Mid-Morning Look

Tuesday, July 22, 2025

U.S. stocks mixed early as recent market leader Technology (XLK) pulls back from all-time highs led by some profit taking in semiconductors (SOX), while attention this morning focused firmly on earnings and guidance with a deluge of corporate results. Among early leaders are home builders after DHI, PHM results; coal stocks seeing strength (AMR, BTU) on China headlines; and defense stocks active on earnings (NOC rises, LMT, RTX fall on results). On the flip side, seeing some weakness in MO in tobacco, NXPI in semis, GM in autos, Dow component KO slips on results and SHW dips in chemicals after earnings results this morning. August 1st tariff deadline also looming in the background/have reports that Trump may issue more unilateral trade letters before the. U.S. Treasury Secretary Scott Bessent said on Tuesday that he will meet his Chinese counterpart next week and discuss what is likely to be an extension of an August 12 deadline for higher tariffs. Gold prices extend yesterday’s gains up another +0.8% at $3,433 and Bitcoin rises to around $119K. Healthcare (XLV) among early sector leaders, along with REITs (XLRE) and Consumer Staples (XLP) while Tech (XLX) and Industrials (XLI) decline.

• In Homebuilders: sector was stronger on the back of earnings from DHI and PHM; DHI reported Q3 earnings and revenue that beat Wall Street estimates and said it “closed more homes than the high end of our guidance range, while maintaining a home sales gross margin of 21.8%.” PHM reported mostly in-line Q2 results (revs slipped y/y) as Q2 net new orders totaled 7,083 homes with value of $3.9B; Home sale gross margin in the quarter came in at 27% but compared with 29.9% last year.
• In Paper & Packaging: CCK posted another beat and raise quarter as 2Q EPS beat by 15%; 2025 EPS Guide +3%; raised 2025 EPS midpoint to $7.30 from $6.90 (range of $7.10–$7.50 vs prior $6.70-$7.10) and better Q3 guidance as well led by strength in global beverage shipments and operational efficiencies. AVY forecasted Q3 EPS $2.24-$2.40, below estimates of $2.41 as uncertainty fluctuating tariff policy mounts, after reported Q2 EPS flat y/y and revs fell nearly 1% to $2.22 billion from a year earlier.
• In Defense: LMT Q2 sales $18.200B vs. est. $18.573B, Q2 order backlog $166.530B; Reaffirming 2025 guidance for sales and free cash flow; Recorded pre-tax losses on programs of $1.6B and other charges of $169M in qtr. NOC shares rise on results; Q2 sales $10.35B vs est. $10.07B while narrows FY 2025 sales view to $42.05B to $42.25B vs prior outlook $42B to $42.5B; sees 2025 EPS $25-$25.40 vs prior outlook $24.95 to $25.35 (est. $25.16); Outlook FY 2025 free cash flow $3.05B to $3.35B vs prior outlook $2.85B to $3.25B. RTX shares fall on guidance; now sees 2025 organic sales growth of 6%-7% vs prior outlook 4%-6%, but cuts 2025 view to adj eps $5.80-adj eps $5.95 vs prior outlook $6-$6.15; now sees 2025 adjusted sales $84.75B-$85.5B vs prior outlook $83B-$84B; still sees 2025 free cash flow $7B-$7.5B.

• BAH +2%; awarded a $315M contract to deliver battle management prototype for the Dept. of the Air Force; was also upgraded from Market Perform to Outperform at William Blair.
• CALX +3%; reported Q2 revenues of $242M increased 22% Y/Y and 10% Q/Q, beating consensus by $18M or 8% and margins exceeded estimates by 60bps/380bps, and EPS at $0.33 was 50% higher than modeled while Q3 revenue, margins and earnings guidance beat consensus.
• CSX +2%; as Semafor reported BNSF, the railroad giant owned by Warren Buffett’s Berkshire Hathaway, is working with Goldman Sachs to explore a takeover of a rival, according to people familiar with the matter. Its interest comes as its chief rival, UNP, pursues a takeover of NSC, https://tinyurl.com/5n6w6v74
• DHI +12%; reported Q3 earnings and revenue that beat Wall Street estimates and said it “closed more homes than the high end of our guidance range, while maintaining a home sales gross margin of 21.8%.”
• IQV +17%; among top movers in the S&P 500 after results; the provider of healthcare technology and research services tightened the range for its annual earnings and revenue forecasts following Q2 beat $2.81/$4.02B vs. est. $2.77/$3.96B.
• MEDP +56%; after reporting a strong earnings beat. Adjusted EBITDA and EPS beat consensus estimates by +11% and +5%, respectively; bookings improved in the quarter, up +13% y/y; MEDP raised revenue and adjusted EPS guidance by +13% and +12%, respectively.
• NOC +8%; shares rise on results; Q2 sales $10.35B vs est. $10.07B while narrows FY 2025 sales view to $42.05B to $42.25B vs prior outlook $42B to $42.5B; sees 2025 EPS $25-$25.40 vs prior outlook $24.95 to $25.35 (est. $25.16); Outlook FY 2025 free cash flow $3.05B to $3.35B vs prior outlook $2.85B to $3.25B.

• GM -7%; reported Q2 adjusted EPS that fell from a year earlier as Q2 core profit fell 32% to $3B as the automaker continued to confront challenging tariff policies, which it said sapped $1.1B from the results; revs fell nearly 2% to about $47.12B vs. est. $46.28B; 2025 full-year guidance unchanged.
• NXPI -3%; reported Q2 sales/pf-EPS results 1%/1% above and Q3 guide 3%/1% ahead; Auto in line in Q2, non-Auto drove sales beat; shares are weaker after market potentially due to limited GM upside, Q4 visibility concerns, and CEO transition uncertainty.
• PM -7%; after the tobacco company reported Q2 revs $10.1B vs. est. $10.33B and said quarterly cigarette shipment volumes down (-1.5%) compared to a (+1.1%) rise in the prior quarter; did raise FY adjusted profit forecast to between $7.43-$7.56 per share, from prior view $7.36-$7.49.
• REPL -72%; after saying the FDA issued a complete response letter (CRL), and declined to approve its experimental skin cancer drug, called RP1, for patients with advanced melanoma. The letter said the clinical trial to test the drug “was not considered to be an adequate and well-controlled clinical investigation that provides substantial evidence of effectiveness.”
• SRPT -3%; announced a pause of all US Elevidys shipments, in-line with the FDA’s request, reversing the company’s initial statement that it will continue shipments to ambulatory patients.
• STLD -2%; shares fell after results as Q2 EPS $2.01 missed the est. $2.10, adj EBITDA $533Mm vs est. $607.61Mm on revs $4.565B vs est. $4.756B