Core Viewpoint - Incorporating top stocks from various sectors can effectively balance an investment portfolio, with the Global Industry Classification Standard aiding in sector comparison and market tracking [1][2]. Sector Summaries 1. Technology - The technology sector comprises over a third of the S&P 500, with a 34% weighting, including major companies like Nvidia, Microsoft, and Apple. Texas Instruments is highlighted as a top tech stock for 2025 due to its diversified business and 2.7% dividend yield [5][6]. 2. Financials - Financials represent the second-largest sector at 13.8% of the S&P 500. American Express is noted for its dual role as a payment processor and card issuer, maintaining a low net write-off rate, indicating strong risk management [7]. 3. Consumer Discretionary - This sector accounts for 10.4% of the S&P 500 and is sensitive to economic conditions. Starbucks is identified as a top pick due to its successful turnaround and 2.7% dividend yield, supported by leadership changes [8][9]. 4. Communications - The communications sector makes up 9.9% of the S&P 500. Alphabet is recommended for its diverse business model and low valuation, with continued growth in Google Search and accelerating adoption of its chatbot, Google Gemini [10]. 5. Healthcare - Healthcare constitutes 8.8% of the S&P 500, facing pressure from sell-offs. Eli Lilly is recognized for its promising drug pipeline and growing dividend, appealing to investors [11]. 6. Industrials - The industrials sector has an 8.6% weighting in the S&P 500. Honeywell International is noted for its plan to split into three businesses to enhance shareholder value, with a 2.1% dividend yield [12]. 7. Consumer Staples - Consumer staples represent 5.2% of the S&P 500 and are currently challenged by inflation. Procter & Gamble is highlighted for its strong pricing power and 2.7% dividend yield, having increased payouts for 69 consecutive years [13]. 8. Energy - The energy sector is under pressure from low oil prices and the energy transition. ExxonMobil is recommended for its low production costs and diversified portfolio, boasting a 3.7% dividend yield and 42 years of increasing payouts [15][16]. 9. Utilities - Utilities make up 2.5% of the S&P 500 and are known for reliable passive income. Southern Company is noted for its high demand and 3.1% yield, making it a strong investment choice [17]. 10. Real Estate - The real estate sector accounts for 2% of the S&P 500, including REITs. Mid-America Apartment Communities is highlighted for its strong dividend history, with a yield of 4.3% [19]. 11. Materials - The materials sector comprises 1.8% of the S&P 500. Sherwin-Williams is recognized for its long history of dividend increases and stock repurchases, yielding 0.9% [20][22].

Core Viewpoint - Honeywell's transformation into three separate publicly traded companies presents a buying opportunity for investors, especially given its recent stock decline despite strong financial performance [2][4][12]. Financial Performance - Honeywell reported an 8% sales growth and a 10% increase in adjusted earnings per share (EPS), exceeding previous guidance [9]. - The updated guidance for 2025 includes projected revenue of $40.8 billion to $41.3 billion, adjusted EPS of $10.45 to $10.65, and free cash flow (FCF) of $5.4 billion to $5.8 billion [9]. - The stock is currently valued at 20.5 times the midpoint of adjusted 2025 earnings and 24.7 times FCF, which is a discount compared to its five-year median P/E ratio of 25.5 and price-to-FCF of 29.5 [10]. Strategic Changes - Under CEO Vimal Kapur, Honeywell is undergoing a portfolio review and plans to split into three companies: Honeywell Automation, Honeywell Aerospace, and Solstice Advanced Materials [3][4]. - The decision to separate is seen as a way to enhance shareholder value, acknowledging that the conglomerate structure has become a disadvantage [7]. Dividend and Valuation - Honeywell has a 14-year history of increasing its dividend, currently yielding 2.1%, with sufficient FCF to support future increases [11]. - The potential for each stand-alone company to achieve different valuations based on their growth prospects, particularly in sectors like artificial intelligence, is noted [13]. Investment Recommendation - The current stock price presents a strong buying opportunity before the breakup, with the potential for significant value appreciation post-split [12].

Core Insights - The Industrial Select Sector SPDR ETF (XLI) is designed to provide broad exposure to the Industrials sector, launched on December 16, 1998, and has become a popular choice among retail and institutional investors due to its low costs and tax efficiency [1][2] Fund Overview - XLI is sponsored by State Street Investment Management and has over $23.35 billion in assets, making it the largest ETF in the Industrials sector [3] - The ETF aims to match the performance of the Industrial Select Sector Index, which includes various industries such as aerospace, machinery, and logistics [4] Cost Structure - The ETF has an annual operating expense ratio of 0.08%, positioning it as one of the least expensive options in the market, with a 12-month trailing dividend yield of 1.28% [5] Sector Exposure and Holdings - XLI has a 100% allocation in the Industrials sector, with General Electric (GE) making up approximately 6.06% of total assets, and the top 10 holdings accounting for about 37.98% of total assets [6][7] Performance Metrics - The ETF has returned approximately 15.11% and is up about 22.94% year-to-date as of August 11, 2025, with a trading range between $116.42 and $154.99 over the past 52 weeks [8] - XLI has a beta of 1.07 and a standard deviation of 17.12% over the trailing three-year period, indicating a medium risk profile [8] Investment Alternatives - XLI holds a Zacks ETF Rank of 1 (Strong Buy), indicating strong expected returns and favorable metrics compared to other ETFs in the sector [9] - Other ETFs in the Industrials space include the First Trust RBA American Industrial Renaissance ETF (AIRR) and the Vanguard Industrials ETF (VIS), with AIRR having $4.55 billion in assets and VIS having $6.06 billion [11]

Group 1: Honeywell International - Honeywell is undergoing a breakup that is expected to create value for investors by allowing its constituent parts to trade as stand-alone companies [4][7] - The breakup is driven by the different valuation methods for aerospace and industrial companies, with Honeywell Aerospace being the largest of the three new companies [5] - The remaining company, Honeywell Automation, will focus on building and industrial automation, aligning with industry trends towards software-driven automation [6] Group 2: American Express - American Express is approaching an all-time high due to its strong performance, catering to affluent customers despite pressures on consumer spending [9] - The company has a diverse revenue stream from card fees and transaction fees, which contributes to its robust business model [10] - American Express reported a 2% net write-off rate in Q2 2025, significantly lower than the industry average of 4.44%, indicating effective risk management [11][12] - Over the past three years, American Express stock has increased by 130.3%, with a current P/E ratio of 21.8, reflecting its strong business fundamentals [14] Group 3: Coca-Cola - Coca-Cola's stock has recently retreated about 6% from its peak of $74.38, but it still offers a forward-yielding dividend of 2.9% [16] - The company has diversified its portfolio through acquisitions, positioning itself well to adapt to changing consumer preferences towards healthier options [17] - Coca-Cola is recognized as a Dividend King, having increased its dividend for 63 consecutive years, showcasing its commitment to returning capital to shareholders [18] - Current valuation suggests a discount compared to its five-year average cash flow multiple, making it an attractive investment option [19]

Core Viewpoint - Emerson Electric's financial results for Q3 2025 were mixed, leading to a significant drop in stock price despite beating earnings expectations, indicating that the stock's current valuation may not be justified [1][6]. Financial Performance - Emerson reported a profit of $1.52 per share, surpassing analyst expectations of $1.51, but revenue fell short at just over $4.55 billion compared to the predicted $4.6 billion [1][3]. - Year-over-year sales growth was 4%, and the pre-tax operating profit margin increased by 570 basis points to 16.1% [3]. - The reported profit of $1.52 was a non-GAAP figure, while GAAP earnings were only $1.03 per share, although this represented a 72% improvement from $0.60 per share a year ago [3]. Future Guidance - For Q4, Emerson forecasts sales growth to accelerate to about 6%, projecting total sales growth for the year at approximately 3.5% [5]. - Management anticipates adjusted earnings of about $6 and expects to generate $3.2 billion in positive free cash flow by the end of the fiscal year [5]. Valuation Concerns - With an enterprise value of $79 billion and net debt of about $13 billion, the enterprise value-to-free cash flow ratio stands at nearly 29x, raising skepticism about the high valuation relative to the expected 3.5% annual sales growth [6].

Core Insights - Fortive (FTV) reported a revenue of $1.02 billion for the quarter ended June 2025, marking a year-over-year decline of 34.5% and an EPS of $0.58 compared to $0.93 a year ago [1] - The reported revenue exceeded the Zacks Consensus Estimate of $1.01 billion by 0.85%, while the EPS fell short of the consensus estimate of $0.60 by 3.33% [1] Financial Performance Metrics - Advanced Healthcare Solutions generated sales of $319.5 million, slightly above the estimated $319.3 million, reflecting a year-over-year decline of 1.3% [4] - Intelligent Operating Solutions reported sales of $675.7 million, below the estimated $689.46 million, with a year-over-year change of -0.2% [4] - Adjusted Operating Profit (Non-GAAP) for Intelligent Operating Solutions was $223.7 million, exceeding the average estimate of $222.26 million [4] - Adjusted Operating Profit (Non-GAAP) for Advanced Healthcare Solutions was $80.8 million, surpassing the estimated $75.14 million [4] - Operating Profit for Advanced Healthcare Solutions was $39.1 million, above the average estimate of $36.77 million [4] - Operating Profit for Intelligent Operating Solutions was $166.7 million, below the average estimate of $179.96 million [4] - Operating Profit for Other segments was -$76.8 million, significantly worse than the average estimate of -$30.83 million [4] Stock Performance - Fortive's shares have returned -4.2% over the past month, contrasting with the Zacks S&P 500 composite's increase of +3.4% [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), indicating potential underperformance relative to the broader market in the near term [3]

Group 1 - Honeywell International Inc. reported revenue of $10.35 billion for the quarter ended June 2025, reflecting an 8.1% increase year-over-year and a surprise of +3.33% over the Zacks Consensus Estimate of $10.02 billion [1] - The earnings per share (EPS) for the quarter was $2.75, up from $2.49 in the same quarter last year, with an EPS surprise of +4.17% compared to the consensus estimate of $2.64 [1] - Honeywell's stock has returned +7.9% over the past month, outperforming the Zacks S&P 500 composite's +5.7% change, and currently holds a Zacks Rank 3 (Hold) [3] Group 2 - Net Sales in Building Automation reached $1.83 billion, exceeding the average estimate of $1.75 billion, representing a year-over-year change of +16.2% [4] - Net Sales in Industrial Automation were $2.38 billion, slightly above the average estimate of $2.24 billion, but showed a year-over-year decline of -5% [4] - Aerospace Technologies generated $4.31 billion in Net Sales, close to the average estimate of $4.33 billion, with a year-over-year increase of +10.7% [4] - Energy and Sustainability Solutions reported Net Sales of $1.84 billion, surpassing the average estimate of $1.67 billion, reflecting a year-over-year growth of +14.5% [4] - Corporate and All Other segment reported Net Sales of $2 million, significantly below the average estimate of $12.97 million, indicating a year-over-year decline of -60% [4] Group 3 - Segment Profit for Aerospace Technologies was $1.1 billion, slightly below the average estimate of $1.15 billion [4] - Building Automation achieved a Segment Profit of $479 million, exceeding the average estimate of $459.26 million [4] - Energy and Sustainability Solutions reported a Segment Profit of $443 million, surpassing the average estimate of $395.83 million [4] - Industrial Automation's Segment Profit was $456 million, above the average estimate of $438.06 million [4] - Corporate and All Other segment reported a Segment Profit of -$110 million, better than the average estimate of -$134.58 million [4]

Core Viewpoint - The market anticipates a year-over-year decline in Fortive's earnings due to lower revenues, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - Fortive is expected to report quarterly earnings of $0.60 per share, reflecting a year-over-year decrease of 35.5% [3]. - Revenue projections stand at $1.01 billion, down 35.1% from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised down by 33.75% over the last 30 days, indicating a reassessment by analysts [4]. - The Most Accurate Estimate matches the Zacks Consensus Estimate, resulting in an Earnings ESP of 0% [12]. Earnings Surprise Prediction - A positive Earnings ESP is a strong indicator of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3 [10]. - Fortive currently holds a Zacks Rank of 5, complicating predictions of an earnings beat [12]. Historical Performance - In the last reported quarter, Fortive met the expected earnings of $0.85 per share, resulting in no surprise [13]. - Over the past four quarters, the company has beaten consensus EPS estimates three times [14]. Conclusion - Fortive does not appear to be a strong candidate for an earnings beat, and investors should consider other factors before making decisions [17].

Market Overview - Pre-market futures show positive movement with the Dow up +0.12%, S&P 500 +0.09%, Nasdaq +0.16%, and Russell 2000 leading at +0.52% [1] Bond Market - Bond yields remain stable with the 10-year yield at +4.44%, a slight increase of 3 basis points from last Friday, while the 2-year yield is at +3.88% and the 30-year yield at +5.00% [2] Housing Market - Housing Starts for June are reported at 1.32 million, slightly above projections, but still historically low compared to multi-year highs of 500K more in April 2022 [3] - Building Permits increased to 1.397 million from 1.394 million in May, but remain low compared to nearly 2 million in January 2022, prior to interest rate hikes [4] Company Earnings - 3M reported Q2 earnings of $2.16 per share, exceeding expectations of $2.01, with revenues of $6.2 billion, raising full-year 2025 earnings guidance to $7.75-8.00 per share [5] - American Express surpassed Q2 expectations with earnings of $4.08 per share and revenues of $17.9 billion, reflecting a year-over-year growth of +9% [6] - Charles Schwab's Q2 report showed earnings of $1.14 per share and revenues of $5.85 billion, both exceeding consensus estimates, with shares up +5% in pre-market trading [7] Economic Indicators - A preliminary print on Consumer Sentiment for July is expected to improve to 61.8 from 60.7, aligning with a healthier economic outlook as fears of tariffs impacting the economy have lessened [8]

Core Insights - Zacks Premium offers various tools for investors to enhance their stock market strategies and confidence [1] - The Zacks Style Scores are designed to help investors identify stocks with the highest potential to outperform the market in the short term [2] Zacks Style Scores Overview - The Style Scores categorize stocks into four main types: Value Score, Growth Score, Momentum Score, and VGM Score, each focusing on different investment strategies [3][4][5][6] - Value Score identifies undervalued stocks using financial ratios [3] - Growth Score emphasizes a company's financial health and future growth potential [4] - Momentum Score tracks price trends to capitalize on upward or downward movements [5] - VGM Score combines all three styles to highlight stocks with the best overall characteristics [6] Zacks Rank and Style Scores Interaction - The Zacks Rank is a proprietary model that uses earnings estimate revisions to guide investment decisions [7] - Stocks rated 1 (Strong Buy) have historically achieved an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [8] - To optimize returns, investors should focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B [10] Company Spotlight: Teledyne Technologies - Teledyne Technologies, based in Thousand Oaks, California, operates in various sectors including aerospace, defense, and environmental monitoring [12] - The company currently holds a Zacks Rank of 3 (Hold) and has a VGM Score of B [12] - Teledyne is projected to experience year-over-year earnings growth of 8.8% for the current fiscal year, with a recent increase in earnings estimates [13] - The company has an average earnings surprise of 2.7%, making it a potential candidate for growth investors [13]