Sector Snapshot
Sector Synopsis
Markets showed a split personality Tuesday, with strength in defensive names, select energy plays, and high-quality leisure stocks, while tech and discretionary retail remained under pressure. Upgrades in utilities, insurance, and brokers reflect an investor pivot to stability and yield. M&A headlines, tariff fallout, and interest rate positioning continue to shape sector rotation.
Retail, Consumer Staples & Restaurants
Restaurant stocks moved on M&A buzz, with LOCO jumping after a takeover offer. In earnings, PLAY reported falling comps and revenue declines, though EPS met expectations. LEVI posted a mixed quarter but was upgraded on valuation, while RL received a bullish call due to strong brand momentum. Off-price retailers like ROST were upgraded, while discretionary-focused SIG was downgraded on economic risk.
Leisure, Gaming & Lodging
Gaming data from MD and IL showed a mixed regional trend, with PENN and CZR performing unevenly. Stifel highlighted RCL, OSW, IGT, and FLUT as preferred names for their quality and resilience despite market weakness. Analysts see these as high-quality names best positioned to weather tariff and macro volatility.
Energy, Utilities & Materials
E&P stocks rebounded as oil stabilized, but a shift toward natural gas names like AR and EQT emerged after OXY was downgraded. LNG momentum continued with NEXT announcing a 20-year deal with Saudi Aramco. Coal stocks rallied after the Trump administration announced new executive orders in support of the industry. Utilities saw selective upgrades, with analysts preferring low-rate exposure and strong regional regulatory dynamics.
Financials
Brokers like CME and CBOE were upgraded on defensiveness and options exposure, while HOOD and VIRT were cut due to retail trading risk. Major banks including WFC and JPM were cited as well-positioned ahead of earnings, though the group faces a narrative reset amid macro uncertainty. In insurance, ALL and RNR were upgraded, while AIG was cut to neutral. Select mortgage lenders like RKT and GHLD were also upgraded on refi tailwinds tied to lower rates.
Crypto & Fintech
Ripple made headlines with a $1.25 billion acquisition of Hidden Road, its biggest-ever deal. Bitcoin miner CORZ posted higher output but declining hash rate, reflecting operational strain. Payment names continue to face headwinds as consumer confidence and transaction volumes remain in flux.
Biotech & Pharma
CRMD and PCRX posted strong fundamental updates with guidance hikes and favorable litigation resolution, respectively. Goldman Sachs resumed coverage on major pharma names with a broadly constructive tone. Drugmakers were viewed as an appealing defensive trade in the current uncertain environment.
Healthcare Services & MedTech
Medicare Advantage reimbursement rates were raised more than expected, boosting HUM, UNH, CVS, and others in managed care. WBA reported earnings but pulled guidance; CVS named a new CFO, showing ongoing transformation in management. The surprise rate boost from CMS was viewed positively across the board.
Industrials & Infrastructure
AGCO was upgraded over DE on geographic mix advantages, while Piper launched broad infrastructure coverage with positive ratings on PWR, MTZ, and PRIM. Airlines saw mixed ratings action as GS upgraded SKYW and downgraded AAL. Transports were also in focus, with Citi upgrading UNP, ODFL, and KNX following steep recent selloffs despite weak demand trends.
Technology & Semiconductors
AAPL extended its selloff due to tariff exposure, while HPE was downgraded on similar risks. CDW and TDC received upgrades based on valuation and defensive positioning. U.S.-listed Chinese tech stocks continued to tumble. In semiconductors, MU announced a surcharge to offset tariffs; AMD was downgraded over China exposure and pricing pressure, while AVGO authorized a $10 billion buyback.
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Inside the Earnings Call - RPM International
Summary Table
Theme | Q3 FY2025 | Q1–Q2 FY2025 | Q4 FY2024 |
|---|---|---|---|
Volume vs Price | Volume declines, FX & weather drag | Modest volume with price and margin gains | Volume mixed, offset by strong margin recovery |
Margins | Pressured by transitory costs from plant closures and FX | Improved via MAP 2025 savings and better mix | Significant improvement from FY24 margin lows |
Supply Chain | Reorganizing operations, plant transitions | Stable with optimization in progress | Post-COVID normalization underway |
Operating Efficiency | Reinvestment phase, higher transitional cost | Efficiency programs (MAP 2025) driving leverage | Full-year benefit from FY24 cost initiatives |
Outlook Tone | Cautiously constructive amid near-term headwinds | Focused on execution with steady confidence | Confident outlook, growth-focused |
Guidance | Reiterated full-year targets | Maintained throughout | Reaffirmed with bullish tone |
Tariffs & Macro | Cited FX headwinds and cost inputs | Light macro references, mostly FX-related | Minimal macro discussion |
Takeaway for Investors
Q3 FY2025 presented a bump in the road for RPM — not due to demand, but due to external and operational headwinds. Weather, foreign exchange, and facility restructuring muted performance, but the strategic initiatives from earlier quarters (especially MAP 2025) remain in place.
RPM is:
Still benefiting from efficiency programs, even amid transition costs
Staying disciplined on pricing and margin protection
Investing in long-term plant improvements
Managing through FX volatility and soft demand in Europe
With guidance held steady and initiatives underway to address plant and weather-related friction, RPM’s Q4 and FY2026 setup remains constructive. Investors may view this as a temporary reset rather than a structural setback.