HAPPY WEDNESDAY TO THE STREET
Here’s one way to double your stock price, and then some: cure cancer.
Okay, so Moderna (MRNA) didn’t do exactly that. But the biotech’s personalized cancer vaccine with Merck (MRK) did just hit its main goal in a late-stage melanoma trial. The stock soared a whopping 150% today in response. Merck also jumped 10%.
They say the best business models solve big problems no one else has cracked. Well, problems don’t get much bigger than that.
🟩 | US stocks ticked up today, snapping a losing streak, as the US Treasury unveiled a plan to stymie surging bond yields.
📉 | One Notable Decliner: La-Z-Boy (LZB) sank after guiding current-quarter revenue below consensus.
— Brooks & The Street Sheet Team
MARKET SNAPSHOT
S&P 500 Heatmap. Credit: Unusual Whales
Market Movers
COINBASE, TARGET, MERCURY SYSTEMS
📈 | Coinbase (COIN) surged as bitcoin popped above $68K.
📈 | Target (TGT) topped Q2 revenue estimates and hiked full-year guidance on a $752M tariff refund.
📉 | Mercury Systems (MRCY) missed fiscal Q4 earnings estimates by a penny.
📈 | Pilgrim's Pride (PPC) rallied after its majority owner bid to buy out the chicken producer’s remaining shares.
📈 | Estee Lauder (EL) beat fiscal Q4 earnings and revenue estimates.
Tomorrow's Trade Idea, Today
HONA, I SHRUNK THE MULTIPLE
Stock Spotlight
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Bargain Bin Aerospace
Morgan Stanley analyst Kristine Liwag upgraded Honeywell Aerospace to Overweight. But that’s not a bid of confidence in its fundamentals.
The analyst admits she still sees below-peer revenue and earnings growth, limited margin expansion, and free cash flow conversion that trails the group. Her argument? The worst case is already priced in.
The 35% Haircut
The stock trades near 16.8x estimated price-to-free cash flow and 11.4x expected 2028 EV/EBITDA, the cheapest large cap aerospace name Morgan Stanley covers.
Liwag thinks a discount compared to the sector is warranted. But a more than 30% markdown? Not so much.
The current price suggests both a drawn-out operational recovery and a permanently smaller earnings base, per Liwag.
She sees the second half of that scenario as particularly over-punitive, given the installed base, aftermarket exposure, and defense portfolio.
Alone at the Gate
The Street is not on Liwag’s side. Of the 15 analysts covering the stock, 10 rate it a Hold. Just 5 have a Buy or Strong Buy.
Shares have been sliding since the late-June spinout from Honeywell (HON). Morgan Stanley is one of the few looking to buy the descent.
Do you own any shares of Honeywell Aerospace (HONA)?
OVERHEARD ON THE STREET
📉 Long-dated Treasury yields came down off multi-decade highs after the Treasury Department said it would double the size of its debt buybacks, lifting gold miners and homebuilders along the way.
🇨🇦 President Trump paused 50% tariffs on Canada for three days and declared a deal, with the documents still unfinalized and Keystone XL floated as part of it.
🏦 July FOMC minutes showed many Fed officials see a hike coming if inflation does not cool, with three regional presidents already dissenting in favor of one.
🍽️ Meal kit customers are getting nearly empty boxes after the key fulfillment supplier of major services like Blue Apron declared bankruptcy, forcing a rushed handoff to a new partner.
💘 About 1 in 4 professionals consider LinkedIn for dating, per Zety data, although Microsoft's (MSFT) platform technically bans romantic advances.
TUESDAY'S POLL RESULTS
Do you own any shares of Duolingo (DUOL)?
▇▇▇▇▇▇ 🐂 Yup, I'm holding
▇▇▇▇▇▇ 🐻 Nope, not interested
▇▇▇▇▇▇ 👀 No, but I'm interested
And, in response, you said:
🐻 Nope, not interested — “The idea isn't unique. Hard to see how they'll keep their market, let alone grow it.”
