Freeport-McMoRan, Inc. (NYSE:FCX) moved to reset expectations for its flagship Grasberg mine after completing its investigation into September’s mud-flow incident, issuing lower-than-expected multi-year production guidance while signaling that the worst of the operational overhang is easing.Scotiabank analyst Orest Wowkodaw upgraded Freeport-McMoRan to Sector Outperform from Sector Perform after the company issued updated production and capex guidance for its Indonesian Grasberg mine.Although the new 2026–2 ...

Core Viewpoint - Morgan Stanley warns that the market valuation multiples for Caterpillar's power generation business have significantly exceeded those of industry leaders like Nvidia and GE Vernova, indicating a potential overvaluation that could lead to a sharp correction if market conditions change [1][4]. Valuation Comparison - Caterpillar's power generation business is currently valued at an EV/EBITDA multiple between 58x and 103x, while GE Vernova and Nvidia are valued at approximately 28x and 25x, respectively [1][4]. - This suggests that the market perceives Caterpillar's power generation business as more valuable than the related businesses of top technology and energy companies [4]. Business Segment Analysis - The projected EBITDA for Caterpillar's segments in 2026 is as follows: - Construction Industries: $3,664 million at a 13.0x multiple, resulting in an EV of $47,628 million - Resource Industries: $2,118 million at a 13.0x multiple, resulting in an EV of $27,538 million - Power Generation: $1,508 million at a 103.0x multiple, resulting in an EV of $155,369 million - Other Energy & Transportation: $7,132 million at a 13.0x multiple, resulting in an EV of $92,713 million [5]. Market Expectations - To justify Caterpillar's current stock price of $585, the market must accept one of two extreme scenarios: 1. The valuation of Caterpillar's traditional cyclical businesses (like construction and resource extraction) is pushed to "absurd levels" far beyond historical norms. 2. Even with optimistic assumptions for the power generation business, the implied valuation for cyclical businesses remains high at 28x, despite declining operating margins [6][7]. - Morgan Stanley estimates that even with aggressive growth projections for the power generation business, it is unlikely to meet bullish expectations of $20 billion in sales by 2027 [7]. Price Target and EPS Forecast - Morgan Stanley maintains a 2026 EPS forecast for Caterpillar at $19.24, with a target price of $380 based on a 20x P/E ratio, indicating a potential downside of 35% from the current stock price [7].

Core Insights - Enterprise Products Partners LP (EPD) is scheduled to report its third-quarter 2025 results on October 30, with earnings estimated at 67 cents per share, reflecting a 3.1% year-over-year increase, while revenues are expected to decline by 9% to $12.6 billion [1][5]. Earnings Performance - EPD has beaten consensus earnings estimates in two of the last four quarters, with an average surprise of 0.01% [2]. - The current Earnings ESP for EPD is -0.75%, and it holds a Zacks Rank of 4 (Sell), indicating a lower likelihood of an earnings beat this time [3]. Operational Factors - EPD operates a pipeline network exceeding 50,000 miles and has over 300 million barrels of liquids storage capacity, which is expected to generate stable fee-based revenues [4]. - The Gross operating margin from the Natural Gas Pipelines & Services segment is estimated at $402.33 million, up from $349 million a year ago [6]. Market Performance - EPD's stock has increased by 14.8% over the past year, outperforming the industry average of 2.9% [7]. - The current trailing 12-month EV/EBITDA ratio for EPD is 10.08, which is lower than the industry average of 10.44, suggesting it is undervalued [10]. Commodity Dependence - EPD relies heavily on the Permian Basin for its operations, which is experiencing a shift towards natural gas production as core oil-producing regions are depleting [12]. - This shift may pressure EPD's profit margins, as natural gas and NGLs are generally less profitable than oil [13]. Comparison with Peers - Enbridge (ENB) is set to report earnings on November 7, 2025, with an Earnings ESP of -7.36% and a Zacks Rank of 3 [14]. - Kinder Morgan Inc. (KMI) reported third-quarter earnings of 29 cents per share, meeting estimates, with total revenues of $4.15 billion, surpassing expectations [15][16].

Core Viewpoint - MGM China (02282) shares rose over 5%, reaching HKD 15.05, with a trading volume of HKD 87.37 million, driven by positive industry forecasts and analyst upgrades [1] Group 1: Industry Outlook - Citigroup forecasts a 7% year-on-year increase in EBITDA for the Macau gaming operators in Q3, with MGM China expected to achieve a 13% year-on-year growth [1] - The anticipated higher EBITDA growth for MGM China compared to the industry may provide positive stock momentum ahead of the company's earnings announcement on October 30 [1] Group 2: Analyst Ratings and Price Targets - Citigroup maintains a "Buy" rating for MGM China, setting a target price of HKD 19, and includes it in the positive catalyst watchlist for October 30 [1] - Credit Lyonnais believes MGM China has revaluation potential, noting that its 2026 EV/EBITDA and P/E multiples remain low among six Macau gaming companies [1] - Following an assessment of market share, profit margins, return on capital, and dividend growth, Credit Lyonnais raised its target price for MGM China from HKD 18.3 to HKD 22.7, maintaining an "Outperform" rating [1]

Core Insights - Exxon Mobil Corporation (XOM) anticipates a sequential increase in third-quarter 2025 earnings by up to $300 million, primarily driven by changes in oil prices and favorable refining margins [1][8] - The company expects its energy products business unit to generate earnings between $300 million and $700 million in the same quarter due to favorable industry refining trends [4][8] Oil & Natural Gas Price Impact - XOM projects a sequential earnings increase of $200 million in Q3 2025 due to natural gas price changes, with potential impacts ranging from a $200 million loss to a $200 million profit [2] - Average WTI spot prices for July, August, and September 2025 were $68.39, $64.86, and $63.96 per barrel, respectively, indicating a healthier pricing environment compared to the previous quarter [3] Production Outlook - ExxonMobil aims to increase its Permian production to 2.3 million barrels of oil equivalent per day by the end of the decade, up from approximately 1.6 million [5] - The company has made significant oil and gas discoveries in offshore Guyana, estimating recoverable reserves at 11 billion barrels of oil equivalent [6] Dividend and Stock Performance - XOM's current dividend yield is 3.47%, lower than the industry average of 4.4%, with competitors like BP and Chevron offering higher yields [7] - Over the past year, XOM's stock has declined by 4%, underperforming the industry's composite gain of 1% [8][12] Valuation Concerns - XOM is considered overvalued, trading at a trailing 12-month EV/EBITDA of 7.32X, which is higher than the industry average of 4.49X [14] - Compared to BP and Chevron, ExxonMobil's stock is currently priced at a premium [14] Future Outlook - The third-quarter 2025 results are expected to reflect a weaker oil pricing environment compared to the same period last year, with projected WTI prices declining in the coming years [10][11] - Despite a strong production outlook, the anticipated weakening of crude prices may negatively impact XOM's earnings [11]

Group 1 - UBS expects Budweiser APAC (01876) to see a turnaround in the Chinese market by Q4 2025 due to low base effects and stabilization of average selling prices, maintaining a "Buy" rating [1] - The target price for Budweiser APAC has been slightly raised from HKD 9.05 to HKD 9.07, implying a projected EV/EBITDA of 7 times for 2026, based on a 5% CAGR in EBITDA from 2025 to 2027 [1] - UBS conducted an on-site visit in Fujian, including factory and market tours, and discussions with Budweiser APAC's CFO, revealing ongoing challenges in the Chinese beer market due to a decline in offline channels such as restaurants and nightlife [1] Group 2 - The company has adjusted its profit forecasts for 2025 to 2027 down by 3% to 2%, considering a projected decline in sales in China during the second half of 2025 [1]

Core Viewpoint - Energy Transfer LP (ET) has outperformed the Zacks Oil and Gas - Production Pipeline - MLB industry, gaining 7.9% over the past year while the industry declined by 0.8% [1][8]. Performance Summary - Energy Transfer is trading above its 50-day simple moving averages (SMA), indicating a bullish trend [6]. - The company secures 90% of its revenues from fee-based contracts, providing stable cash flow [10]. - ET's current trailing 12-month EV/EBITDA is 9.29X, below the industry average of 10.65X, suggesting it is undervalued [21]. Growth Factors - Energy Transfer has a vast midstream network of nearly 140,000 miles of pipelines, enhancing its competitive edge [11]. - The company is strategically positioned to meet rising U.S. natural gas demand through its extensive storage network [12]. - Strategic acquisitions have bolstered ET's operations, enhancing scale and efficiency [13]. - The company plans to invest $5 billion in capital spending to strengthen its infrastructure [14]. Earnings Estimates - The Zacks Consensus Estimate indicates year-over-year earnings growth of 8.59% for 2025 and 10.91% for 2026 [15]. - Current estimates for 2025 earnings per unit are $1.39, with a high estimate of $1.46 and a low estimate of $1.31 [17]. Cash Distribution - ET's current quarterly cash distribution rate is 33 cents per common unit, with management raising distribution rates 16 times in the past five years [19]. Comparison with Peers - Plains All American Pipeline (PAA) has seen a decline of 1.9% over the past year, contrasting with ET's growth [6]. - Delek Logistics Partner LP (DKL) has a higher distribution rate but also a higher payout ratio of 151% [20]. Conclusion - Energy Transfer is well-positioned to benefit from increasing U.S. oil, natural gas, and NGL production, supported by fee-based earnings and strategic acquisitions [26].

Core Viewpoint - The performance of Kingsoft Holdings in 1H25 exceeded expectations, with significant growth in both total revenue and EBITDA, driven by a recovery in business volume and the introduction of new products [1][2]. Financial Performance - Total revenue reached $342 million, a year-on-year increase of 17% and a quarter-on-quarter increase of 27%, recovering to 38% of the level in 1H19 [1]. - Total gaming revenue was $332 million, also reflecting a 17% year-on-year increase and a 28% quarter-on-quarter increase, recovering to 38% of the level in 1H19 [1]. - EBITDA amounted to $200 million, showing a year-on-year growth of 261% and a quarter-on-quarter growth of 36%, recovering to 61% of the level in 1H19, surpassing the forecast of $188 million [1]. Development Trends - Infrastructure improvements and increased flight frequency have boosted visitor numbers, driving growth in the mid-market segment [1]. - The number of Chinese tourists visiting Cambodia increased by 51% year-on-year and 28% quarter-on-quarter in 1H25, with business travelers increasing by 46% year-on-year and 31% quarter-on-quarter [1]. - The new Decho International Airport is set to open in September 2025, with a passenger capacity of 13 million, while the existing Phnom Penh International Airport will cease operations [1]. VIP Business Growth - The direct VIP business turnover increased by 88% year-on-year and 87% quarter-on-quarter in 1H25, driven by the rise in business travelers and expatriates [2]. - The acceleration in foreign direct investment in Cambodia, particularly following Chinese President Xi Jinping's visit in April, has contributed to this growth [2]. Future Plans and Dividend - The Naga 3 project is expected to announce more details in 1H26, with management anticipating more iconic tourist attractions and amenities [2]. - The company declared an interim dividend of $0.0101 per share, corresponding to a 30% payout ratio, compared to a historical level of 60% [2]. Earnings Forecast and Valuation - The EBITDA forecasts for 2025 and 2026 have been raised by 6%, reaching $406 million and $481 million, respectively [2]. - The current stock price corresponds to 7 times the 2025 EV/EBITDA, with a target price raised by 12% to HKD 6.50, indicating a 12% upside potential from the current price [2].

Summary of Key Points from the Conference Call Industry Overview - The conference call focuses on the **Metals & Mining** industry, utilizing the **HOLT valuation framework** to analyze various sub-sectors and companies within this space [1][2][3]. Core Insights and Arguments Valuation Methodology - HOLT's valuation framework is based on a **discounted cash flow model**, emphasizing **Cash Flows Return on Investment (CFROI)** as a key metric for comparing performance across companies and time [1][13]. - The report suggests that there is no single valuation methodology for metals & mining; a combination of **short-term trading multiples (EV/EBITDA)**, cash returns, and **Net Present Value (NPV)** is preferred [1]. Sub-Sector Valuation Insights - **Gold**: - Gold stocks are seen as **undemanding** with market-embedded expectations around **6%**, compared to near-term CFROI forecasts of **~8%** [3][29]. - Top picks include **ABX**, **KGC** in North America, and **EDV** in Europe [3][31]. - **Aluminium**: - Aluminium stocks are viewed positively, trading at a **15-30% discount** to historical EV/EBITDA averages [4][36]. - Preferred stock for exposure is **NHY** [4][37]. - **Copper**: - Copper stocks are considered **expensive** with high market expectations, trading close to historical averages [5][50]. - Recent downgrades include **FCX**, **SCCO**, and **LUN** to Neutral, and **KGHM** to Sell due to a cautious outlook [5][51]. - **Diversified Miners**: - Market expectations are in line with forecasts at **~4%**, but these stocks trade at a premium compared to other sub-sectors [8][43]. - Preference for **GLEN** over **RIO**, **BHP**, and **Vale** due to better capital discipline [8][44]. - **Steel**: - EU steel stocks are pricing in low returns due to high capital intensity and regulatory uncertainties, while US steel stocks are expected to perform better due to protective tariffs [9][57]. - Preferred US steel stocks include **NUE** and **STLD** [9][57]. Additional Important Insights - The report highlights the **structural challenges** faced by the steel industry in Europe, including high costs related to CO2 emissions and energy [58][59]. - The **EU Steel Action Plan** may provide support for returns on decarbonization projects, potentially leading to a re-rating of the sector [60]. - The **HOLT methodology** does not assign ratings or target prices but serves as an analytical tool for evaluating company performance [66][67]. Conclusion - The Metals & Mining industry presents varied investment opportunities across sub-sectors, with specific stocks recommended based on their valuation relative to market expectations and forecasts. The report emphasizes a selective approach, particularly in the context of changing commodity prices and regulatory environments.

Valuation Assessment - Enterprise Multiple (EV/EBITDA) helps assess company valuation [1] - The metric is used in comparing industry peers for investors and analysts [1] Formula and Application - The report explains the formula for Enterprise Multiple (EV/EBITDA) [1] - The report details applications of EV/EBITDA [1]