Investment Rating - The investment rating for TOTVS is Neutral, with a price target of R$33.50, implying a ~24x multiple to 2025E earnings [16]. Core Insights - The acquisition of Linx by TOTVS is seen as strategically positive, as it complements TOTVS' portfolio and could unlock new growth avenues, particularly in the TechFin vertical [4][7]. - Linx's current monetization is only 0.3% of its estimated R$350 billion GMV, indicating significant room for expansion [3]. - The integration of Linx's software solutions into TOTVS' offerings will require adaptation for small and medium-sized businesses (SMBs), which may necessitate further investments [3][4]. Summary by Sections TOTVS and Linx Acquisition - The CEO of TOTVS stated that acquiring Linx remains strategic, as Linx's capabilities complement TOTVS' offerings [1]. - Linx was acquired by Stone in 2020 for R$6.8 billion, and the integration has been ongoing since then [1][2]. Market Position and Client Base - Linx serves approximately 70,000 mid-large retailers with a GMV of R$300 billion, providing a new client base for TOTVS [1]. - Most of Linx's clients are larger enterprises, with only 11% being SMBs, which presents a challenge for scaling Linx's solutions to TOTVS' typical client base [3][4]. Financial Metrics and Growth Potential - The average monthly ticket for clients using Linx's ERP/POS software is R$160, supporting the potential for increased cross-selling opportunities [2]. - The report highlights that 50% of Linx's sub-acquiring clients have migrated to Stone, indicating successful integration efforts [2]. Valuation and Market Outlook - The valuation for Stone is based on a 2025E PE target multiple of 11x, reflecting the broader economic environment and regulatory changes impacting the Brazilian financial sector [8]. - The report suggests that TOTVS could benefit from future cross-selling of Business Performance solutions to Linx's customer base [4].

Global Research and Evidence Lab 14 August 2024 Cardinal Health Inc. Caliendo's Conference Call Commentary ● General Takeaways: Management provided additional color underlying the improved FY25 Pharma EBIT outlook and steady FY25 GMPD EBIT guidance. Within Pharma, guidance calls for y/y EBIT improvement of +1-3% with consistent generic market dynamics, a greater contribution from brand/specialty products, a modest y/y headwind from COVID vaccine, and cost optimization. On GMPD, CAH did not seem overly conce ...

Investment Rating - The report assigns a 12-month rating of "Sell" for Victoria's Secret & Co (VSCO) with a price target of US$13.00 [2][12][14] Core Viewpoints - Victoria's Secret & Co pre-announced Q2 2024 EPS guidance of $0.34-$0.39, exceeding previous expectations of $0.05-$0.20, while net sales are expected to decline by 1-2% year-over-year [2][4] - The appointment of Hillary Super as CEO is viewed positively, as she has a track record of turning around brands, which may enhance market sentiment [2][4] - Despite the positive short-term outlook, the report maintains a "Sell" rating due to ongoing structural issues and market share loss in North America [2][4] Summary by Sections Financial Performance - For FY22, Victoria's Secret generated approximately $6.5 billion in revenue [4] - The forecast for revenues shows a decline from $6,182 million in FY24 to $5,978 million in FY25 [2] - EBIT is projected to decrease from $327 million in FY24 to $255 million in FY25 [2] Valuation Metrics - The report indicates a forecast stock return of -31.8% with a market return assumption of 8.9% [3] - The P/E ratio is expected to rise from 10.8x in FY24 to 12.3x in FY25 [2] - The net debt to EBITDA ratio is projected to improve from 1.2x in FY25 to 0.9x in FY29 [2] Market Dynamics - The industry structure is rated as stable (3 on a scale of 1-5) over the next six months, indicating no significant changes expected [7] - The report highlights increased competition in the intimates market and a shift in consumer preferences towards off-price and mass merchants [2][4]

Investment Rating - The report does not explicitly state an investment rating for the railroad industry, but it provides various performance metrics and trends that can inform investment decisions. Core Insights - Railroad volumes increased by 3.6% year-over-year in Week 32, following a growth of 3.5% in Week 31 and 2.9% in Week 30, with BNSF and UP showing significant increases of 7.0% and 7.8% respectively [2][3][10] - A shift of international intermodal volumes to US West Coast ports due to potential strikes at Canadian rails has likely benefited BNSF and UP intermodal volumes in recent weeks [2][3] - All end markets, excluding coal, were above trend in Week 32, with agriculture traffic increasing by 18.1% year-over-year [3][10] Summary by Category Volume Growth - BNSF carloads increased by 7.0% year-over-year, UP volumes rose by 7.8%, while CSX shipments grew by 0.4% and NS carloads rose by 3.7% [2][3] - CN volumes decreased by 2.6% year-over-year, and CPKC volumes fell by 3.8% [2] Performance Metrics - In the western U.S., train speed fell by 4.7% year-over-year for BNSF, while UP's velocity increased by 0.9% [4] - In the eastern U.S., CSX's velocity improved by 7.3% year-over-year, and NS's velocity increased by 8.9% [4][11] Dwell Time - Dwell time improved by 6.2% year-over-year for BNSF and 2.9% for UP in the western U.S. [5] - In the eastern U.S., dwell time deteriorated by 3.9% for CSX and 6.6% for CN, while it improved by 10.8% for CPKC [5][11] Sector Performance - Intermodal shipments increased by 7.1% year-over-year, while coal traffic decreased by 9.8% [3][10] - Automotive shipments were up by 0.3% year-over-year, and shipments of industrial products rose by 1.8% [3][10]

Investment Rating - The report assigns a "Buy" rating for Ipsen SA with a 12-month price target of €145.00, indicating a potential upside from the current price of €106.80 [2][15][18]. Core Insights - Ipsen SA is focused on the launch of its drug Igirvo, recently approved for a rare liver disease, which is in competition with Gilead's Livdelzi [2]. - The report highlights the comparable indications and usage sections of both Igirvo and Livdelzi, noting that both drugs are approved for 2L primary biliary cholangitis (PBC) [2]. - Physician feedback suggests that the lack of pruritus indication for Livdelzi may not significantly impact the competitive landscape for Igirvo [2]. - The report anticipates positive sentiment support for Ipsen, especially following a recent stock pullback [2]. Financial Forecasts - Revenue projections for Ipsen are expected to grow from €3,306 million in 2023 to €4,526 million by 2028 [2]. - EBIT is forecasted to increase from €1,001 million in 2023 to €1,480 million in 2028 [2]. - Net earnings are projected to rise from €763 million in 2023 to €1,140 million in 2028 [2]. - The diluted EPS is expected to grow from €9.15 in 2023 to €13.67 in 2028 [2]. Valuation Methodology - The valuation of Ipsen is based on a 50/50 blend of a DCF-based sum-of-the-parts (SOTP) analysis and peer multiples [3][6]. Market Outlook - The report indicates a forecast price appreciation of 35.8% and a forecast stock return of 36.9%, suggesting a strong investment opportunity relative to the market return assumption of 8.0% [4].

Investment Rating - The report assigns a 12-month rating of Neutral to Hydro One Limited with a price target of C$42.00 [1][13]. Core Insights - Hydro One Limited reported an adjusted EPS of C$0.49 for Q2'24, matching consensus expectations and showing a 2.0% increase from C$0.48 in Q2'23 [1]. - The company's performance was driven by higher rates and peak demand, offset by taxes, depreciation and amortization, and asset removal costs [1]. - Hydro One has filed for approval to construct the St. Clair Transmission Line Project, expected to cost C$472 million and be operational by 2028 [1]. Financial Metrics - The market capitalization of Hydro One is C$26.5 billion (US$19.4 billion) with 598 million shares outstanding [1]. - Revenue projections show an increase from C$7,225 million in 2021 to an estimated C$8,135 million in 2024 [1]. - The net earnings forecast for 2024 is C$1,154 million, with an EPS of C$1.92 [1]. Valuation and Returns - The report indicates a forecast price appreciation of -5.3% and a forecast dividend yield of 2.8%, leading to an expected stock return of -2.5% [2]. - The price target reflects a 24% premium to the average Utility P/E of 19.3x based on the 2026E EPS of C$2.18 [4]. Industry Outlook - The industry structure and regulatory environment facing Hydro One are rated as stable, with a score of 3 on a scale of 1 to 5 [6]. - The consensus EPS forecast is expected to remain in line with previous estimates, indicating no significant surprises anticipated [6].

Investment Rating - The report assigns a 12-month rating of Neutral to Progressive Corporation [5][19]. Core Insights - The report indicates that Progressive Corporation (PGR) experienced better-than-expected growth in Personal Insurance Fund (PIF) in July, although the underlying loss ratio was slightly worse than consensus expectations [2][3]. - PGR's operating EPS for June was reported at $1.30, exceeding the forecast of $0.89, with a favorable prior year development (PYD) of $82.9 million [3][4]. - The agency PIF growth was up 1.8% month-over-month, while direct PIF growth was up 2.4% month-over-month, both surpassing expectations [4]. Summary by Sections Financial Performance - PGR's annualized loss ratio (AYLR) was reported at 66.3%, down 6.3 percentage points year-over-year and up 4 percentage points month-over-month, but below the UBS estimate of 70.1% [4]. - The expense ratio was relatively low at 0.7%, up 5.3 percentage points year-over-year and above the UBS estimate of 19.3% [4]. - Companywide net premium written (NPW) growth was reported at 7.2% year-over-year, significantly above the UBS estimate of 3.9% [4]. Market Position and Outlook - PGR is expected to continue gaining market share as it loosens underwriting restrictions faster than the industry, although growth may slow due to increasing competitive pressures [2]. - The report forecasts a price target of $233.00 for PGR, with a current price of $222.33 [5][19]. - The forecasted stock return is 6.1%, with a price appreciation of 4.8% and a dividend yield of 1.3% [8]. Company Overview - Progressive Corporation is one of the largest personal auto insurers in the US and the largest commercial auto insurer, distributing products through over 35,000 independent agents and direct channels [9].

Global Research and Evidence Lab 14 August 2024 Brazilian Utilities Daily Current Opening of the free market may be 'immediate' after approval of reform The Minister of Mines and Energy, Mr. Alexandre Silveira, said that the structural measures will come through a PL, which should be presented in September. In July, Mr. Silveira had promised the regulation, which could come through a Provisional Measure (MP), for August. One of the foundations of the text of the bill will be the long-awaited full opening of ...

Global Research and Evidence Lab 14 August 2024 First Read Serena Energia SA 2Q24 - Weak winds driving results Q: How did the results compare vs expectations? Serena reported results that were below the company's expectations given poorer wind resources. Serena also updated its 2024 guidance, now expecting a mid point guidance -5% below its guidance at the start of the year, adjusting to R$1,821mn from R$1,917mn vs. UBSe 2024 adjusted EBITDA of R$1,781mn. Serena in 1H24 has achieved 40% of the new FY guidan ...

Global Research and Evidence Lab 14 August 2024 Madrigal Pharmaceuticals Inc Rezdiffra Formulary Coverage Tracker Rezdiffra coverage substantially improves in July update (50% commercial coverage, consistent w/mgmt commentary). See inside for an overview of the data on coverage and formulary status plan by plan and how Rezdiffra coverage is changing over time. We update our proprietary monthly formulary coverage tracker for MDGL's Rezdiffra using Evidence Lab's US drug formulary monitor (access data here). ...