Europe

Woozle Research

Consumer Discretionary

Q1 channel checks reveal weaker-than-expected SSS growth in Europe (+0.35% Y/Y vs. consensus of +2.65%). While 50% of surveyed store managers reported positive Y/Y revenue growth, driven by new seasonal collections and effective in-store promotions, 30% of stores experienced declines due to competitive pressures and adverse weather conditions, particularly in markets like the UK and Czech Republic. 40% of managers noted declining foot traffic as a headwind, particularly in Eastern and Northern Europe. Seasonal inventory challenges were also cited by 20% of respondents, affecting sales performance in some regions, especially in Switzerland and the UK.

Forensic Alpha

Financials

Despite the recent recovery in ABDN's share price, Forensic Alpha continues to identify several accounting flags. Foremost amongst these is the accrued income balance, which has continued to rise from an already elevated level in 2023 and comes despite a decline in management and performance fees. The value on ABDN’s balance sheet of £333m now compares to management and performance fees of £815m. Over the past 4 years in fact, accrued income has risen every year even as fee income has declined. Furthermore, the amount of receivables and other financial assets expected to be recovered after more than 12 months is £84m (vs. £34m in FY22). Given the industry's very short billing cycle, why is such a high proportion of these receivables not going to be paid out in the next year?

Iron Blue Financials

Industrials

Following publication of its FY24 annual report, Iron Blue increases their ABB score +2pts to 29/60 (newly top decile / fertile grounds for shorting). Headline earnings were struck after higher Y/Y stripped out costs / losses and increased cost capitalisations whilst they also included seemingly greater one-off benefits related to derivatives and self-insurance. This could imply a tough comp effect for FY25 earnings delivery. Risks also seem to have increased. KPMG added “valuation of goodwill for the Machine Automation reporting unit” as a new critical audit matter, implying heightened risk of a future impairment. Management added “intensified competition” as a new risk. “Legal and regulatory changes” was also newly cited with a focus on potential restrictions from trade sanctions. Finally, whistleblower cases increased +18% Y/Y.

Insight Investment Research

Industrials

FER agrees to acquire up to a 5.06% stake in 407 ETR from AtkinsRéalis for C$2.09bn, which Robert Crimes considers highly value accretive (the deal price implies for 100% of equity in the toll road a valuation of only C$41,304m, a -63% discount to his DDM valuation) and strategically positive (Cintra will be the majority shareholder). With CPPIB also showing a willingness to reduce its stake in 407 ETR, he strongly believes FER should continue to increase its holding. Robert’s SOTP based TP is €99 (140% upside); he believes the market underestimates the company’s long duration infrastructure cashflows.

Kolytics

Real Estate

Kolytics' report analyses European and US industrial real estate, examining demand drivers, supply imbalances, valuations and company-specific comparisons. They highlight the structural demand drivers supporting the long-term outlook for industrial real estate, with the Covid-era supply surge now behind us. However, they caution that macro and geopolitical uncertainty could weigh on near-term performance. Following the post-Covid e-commerce and trade boom, valuations have corrected - more sharply in public markets, particularly Europe - creating selective opportunities in the REIT space. Companies covered include Catena, First Industrial, Prologis, Rexford Industrial, Sagax, Segro, Tritax Big Box and Warehouses De Pauw.

North America

Trivariate Research

With investors searching for value in the current market sell-off and likely looking to buy names among the safer, larger cap universe, Trivariate has assessed the performance of several metrics within the stocks >$100bn m/cap to see if they could systematically pick winners from losers. The best performing signal over the last 10 years, was buying the companies in the top third of forecasted revenue growth, while the second best was buying the one-third of companies with the lowest short interest. The worst performing signals were those in the highest third of leverage and stock volatility (distance-to-default) and those with the worst third of downward earnings revisions. Current long ideas from Trivariate’s $100bn Club Framework include all the Mag 7 (except Tesla), as well as Eli Lilly, Visa and UnitedHealth. Shorts include Goldman Sachs, PepsiCo, Caterpillar and Starbucks.

MYST Advisors

MYST’s latest buyside event saw a large group of investors offer a diverse set of ideas spanning various sectors / themes. Stocks highlighted include:

Bayer (BAYN GR) - New management advancing turnaround as litigation resolution approaches. TP €40 (65% upside).
CRH (CRH) - Increased pricing power + Ukraine rebuild opportunity to narrow valuation gap vs. peers. TP $135 (35% upside).
NFI (NFI CN) - Earnings / margins to rebound sharply as production issues ease. TP C$40 (200% upside).
Paramount Global (PARA) - Pending deal approval to trigger “structural bid” from Arbs while streaming business inflects. TP $15 (30% upside).
Parkland (PKI CN) - Substantial SOTP upside amid ongoing strategic alternatives process. TP C$54 (45% upside).

New Street Research

Communications

New Street previously commented that if Trump was elected, Elon Musk would be the most powerful force in telecom policy, elevating satellite priorities over the policy priorities of traditional communications networks. One of the issues they pointed to where that influence might be exercised involved potential SpaceX interference with T’s cellular network. The FCC recently addressed that issue, granting a conditional waiver to SpaceX re. OOBE that will improve the TMUS direct to device service, despite studies from T and VZ providing evidence that doing so will degrade T’s cellular service. In this note, New Street describes the grant and lays out the implications for investors, including how it may impact other spectrum battles.

86Research

Consumer Discretionary

Media outlets have been highlighting the China-based R&D efforts of multinational auto brands like Volkswagen, Renault and Hyundai. Notably, autonomous driving, smart cabin technology and lithium battery development are key areas where these brands seek lasting partnerships - sometimes to better localise their China-specific models but increasingly to gain a competitive edge in global markets as well. This poses a thorny question for US automakers pursuing decoupling: on one hand, imitating such strategies is politically unpalatable back home; on the other, an import ban on Chinese cars does not provide full protection, as European and Asian brands are also out-innovating them, often by leveraging their China-based R&D operations. The challenge to US carmakers' global sales may prove greater than some had anticipated.

JJK Research Associates

Consumer Discretionary

Janet Kloppenburg was impressed with BURL’s Q4 results and the company’s long-delayed 2.0 plan is now unfolding, supported by supply chain improvements and a shift towards an off-price sourcing model. BURL is also benefitting from acquiring its distribution centres, which enhances cost control. A more experienced buying team has helped to stabilise brand quality and product flow. Higher AUR levels also provide evidence that a higher quality consumer (who wants a deal) is now considering BURL as a value shopping alternative. Janet’s FY25 EPS estimate is $9.30, but looks for upside opportunity throughout the year with infrastructure now better prepared to drive +L to +MSD comps and greater margin and earnings flow through.

Badger Consultants

Financials

Tom Chanos believes ERIE’s business model is built on a foundation of quicksand and sees similar traits to two of his previous shorts that went bankrupt, Boston Chicken and Enron. Bulls think that it is a service business with good increasing revenue growth and operating leverage. If you only look at its reported results, that would be accurate. In reality, ERIE is dependent on the Erie Insurance Exchange doing well (ERIE’s only customer) - which it isn't. If the Exchange was consolidated with ERIE, as Tom believes it should be, ERIE's Operating EPS (ex-capital gains) would have been <$1 in the latest twelve months vs. the >$10 reported!

Portales Partners

Financials

MTB has some of the best banking DNA that Charles Peabody is aware of. This includes a unique community bank strategy; impressive leadership; strong balance sheet with excess capital (unimpaired by unrealised bond losses); excess liquidity (available to be reinvested into higher yield asset opportunities); improving credit outlook; and good earnings momentum (forecasts DD EPS growth in each of the next 2 years). Charles expects MTB to generate a mid-teen RoTCE. The bank has grown TBV at an 8% CAGR over a multi-decade period and he forecasts TBV growth to accelerate toward $116 per share by year-end ’25 and $130 per share by year-end ’26. The dividend is safe even in a recessionary environment.

Huber Research Partners

Financials

Craig Huber sees debt issuance continuing to increase meaningfully over the next several years (on top of record levels in 2024) and MCO should benefit materially including further upside to margins. Short and long term, he likes the stock and fundamentals a lot. His 2025 adjusted EPS estimate is $14.55 (Street high) and $16.50 for 2026. Near-term, his 1Q25 adjusted EPS estimate is $3.65 and for revenue to be up 7.6% Y/Y. Craig maintains his long-held Overweight rating and raises his 12-month TP to $554 based on averaging 23.5x 2026E EBITDA (or 32.0x adjusted EPS) and his 10-year DCF analysis (8.5% WACC, 4.8% long-term FCF growth rate and 27.6x terminal FCF multiple).

Sidoti & Company

Industrials

1Q25 EPS exceeds expectations due to revenue outperformance led by technical solutions and aviation segment gains. As a result, Sidoti increases their FY25 EPS estimate to $3.76 and FY26 estimate to $4.32. Their estimates now imply annual growth rates of 5.3% and 15.1%, respectively. Their FCF per share estimates of $4.44 and $5.82 imply respective FCF yields of 9.8% and 12.8%. ABM shares have historically traded at an average premium of 10% to the S&P Small Cap 600 Index but currently trade at a 19% discount. Given the upside Sidoti’s $68 price target implies, they maintain their Buy rating.

Alembic Global Advisors

Materials

Cheap valuation and manageable debt load - Hassan Ahmed upgrades the stock to Overweight. CE’s high exposure to the Chinese / European economies and to the auto and construction / housing end markets provides an earnings growth tailwind going forward. Germany's new €500bn infrastructure fund also serves as an upside catalyst for earnings. Re. the group's bloated debt position, Hassan notes that if CE were to hit a quarterly run rate EPS of $2.00+ per share it could generate ~$1.3bn in FCF annually and be able to organically take care of its debt payments. While not his base case, the company could raise as much as $1.5bn by selling its acetate tow business.

Off Wall Street

Technology

YOU's KPIs are continuing to deteriorate, its ancillary businesses are not demonstrating meaningful revenue generation and its 1Q25 bookings guidance was notably weak. Relationships with key partners are fraying and YOU's CFO abruptly announced his departure. OWS maintains their view that YOU is a company whose core business is facing an existential structural challenge from TSA PreCheck’s new Touchless ID verification system and has limited optionality with which to respond. They believe this view has yet to be fully recognised by the group's growth-technology oriented investor base and therefore continue to encourage clients to short the stock. TP $16 (40% downside).

Japan

Vermilion Research

Energy

The TOPIX and Japan Hedged Equity ETF are breaking out following 5+ months of consolidation. Japanese Financials have been the leading sector in Japan for quite some time; Vermilion has been bullish for nearly a year and it has been the only Japanese Sector that they have been widely recommending ever since the TOPIX breakdown in Jul/Aug 24. However, over the past 1.5 months, the Energy Sector within Japan has also been leading the charge higher and outperforming. The FTSE Japan Oil & Gas Sector now displays bullish 8.5-month price and relative strength inflections. Actionable names include Idemitsu Kosan, JAPEX, INPEX and ENEOS.

Astris Advisory Japan

Financials

Fintech operational performance remains healthy with usage and / or revenue growing in the high teens across the segments Astris tracks. Relative to their coverage, the main issues are the path that DoCoMo takes to adding banking to its fintech portfolio (Astris thinks it will build a smartphone app) and the timing and size of a PayPay IPO. In the case of the latter, a surge in private fintech values (up 30%+ in 2025) looks promising although recent market volatility adds some doubt. A longer timeline to a listing gives LY Corp / Softbank time to further expand PayPay’s fintech presence.

Azabu Research

Industrials

Activist investors are urging Keisei to sell off at least part of its stake in Oriental Land and reinvest the capital into more profitable ventures. However, Mike Allen strongly disagrees, arguing that Keisei has no other business segment with a higher return on investment than Oriental Land. The activists are basing their argument on a false pretence that market value equates to intrinsic value. He thinks it would be far better for shareholders if Keisei worked toward liquidating as much of its retail business as quickly as possible. If activists want to help the company improve its returns, this is where they should focus.

Emerging Markets

Copley Fund Research

Following President Xi’s recent meeting with select private sector leaders, Steven Holden breaks down the percentage of funds invested in each stock, segmented by fund type, from broad-based Global and GEM funds to specialist China strategies (MSCI and A-Shares). As expected, ownership increases as we move from global strategies to China-focused funds. Beyond Tencent, Alibaba, BYD, CATL, Meituan and Xiaomi, representation in non-China funds is limited. Some names, such as Shiyuan and Qi An, are almost entirely absent from all fund groups. Will Semiconductor and Muyuan Foods stand out as the biggest discrepancies - despite decent representation in specialist China funds, they barely register in Global, GEM, or Asia Ex-Japan allocations.

Drewry Maritime Financial Research

Industrials

Eleanor Hadland and Eirik Hooper provide a comprehensive assessment of the recently announced ports sale. The deal highlights the growing dominance of hybrid operators (terminal operators owned by carriers) in the market. While the BlackRock / TIL consortium appears to have paid a premium, the strategic advantages likely justify the cost, especially as M&A remains a key route to overcome the high barriers-to-entry in the terminal sector. Competition concerns may also lead to secondary transactions, particularly in Northwest Europe, where regulators could assess that the deal leads to excess market concentration. Click here to watch.

AlphaMena

Materials

After a larger-than-expected Q4 loss, AlphaMena significantly lowers their earnings estimates for 2025 and 2026, revising their EPS forecasts to SAR 0.78 and SAR 1.67, respectively. While SABIC boasts a healthy balance sheet and has maintained its FCF at a high level, even in difficult times, AlphaMena expects pressure to persist on the chemicals industry with weak demand and high input costs, leading to lower prices and squeezed margins. So, overcapacity will continue to be a challenge, especially for polymers. Given the near-term challenges facing the company, they are waiting for a further pullback in the share price (up to 10%) to provide a more attractive entry point.

Developed Markets

Topdown Charts

Callum Thomas notes how the US stock/bond ratio has rolled over from extraordinary price levels + excessive relative optimism in stocks vs bonds + extended positioning + extreme expensive valuations for stocks. Meanwhile, the macro backdrop is as unfavourable as it gets for the ratio. The fiscal contraction aspect is also a double whammy in that it is a headwind for stocks and supportive for bonds through the possibility of short-term decline in growth/inflation, and improved sovereign credit quality. From an asset allocation standpoint, it seems prudent to rethink the stock/bond mix, particularly vs where portfolios might have drifted to in recent years as stocks significantly outperformed bonds. The key point really is to not be fixated on what used to work in recent years, because that (and the consensus industry positioning) is likely to be dangerous and suboptimal in the coming months and years.

Lazarus Economics

The Bank of England’s MPC voted 8-1 to maintain the rate at 4.5%. GDP growth for Q1 2025 is now expected at 0.25%, slightly higher than the 0.1% forecasted in February. Employment growth in the three months to January was stronger than anticipated, though other indicators suggest a more subdued outlook due to rising employer National Insurance contributions. Private sector wage growth remains high at nearly 6%, but is expected to slow in late 2025 and 2026. Government spending increased in late 2024, boosting growth but contributing to a £132.25 billion deficit from April to February. In his latest report, Darren Winder lays out a range of estimates for the UK, including estimates for margin, earnings, dividends, balance sheets and valuation across the region.

Eurizon SLJ Capital

Europe’s cyclical outlook has improved with its adoption of an expansionary fiscal posture. Stephen Jan and Fatih Yilmaz say that investors should be favourably inclined towards EUR assets, including the currency. They think EUR/USD could test 1.20 this year. However, investors should also be mindful of all the structural flaws that will one day return to haunt these same assets if they are not fixed. Stephen and Fatih are cyclically positive but remain structurally cautious on Europe. They suspect the intra-European divergences may widen in the coming years as core economies like Germany outrun the peripherals. The bullish European market narrative is a nuanced one.

Eurointelligence

The now agreed de facto abolition of the German debt brake will lead to a big rise in Germany’s structural deficit, but it will not increase investment by nearly as much as the headline figures suggest. According to Wolfgang Münchau, the biggest obstacles to infrastructure investment in Germany are bureaucracy and a lack of capacity in the construction sectors. The big constraint for military spending is the lack of soldiers in the Bundeswehr as the country moves beyond spending levels of 2%. Wolfgang says that there are three problems with the package that was agreed last Friday: despite what it says on the label, the deal will not produce an infrastructure spending boom, or big increases in military spending; it makes the euro area more prone to financial crises than before; and it perpetuates bad policies and reduces pressure for structural reforms.

Andrew Hunt Economics

Despite a much hyped and universally expected decline in the TGA, Andrew Hunt’s measures of financial liquidity are in general weak. Surging R/P lending activity may be a sign of rising strains within the financial sector. Credit quality may be deteriorating. It is early days, but these signs deserve close monitoring. The rate of tightening in fiscal policy has slackened as DOGE has lost momentum. It seems that rising credit demand in the real economy has left banks with “less money” to lend to the financial sector. Rather than “crowding out” the real economy – as has frequently been the case over recent years - the financial sector could be being crowded out by rising credit demand from the real sector. This de-financialization could leave asset markets vulnerable. US banks are retreating aggressively from foreign markets. Andrew is negative the USD on a six-month view given the US’s reliance on foreign inflows.

Quill Intelligence

Higher unemployment expectations have flared to extremes. In five of the six previous instances when UMich Higher Unemployment Expectations first crossed the 60% threshold, real GDP contracted four quarters out by an average of -0.8% YoY; despite this, the Fed’s median projection for 2025 GDP growth sits at 1.7% YoY. Regardless of the evolving core inflation narrative, the Fed has responded to economic hardship on par with the current episode in previous cycles with aggressive easing actions. With just two rate cuts expected and priced by year-end, investors are not prepared for a repricing that would validate the historical context. Every single cycle following a crescendo in UMich Higher Unemployment Expectations saw the Fed funds rate cut by more than a full point 4 quarters out; clearly, the Fed, rates traders and sell-side alike are all out of step with history.

Greenmantle

After months of rising fortunes for Canada’s Conservatives, Donald Trump’s return to power in the United States and fresh Liberal leadership at home seems to have reversed the tide. In two months, the Conservatives’ double-digit polling lead has disappeared. Niall Ferguson expects newly elected Prime Minister Mark Carney to announce an early election on March 23rd, with elections in late April or early May. He sees Carney retaining his premiership (60% probability). Post-election, Trump’s escalating tariffs will force Canada to cooperate in order to minimise recession risk and gain more favourable terms for USMCA renegotiation in H1/2025, with Canada making tough concessions on sectoral market access, the trade balance, and Chinese value-added in North America.

Emerging Markets

Greenmantle

Niall Ferguson says the collapse of the Gaza ceasefire and the launch of a major U.S. campaign against the Iran-backed Houthis in Yemen are not isolated events—they are likely steps in an escalating sequence that could culminate in strikes on Iran’s nuclear program by mid-year. The U.S. struck first against the Houthis, launching its largest wave of attacks since 2015, then declared “sustained combat operations,” vowing to hold Iran responsible for further attacks. This effectively creates an open-ended pretext for strikes on Iranian targets in Iraq and Iran itself. Meanwhile, Tehran’s hardliners remain entrenched, refusing talks even as economic pressure mounts. With inflation soaring and the rial collapsing, the Iranian regime sees capitulation as a greater risk than economic collapse. A wider conflict looks more likely in the coming months.

East Asia Econ

According to the official activity data for January-February, output remains reasonably firm, with growth in production of both goods and services continuing to grow by more than 5% YoY in the first couple of months. Paul Cavey’s GDP tracker is now back around 5%, which is once again the official aim for this year. However, the details aren't robust. In particular, there's still no sign of a reversal of the steep drop-off in property construction, with starts reaching a new low in the first couple of months. Other indicators like cement production, the construction PMI and excavator sales show the overall picture for construction is more mixed, though only excavator sales suggest any real pick-up. Similarly, while home sales and the separately released data for property prices aren't collapsing in the same way as starts, they aren't pointing to robust recovery either.

Westbourne Research

The manufacturing sector is barely expanding, the profit margin squeeze continues, urban unemployment is rising, disposable income growth is slowing. Additionally, the country’s corporate and investment cycles suggest the economy is yet to bottom, so Sharmila Whelan advises investors to remain cautious. The situation may ease when a US-China bilateral trade deal is struck, as Sharmila expects, and the overall business cycle score has improved as Beijing undergoes a mindset shift regarding the role of the private sector; this will bode well for investment and overall economy activity in the longer run. Sharmila moves from underweight to neutral on equities, overweight to neutral on government bonds and remains a seller of the renminbi. She is selective of certain stocks and growth sectors, including AI, high tech, software, hardware, robotics and electronics.

Alberdi Partners

Marcus Buscaglia notes that Colombia has entered into full electoral and campaign mode. All parties, and especially the Gustavo Petro administration, are strategizing about the alliances they will form to optimize their chances of securing seats in the bicameral congress. As all parties are thinking about the next election, the chances of meaningful progress for any major reform are quickly dwindling. However, President Petro continues to push for polarization, wrongly believing that a majority of Colombians will take his side. Yet, Marcus believes that Colombians will be inclined to vote for change in 2026. While winds are signalling a right-wing shift, the multiplicity of candidates vying for the presidency might end up leading a far-right candidate to face a moderate candidate in the runoff election in 2026. That would give a chance to the moderate candidate to score what now seems an improbable victory.

Teneo

The M23 armed group’s last-minute decision to withdraw from the planned peace talks in Angola is yet another indicator that a resolution to the ongoing conflict in eastern DRC remains far from imminent. Although DRC President Tshisekedi and Rwandan President Kagame convened in Qatar to issue a joint statement calling for a ceasefire, the declaration is more symbolic than impactful. The M23 rebels, ostensibly backed by Rwanda, continue to press deeper into Congolese territory as Tshisekedi faces increasing pressure to directly engage with the group. For now, it is clear a lasting solution is out of reach of all parties.

Emerging Advisors Group

The current narrative is dominated by politics, as governance risk and uncertainty has caused a sell-off in Romanian assets this year. However, for Jonathan Anderson the biggest issue remains wide "twin deficits" and heavy external issuance. Romania is still the most imbalanced twin deficit economy he follows - and while these deficits have been financed in part by FDI, EU transfers and portfolio inflows, they also reflect a massive surge in external market borrowing. Indeed, Romania is now tied for the title of largest EM sovereign Eurobond issuer. As a result, it's hard to get excited about asset markets. Even if political sentiment calms down, Jonathan worries that medium-term external stability questions will increasingly hang over the investment outlook.

Krutham (formerly known as Intellidex)

The SARB’s MPC kept rates unchanged at 7.50%, as expected. While this move aligns with Peter Montalto’s expectations, he believes the MPC missed an opportunity to cut, given the (very) benign inflation outlook in both the short and medium term. The MPC overemphasises global geopolitical and trade risks versus the realised downside risks. Still, it is quite clear they are remaining highly risk averse and want to keep a 25bp buffer vs neutral – for now - by sitting at the top end of the neutral range. The key question now is whether this marks the end of the cutting cycle. Peter reckons that it does. He maintains his longstanding view that if any further easing were to happen, it would likely be limited to just one more cut to bring rates to neutral. The baseline for now to be clear is no further cut.

Commodities

Stray Reflections

Jawad Mian points out that the last great commodities boom ended in collapse. The next one has just begun. The last cycle peaked in 2011, marking the best decade in commodity market history. Then came the crash. Years later, 2020 heralded the start of a new secular bull market. The pandemic triggered an unprecedented policy response, unleashing fiscal and monetary stimulus at levels unseen in modern history. The result? A massive demand shock. Jawad notes that this upcycle is being reinforced by structural forces, not least the global energy transition and geopolitical tensions. Historically, secular cycles in commodities and stocks tend to move in opposition. Commodities peaked in 2011, just as equities entered a decade-long bull market. Today, we may be witnessing another turning point.

WHB Energy Research

With all the uncertainty on the geopolitical front in the Middle East, there is no shortage of “rethinks” on Wall Street in terms of where crude oil prices are headed this year. In this regard, Goldman Sachs have cut their crude oil price forecasts, reflecting a somewhat less robust demand outlook due to their assumed impact of tariffs on global economic activity. For this year and for WTI, GS is now looking for an average of $69.00 per barrel, well below William Brown’s base case. For Brent, GS is looking for an average of $73.00 per barrel for 2025 compared to William’s average of $79.23 per barrel. His short-term trading range for NYMEX remains at $65-$72 per barrel, and he would rather remain long than short and still recommends opportunistic trading in the calendar spreads.

CPM Group

In the upcoming 2025 Gold Market Outlook and Yearbook launch, CPM Group’s analysts discuss many of the trends and indicators that investors will be following this year, including the Russia-Ukraine war, slowing US economic growth, Fed rate hikes and reductions, investor demand for gold, central bank gold buying, and the impact of inaccurate and misleading commentary on gold investment. The team also examine the market dynamics that took place throughout 2024. Please contact us to find out more.