00:00 Speaker A
Now time for some of today’s trending tickers. We’re watching shares of Eaton, Caterpillar, and Lemonade. Eaton stock, let’s start there. It’s falling after announcing third quarter guidance for the company that did miss expectations spurred on by tariff costs. So this one, uh, in the red, Chris narrows, its full year adjusted earnings per share forecast it looks like. Uh, noted there was a high bar on this one and that’s what Keybank kind of pointed out. They Keybank by the way, likes this one. They said view the results as encouraging update, did think shares could trade lower near term given, they pointed out the high bar into the print. Um, they said due to well well documented data center strength, most on the street still like this one, but what do you think?
01:19 Chris
So, we like it. We own it. And I agree that it was a high bar coming in. The stock, you know, like a lot of names had a very, very strong run. You know, my thinking coming into the earning season is that, you know, stocks that have had tremendous moves, in order to move higher, they have to deliver a beat and raise. So flip it around, you know, a beat and reiterate or a beaten, you know, modest guide down. You’re going to see some pressure on those shares. That’s what we’re seeing, but the Keybank guy is correct. The data center orders were up 55% year over year. That’s where the strength is. Um, you know, they had strong print in aerospace as well. The weakness is in their vehicle sales. No surprise given tariffs. So you’re seeing a stock kind of get beaten up for guidance for the current quarter that on a $3 number is down a couple pennies. Does that make sense? Is that 78%? I don’t think so. Let’s focus on where the tail winds are blowing and that’s driving over 90% of the profits.
03:15 Speaker A
All right, next up, I want your your take on this one too. Caterpillar. Missing on the top and bottom lines in the second quarter, the industrial giant projecting a net impact from tariffs of 1.3 to 1.5 billion for the full year. Um, so does expect to face Chris’s net incremental tariffs. CEO did say the company will be able to offset the impact, uh, saying we’re going to mitigate the impact of tariffs, talk about exactly which levers the CEO is saying we’re going to pull, we’re looking for a little more clarity before reaching into those. Um, we have heard many CEOs that talk about tariffs. Some as we talked about, seems to suggest that there are levers they could pull to mitigate whether that’s cutting costs or raising prices, or maybe leaning on their suppliers. But what do you think about Caterpillar?
04:28 Chris
So, it’s an interesting story, right? You know, construction equipment. We know that there’s a lot of that activity going on in the states, whether it’s data center, non-residential construction. I I would favor more like United Rentals and the rental companies for that, but as it relates to, you know, Caterpillar, you know, what about their non-US sales? What about the the impact of the dollar? How is that changing in the back half of the year for them? To me, this is more of a wait and see story. Maybe some clarity on tariffs can help help someone get more bullish on that name.
05:16 Speaker A
All right, final one here. Check out insurance provider lemonade, rising on their Q2 results, including a beat on revenue, a better than feared loss per share. In a letter to shareholders, company scribes the better than expected quarter to acceleration in growth, underwriting performance and expense management. The insurer also raising revenue for the remainder of the year spurred on by reinsurance renewal and reiterating that outlook. So this one in the green today. Um, boost the full year revenue guidance, Chris. Now sees between 710 and 715 million. I do see an analyst at Jeffries side is saying many underwriting metrics, they said, were better than their and consensus forecast. Stock’s up about 30% this year.
06:16 Chris
Yeah, looks it looks like a champ. Uh, you know, when I was kind of reviewing it, you know, the thing that stood out to me is how they’re leveraging AI to do this. So it’s another, you know, example, Josh, of AI helping drive, you know, improving cost structures, productivity, kind of keeps me bullish on some of the other names that are out there that I’ve yet to report.