Economic Overview - Wall Street has shown resilience despite fears of a weakening economy, although major indexes have experienced volatility recently [1][2] - The U.S. economy added only 22,000 jobs in August, significantly below the consensus estimate of 75,000, with the unemployment rate rising to 4.3% [5][6] - Consumer confidence has declined, with a drop from 98.7 in July to 97.4 in August [9] Federal Reserve and Interest Rates - Hopes for a rate cut by the Federal Reserve in September have somewhat improved investor sentiment, with an 89% chance of a 25 basis point cut anticipated [8] - Inflation has decreased but remains a concern due to new tariffs imposed by President Trump, which have created additional price pressures [7][8] Investment Recommendations - It is advisable to focus on low-beta, defensive stocks, particularly in the utilities sector, to navigate current market volatility [3][4] - Recommended stocks include: - **Atmos Energy Corporation (ATO)**: Expected earnings growth of 7.3%, dividend yield of 2.09%, beta of 0.75 [11][13] - **OGE Energy (OGE)**: Expected earnings growth of 4.1%, dividend yield of 3.2%, beta of 0.60 [11][14] - **Fortis, Inc. (FTS)**: Expected earnings growth of 4.6%, dividend yield of 3.61%, beta of 0.48 [11][15] - **Northwest Natural Holding Company (NWN)**: Expected earnings growth of 25.3%, dividend yield of 4.68%, beta of 0.59 [11][17]

Core Insights - The inauguration of the JUPITER Booster, an AI-dedicated partition, marks a significant advancement in high-performance computing (HPC) and AI capabilities in Europe [1][2][4] - JUPITER is recognized as Europe's most powerful HPC and AI system, with the ability to perform over one quintillion calculations per second, equivalent to the power of 10 million modern desktop computers [2][3] - The JUPITER system integrates advanced technologies, including 24,000 NVIDIA GH200 Grace Hopper Superchips and Direct Liquid Cooling technology, achieving exceptional energy efficiency and performance [4] Company Overview - Eviden, a brand of Atos Group, specializes in advanced computing, cybersecurity products, mission-critical systems, and vision AI, generating approximately €1 billion in revenue and operating in 36 countries [7] - Atos Group, with around 70,000 employees and annual revenue of approximately €10 billion, is a leader in digital transformation and is committed to a secure and decarbonized future [8] Technological Impact - JUPITER's capabilities will enhance research in various fields, including climate science, sustainable energy, and AI, enabling unprecedented innovation across Europe [5][13] - The supercomputer's power allows for detailed simulations in climate modeling and brain research, significantly improving understanding of extreme weather events and neurodegenerative diseases [13]

Economic Overview - U.S. consumer confidence dropped to 97.4 in August from 98.7 in July, indicating a decline of 1.3 points, with short-term expectations for income, business conditions, and employment also falling to 74.8 [4][5] - Concerns about the economy have been exacerbated by tariffs imposed by President Trump, which have raised inflation fears and impacted consumer confidence [5][6] - A weak labor market, characterized by slow job additions, has further fueled recession fears, despite low layoffs and unemployment rates [7] Investment Recommendations - Given the economic uncertainty, it is advisable to invest in low-beta defensive stocks from the utility and consumer staples sectors, which include Atmos Energy Corporation (ATO), Fortis, Inc. (FTS), Northwest Natural Holding Company (NWN), Ingredion Incorporated (INGR), and Carriage Services, Inc. (CSV) [2][10] - These stocks are characterized by a beta greater than 0 but less than 1, indicating lower volatility, and they also offer high dividend yields [3] Company Profiles - **Atmos Energy Corporation (ATO)**: Engaged in regulated natural gas distribution and storage, serving approximately 3.3 million customers across eight states. Expected earnings growth rate is 7.2% for the current year, with a beta of 0.75 and a dividend yield of 2.09% [8][9] - **Fortis, Inc. (FTS)**: Operates in the electric and gas utility sector, primarily in Canada and the Caribbean. Expected earnings growth rate is 4.6% for the current year, with a beta of 0.48 and a dividend yield of 3.57% [10][11] - **Northwest Natural Holding Company (NWN)**: Focuses on natural gas distribution systems and pipeline projects, serving residential, commercial, and industrial customers. Expected earnings growth rate is 25.3% for the current year, with a beta of 0.59 and a dividend yield of 4.72% [12][13] - **Ingredion Incorporated (INGR)**: Provides ingredient solutions specializing in nature-based sweeteners and starches, serving various sectors. Expected earnings growth rate is 6.7% for the current year, with a beta of 0.77 and a dividend yield of 2.47% [14] - **Carriage Services, Inc. (CSV)**: A leading provider of death care services in the U.S., offering a range of funeral and burial services. Expected earnings growth rate is 23.4% for the current year, with a beta of 0.86 and a dividend yield of 1.03% [15][16]

Core Insights - Atos Group is enhancing its management team with four senior executive appointments to support its transformation plan aimed at restoring sustainable profitable growth and creating long-term value for stakeholders [1][2][3] Group Management Changes - Florin Rotar has been appointed as EVP, Group Chief Technology Officer, bringing over 20 years of experience in AI and emerging technologies to help Atos become a global AI-powered technology partner [3][4] - Laurent Soulier is appointed as EVP, Strategy and Operational Excellence, with a background in cybersecurity and digital transformation programs in both public and private sectors [5][6] - Pénélope de Fouquières takes on the role of SVP in charge of Communication, leveraging her 20 years of experience in corporate communications and brand development [7] - Camille le Provost is appointed as Head of M&A, recognized for her expertise in managing complex international transactions [8][9] Company Overview - Atos Group operates with approximately 70,000 employees and generates annual revenue of around €10 billion, providing services under the Atos brand and products under the Eviden brand [11] - The company is a leader in cybersecurity, cloud, and high-performance computing, committed to a secure and decarbonized future [11][12]

Core Viewpoint - Atmos Energy (ATO) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system is based on changes in earnings estimates, which are closely correlated with stock price movements [4][6]. - An increase in earnings estimates typically leads to higher fair value calculations by institutional investors, resulting in buying or selling actions that affect stock prices [4]. Recent Developments for Atmos Energy - Atmos is projected to earn $7.33 per share for the fiscal year ending September 2025, with no year-over-year change expected [8]. - Over the past three months, the Zacks Consensus Estimate for Atmos has increased by 2.4%, reflecting a positive trend in earnings estimates [8]. Zacks Rating System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with only the top 20% receiving a "Strong Buy" or "Buy" rating [9][10]. - The upgrade of Atmos to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Industry Overview - Natural gas is increasingly utilized in power generation due to its cleaner-burning characteristics compared to other fossil fuels, leading to a rise in domestic natural gas output and greater LNG exports [1] - The demand for natural gas across various consumer categories necessitates the installation of more distribution pipelines [1][2] Natural Gas Distribution Infrastructure - The U.S. natural gas network comprises nearly 3 million mainline and other pipes, essential for transporting natural gas from transmission networks to end users [2] - The natural gas pipeline industry requires a consistent flow of funds for the repair and maintenance of its extensive network and to address aging infrastructure [3] Production and Market Trends - According to the U.S. Energy Information Administration, dry natural gas production increased by over 1 billion cubic feet per day from Q1 to Q2 of 2025, but is expected to decline by a similar amount in the following year [4] - Marketed natural gas production is projected to grow by 3% over 2024 volumes [4] Company Comparisons - A comparative analysis of Atmos Energy (ATO) and Northwest Natural (NWN) shows both companies currently hold a Zacks Rank 2 (Buy) [5] - The Zacks Consensus Estimate for ATO's fiscal 2025 EPS has risen by 1% to $7.33, while NWN's EPS estimate increased by 1.4% to $2.92 [6][10] Financial Metrics - ATO's return on equity (ROE) is 9%, while NWN's ROE is 8.6%, compared to the industry average of 9.08% [7] - ATO has a current ratio of 1.37, indicating sufficient short-term assets to cover liabilities, whereas NWN's current ratio is 0.68 [8] - ATO's debt-to-capital ratio stands at 40.21%, significantly lower than NWN's 62.05% and the industry average of 51.09% [11] Stock Performance - In the past month, ATO shares have increased by 7%, outperforming NWN's 2% rise and the industry's 3.9% growth [10][12] - ATO's dividend yield is 2.1%, while NWN's is 4.74%, both exceeding the S&P 500 composite average of 1.15% [14] Conclusion - Both Atmos Energy and Northwest Natural are positioned as strong investment options, with ATO being favored due to its superior debt management, liquidity, and stock performance [15]

Group 1 - The utilities sector is showing signs of potential overbought conditions, particularly for two stocks, PG&E Corp and Atmos Energy Corp, which may concern momentum-focused investors [1][2] - The Relative Strength Index (RSI) is a key momentum indicator, with values above 70 indicating overbought conditions [2] Group 2 - PG&E Corp reported disappointing quarterly earnings on July 31, despite a 16% stock increase over the past month, with an RSI value of 73 and current trading price of $15.48 [7] - Atmos Energy Corp exceeded Q3 financial expectations and raised its FY25 EPS guidance, with a stock increase of around 6% over the past five days, an RSI value of 70.8, and current trading price of $165.64 [7]

Core Insights - Atos has been recognized as a Leader in ISG's Provider Lens™ Mainframes – Services and Solutions in Europe for the fourth consecutive year, reinforcing its strong market position and expertise in mainframe services [1][2] Group 1: Market Position and Recognition - Atos has been named a Leader in four quadrants: Mainframe Optimization Services, Application Modernization Services, Mainframe as a Service (MFaaS), and Mainframe Operations, showcasing its comprehensive service offerings [1][2] - ISG has elevated Atos from a Product Challenger to a Leader in the Mainframe Optimization Services quadrant, highlighting its decades of mainframe experience and innovative AI modernization capabilities [3] Group 2: Service Offerings - In the Application Modernization Services quadrant, Atos is recognized for its risk-averse modernization approach and secure migration framework, integrating GenAI into its modernization efforts [4] - Atos stands out in the MFaaS quadrant for its tailored migration strategies and hybrid environment support, combining IBM expertise with cloud-aligned scalability [5] - The Mainframe Operations quadrant assessment emphasizes Atos' focus on automation, cost efficiency, and hybrid IT integration in its operations services [6] Group 3: Company Background - Atos Group operates globally with approximately 70,000 employees and annual revenue of around €10 billion, positioning itself as a leader in digital transformation and cybersecurity [8][9] - The company is committed to a secure and decarbonized future, providing AI-powered, end-to-end solutions across various industries [9][10]

Financial Data and Key Metrics Changes - For fiscal year to date 2025, the company reported net income of $1 billion or $6.4 per diluted share, with updated earnings per share guidance ranging from $7.35 to $7.45 [3][10] - Consolidated capital spending increased by 22% to $2.6 billion, with 86% dedicated to improving safety and reliability [13][14] - Operating income increased by $322 million due to regulatory outcomes, with residential customer growth contributing an additional $22 million [10][14] Business Line Data and Key Metrics Changes - The pipeline and storage segment saw revenue increase by $12.5 million primarily due to increased throughput [10] - The distribution segment experienced strong residential and industrial customer growth, adding nearly 58,000 new residential customers and 22 new industrial customers with an anticipated annual load of approximately 3.4 Bcf [4][5] Market Data and Key Metrics Changes - Texas added over 198,000 jobs in the last twelve months, reflecting a 1.4% annual growth rate, which supports the demand for natural gas [4] - The company achieved a 97% customer satisfaction rating, indicating strong customer service performance [6] Company Strategy and Development Direction - The company is focused on modernizing natural gas distribution, transmission, and storage systems while expanding customer service [3][6] - Recent Texas legislation allows for increased capital spending deferral treatment, which is expected to enhance financial flexibility and support future growth [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the role of natural gas in economic development and anticipates continued customer growth [4][6] - The company expects earnings per share to grow at a rate of 6% to 8% annually, with a full update on the five-year plan to be provided in November [16] Other Important Information - The company has been recognized as the most trusted brand in 2025 among U.S. utility companies, reflecting its strong reputation in the market [7] - The company finished the third fiscal quarter with an equity capitalization of 60% and approximately $5.5 billion in liquidity [15] Q&A Session Summary Question: Clarification on the $0.10 increase from Texas legislation - The $0.10 reflects the impact of legislation from June 20 through the end of fiscal 2025, effectively one quarter [21] Question: Inquiry about the through system commentary - The company anticipates a more normal operating environment for fiscal 2026, adjusting based on market conditions [23][24] Question: Capital outlay for the data center project in Abilene - The company continues to receive inquiries for projects across its service territory, with updates to be provided once contracts are signed [30] Question: Clarification on the percentage of capital spending eligible for deferral - The 80% figure refers to Atmos as a whole, with the majority of the increase associated with APT's investments [32] Question: Impact of stronger operating cash flow on future financing - The company plans to finance future growth using a balanced mix of equity and long-term debt, anticipating increased operating cash flow [41]

Financial Data and Key Metrics Changes - For fiscal year to date 2025, the company reported net income of $1 billion or $6.4 per diluted share, with updated earnings per share guidance ranging from $7.35 to $7.45 [3][11] - Operating income increased by $322 million due to regulatory outcomes, with residential customer growth and rising industrial load contributing an additional $22 million [11][12] - Consolidated capital spending rose by 22% to $2.6 billion, with 86% dedicated to improving safety and reliability [13][15] Business Line Data and Key Metrics Changes - The pipeline and storage segment saw revenue increases of $12.5 million primarily due to increased throughput [11] - The distribution segment experienced strong residential customer growth, adding nearly 58,000 new residential customers year to date, with approximately 45,000 in Texas [4][11] - Industrial demand remained robust, with 22 new industrial customers added year to date, expected to generate an annual load of approximately 3.4 Bcf [5][11] Market Data and Key Metrics Changes - Texas added over 198,000 jobs in the last twelve months, reflecting a 1.4% annual growth rate, which supports the demand for natural gas [4] - The company achieved a 97% customer satisfaction rating, indicating strong customer service performance [7] Company Strategy and Development Direction - The company is focused on modernizing its natural gas distribution, transmission, and storage systems while ensuring reliable service to 3.4 million customers across eight states [3] - Recent Texas legislation (House Bill 4384) allows for increased deferral treatment of capital spending, which is expected to enhance financial flexibility and support future growth [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing role of natural gas in economic development and anticipates continued customer growth [4][6] - The company expects earnings per share to grow at a rate of 6% to 8% annually, with a full update on the five-year plan to be provided in November [17] Other Important Information - The company has been recognized as the most trusted brand in 2025 by Eskom, reflecting its strong reputation among customers [8] - The company finished the third quarter with an equity capitalization of 60% and approximately $5.5 billion in liquidity [16] Q&A Session Summary Question: Clarification on the $0.10 increase from Texas legislation - Management clarified that the $0.10 reflects the impact of the legislation from June 20 through the end of fiscal 2025, effectively one quarter [22] Question: Inquiry about the through system commentary - Management indicated that they expect a more normal operating environment for fiscal 2026, with adjustments based on market conditions [25][26] Question: Capital outlay for the data center project in Abilene - Management noted ongoing inquiries for similar projects across their service territory, with updates to be provided once contracts are signed [30][32] Question: Clarification on the percentage of capital spending eligible for deferral - Management confirmed that the 80% figure applies to Atmos as a whole, with most of the increase related to APT's investments [34] Question: Impact of stronger operating cash flow on financing future growth - Management stated that they will continue to finance growth using a balanced mix of equity and long-term debt, anticipating increased operating cash flow [42]