seen up nearly 136% year over year.Higher liquid prices may lift XOM's upstream earnings by $3.5B-$3.9B sequentially.XOM has outpaced its industry, but its 10.23x EV/EBITDA exceeds the 6.71x industry average. ExxonMobil Holdings Corporation (XOM - Free Report) is set to report second-quarter 2026 results on July 31, before the opening bell.

The Zacks Consensus Estimate for second-quarter earnings is pegged at $3.87 per share, implying a surge of almost 136% from the year-ago reported number. It has witnessed one downward estimate revision in the past seven days. The Zacks Consensus Estimate for second-quarter revenues is currently pegged at $95.8 billion, suggesting a roughly 18% rise from the year-ago actuals.

XOM beat the consensus estimate for earnings in each of the trailing four quarters, with the average surprise being 6.04%. This is depicted in the graph below:  

Image Source: Zacks Investment Research

Q2 Earnings Whispers for XOMOur proven model doesn’t predict an earnings beat for XOM this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or 3 (Hold) increases the chances of an earnings beat. That isn’t the case here.

The leading integrated energy player has an Earnings ESP of -2.40%. XOM currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

XOM’s Factors to NoteIn its latest 8-K SEC filings, XOM stated that it is likely to see a sequential improvement in the June quarter upstream earnings by $3.5 billion to $3.9 billion due to an increase in liquid prices.

To have an idea of how oil prices behaved in the June quarter, let's analyze the commodity prices from the data provided by the U.S. Energy Information Administration (“EIA”). The average Cushing, OK, WTI spot prices for April, May and June of this year were $100.32 per barrel, $102.13 per barrel and $84.81 per barrel, respectively, per EIA data. Commodity prices were $63.54 per barrel, $62.17 per barrel and $68.17 per barrel, respectively, in April, May and June of 2025, according to the EIA.

A constructive oil-price backdrop due to the Iran war aided the company’s exploration and production businesses in the June quarter of this year, similar to BP plc (BP - Free Report) and Chevron Corporation (CVX - Free Report) .

XOM added that stronger margins from its Energy Products segment are likely to have provided a $2.0 billion to $2.4 billion sequential benefit.

XOM’s Price Performance & ValuationXOM's stock has jumped 37.2% over the past year, outperforming the industry’s 35.6% surge. BP has gained 28.4% over the same time frame, while Chevron has rallied 21%.

One-Year Price Chart

Image Source: Zacks Investment Research

While XOM’s stock price has outperformed the industry, the company appears relatively overvalued. The company's current trailing 12-month enterprise value/earnings before interest, tax, depreciation and amortization (EV/EBITDA) is 10.23x, reflecting that it is trading at a premium compared with the industry average of 6.71x. Both BP and CVX are valued lower at 3.15x and 9.85x, respectively.

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Investment Thesis of XOMExxonMobil has a massive footprint in the Permian, the most prolific oil and gas play in the United States, and offshore Guyana. In the Permian, the integrated giant has been employing lightweight proppant technology and hence is capable of boosting its well recoveries by up to as much as 20%.

According to the data from the Federal Reserve Bank of Dallas, the shut-in price for existing wells in the Midland, a sub-basin of the Permian, is $42 per barrel. For Delaware, another sub-basin, the Federal Reserve Bank of Dallas estimated the price at $34 per barrel.

With West Texas Intermediate (“WTI”) crude oil trading above the $80-per-barrel mark, significantly above the shut-in prices, it makes sense for XOM to continue production in the wells. Although the upstream business seems lucrative now, the high oil price is hurting the company’s refining operations, since the input costs have jumped. Also, with a significant proportion of earnings being generated from upstream activities, the company’s business is highly vulnerable to the volatility in commodity prices.

Last WordGiven the backdrop, it might not be wise for investors to bet on the integrated energy giant ahead of earnings because of its overvaluation. However, those who have already invested may hold on to the stock.

On Thursday, we’ll get a clearer picture of how the turnaround story at Starbucks (SBUX -0.52%) is progressing. The coffee slinger is scheduled to publish its fiscal third-quarter results after market close tomorrow (Wednesday, July 29).

So far this year, the stock is up by more than 23%, crushing the 8% growth of the bellwether S&P 500 index. That’s made it expensive in terms of valuations. The upcoming earnings report will show whether the company can maintain momentum while its “Back to Starbucks” strategy is still brewing.

Image source: The Motley Fool.

Caffeinated numbersCollectively, analysts expect Starbucks to post just over $9.1 billion in revenue and $0.65 per share in net income. That’s nearly 4% below the company’s third-quarter fiscal 2025 figure (although this will likely be due mainly to changes in the China business; more on that in a moment). On the flip side, that bottom-line projection would be a sweet 30% improvement over the year-ago number.

Back to Starbucks, the return-to-growth strategy that’s been the defining feature of CEO Brian Niccol’s tenure, has been producing results lately. At least, that’s according to the company, which attributed its solid second-quarter performance to the initiative.

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Personally, I’ve seen at least a few of the program’s goals — more comfortable and welcoming interiors, quicker order implementation, etc. — in effect at several of my local cafes in California. So I think Back to Starbucks is a sensible program, and the company is executing it effectively.

While I doubt it’s the only reason for the improvements the company posted in the second quarter, growth was impressive. That period saw Starbucks increase net revenue by nearly 9% year over year (to over $9.5 billion) on the back of a 7% rise in comparable sales. Both growth rates rose steadily across the last four quarters. Meanwhile, net earnings not under generally accepted accounting principles (non-GAAP, or adjusted) raced 22% higher to $0.50 per share.

Management also raised certain full-year 2026 guidance items. Its “comps” were adjusted to at least 5% over the 2025 tally, from the previous forecast of more than 3%. Adjusted earnings per share (EPS) are now expected to land at $2.25 to $2.45, compared to the preceding guidance of $2.15 to $2.40.

Increasingly dependent on domestic businessThere was much to like in Starbucks’ second quarter, and there should be some encouraging numbers in the subsequent frame. To me, though, there are areas of concern I think all Starbucks-watchers should keep an eye on.

One is international sales. Much of the company’s second-quarter growth came from its North America outlets, where same-cafe growth was over 7%, fueled by a 4.4% rise in number of transactions and a 2.7% improvement in average “ticket” (i.e., customer spend per purchase). The numbers for international cafes were notably lower, at a respective 2.6%, 2.1%, and 0.5%. Worse, Starbucks’ once-great hope for its business abroad, China, posted 0.5%, 2.1%, and a decline of 1.6%, respectively.

Starbucks is letting go of China to some extent; in early April, it completed the shift of its business there to a 60/40 joint venture, majority-owned by the private equity firm Boyu Capital. The U.S. company will no longer book register sales as part of its overall revenue; instead, it’ll earn royalty fees and a 40% share of net profit. So beware — certain China figures starting in the third quarter will be notably lower.

That leaves the North America business as more of a core for the company than it’s been in many years. And, if anything, Starbucks has been closing locations rather than opening new ones (it boasted only 11 net new stores worldwide in the second quarter, for a total of 41,129).

Meaning that it’s in a position where it has to squeeze growth from a store base that will expand only modestly, at best. There are only so many operational efficiencies and improvements that can be made to effect this; ditto for price increases in an era of increasing consumer price consciousness. So it feels to me that those recently increasing growth numbers might wither or even go negative before long.

A high price to payMy impression of the current state of Starbucks, then, is that it’s a mature business with a huge footprint that has little room to grow. The Back to Starbucks program has produced results, but I don’t envision those efficiency-fueled gains to continue at the recent pace. Meanwhile, the stock is priced for hot growth, with a forward P/E of almost 35, which I doubt will be matched by leaps in profitability.

Starbucks could very well meet or exceed its winning second quarter, but I still wouldn’t feel like it’s a solid, long-term growth story. I’m not enthusiastic about the stock now, and even an estimates-beating third frame isn’t going to sway me.

Key Takeaways INTC partnered with Lens Technology to develop advanced glass substrate chip packaging.INTC will pair advanced packaging expertise with Lens Technology's glass manufacturing capabilities.Intel will explore AI PCs, data centers, robotics, industrial equipment and edge computing. Intel Corporation (INTC - Free Report) has partnered with Lens Technology to develop advanced glass substrate packaging for semiconductor chips. The collaboration aims to improve chip performance and power efficiency while supporting the growing demand for artificial intelligence (AI), data center and high-performance computing applications.

Under the agreement, Intel will leverage its expertise in semiconductor architecture and advanced packaging, while Lens Technology will contribute its capabilities in precision glass processing and large-scale manufacturing. By combining their complementary strengths, the companies plan to accelerate the development of glass substrate-based packaging solutions for next-generation computing platforms.

The partnership aligns with the semiconductor industry's increasing focus on advanced packaging as chip designs become more complex. Intel is expanding its efforts in glass substrate technology, which is expected to enable more efficient integration of chip components while meeting the performance requirements of future computing systems.

In addition, both companies will explore opportunities across AI PCs, data center infrastructure, robotics, industrial equipment and edge computing. These initiatives are likely to strengthen Intel's position in AI-driven markets while supporting its long-term growth strategy.

How Are Competitors Performing in Advanced Packaging?Intel faces competition from Qualcomm Incorporated (QCOM - Free Report) and Advanced Micro Devices (AMD - Free Report) . Qualcomm is expanding its focus on advanced packaging to support its AI and data center business. The company is developing multi-chiplet processors that use advanced packaging to improve performance, power efficiency and scalability. Qualcomm is enhancing its packaging capabilities to support end-to-end silicon development, accelerate time-to-market and minimize integration risk.

Advanced packaging is a key part of AMD's semiconductor strategy, helping it to improve chip performance, power efficiency and scalability. The company uses chiplet-based designs and advanced packaging technologies to integrate multiple computing components into a single processor. AMD continues to invest in packaging innovations to support growing demand for AI, data center and high-performance computing applications.

INTC’s Price Performance, Valuation & EstimatesShares of Intel have skyrocketed 343.3% over the past year compared with the industry’s growth of 23.7%.

Image Source: Zacks Investment Research

Going by the price/book ratio, the company's shares currently trade at 4.47 book value, lower than the industry average of 20.61.

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INTC’s earnings estimates for 2026 have increased 1.9% to $1.07 per share, while those for 2027 have increased 4.2% to $1.50 over the past 60 days.

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Intel stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Key Takeaways SAP plans nearly 50 AI assistants by Q3-end and over 400 Autonomous Suite agents for workflows by year-end.SAP expects usage- and value-based models to drive cloud growth by 2030 as seat revenue steadies.AI migration tools can cut costs by up to 30%, but acquisitions dilute 2026 profit by over 100M euros. SAP SE (SAP - Free Report) is leaning into agentic AI as enterprise software shifts from record-keeping systems toward autonomous workflows. Its strategy ties AI assistants, trusted business data and cloud ERP migration tools into one operating model.

The opportunity is long dated. By 2030, management expects cloud growth to rely more on consumption, usage and value-based pricing than traditional seat expansion.

SAP Scales Agentic AI Across Enterprise WorkflowsSAP plans to release nearly 50 AI assistants by the end of the third quarter. It also expects to support more than 400 Autonomous Suite agents by year-end, giving customers a broader automation layer inside core business processes.

The company is embedding AI across finance, procurement, supply chain, human resources and customer operations. The goal is not a standalone chatbot layer, but AI that works within applications that already hold business context, transaction history and governance controls.

SAP Shifts Toward Usage-Based Cloud RevenueManagement expects SAP’s cloud revenue mix to shift meaningfully by 2030. Consumption-based and non-seat-based models are expected to drive most incremental cloud growth as AI and data adoption increase.

That would mark a different growth model from conventional software seats. Seat-based revenue is expected to stabilize, while value- and usage-driven pricing becomes a larger contributor as customers use more AI, data and automation inside SAP’s cloud suite.

SAP Data Deals Strengthen the AI PlatformSAP’s recent data moves support that strategy. Dremio adds data lakehouse capabilities that enable real-time analytics across SAP and non-SAP data without requiring data movement or conversion.

Reltio and Prior Labs address different layers of the same problem. Reltio strengthens master-data governance and semantic data models, while Prior Labs adds tabular AI capabilities for structured business data. Together, these assets help SAP ground AI agents in cleaner, more connected enterprise data.

SAP ERP Tools Could Lower Migration FrictionERP migration remains one of the biggest barriers to cloud adoption. SAP says its AI-powered ERP migration toolchain is helping customers accelerate deployments, shorten time to value and reduce migration costs by up to 30%.

The company also plans to introduce three additional ERP migration assistants with 10 underlying agents later this quarter. If these tools work as intended, they could make RISE with SAP and GROW with SAP easier to adopt for customers moving legacy workloads into the cloud.

SAP Trends Carry Margin and Macro RisksAI scale is not free. SAP has to keep investing in product development, acquisitions and platform capacity while competing with large providers such as Oracle Corporation (ORCL - Free Report) , whose Fusion Cloud Applications also embed AI agents across enterprise workflows.

Near-term dilution is another concern. SAP lowered its 2026 non-IFRS operating profit outlook to €11.8-€12.2 billion, reflecting more than €100 million of expected impact from Dremio and Prior Labs. Operating expenses for 2027 are projected to rise at 80-90% of revenue growth.

Enterprise AI adoption also carries timing risk. Long sales cycles, complex license transactions, cybersecurity exposure, geopolitical tension and customer budget shifts could weigh on demand. Salesforce, Inc. (CRM - Free Report) , through Agentforce, adds another major competitive reference point in enterprise agentic software.

SAP Signals Show Momentum Still Needs RepairSAP’s agentic AI and cloud ERP strategy gives it a credible path to broader enterprise automation, but the stock’s near-term setup is less supportive. Product momentum must still translate into firmer earnings revisions and better market timing.

SAP currently carries a Zacks Rank #4 (Sell). Its Growth Score of C recognizes underlying expansion potential, but its Value Score of D, Momentum Score of F and VGM Score of D point to weaker valuation, timing and blended style characteristics. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The rank and Style Scores suggest investors should separate the long-term AI platform story from the stock’s current earnings-momentum profile. SAP’s trends through 2030 remain worth tracking, but execution risk and timing still matter.

Key Takeaways SAP's cloud ERP and AI strategy targets autonomous workflows across core business functions.SAP Business Data Cloud reached about 2B euros in contract value, with AI in over 90% of top deals.SAP expects about 10B euros in 2026 free cash flow, while legacy declines and integration costs weigh. SAP SE (SAP - Free Report) is tying cloud ERP migration to embedded AI, enterprise data and workflow automation. The strategy is meant to move customers from legacy systems into a cleaner cloud model that can support more autonomous business processes.

The investor debate is straightforward. Cloud and AI demand are improving SAP’s growth profile, but software license and services revenues are still declining as the business model shifts.

SAP Builds Around the Autonomous EnterpriseSAP’s AI strategy centers on the Autonomous Suite and Business AI Platform. The company is embedding AI across finance, procurement, supply chain, human resources and customer operations, using enterprise applications as the operating layer.

Joule Studio forms the build layer for creating and extending AI agents. SAP Business Data Cloud supplies business context, while the run-and-govern layer helps customers deploy, manage and govern agents at scale.

SAP Business Data Cloud Gains Early TractionSAP Business Data Cloud generated approximately €2 billion in total contract value within its first year. That early adoption supports the case that customers want AI tied to governed enterprise data, not disconnected models.

More than 90% of SAP’s 50 largest second-quarter deals included AI and SAP Business Data Cloud. That mix gives management confidence in second-half demand as Business AI reaches more customers.

SAP Cash Flow Funds Innovation and BuybacksSAP reaffirmed its expectation for approximately €10 billion in 2026 free cash flow. That cash generation gives the company room to invest in product innovation, acquisitions and business development while navigating the cloud transition.

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Capital returns remain part of the story. SAP announced a €10 billion share repurchase program running through the end of 2027, and as of June 30, had repurchased more than 16.28 million shares for approximately €2.6 billion.

SAP Faces Migration and Execution RisksThe shift away from legacy software still has costs. Second-quarter software license revenues declined 32% year over year to €0.13 billion; services revenues fell 3% to €1 billion and cloud backlog growth is expected to moderate as the business scales.

Acquisition-related dilution also tempers the outlook. SAP expects Dremio and Prior Labs to reduce 2026 operating profit by more than €100 million, while competition remains intense from providers such as Oracle Corporation (ORCL - Free Report) , which also embeds AI agents into cloud applications.

Regulated enterprise deals can take longer to negotiate, deploy and ramp. Salesforce, Inc. (CRM - Free Report) , through Agentforce, adds another competitive reference point in enterprise AI, particularly where customers evaluate agent platforms tied to workflow automation.

Geopolitical uncertainty, cybersecurity exposure, pricing pressure and changing customer budgets remain risks. SAP also noted that its outlook assumes a near-term de-escalation of tensions in the Middle East.

SAP Signals Point to a Cautious Near-Term ViewSAP’s long-term growth case rests on a clear shift toward cloud ERP, trusted data and AI-enabled workflows. The near-term stock setup is less supportive because estimated momentum and share-price timing remain weak.

SAP currently carries a Zacks Rank #4 (Sell), which points to an unfavorable one-to-three-month earnings outlook. Its Value Score of D, Growth Score of C,  Momentum Score of F and VGM Score of D reinforce a selective stance. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The scores do not erase SAP’s cloud and AI progress. They do suggest investors should separate long-term platform potential from weaker current valuation, momentum and estimate-revision signals.

Key Takeaways Honeywell faces pressure from automation weakness, high costs and lower earnings estimates after its spin-off.ROK is gaining from strength across automation markets, pricing actions and growing data center investments.Rockwell offers stronger earnings growth prospects than Honeywell despite trading at a higher valuation. Honeywell Technologies (HON - Free Report) and Rockwell Automation, Inc. (ROK - Free Report) are two familiar names operating in the industrial sector. As rivals, both companies compete in multiple industries with significant overlap in the industrial automation and process control markets.

These companies are poised to benefit from significant growth prospects in industrial and process automation sectors, supported by technological upgrades and higher demand for automation solutions. But which company is better positioned to deliver upside in 2026? Let’s compare their fundamentals, growth prospects and challenges to see which stock stands out now.

The Case for HoneywellSolid demand for its products and solutions, led by increasing building projects in North America, India and the Middle East, is driving the Building Automation segment. Increasing order rates and capex investments in data centers and health care projects bode well for it. In the second quarter, the segment’s organic revenues increased 9% year over year. Also, healthy growth in orders across the sensing and industrial measurement business bodes well for the Industrial Automation segment. The segment’s organic revenues increased 4% year over year in the second quarter.

However, Honeywell has been witnessing persistent weakness in the Process Automation and Technology segment. The segment’s organic revenues decreased 1% on a year-over-year basis in second-quarter 2026 following a decline of 6% in the first quarter. This decline was attributable to softness in the aftermarket business owing to lower refining catalyst shipments. However, growth in orders across LNG and automation projects bodes well.

The company has also been dealing with the adverse impact of rising cost of sales and operating expenses. In the second quarter, the company’s total cost of sales (including the Honeywell Aerospace business) was about $6.07 billion, up 7.2% year over year. The operating income margin declined to 17.9% from 19.8% in the year-ago period.

Its worth noting that on June 29, 2026, Honeywell Technologies became a standalone public company following the spin-off of the Aerospace Technologies business from Honeywell International. The separation completed the company's multi-year portfolio restructuring, creating three independent publicly traded companies. Recently, HON also completed the divestment of its warehouse and workflow solutions business to American Industrial Partners.

The Case for RockwellThe company continues to see broad-based demand across discrete, hybrid and process markets. Discrete markets posted mid-teens growth in fiscal second-quarter 2026 (ended March 2026), led by Automotive, e-Commerce & Warehouse, and Semiconductor. Within e-Commerce, customers continue to prioritize upgrades and retrofits within existing warehouses over new greenfield builds and the company’s fiscal 2026 guidance factors in a 20% rise in e-Commerce & Warehouse Automation sales.

Automotive is expected to be up mid-single digits while semiconductor is expected to be up around 10%, backed by AI and data center-driven investment. In hybrid markets, Food & Beverage remains strong, reflecting customer investments in healthier products. In the fiscal second quarter, Food & Beverage sales grew high-single digits and are projected to be up in mid-single digits for fiscal 2026.  Life Sciences is projected to be up mid-single digits, backed by new capacity projects in North America and the Asia Pacific.

Rockwell continues to drive productivity and pricing to support margins as demand shifts. Management expects pricing actions to fully recover tariff costs in fiscal 2026 and is also using supply-chain optimization to mitigate tariff exposure. For fiscal 2026, ROK raised its reported and organic sales growth outlook to 5-9% and lifted its adjusted EPS range to $12.50-$13.10.

The company continues to build momentum through new customer engagements across its end markets. Recent project awards in industrial automation and infrastructure underscore sustained demand for its solutions. Meanwhile, data centers remain a key growth driver, with customers investing in facility upgrades and new capacity to improve operational reliability, energy efficiency and deployment speed.

However, the Lifecycle Services segment has continued to face weak organic demand, as customers delay larger capital projects while maintaining focus on smaller productivity improvements and modernization initiatives.

The Zacks Consensus Estimate for HON & ROKThe Zacks Consensus Estimate for HON’s 2026 earnings per share (EPS) implies a year-over-year decline of 58%. Honeywell’s EPS estimates for both 2026 and 2027 have plunged over the past 60 days.

Image Source: Zacks Investment Research

The consensus estimate for ROK’s fiscal 2026 EPS implies year-over-year growth of 24%. The EPS estimates for both fiscal 2026 and fiscal 2027 have been raised over the past 60 days.

Image Source: Zacks Investment Research

Price Performance and Valuation of HON & ROKPost spin-off of its Aerospace business, Honeywell shares have gained 7.9%, while Rockwell stock has lost 3.4% over the same time frame.

Image Source: Zacks Investment Research

Honeywell is trading at a forward 12-month price-to-earnings ratio of 27.06X, above its median of 19.85X over the past year. Rockwell’s forward earnings multiple sits at 32.41X, close to its median of 31.46X over the same time frame.

Image Source: Zacks Investment Research

Final Take on HON & ROKHoneywell Technologies’ market leadership position and diversified product portfolio, weakness in the Process Automation and Technology unit and rising operating expenses pose a threat to its near-term catalysts. The spin-off of the Aerospace business will also likely weigh on its top and-bottom-line results in the quarters ahead. The downward estimate revision activity in earnings warrants a cautious approach for existing investors.

In contrast, Rockwell’s steady demand across discrete, hybrid and process markets, along with its productivity measures and pricing actions, will likely drive its long-term performance. Despite its steeper valuation, ROK seems to be a better pick due to strong estimates and better prospects for sales and profit growth.

While ROK currently carries a Zacks Rank #3 (Hold), HON has a Zacks Rank #5 (Strong Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The decentralized perpetual futures exchange Lighter (LIT) has announced significant steps to strengthen its token economy. In a statement made on the social media platform X, exchange founder Vladimir Novakovski reported that over 16 million LIT tokens have been repurchased to date and that a regular quarterly token burning program has recently been officially launched.

Novakovski stated that the buyback program is part of a long-term strategy to reduce the circulating supply of the LIT token. He added that regular token burns will also be implemented with the same goal in mind, saying that this mechanism aims to support the sustainability of the ecosystem.

Lighter’s CEO also emphasized that there were no changes to the company’s issuance structure before or after the Token Generation Event (TGE). Novakovski noted that while existing investors were offered the opportunity to sell their shares or tokens, the majority chose to hold onto their positions. He stated that this is a significant indicator of confidence in the project.

In his statement, Novakovski addressed not only Lighter’s token economy but also regulatory developments in the US. He stated that the expected changes to the US Securities and Exchange Commission’s (SEC) regulatory framework regarding digital assets, as outlined in the CLARITY Act currently before Congress, are critically important for the sector.

According to the founder, once these regulations are finalized, blackchain-based fundraising methods and the tokenization of shares could rapidly become widespread. Novakovski stated that such a transformation would create a stronger bridge between both traditional finance and cryptocurrency markets, and he expects blackchain capital markets to grow significantly in the coming years.

*This is not investment advice.

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Pentair plc (PNR) Q2 2026 Earnings Call July 28, 2026 9:00 AM EDT

Company Participants

Jeff Thompson - Vice President of Investor Relations
John Stauch - President, CEO & Director
Robert Fishman - Interim Executive VP & CFO

Conference Call Participants

Bryan Blair - Oppenheimer & Co. Inc., Research Division
Andrew Krill - Deutsche Bank AG, Research Division
Brett Linzey - Mizuho Securities USA LLC, Research Division
Michael Halloran - Robert W. Baird & Co. Incorporated, Research Division
Nathan Jones - Stifel, Nicolaus & Company, Incorporated, Research Division
Deane Dray - RBC Capital Markets, Research Division
Nigel Coe - Wolfe Research, LLC
Andrew Kaplowitz - Citigroup Inc., Research Division
Tyler Bisset - Goldman Sachs Group, Inc., Research Division

Presentation

Operator

Welcome to the Pentair Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Jeff Thompson, Vice President, Investor Relations. Please go ahead.

Jeff Thompson
Vice President of Investor Relations

Thank you, operator, and welcome to Pentair's Second Quarter 2026 Earnings Conference Call. On the call with me are John Stauch, our President and Chief Executive Officer; and Bob Fishman, our Interim Chief Financial Officer. On today's call, we will provide details on our second quarter performance as outlined in this morning's press release. On the Pentair Investor Relations website, you can find our earnings release and slide deck, which is intended to supplement our prepared remarks during today's call and provide a reconciliation of differences between GAAP and non-GAAP financial measures that we will reference. The non-GAAP financial measures provided should not be considered as a substitute for or superior to the measures of financial performance prepared in accordance with GAAP. They are included as additional clarifying items to aid investors in further understanding the company's performance in addition to the impact these items have -- these items and events have on the financial results.

Rithm Capital Corp. (RITM) Q2 2026 Earnings Call July 28, 2026 8:00 AM EDT

Company Participants

Emma Bolla - Deputy General Counsel of Corporate & Securities
Michael Nierenberg - Chairman, President & CEO
Peter Brindley
Baron Silverstein - President
Nicola Santoro - CFO, Chief Accounting Officer & Treasurer

Conference Call Participants

Douglas Harter - BTIG, LLC, Research Division
Jason Stewart - Compass Point Research & Trading, LLC, Research Division
Kenneth Lee - RBC Capital Markets, Research Division
Trevor Cranston - Citizens JMP Securities, LLC, Research Division
Crispin Love - Piper Sandler & Co., Research Division
Matthew Erdner - JonesTrading Institutional Services, LLC, Research Division
Michael Piccolo - Wedbush Securities Inc., Research Division

Presentation

Operator

Good morning, and welcome to the Rithm Capital Second Quarter 2026 Earnings Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Emma Hoelke, Deputy General Counsel. Please go ahead.

Emma Bolla
Deputy General Counsel of Corporate & Securities

Thank you, and good morning, everyone. I would like to thank you for joining us today for Rithm Capital's Second Quarter 2026 Earnings Call. Joining me today are Michael Nierenberg, Chairman, CEO and President of Rithm Capital; Nick Santoro, Chief Financial Officer of Rithm Capital; Baron Silverstein, President of Newrez; and Peter Brindley, Head of Real Estate at Elecor Properties.

Throughout the call, we are going to reference the earnings supplement that was posted this morning to the Rithm Capital website, www.rithmcap.com. If you've not already done so, I'd encourage you to download the presentation now. I would like to point out that certain statements made today will be forward-looking statements. These statements, by their nature, are uncertain and may differ materially from actual results.

I encourage you to review the disclaimers in our press release and earnings supplement regarding forward-looking statements and to review

Western Digital Today

WDC

Western Digital

$456.00 -41.92 (-8.42%)

As of 02:40 PM Eastern

This is a fair market value price provided by Massive. Learn more.

52-Week Range$69.30▼

$799.87Dividend Yield0.13%

P/E Ratio27.27

Price Target$520.32

Few stocks capture the euphoria and the anxiety of the artificial intelligence (AI) storage boom quite like Western Digital Corporation NASDAQ: WDC. Through the middle of last month, the stock had been one of the market's standout performers of the year, riding relentless demand for data storage to enormous gains. Yet the past few weeks have been a sharp reminder that nothing goes up in a straight line.

Shares have fallen around 40% from June’s high as the wider AI trade has wobbled, with investors growing nervous that elevated valuations across the storage and memory space may have run ahead of themselves. However, even after that drop, Western Digital shares are still up significantly for the year to date, which rather neatly frames the question facing investors today.

Get Western Digital alerts:

With the company due to report earnings on Aug. 5, is this pullback a chance to buy one of the AI theme's biggest winners at a discount, or a warning that the storage rally is finally running out of road?

Western Digital’s Bull Case Still Starts With AI Storage DemandLet’s start with why the stock ran so hard in the first place. Western Digital sits at the heart of one of the most powerful supply-and-demand imbalances in tech right now. The explosion of AI infrastructure has sent demand for high-capacity storage soaring, while supply has remained tight, handing manufacturers like Western Digital significant pricing power.

That dynamic has been showing up throughout the business. Revenue has been growing rapidly year over year, while the company has generated enough cash to hike its dividend and buy back a meaningful chunk of stock.

Wall Street Has Not Given Up on the AI Storage TradeThe analyst community has clearly taken note, with Morgan Stanley recently raising its price target to $650, arguing that conservative margin guidance leaves ample room for another beat. Alongside Citigroup’s refreshed price target of $800 from earlier this month, and the nearly 40% that implies, it’s easy to see why Western Digital has a consensus rating of Moderate Buy.

Crucially, the tailwinds driving these bullish updates all look durable. Data center capital spending is projected to keep climbing for years to come, driven by the same AI buildout that has powered the storage rally so far. The thinking is that if this demand holds, Western Digital's pricing power should hold with it.

Earnings Will Test the Margin StoryWestern Digital Stock Forecast Today12-Month Stock Price Forecast:
$520.32
18.27% Upside

Moderate Buy
Based on 24 Analyst Ratings

Current Price$439.93High Forecast$1,050.00Average Forecast$520.32Low Forecast$163.00Western Digital Stock Forecast Details

That makes the upcoming earnings report an important test. The single most-watched number will be gross margin, which has become the clearest signal of whether the company's pricing power is still expanding.

Management has guided to a healthy gross margin, and any sign it is coming in ahead of that, or being guided higher still, would go a long way toward confirming the bull case. Continued expansion would tell investors that the tight-supply story remains intact and that the recent sell-off was little more than sentiment-driven noise. On the other hand, a softer read would give the bears exactly the ammunition they have been looking for.

Beyond margins, investors will also be listening closely to what management says about pricing and supply heading into the back half of the year. In a story built almost entirely on the supply-demand imbalance, any hint that the imbalance is starting to ease would matter far more than the headline revenue and earnings figures.

Valuation Still Leaves Little Room for ErrorFor all the strength in the underlying dynamics, the bears have some legitimate points, and none is stronger than Western Digital’s valuation. Even after the recent pullback, the stock still trades at a meaningful premium to both its own historical averages and its sector peers.

When a stock goes into an earnings report still priced so richly, the room for error is minuscule, and any disappointment, even if the results themselves are still solid, can be punished quickly.

Investors Have to Decide How Much Risk to Take Before EarningsThis is where it’s hard to ignore the risk/reward profile after such a sell-off, especially as the analyst community has remained so bullish, with targets rising even as the stock has fallen in recent weeks.

If the demand proves as durable as the bulls believe, a 40% pre-earnings pullback could end up looking like a golden entry opportunity in hindsight. For investors who believe the AI buildout is still in its early innings, buying quality on weakness has tended to pay off throughout this cycle, and it could be a smart move to consider again now.

Should You Invest $1,000 in Western Digital Right Now?Before you consider Western Digital, you'll want to hear this.

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Key Takeaways Gentex's Q2 earnings rose 16% and beat estimates, while revenues fell 1% and missed expectations.Favorable mix, cost control and tariff reimbursements lifted gross margin 280 basis points to 37%.Gentex raised its 2026 gross margin outlook and reported a 20% increase in free cash flow. Gentex Corporation (GNTX - Free Report) reported second-quarter 2026 adjusted earnings of 58 cents per share, beating the Zacks Consensus Estimate of 50 cents by 16%. Earnings rose 16% from the year-ago quarter. Revenues, however, declined 1% year over year to $651.3 million and missed the consensus mark of $669 million by 2.6%.

Profitability stemmed from favorable product mix, disciplined cost management and tariff reimbursements. Non-automotive revenues accounted for about 14% of quarterly sales, helping offset weaker automotive demand and lower mirror shipments.

Gentex's Segmental PerformanceAutomotive net sales fell to $560.1 million from $578.1 million a year earlier. The decline reflected lower light-vehicle production and reduced shipments of base auto-dimming mirrors. Strength in North America, new technology launches and higher content per vehicle partly cushioned the pressure.

Total auto-dimming mirror shipments decreased 10% year over year to 10.4 million units. North American mirror shipments rose 6%, supported by gains in both interior and exterior products. However, international shipments declined 18%, including a 26% drop in international interior mirrors. China revenues fell about 20% amid tariff-related market disruptions.

Premium Audio revenues increased 16% year over year to $51.7 million. Growth was driven by the Powered Systems and Onkyo brands, supported by new product launches and continued demand across premium audio categories.

Other Products revenues rose 12% to $39.4 million. Aerospace products, biometric solutions and accessories supported the improvement, while automotive aftermarket sales remained a partial offset. The gains demonstrated Gentex’s progress in reducing its reliance on the traditional automotive mirror business.

Gentex's Gross Margin ExpandsGross margin increased 280 basis points year over year to 37%. The company recorded an approximately $18 million benefit from IEEPA tariff reimbursements that lowered the cost of goods sold. Favorable product mix also helped, partly offset by higher commodity costs and reduced sales volumes.

Adjusted operating expenses totaled $99.3 million, up from $97.5 million. Adjusted operating income advanced to $141.7 million from $130.3 million, while adjusted net income attributable to Gentex increased to $122.9 million from $110.9 million. Margins improved sequentially even after excluding the tariff benefit.

GNTX Generates Stronger Free Cash FlowPreliminary operating cash flow increased to $180.9 million from $166.1 million in the prior-year quarter. Capital expenditures declined to $19.2 million from $31.1 million, helping free cash flow climb 20% to $161.7 million.

Cash and cash equivalents totaled $233.4 million as of June 30, 2026, compared with $145.6 million at the end of 2025. Gentex repurchased 2.7 million shares for $66 million during the quarter. Year-to-date repurchases totaled 5.9 million shares for $137.6 million.

Gentex Lifts 2026 Gross Margin TargetGentex maintained its 2026 revenue guidance of $2.65-$2.75 billion. However, the company raised its gross margin outlook to 34.5%-35.5% from 34%-35%, reflecting stronger operating execution and the tariff-related benefit.

The company lowered its operating expense forecast to $405-$415 million from $410-$420 million. It also reduced its projected tax rate to 16%-17% and capital expenditure guidance to $115-$125 million. The 2027 revenue forecast was reaffirmed at $2.8-$2.9 billion.

GNTX Advances New Technology ProgramsGentex continued expanding its Full Display Mirror portfolio, with new launches on vehicles from Jeep, Infiniti, McLaren, Toyota and Subaru. Driver and in-cabin monitoring systems also began shipping on new BMW and Kia programs. Management expects these products to contribute more meaningfully during the second half of 2026.

The company is establishing a manufacturing facility in Morocco to support European customers, with production targeted for 2028. Gentex also expects to secure its first advanced electronics contract-manufacturing award, potentially representing a $100-$200 million revenue opportunity, with production planned for late 2028 or early 2029.

Gentex currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Key Releases From the Auto SpaceGeneral Motors (GM - Free Report) reported second-quarter 2026 adjusted earnings of $3.57 per share, up 41.3% year over year. The figure beat the Zacks Consensus Estimate of $3.13 by 14.06%. Revenues increased 1.9% to $48.03 billion and surpassed the consensus estimate of $46.56 billion by 3.15%. Strong pricing, lower costs and disciplined incentives supported results. General Motors raised its full-year adjusted EBIT guidance to $14-$16 billion from $13.5-$15.5 billion. Adjusted earnings are now projected at $12-$14 per share, up from the prior range of $11.50-$13.50.

Tesla (TSLA - Free Report) reported second-quarter 2026 adjusted earnings of 33 cents per share, which declined 17.5% year over year. The figure missed the Zacks Consensus Estimate of 50 cents by 34%. Revenues advanced 25.5% to $28.24 billion and surpassed the consensus estimate of $25.81 billion by 9.41%. Tesla expects 2026 capital expenditures to exceed $25 billion and rise further over the next two to three years. 

Genuine Parts (GPC - Free Report) reported second-quarter 2026 adjusted earnings of $2.15 per share, beating the Zacks Consensus Estimate of $2.10 by 2.38%. The bottom line increased 2.4% from $2.10 in the year-ago quarter. Revenues rose 6% year over year to $6.54 billion and surpassed the consensus estimate of $6.39 billion by 2.36%. Genuine Parts reaffirmed its 2026 adjusted earnings guidance of $7.50-$8 per share and total sales growth outlook of 3-5.5%. Genuine Parts ended June with $2.3 billion of liquidity, including $559 million in cash.

Key Takeaways Xcel Energy's Q2 EPS is expected at 79 cents, up 5.33%, as revenues rise 9.44% to $3.60 billion. Higher power and gas demand, new rates and data-center growth are likely to support XEL's results. New solar and battery assets may boost XEL's earnings, while higher financing costs could offset gains. Xcel Energy (XEL - Free Report) is set to report second-quarter 2026 earnings on July 30, before the market opens. The company reported earnings in line with the Zacks Consensus Estimate in the last reported quarter.

Let us discuss the factors that are likely to be reflected in the upcoming quarterly results.

Q2 Expectations for XELThe Zacks Consensus Estimate for earnings is pegged at 79 cents, implying a year-over-year increase of 5.33%.

The consensus estimate for revenues is pinned at $3.60 billion, indicating an increase of 9.44% from the year-ago reported number.

Factors Likely to Have Impacted XEL’s Q2 EarningsXcel Energy's second-quarter 2026 performance is likely to have benefited from higher electric and natural gas demand, along with the implementation of new rates across its regulated service territories. Growing electricity demand from data centers is also likely to have contributed to the company's second-quarter earnings growth.

Xcel Energy's strategic capital investments in infrastructure, including transmission, distribution and generation assets, are likely to have supported the company’s second-quarter earnings. On April 14, 2026, the company placed into service a 150-megawatt solar facility at Plant X near Earth, TX and battery energy storage systems at Cunningham Generating Station in New Mexico.

The new projects placed into service during the second quarter are likely to have strengthened the company's renewable generation and energy storage portfolio, enhanced grid reliability and expanded its regulated asset base, thereby supporting earnings growth. The company is also expected to have gained from rising demand across its expanding electric and natural gas customer base.

However, higher financing costs may partially offset the positives during the second quarter.

What Our Quantitative Model Predicts for XELOur proven model does not conclusively predict an earnings beat for Xcel Energy this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is not the case here, as you will see below.

XEL’s Earnings ESP: The company has an Earnings ESP of -0.06% at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

XEL’s Zacks Rank: Currently, Xcel Energy carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to ConsiderInvestors may consider the following players from the same industry, as these have the right combination of elements to post an earnings beat this reporting cycle.

Ameren (AEE - Free Report) is set to report second-quarter results on July 31 and is likely to have come up with an earnings beat. It has an Earnings ESP of +0.19% and a Zacks Rank #2 at present.

AEE’s long-term (three to five years) earnings growth rate is 7.68%. The Zacks Consensus Estimate for second-quarter EPS is pinned at $1.08, which implies a year-over-year increase of 6.93%.

Edison International (EIX - Free Report) is set to report second-quarter results on July 30 and is likely to have come up with an earnings beat. It has an Earnings ESP of +4.66% and a Zacks Rank #2 at present.

EIX’s long-term earnings growth rate is 2.10%. The Zacks Consensus Estimate for second-quarter EPS is pinned at $1.02, which implies a year-over-year increase of 5.15%.

The Southern Company (SO - Free Report) is scheduled to report second-quarter results on July 30 and is likely to have come up with an earnings beat. It has an Earnings ESP of +1.16% and a Zacks Rank #3 at present.

SO’s long-term earnings growth rate is 11.36%. The Zacks Consensus Estimate for second-quarter EPS is pinned at $1.01, which implies a year-over-year increase of 10.99%.

Xylem Inc. (XYL) Q2 2026 Earnings Call July 28, 2026 9:00 AM EDT

Company Participants

Gregory Giometti
Matthew Pine - CEO, President & Director
William Grogan - Executive VP & CFO

Conference Call Participants

Deane Dray - RBC Capital Markets, Research Division
Michael Halloran - Robert W. Baird & Co. Incorporated, Research Division
Adam Farley - Stifel, Nicolaus & Company, Incorporated, Research Division
Andrew Kaplowitz - Citigroup Inc., Research Division
Scott Davis - Melius Research LLC
Andrew Buscaglia - BNP Paribas, Research Division
Christopher Grenga - TD Cowen, Research Division

Presentation

Operator

Good day, everyone, and welcome to Xylem's Second Quarter 2026 Results Conference Call. [Operator Instructions] Please also note, today's event is being recorded. At this time, I'd like to turn the floor over to Mr. Gregory Giometti, Senior Vice President, Investor Relations and FP&A. Please go ahead.

Gregory Giometti

Thank you, operator. Good morning, everyone, and welcome to Xylem's Second Quarter 2026 Earnings Call. With me today are Chief Executive Officer, Matthew Pine; and Chief Financial Officer, Bill Grogan. They will provide their perspectives on Xylem's second quarter results and discuss the third quarter and full year 2026 outlook.

Following our prepared remarks, we will address questions related to the information covered on the call. I'll ask that you please keep to one question and a follow-up and then return to the queue. As a reminder, this call and our webcast are accompanied by a slide presentation available in the Investors section of our website. A replay of today's call will be available until midnight, August 11, and will be available for playback via the Investors section of our website under the heading Investor Events.

Please turn to Slide 2. We will make some forward-looking statements on today's call, including references to future events or developments that we anticipate will or may occur in the

Key Takeaways CenterPoint Energy's Q2 adjusted EPS rose 37.9% to 40 cents, beating the consensus estimate by 8.1%.Revenues increased 10.7% year over year to $2.15 billion, while operating income reached $534 million.CNP expects 2026 adjusted EPS of $1.89-$1.91, with the upper end matching the consensus estimate. CenterPoint Energy, Inc. (CNP - Free Report) reported second-quarter 2026 adjusted earnings of 40 cents per share, which surpassed the Zacks Consensus Estimate of 37 cents by 8.1%. The bottom line also increased 37.9% from the year-ago quarter’s figure of 29 cents.

The company’s GAAP earnings were 37 cents per share, which increased 23.3% from the prior-year quarter’s figure of 30 cents.

CNP’s RevenuesCNP generated revenues of $2.15 billion, which beat the Zacks Consensus Estimate by 1.8%. The top line also came in 10.7% higher than the year-ago quarter’s reported figure of $1.94 billion.

CNP’s Operational ResultsIn the second quarter of 2026, total expenses increased 6% year over year to $1.62 billion.

The company reported an operating income of $534 million during the second quarter compared with $417 million in the prior year.

Interest expenses and other finance charges totaled $240 million, up 25.7% from $191 million recorded in the previous year.

CNP’s Financial ConditionAs of June 30, 2026, CenterPoint Energy had cash and cash equivalents of $49 million compared with $38 million as of Dec. 31, 2025.

The total long-term debt was $21.16 billion as of June 30, 2026, compared with $19.90 billion as of Dec. 31, 2025.

Net cash flow from operating activities amounted to $1.06 billion as of June 30, 2026, compared with $0.97 billion in the year-ago period.

The total capital expenditure was $2.57 billion as of June 30, 2026, compared with $2.17 billion in the prior year.

CNP’s 2026 GuidanceCenterPoint Energy expects to generate adjusted earnings per share in the range of $1.89-$1.91. The Zacks Consensus Estimate for 2026 earnings is pegged at $1.91 per share, which is in line with the upper limit of the company’s guided range.

CNP’s Zacks RankCNP currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Utility ReleasesXcel Energy Inc. (XEL - Free Report) is slated to report its second-quarter 2026 results on July 30, before market open.

The Zacks Consensus Estimate for second-quarter sales is pegged at $3.60 billion, which implies a 9.4% improvement from the year-ago quarter’s figure. The consensus estimate for earnings is pegged at 79 cents per share.

Duke Energy (DUK - Free Report) is scheduled to report its second-quarter 2026 results on Aug. 4, before market open.

The consensus estimate for sales is pegged at $7.71 billion, which indicates a 2.6% improvement from the year-ago quarter’s figure. The consensus estimate for earnings is pegged at $1.29 per share.

Consolidated Edison (ED - Free Report) is scheduled to report its second-quarter 2026 results on Aug. 6, after market close.

The Zacks Consensus Estimate for sales is pegged at $3.74 billion, which indicates a 4.2% improvement from the year-ago quarter’s figure. The consensus estimate for earnings is pinned at 74 cents per share.

FirstSun Capital Bancorp NASDAQ: FSUN reported a second-quarter net loss of $23 million, or $0.49 per diluted share, as merger-related expenses and elevated credit provisions weighed on results following its April 1 acquisition of First Foundation.

Chief Executive Officer Neal Arnold said the quarter marked an important stage in the company’s integration of First Foundation, which expanded FirstSun’s presence in Southern California and added a wealth management platform. He said the company completed its planned balance-sheet downsizing during the quarter and is focused on completing its core-system conversion in late September.

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The quarterly loss included $44 million in after-tax merger-related expenses and $30 million in after-tax credit-loss provisioning, Arnold said. Chief Financial Officer Rob Cafera said adjusted pre-tax, pre-provision net income, excluding merger costs, rose to $70 million, or $1.50 per share, from $37.3 million, or $1.32 per share, in the first quarter.

Balance-sheet repositioning completed Cafera said FirstSun reduced acquired assets by about $3.9 billion during the second quarter, including $1.4 billion of acquired securities and $1.3 billion of acquired loans. Loan reductions included about $901 million of multifamily loans, $337 million of municipal loans and nearly $100 million of shared national credits.

On the funding side, the company reduced acquired funding by about $3.9 billion, including $2.2 billion in brokered deposits, about $330 million in higher-cost non-relationship deposits and $1.4 billion in Federal Home Loan Bank borrowings. FirstSun’s wholesale funding ratio ended the quarter at 6.8%.

Management said the actions reduced concentration, liquidity and interest-rate risks while improving capital flexibility. Excluding acquired First Foundation deposits net of downsizing, core deposits grew at an adjusted annualized rate of about 5%, led by the Los Angeles and Orange County markets.

Core loan balances, excluding acquired loans and net of downsizing, declined at a 6% annualized rate in the second quarter. New loan fundings totaled $377 million, down 29% from the first quarter, while line utilization fell 4%. However, Cafera said core loan balance growth for the first six months of 2026 was 9.7% on the same adjusted basis.

Margin pressure eased late in the quarter Net interest margin was 3.58% in the second quarter, compared with 4.25% in the first quarter. Cafera said the decline reflected the acquired loan portfolio’s lower stated coupons, higher funding costs and the timing of repositioning actions, as loan sales were completed in June.

Still, the company said its net interest margin improved by 29 basis points from April to June, reaching 3.76% in June. Deposit costs in June were 20 basis points lower than in April, according to Cafera.

FirstSun expects cost-of-funds reductions, including lower brokered-deposit costs and additional funding remixing, to support further margin improvement. Management expects net interest margin to increase slightly in the third quarter from June’s level, reach the mid-3.80% range in the fourth quarter, and move into the high-3.80% range in the first quarter of 2027.

Service-fee revenue increased 50.7% from the first quarter, primarily because of the acquisition. The company also reported organic growth in mortgage and treasury-management revenue. Mortgage and wealth-management revenue combined accounted for 62.3% of second-quarter service-fee revenue, while total service-fee revenue represented 22% of company revenue.

Credit losses tied to two larger loans Provision expense totaled $40.4 million in the second quarter and net charge-offs were $42.4 million, or 145 basis points of average loans on an annualized basis. Two loan events accounted for 86% of the quarter’s provision expense and 82% of charge-offs, Cafera said.

The first involved what management described as fraudulent misrepresentations by a borrower in the materials-distribution business. The second involved a technology company whose financial performance deteriorated during the quarter. The two loans generated approximately $35 million in pre-tax charge-offs, Arnold said.

Management said the losses were borrower-specific and not indicative of broad-based deterioration in the commercial and industrial portfolio. Nonperforming loans increased to 1.64% of total loans at June 30, from 0.86% at March 31, while criticized loans rose to 7.7% of loans from 4.3%.

Cafera said about 76% of the increase in criticized loans was related to the acquired First Foundation portfolio. Multifamily loans represented 60% of the increase in criticized balances. Management said weighted loan-to-value for criticized multifamily loans was 68%, and guarantees covered approximately 94% of those loans.

The allowance for credit losses stood at 150 basis points of loans at June 30, up from 120 basis points at the end of the first quarter. FirstSun expects full-year net charge-offs to average in the high-50-basis-point range and anticipates a more normalized charge-off level in 2027.

Capital and outlook Tangible book value per share was $35.16, down almost 9% from March 31. The company said acquisition-related tangible book value dilution was approximately 10%, lower than its original 14% estimate, reflecting lower expected merger expenses and more favorable net fair-value effects.

FirstSun reported a common equity Tier 1 capital ratio of 11.95%, total risk-based capital of 14.13% and a Tier 1 leverage ratio of 9.47%. The company also announced a share-repurchase authorization of up to $150 million, with purchases targeted over the next four quarters beginning in the third quarter.

For the remainder of 2026, management expects low-double-digit loan growth from the second-quarter period-end level and low-single-digit deposit growth. It expects mid-single-digit loan and deposit growth in 2027. The company expects its adjusted efficiency ratio to improve to the low-60% range in the fourth quarter as further cost savings are realized after the planned September systems conversion.

About FirstSun Capital Bancorp (NASDAQ:FSUN)FirstSun Capital Bancorp engages in the provision of commercial banking services. It operates through the following segments: Banking, Mortgage Operations, and Corporate. The Banking segment consists of loans and provides deposits and fee-based services to consumer, business, and mortgage lending customers. The Mortgage Operations segment originates, sells, services, and manages market risk from changes in interest rates on one-to-four family residential mortgage loans to sell and hold. The company is founded on November 9, 1981 headquartered in Denver, CO.

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Key Takeaways Comfort Systems' backlog surged 73% to $14.06 billion, providing strong revenue visibility into 2027.Technology projects drove 58.7% of Q2 revenue, while modular operations expanded with capacity investments.Gross margin rose to 25.9% as stronger execution and cost leverage boosted operating profitability. Comfort Systems USA, Inc. (FIX - Free Report) has turned technology infrastructure demand, expanding modular operations and better project execution into rapid growth. Second-quarter revenues rose 50.3% year over year, while earnings per share increased 91.9%.

The key investor question is whether these advantages can keep supporting growth as the company moves into tougher comparisons and a larger operating base.

Comfort Systems Backlog Extends Growth VisibilityBacklog reached $14.06 billion at June 30, 2026, up 73% from the prior-year period and 13% sequentially. Same-store backlog increased to $13.7 billion from $8.12 billion a year earlier.

That backlog supports revenue visibility into 2027. Comfort Systems expects roughly 65% to 75% of remaining construction performance obligations to convert into revenues over the next 12 months.

FIX Gains From Technology Infrastructure DemandTechnology projects accounted for 58.7% of second-quarter revenues, up from 43% a year earlier. The mix shift shows how data center and related infrastructure work has become a larger driver of the company’s project base.

Bookings remained elevated across traditional construction and modular offerings. EMCOR Group, Inc. (EME - Free Report) , another mechanical and electrical construction services provider, offers investors a useful comparison point for demand tied to complex building systems. Quanta Services, Inc. (PWR - Free Report) is also relevant because power and communications infrastructure needs are increasingly tied to large-scale technology development.

Comfort Systems Expands Modular CapacityModular operations generated 17% of first-half revenues. The business gives Comfort Systems a scalable way to serve repeatable technology projects while moving more work into controlled production environments.

The company had more than 3.5 million square feet of dedicated modular capacity at the end of the second quarter. Management expects capacity to exceed 4 million square feet by year-end 2026 and reach about 5 million by late summer 2027, supported by customer commitments and investments in automation, robotics and fabrication equipment.

FIX Converts Scale Into Wider MarginsSecond-quarter 2026 gross margin expanded to 25.9% from 23.5% a year earlier. Operating margin improved to 17.1% from 13.8%, helped by stronger project execution, favorable mix and better cost leverage.

Selling, general and administrative expenses fell to 8.8% of revenues from 9.7%. Adjusted earnings before interest, taxes, depreciation and amortization rose 79.7% year over year to $600.5 million, showing that higher throughput is converting into broader profitability.

Comfort Systems Faces Capacity and Mix RisksLabor availability remains the company’s main growth constraint. Management continues to describe demand as stronger than available capacity, which means execution depends on hiring, training and deploying skilled workers across markets.

Capital spending is also elevated as Comfort Systems expands modular facilities and buys specialized equipment. Larger technology exposure adds another risk, since customer concentration, large projects and favorable estimate revisions can make quarterly margins more volatile even when end-market demand stays healthy.

FIX Signals Favor Growth but Not ValueComfort Systems’ backlog, technology mix and modular expansion support a growth-oriented operating story. The offset is that expectations have risen after a sharp stock advance and rapid earnings expansion.

The stock currently carries a Zacks Rank #3 (Hold), with a VGM Score of B. Its Growth Score of A aligns with the company’s revenue, earnings and backlog momentum, while the Value Score of D points to a less favorable valuation setup. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Momentum Score of C reinforces a balanced near-term view. FIX still has clear operating strengths, but the ranking and scores suggest investors should weigh that growth profile against valuation and execution risks.

Key Takeaways Robert Half matched Q2 EPS estimates as Talent Solutions delivered sequential revenue improvement.RHI expects Q3 adjusted EPS of 45 cents to 53 cents, with the midpoint above the Zacks Consensus Estimate.Robert Half sees improving hiring demand as Permanent Placement grows & Contract Talent Solutions stabilizes. Robert Half Inc. (RHI - Free Report) reported second-quarter 2026 adjusted earnings of 26 cents per share, which matched the Zacks Consensus Estimate but declined 36.6% year over year. Revenues of $1.34 billion surpassed the consensus estimate by 0.8% but decreased 2.4% year over year.

However, investors remain optimistic due to strong earnings guidance for the third quarter of 2026, as the stock has gained 5% since the company released results on July 23.

The company guided adjusted earnings per share between 45 cents and 53 cents, with the midpoint of 49 cents being higher than the Zacks Consensus Estimate of 47 cents.

Over the past year, RHI's shares have risen 3.5% compared with the industry's 3.7% growth. The Zacks S&P 500 composite has gained 18.4% during the said time frame.

The earnings performance of the reported quarter reflected improving demand in Talent Solutions, partly offset by continued weakness at Protiviti and restructuring-related costs.

Talent Solutions Show Sequential ImprovementTalent Solutions revenues totaled $865.4 million, down 1% year over year. Within the segment, Contract Talent Solutions revenues declined 1.6% to $747.4 million, while Permanent Placement Talent Solutions revenues increased 2.9% to $118 million, marking a return to year-over-year growth.

Protiviti revenues fell 4.9% year over year to $471 million, reflecting ongoing softness in the U.S. financial services regulatory environment. Management noted that Talent Solutions delivered its third consecutive quarter of sequential revenue growth on an adjusted basis, while hiring demand continued to improve.

RHI’s MarginsContract Talent Solutions' gross margin remained 39.1%, unchanged from the prior-year quarter. Overall, Talent Solutions’ gross margin improved to 47.4% from 47.1% a year ago.

Protiviti's reported gross margin declined to 13.5% from 19.7%. On an adjusted basis, gross margin was 18.5%, down from 22.3%, reflecting approximately $7 million in severance costs related to restructuring actions.

Profitability Pressured by Higher ExpensesThe company reported an operating loss of $62.3 million, against an operating income of $1.5 million in the year-ago quarter. Adjusted operating income was $38.6 million, representing 2.9% of revenues.

The quarter included a $100.9 million gain from investments held in employee deferred compensation trusts, fully offset by related compensation expenses, resulting in no impact on net income. The effective tax rate increased to 35% from 33% a year ago.

Balance Sheet & Cash FlowRobert Half ended the quarter with $324.7 million in cash and cash equivalents, compared with $380.5 million a year earlier. Accounts receivable stood at $821.4 million. Cash flow from operations totaled $109 million in the quarter. The company paid a quarterly dividend of 59 cents per share, returning $59 million to its shareholders.

RHI’s Other GuidanceFor the third quarter of 2026, Robert Half expects revenues to be between $1.31 billion and $1.41 billion, with the midpoint of $1.36 billion in line with the Zacks Consensus Estimate.

At the midpoint, management expects Talent Solutions revenue growth of about 3% year over year, while Protiviti revenues are projected to decline about 6%. Management noted improving hiring activity, with Contract Talent Solutions revenues down 1% in the first two weeks of July 2026 and Permanent Placement revenues up 4% during the first three weeks of the month.

Currently, Robert Half carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Earnings SnapshotsWaste Connections, Inc. (WCN - Free Report) reported impressive second-quarter 2026 results. WCN’s adjusted earnings of $1.50 per share outpaced the consensus mark by 11.1% and rose 16.3% from the year-ago quarter. Waste Connections’ total revenues of $2.56 billion surpassed the consensus mark by 1.1% and increased 6.4% year over year.

Rollins, Inc. (ROL - Free Report) posted unimpressive second-quarter 2026 results. ROL’s adjusted earnings of 32 cents per share missed the Zacks Consensus Estimate by 5.9% but rose 6.7% year over year. Total revenues of $1.08 billion fell short of the consensus estimate by 1.7% but increased 7.9% from the year-ago quarter.

Key Takeaways BRBR trades below industry, sector and historical valuation levels after a sharp 2026 stock decline.BellRing Brands cut 2026 sales and EBITDA guidance amid weaker demand, promotions and higher costs.BRBR benefits from protein demand, distribution gains, innovation and remaining share repurchase capacity. BellRing Brands, Inc. BRBR has seen a sharp valuation reset in 2026 as investors weigh weaker guidance, falling margins and a less certain earnings recovery. The stock’s lower multiple now reflects a more cautious view of the business.

The question is whether that discount adequately compensates investors for execution risks tied to promotions, input costs, freight, mix and the timing of margin improvement.

BRBR Trades Below Key Valuation BenchmarksBRBR trades at 10.2X forward 12-month earnings, below 14.58X for its Zacks sub-industry, 17.0X for the broader Zacks Consumer Staples sector and 20.2X for the S&P 500 index.

The discount also looks large against the company’s own history. BellRing shares trade well below the stock’s five-year median forward earnings multiple, after falling 51.1% year to date and 76.5% over the trailing 12-month period.

Image Source: Zacks Investment Research

BellRing Brands’ Guidance Reset Raises RiskManagement lowered fiscal 2026 net sales guidance to $2.33-$2.37 billion, or flat to 2% growth. The prior outlook called for $2.41-$2.46 billion, or 4% to 6% growth.

The adjusted EBITDA outlook was cut to $315-$335 million from $425-$440 million. The revision reflects weaker Premier Protein baseline velocities, more muted demand-driver contribution, unfavorable mix, increased trade investment, freight and protein inflation, lower cost savings and reduced selling, general and administrative expense leverage.

BellRing currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

BRBR Earnings Show Significant CompressionBellRing’s fiscal second-quarter earnings showed why the valuation reset alone may not settle the investment debate. Adjusted earnings fell 74% to 14 cents, while adjusted EBITDA declined 55% to $53.8 million.

Adjusted EBITDA margin fell to 9% from 20.2% a year earlier. Premier Protein volumes rose 11%, primarily from promotions and distribution gains, but average net selling prices declined because of promotional investment and unfavorable mix.

That matters for investors assessing sales quality. Volume growth can protect category relevance, but it does not necessarily rebuild earnings if it depends heavily on discounts while costs remain elevated.

BRBR needs better pricing, mix and cost control to convert demand into stronger margins. Until that happens, earnings recovery could lag the company’s top-line opportunity.

BellRing Brands Retains Long-Term SupportThe risk case is balanced by solid long-term demand drivers. BellRing operates in a protein category that remains healthy, with ready-to-drink shakes still benefiting from mainstream wellness trends and retailer support.

Distribution also remains a positive. Premier Protein consumption outside club rose 15% in the fiscal second quarter, while mass, food and eCommerce generated high-teens growth. Innovation through Premier Protein Ultimate and Premier Protein Sparkling Soda adds potential new use cases and shelf opportunities.

The Simply Good Foods Company (SMPL - Free Report) is a relevant active-nutrition comparison because its Atkins and Quest brands compete for health-and-wellness consumer spending. Celsius Holdings, Inc. (CELH - Free Report) , a functional beverage company with CELSIUS and Alani Nu, also shows how wellness-oriented beverage brands are competing for consumer routines and retail space.

Capital allocation provides another support point. BellRing had $516.9 million remaining under its share-repurchase authorization as of March 31, 2026. Management expects strong cash flow in the second half of 2026 and net leverage in the low 3X range for the remainder of the fiscal year.

Image Source: Zacks Investment Research

BRBR’s Valuation Signal Remains MixedThe bottom line is that BRBR’s lower multiple improves the valuation setup, but it does not erase execution risk. The company still needs to show that category demand, distribution and innovation can translate into better earnings quality.

The current Zacks Rank and individual Style Scores are not specified for BRBR. In general, the Zacks Rank is most useful for evaluating estimate-revision momentum, while Style Scores help investors assess value, growth and momentum characteristics alongside that rank.

For BRBR, the Neutral view and $14 price target point to a balanced risk-reward profile rather than a clear bullish signal. Discounted multiples may attract attention, but weaker visibility around margins and earnings recovery keeps the valuation message mixed.

Principal Financial Group NASDAQ: PFG reported second-quarter 2026 results marked by double-digit earnings growth, margin expansion and continued capital returns, while executives also addressed concentrated investment-management outflows and an agreement to acquire employee benefits provider Beam Benefits.

Chair, President and CEO Deanna Strable said adjusted non-GAAP earnings per share increased 17% from a year earlier and 15% year to date, exceeding the high end of the company’s target range. Enterprise earnings grew 13%, supported by 6% net revenue growth and 200 basis points of margin expansion.

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Strable said favorable underwriting and improved mortality in the Benefits and Protection segment, strong Retirement and Income Solutions fundamentals, and positive market conditions for fee-based businesses more than offset the effect of investment-management net cash outflows.

Second-Quarter Financial Results and Capital Position CFO Joel Pitz said non-GAAP operating earnings totaled $547 million in the quarter, up 12% year over year, while earnings per share rose 16% to $2.50. Excluding significant variances, operating earnings were $529 million, up 13%, and earnings per share were $2.42, up 17% from a year earlier.

Total company operating margin reached 32%, expanding 200 basis points from the prior-year period. Non-GAAP operating return on equity, excluding significant variances, was 16.4%, up 120 basis points year over year and above the midpoint of Principal’s 15% to 17% target range. Net income excluding exit business was $535 million, a 24% increase from the year-ago quarter, with minimal credit losses, Pitz said.

Managed assets under management ended the quarter at $808 billion, up 5% from the first quarter and 7% from the second quarter of 2025.

Principal returned $427 million to shareholders during the quarter, comprising $250 million in share repurchases and $177 million in dividends. Year-to-date shareholder returns totaled $800 million. The company said it remains on track for full-year capital deployment of $1.5 billion to $1.8 billion.

The company also raised its common-stock dividend for the 13th consecutive quarter. It announced a third-quarter dividend of $0.84 per share, up $0.02 sequentially and 8% from a year earlier.

Pitz said Principal ended the quarter with more than $1.6 billion in excess and available capital, including $950 million at the holding company, $300 million at subsidiaries and $350 million above its targeted risk-based capital ratio. Its risk-based capital ratio was approximately 400% at quarter-end.

Retirement, Benefits Results Drive Growth In Retirement and Income Solutions, pre-tax operating earnings increased 8% from a year earlier, supported by 5% net revenue growth and expense discipline. Operating margin expanded 120 basis points to 41%.

Strable said retirement transfer deposits rose 30% year over year and recurring deposits increased 6%. Roll-ins reached $1.7 billion during the quarter and more than $7 billion over the trailing 12 months, with both measures up nearly 20%. The company also reported $2 billion in defined-contribution investment-only sales and $500 million of pension risk transfer sales during the quarter.

Chris Littlefield, president of Retirement and Income Solutions, said the company continued to see growth in participants with account balances, higher deferrals and strong retention. Plan counts were flat to slightly down as Principal de-emphasized the micro-plan market in favor of plans with greater assets and investment-mandate opportunities, he said.

Benefits and Protection generated pre-tax operating earnings of $191 million, up 29% year over year. Specialty Benefits earnings rose 29% to a record $162 million, while the loss ratio improved 280 basis points to 57.4%. Specialty Benefits operating margin increased 360 basis points to 19%.

Amy Friedrich, president of Benefits and Protection, attributed the improvement to favorable results across product lines, including dental-network optimization, past pricing actions, lower disability incidence and lower group life frequency. She said Principal now expects full-year Specialty Benefits underwriting results to emerge below the low end of its previously communicated 60% to 64% loss-ratio range.

Asset Management Outflows Remain a Headwind Principal Asset Management’s earnings increased 6% year over year, aided by assets under management growth and margin expansion. Investment-management earnings rose 4%, as slightly higher revenue and expense discipline offset elevated severance costs. The company said severance expenses across investment management and international pension were about $7 million during the quarter.

However, the company recorded approximately $11 billion in total-company net outflows, concentrated in a small number of U.S. active equity strategies. Kamal Bhatia, president and CEO of Principal Asset Management, said those strategies represent slightly more than 5% of firm assets under management and have faced an “acute and unusual” market environment that has not rewarded quality-oriented, valuation-aware stock selection.

Bhatia said management expects net flows to remain somewhat challenged in the second half, though the committed but unfunded pipeline increased to roughly $10 billion from the first quarter. He also cited growth in other areas, including private markets, international pension assets and active ETFs.

Private markets assets under management increased 10% year over year, while international pension assets under management climbed 18% to a record $169 billion. Active ETFs generated $500 million in quarterly net inflows and $2 billion over the trailing 12 months.

Beam Benefits Acquisition and Portfolio Actions Principal announced earlier in July that it agreed to acquire Beam Benefits, a digital-first employee benefits company serving small and midsize businesses. Beam has more than 25,000 employer customers, about 400,000 members and generated $175 million of premium in 2025, according to Friedrich.

Management said the transaction would expand Principal’s SMB reach and add digital quoting, underwriting and distribution capabilities. Friedrich said potential benefits include eliminating certain leased dental-network costs and extending Beam’s technology across Principal’s broader small-case business.

Pitz said the acquisition is not expected to change the company’s 2026 capital-deployment plan, earnings outlook, free-cash-flow outlook or return-on-equity outlook. Strable said Principal views acquisitions as opportunistic accelerators rather than a replacement for organic growth and will continue to apply financial, strategic and cultural criteria to potential deals.

The company also completed the transition of its Hong Kong pension business to BCT and said its pending sale of the Chile annuity business remains part of efforts to optimize its portfolio.

About Principal Financial Group (NASDAQ:PFG)Principal Financial Group NASDAQ: PFG is a global financial services company headquartered in Des Moines, Iowa, that provides a range of retirement, investment and insurance solutions to individuals, employers and institutional clients. The firm's business is organized around retirement services, asset management, and insurance products designed to help clients plan, invest for, and protect income over the long term.

Principal's product and service offerings include retirement plan recordkeeping and administration for employer-sponsored plans, individual and group retirement annuities, life and disability insurance, employee benefits solutions, and wealth management services.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

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Key Takeaways Darling Ingredients' Q2 revenues are expected to rise 21.8% year over year to $1.8 billion. Higher fat and protein prices, strong poultry volumes and better product mix are set to support margins.Diamond Green Diesel is expected to produce about 320 million gallons near full capacity. Darling Ingredients Inc. (DAR - Free Report) is likely to witness a top-and bottom-line increase when it reports second-quarter 2026 earnings on July 30. The Zacks Consensus Estimate for revenues is pegged at $1.8 billion, suggesting growth of 21.8% from the year-ago period figure.

The consensus mark for earnings has risen from $1.28 to $1.45 over the past seven days, which implies substantial growth from 9 cents reported in the year-ago period. DAR has a trailing four-quarter surprise of 16.1%, on average.

Factors Likely to Influence DAR’s Upcoming ResultsDarling Ingredients’ second-quarter performance is likely to have benefited from a more favorable operating environment, improving commodity markets and continued operational execution across its global platform. Management expected earnings momentum to strengthen as 2026 progressed and projected core ingredients EBITDA of $260-$275 million for the quarter.

Higher fat and protein prices are expected to have supported revenues and margins, with the acceleration in North American fat prices beginning in March and expected to flow through during May and June. Strong poultry volumes, healthy global raw-material availability, improved product quality and sales into higher-value markets are likely to have provided additional support.

Growing collagen demand in Europe and Asia, broader applications across food, nutrition and health products, and favorable pricing and product mix are likely to have aided the Food business. Fuel results may also have increased sharply, as Diamond Green Diesel was expected to produce roughly 320 million gallons and operate near full capacity amid constructive renewable-diesel margins. Higher European energy prices may have supported non-DGD operations as well.

However, stagnant cattle supplies, commodity-price realization lags and early-quarter tariff-related pressure in Brazil may have limited some margin upside.

Earnings Whispers for DAROur proven model doesn’t conclusively predict an earnings beat for Darling Ingredients this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.

 Darling Ingredients currently carries a Zacks Rank #3 and has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With the Favorable CombinationHere are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.

Archer-Daniels-Midland Company (ADM - Free Report) currently has an Earnings ESP of +11.52% and a Zacks Rank of 2. The consensus estimate for ADM’s quarterly revenues is pinned at $22.4 billion, which calls for 5.7% growth from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Archer-Daniels’ upcoming quarter’s EPS is pegged at $1.27, which implies a 36.6% rise year over year. ADM delivered a trailing four-quarter earnings surprise of 5.4%, on average.

Kimberly-Clark Corporation (KMB - Free Report) currently has an Earnings ESP of +1.43% and a Zacks Rank of 3. The Zacks Consensus Estimate for Kimberly-Clark’s upcoming quarterly revenues is pegged at $4.2 billion. The figure indicates a 1.7% increase from the prior-year quarter.

The Zacks Consensus Estimate for Kimberly-Clark’s quarterly earnings per share is pegged at $2.00, suggesting a 4.2% gain from the year-ago period figure. KMB delivered a trailing four-quarter earnings surprise of 19.1%, on average.

Monster Beverage Corporation (MNST - Free Report) currently has an Earnings ESP of +2.61% and a Zacks Rank of 3. The consensus estimate for Monster Beverage’s quarterly revenues is pinned at $2.4 billion, which implies 14.5% growth from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for the upcoming quarter’s EPS is pegged at 59 cents, which calls for a 13.5% jump year over year. MNST delivered a trailing four-quarter earnings surprise of 9.6%, on average.

Key Takeaways SoFi expects Q2 adjusted net revenues of about $1.115B, up roughly 30%, with EPS of 10-11 cents.Strong lending, deposits and product adoption may support growth, while Technology Platform remains softer.With execution, valuation and credit risks still in focus, holding shares appears the preferred stance. SoFi Technologies, Inc. (SOFI - Free Report) , a digital financial services company, is slated to release second-quarter 2026 results on July 29, before market open. For the second quarter of 2026, SoFi expects adjusted net revenues of roughly $1.115 billion, implying approximately 30% year-over-year growth. The adjusted EBITDA margin is projected near 30%, equivalent to around $330 million in EBITDA.

The Zacks Consensus Estimate for the to-be-reported quarter’s adjusted earnings per share (EPS) and revenues is pegged at 11 cents per share and $1.11 billion, respectively.  While the consensus mark for second-quarter 2026 adjusted EPS has been revised a cent downward to 11 cents over the past 60 days, it suggests 37.50% growth year over year. The Zacks Consensus Estimate for quarterly revenues implies a notable year-over-year increase of 29.67%.

Image Source: Zacks Investment Research

For the current year, the Zacks Consensus Estimate for SoFi Technologies’ revenues is pegged at $4.66 billion, indicating a rise of 29.85% year over year. The consensus mark for 2026 adjusted EPS stands at 59 cents, calling for an expansion of around 51.28% on a year-over-year basis.

Over the trailing four quarters, the company’s EPS surpassed the Zacks Consensus Estimate on three occasions and met on the other. This is depicted in the graph below:

Here Is What Our Quantitative Model Predicts for SOFIOur proven model does not conclusively predict an earnings beat for SOFI this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.

SOFI has an Earnings ESP of 0.00% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

SoFi’s Q2 Earnings Could Test Its Growth MomentumSoFi Technologies entered its second quarter with a bar after opening 2026 with record revenues, originations, members and products. Management expects adjusted net revenues of about $1.115 billion, up roughly 30% year over year, with an adjusted EBITDA margin near 30% and EPS of 10 to 11 cents.

Lending is likely to have remained the main growth driver. After record first-quarter originations across personal, student and home loans, SoFi is likely to have experienced demand from borrowers refinancing high-cost debt, funding education and seeking home financing. Its loan platform business should have provided fee income without adding credit risk.

Credit quality will matter as much as growth. SoFi entered the second quarter with stable personal-loan charge-offs, lower delinquency rates and strong borrower profiles. However, investors should watch for any change in borrower performance, fair-value marks or funding costs.

Financial Services is expected to have benefited from rising deposits, card spending, brokerage activity and product adoption. The April relaunch of SoFi Plus may have increased subscriptions and encouraged existing members to open additional products, supporting recurring revenues and stronger customer value.

Technology Platform remains the softer area after losing a large client, but the second quarter is expected to reveal whether new customers are beginning to offset that pressure. Margins, marketing spending and product investment need to be tracked, since management warned that heavier first-half expenses would weigh on quarterly profitability while supporting growth later in 2026.

SOFI's Price Performance & ValuationShares of SoFi have plunged 35.5% so far in the year. The Zacks Financial - Miscellaneous Services industry has declined 12.8%, while the S&P 500 composite has risen 7.6% over the same time frame. SoFi’s peers like Affirm Holdings, Inc. (AFRM - Free Report) and Upstart Holdings, Inc. (UPST - Free Report) have experienced different trends, with Affirm Holdings just falling 1.9%, while Upstart has registered a 37.1% decline.

Year-to-Date Price Performance

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Valuation-wise, SoFi trades at a forward price-to-earnings of 23.81X, ahead of its industry’s average of 12.79X but well below its one-year median of 42.01X. SOFI stock is also currently trading at a reasonable discount compared with Affirm Holdings but at a premium to Upstart. Affirm Holdings is trading at a forward 12-month price-to-earnings of 40.74X, while Upstart is trading at 9.71X.

However, the Value Score of F suggests that SoFi may not be a bargain at current levels.

Forward 12 Month Price-to-Earnings Ratio

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How to Play SoFi Technologies Stock Ahead of Q2 Earnings?SoFi entered the second quarter with strong lending demand, rapid member growth and improving cross-selling across banking, investing and payments. New products, including SoFi Plus, small-business loans, AI investing tools and SoFiUSD, could deepen engagement and expand fee income over time.

Still, near-term earnings may face pressure from higher marketing, product investment and softer Technology Platform revenues following a major client loss. Credit quality and loan fair-value marks also remain key risks in a higher-rate environment. With growth prospects balanced by execution, valuation and credit-cycle uncertainty, maintaining their current position seems a preferable stance while awaiting clearer evidence of sustained margin expansion.

The initial public offering (IPO) of Space Exploration Technologies, aka SpaceX, on June 12 was a major market event for 2026, drawing attention to the innovative company and others in the budding space economy. Investors' enthusiasm spilled over into other space and satellite stocks, such as AST SpaceMobile (ASTS -1.39%), which rocketed to $133 per share in late May.

SpaceX's public debut marked a peak for many space-related stocks, and AST SpaceMobile has since fallen 58%. With AST SpaceMobile now trading below $63 per share, investors may be wondering whether the sell-off is a buying opportunity. Let's dive into the satellite company and its outlook to find out if it's right for you.

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The bull case hinges on successful deployment of its BlueBird satellites AST SpaceMobile operates satellites that provide cellular broadband from space directly to standard smartphones. The company partners with mobile network operators, including AT&T, Verizon Communications, Vodafone, and Alphabet's Google, and typically uses a 50/50 revenue-sharing model for carriers that offer add-on satellite coverage. The company aims to bring cellular coverage to half the Earth's landmass that lacks it, and it has a potential user base of 3 billion subscriber connections across the globe.

To achieve continuous coverage across select high-priority markets, AST aims to deploy 45 to 60 satellites. The company was hoping to achieve this by year-end but faced a setback when its launch partner, Blue Origin's New Glenn rocket, deployed its satellite into an orbit too low to operate in, rendering its BlueBird 7 unusable.

The company used SpaceX's Falcon 9 to launch its BlueBird satellites 8 through 10 on June 17, and aims to launch satellites 11 through 13 in the first half of August. The successful Falcon 9 mission helps AST SpaceMobile continue establishing its satellite constellation, but the recent events reveal the risks around available launch services as it races to build out its satellite network.

Today's Change

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Current Price

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57.48

Does the recent 58% dip in AST SpaceMobile make it a buy? AST is guiding revenue for this year to be between $150 million and $200 million, with half of that backed by its existing backlog. Wall Street is forecasting a net loss of $1.55 per share, or about $463 million, as it deploys its satellites. In July, the company closed a $1 billion private offering of convertible senior notes at 1.625% due 2034. The move gives it $3.8 billion in capital to fund its ongoing orbital expansion.

Looking ahead, management reiterated a revenue expectation of $1 billion next year. For 2028, analysts project revenue to grow to $1.9 billion, with GAAP earnings per share turning positive, assuming the company expands to 90 satellites to provide global continuous coverage.

The recent dip in AST SpaceMobile highlights the risks of investing in the early-stage satellite stock as it establishes its satellite network and scales up its commercial operations. That said, the stock has declined significantly from its recent peak, making it more favorable on a risk-to-reward basis. For aggressive investors bullish on the space economy and AST's role in it, the recent dip presents an appealing opportunity to add some shares in the company.