Valuentum Exclusive Analysis for the Discerning Investor

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Netflix Raises 2025 Revenue and Margin Guidance
Image Source: Netflix. During the second quarter, Netflix generated cash from operating activities of $2.4 billion versus $1.3 billion in the prior-year period. Free cash flow in the second quarter totaled $2.3 billion versus $1.2 billion in the year-ago period. Netflix raised its full year 2025 free cash flow forecast to the range of $8-$8.5 billion from approximately $8 billion due to continued strength in revenue and margin performance. The company ended the quarter with gross debt of $14.5 billion and cash and cash equivalents of $8.2 billion. We liked Netflix’s second quarter and outlook, but we don’t include shares in any newsletter portfolio.

Key Comments from the Banks This Earnings Season
Image: The big banks have done well recently. Let's read through key comments from banking executives this earnings season.

Fastenal’s Second Quarter Results a Positive Read Through for the Broader Economy
Image Source: TradingView. Fastenal’s “manufacturing end markets outperformed primarily due to the relative strength (it is) experiencing with key account customers with significant managed spend where (its) service model and technology are particularly impactful. This disproportionately benefits manufacturing customers. The non-residential construction end market experienced growth for the first time in ten consecutive quarters. Other end market sales were favorably impacted by growth with warehousing and storage, and data center customers, which were partially offset by declining sales with resellers.” We liked Fastenal’s results, and the report is a positive read through to the broader U.S. economy.

Delta Air Lines Restores Financial Guidance
Image Source: TradingView. Delta’s restoration of its financial guidance is positive as it relates to financial visibility, particularly with respect to the impact tariffs may have on consumer spending for travel. As noted in its commentary, fiscal 2025 earnings per share is targeted in the range of $5.25-$6.25, with free cash flow of $3-$4 billion and gross leverage less than 2.5x. Management noted that “demand trends stabilized at levels that are flat to last year” through the quarter and that it “continued to see resilience in (its) diverse, high-margin revenue streams.” For the September quarter, Delta expects total revenue to be flat to up 4% compared to the prior year. Non-fuel unit costs are expected to be the best performance of the year in the September quarter. Delta also upped its quarterly dividend 25% beginning in the September quarter. We like Delta’s enhanced visibility in restoring its guidance, though we think there are better opportunities on the market than airlines. Shares yield 1.3% at the time of this writing.

Dividend Increases/Decreases for the Week of July 11
Let's take a look at firms raising/lowering their dividends this week.

Constellation Brands Maintains Comparable Earnings Per Share Outlook
Image Source: Constellation Brands. On July 1, beer, wine and spirits producer Constellation Brands reported disappointing first quarter fiscal 2026 results with revenue and non-GAAP earnings per share missing the consensus forecast. Comparable net sales dropped 6%, while comparable organic net sales fell 4%. Comparable operating income tumbled 11%, while comparable net income attributable to the company fell 12%. Comparable adjusted earnings before interest and taxes fell 13%, while comparable diluted net income per share dropped 10%, to $3.22. Shares yield 2.4% at the time of this writing.

General Mills’ Top Priority Is to Restore Volume-Driven Organic Sales Growth
Image: General Mills’ shares have been under pressure as of late. On June 25, General Mills reported mixed fiscal fourth quarter results with revenue coming up short of forecasts, but non-GAAP earnings per share exceeding the consensus estimate. In the fourth quarter, net sales dropped 3% driven by lower pound volume and unfavorable net price realization and mix, while organic sales were also down 3%, in line with expectations. Adjusted gross margin was down 220 basis points. Adjusted operating profit of $622 million was down 22% in constant currency, while its adjusted operating profit margin fell 330 basis points year-over-year. Adjusted diluted earnings per share came in at $0.74, which was down 27% in constant currency.

Dividend Increases/Decreases for the Week of June 27
Let's take a look at firms raising/lowering their dividends this week.

Exxon Mobil’s Shares Have Been Choppy of Late
Image: Exxon Mobil’s shares have been choppy of late. Exxon Mobil continues to be shareholder friendly while it exercises cost discipline. Shareholder distributions in the quarter totaled $9.1 billion, consisting of $4.3 billion of dividends and $4.8 billion of share repurchases. The oil and gas giant has now achieved $12.7 billion of cumulative structural cost savings versus 2019, with $0.6 billion of cost savings achieved during the quarter. Management expects to deliver $18 billion of cumulative savings through the end of 2030 versus 2019. Free cash flow in the quarter was $8.84 billion, and the company ended the quarter with industry-leading debt-to-capital and net-debt-to-capital ratios. We like Exxon Mobil as energy exposure in a diversified portfolio, but we don’t include shares in any newsletter portfolio at this time. Shares yield 3.5% at the time of this writing.

J.M. Smucker Sets Fiscal 2026 Earnings Outlook Below Consensus
Image: J.M. Smucker’s shares have been under pressure of late. Looking to its fiscal year 2026 outlook, J.M. Smucker’s net sales are targeted to increase 2%-4% with adjusted earnings per share in the range of $8.50-$9.50 versus consensus of $10.25 per share. Comparable net sales are expected to increase approximately 3.5%-5.5%, which excludes noncomparable sales in the prior year related to the divestitures of the Voortman business and certain Sweet Baked Snacks value brands. Free cash flow is targeted at $875 million for the year, considering capital expenditures of $325 million. Shares yield 4.5% at the time of this writing.