Charged Alpha Stock Encyclopedia

L3Harris Technologies, Inc. (LHX) Q2 2026 — Q2 2026 = the three months ended 3 July 2026, reported AFTER the close on 29 July. Revenue $5,881M vs $5,426M (+8.4%); GAAP diluted EPS $3.13 vs $2.44 (+28%) vs ~$2.80 consensus. Orders $7.3B, book-to-bill 1.2x, record $42B backlog, guidance RAISED. Then management delayed the missile-business IPO to 2027 — and the stock fell 8.6% next session, 11% intraday to a new 52-week low, closing $277.06 on 31 July.

L3Harris beat, raised guidance and posted a record backlog — and the stock fell 11%, because the missile-business IPO slipped to 2027.

THE CALL: BUY (4/5, MARKED DOWN FOR A TIMING DECISION) — base-case value ~$340.0 vs ~$277.06 today.

KEY METRICS:

- Revenue $5,881M vs $5,426M (+8.4%), growth in ALL THREE segments: Space & Mission Systems $2,966M (+7%), Communications & Spectrum Dominance $1,943M (+4%), Missile Solutions $1,054M (+14%). Segments were REORGANISED for 2026

- EPS $3.13 vs $2.44 (+28%) is GAAP — L3Harris publishes no adjusted figure, and the year-ago number is $2.44, NOT $2.78. Operating income $654M (+15%), margin 11.1% (+60bps). FCF $771M, operating cash flow $879M, both +37%

- THE MARGIN CATCH: reported segment operating income $942M / 16.0% (+10bps) includes $39M of 'segment investment income' — a line that was ZERO in Q2 2025 (Table 4). Ex that: $903M and 15.35%, DOWN from 15.9%

- THE COUNTERPOINT, AND IT'S BIGGER: Q2 2025 held $92M of asset-sale gains also absent now. Clean vs clean, $903M vs $771M = +17.1% on +8.4% revenue, margin 15.35% vs 14.21% = UP 114bps. The headline UNDERSTATES the quarter

- WHERE THE 28% CAME FROM: pretax rose $186M — operating income +$83M (45%), non-service FAS pension income and other +$80M (43%, $105M-$185M), interest +$23M; tax a $44M headwind. ~43% is BELOW the operating line

- PROFIT MIX: SMS is ~half of revenue at a 9.8% margin and 31% of segment profit; C&SD is a third of revenue at 26.9% (+230bps) and 55% of profit. DEMAND: $7.3B orders, 1.2x book-to-bill, record $42B backlog, plus PAC-3 MSE and 4x THAAD frameworks

- BALANCE SHEET (3 Jul 26): debt $10,999M less cash $1,521M = net debt $9,478M (~2.4x EBITDA); interest fell to $129M from $152M. PLUS $968M of redeemable subsidiary preferred (Department of War money) ranking AHEAD of common. Tangible book is NEGATIVE $6,654M

- CASH TIMING: H1 FCF is $584M of the $3.0B guide — 80.5% unearned. But H1 2025 was $460M of ~$2.73B (16.8%), so 2026 tracks BETTER. GUIDE RAISED: revenue $23.2-23.7B, EPS $11.80-12.00 (+$0.40 both ends) absorbing a ~$0.20 divestiture hit; dividend $5.00 = 1.80%

- OUR DCF (owner-earnings, 8.0%, 2.5% terminal, on guided $3.0B FCF growing 7% then 5%): PV $27,760M + terminal $46,360M = EV $74,120M, less $9,478M net debt and $968M preferred, /187.3M shares = $340. Bear $246 / bull $446; weighted $343. We publish $340 vs $277.06 = +23%

- REVERSE DCF: at $277.06 equity is $51.89B and EV $62.34B — 20.8x guided FCF, 23.3x guided EPS. That price implies a ~9.0% cost of capital, or at 8.0% terminal growth of just 0.75% — below inflation — from a business with 1.8 years of contracted revenue

- STREET: Buy (17 analysts, S&P Global — 11 strong buy / 1 buy / 5 hold / 0 sell), average target $369.13, median $377, range $285-$443. Susquehanna cut to $350 keeping Buy; RBC $310, UBS $312, Bernstein $405. We ALIGN on direction, more CAUTIOUS on the number

What to watch: Bullish: H2 free cash flow — ~$2.42B needed for the $3.0B guide, so Q3 settles it. Bearish: an EAC charge on fixed-price munitions, a budget CR, or capex well above $600M. Add aggressively below ~$250.

Also on YouTube: @ChargedAlpha

DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

Organon & Co. (OGN) Q2 2026 — Organon released Q2 2026 with its 10-Q on July 31 — no press release, no call, both suspended for the pending Sun Pharma merger. Revenue $1,558M, -2% reported but -5% ex-FX, missing ~$1,566M. Adjusted EPS $0.85, down 15%, missing ~$0.90. Adjusted EBITDA $461M, a 29.6% margin vs 32.7%. The stock closed at $13.55 — exactly unchanged.

It didn't move because Organon is barely a stock any more. On April 26 it agreed to be bought by Sun Pharma for $14.00 a share in cash — ~$11.75B EV, a 103% premium to the unaffected $6.91 — and holders approved on July 23 with 98.7% of votes cast; closing is expected early 2027. Underneath, it got worse: Nexplanon, the one growth asset, fell 21% in the US, and its US rod patents expire in 2027. Net debt is $7,421M, 4.17x EBITDA, so equity is only ~25% of enterprise value. Our standalone DCF says $9.35. The deal says $14.00.

THE CALL: HOLD (3/5, A BOND WITH A 33% TAIL, NOT A STOCK) — base-case value ~$13.25 vs ~$13.55 today.

KEY METRICS:

- OUR CALL: HOLD 3/5. Fair value $13.25 (deal-adjusted) vs $13.55 — ~2% BELOW. Standalone DCF $9.35

- DCF: unlevered FCF $1.11B (adj EBITDA $1,780M less capex $160M, network-exit/restructuring $120M, cash tax $392M), -3%/yr, -2% terminal at 8.5% = EV $9.92B less $7.42B net debt / 266.7M shares = $9.35

- Ladder 7.5/8.5/9.5%: bear $1/$0/$0, base $13.30/$9.35/$6.20, bull $26.76/$21.02/$16.38 — a 15% cash-flow swing takes the equity from $21 to zero

- Reverse DCF: $13.55 implies EV $11.0B = decline of only 1.4%/yr forever vs the -5% ex-FX just printed. At the unaffected $6.91 implied EV was $9.87B, within 0.5% of our $9.92B

- WALL STREET: Hold, $14.00 (deal-anchored). Raw screen mean $11.33, median $12.00, range $8-$14, 2 Buy/4 Hold/3 Sell — contaminated by stale pre-deal targets. We ALIGN on rating, DIFFER on target

- THE DEAL: Sun Pharma $14.00/sh all cash, ~$11.75B EV, signed Apr 26 2026, 103% premium to the unaffected $6.91. Holders approved Jul 23, 98.7% of votes cast. Close expected early 2027. Spread $0.45/3.3% = ~6.7% annualised; price implies ~90% odds of closing (we say 93%)

- Revenue $1,558M, -2% reported / -5% ex-FX (FX +$42M); US $398M -4%, Int'l $1,160M -2%. H1 $3,018M, -7% ex-FX

- Adj diluted EPS $0.85 (-15%) vs ~$0.90 est; GAAP $0.40 vs $0.56. Adj EBITDA $461M vs $522M, margin 29.6% vs 32.7%; adj gross margin 58.7% vs 61.7%

- Franchises: Established Brands $930M (-1%, 60% of sales), Women's Health $419M (-9%), Biosimilars $195M (+13%; Hadlima $79M +58%). Nexplanon $230M -4%: US $129M -21% on delayed 5-year-label reinsertions, Int'l $101M +31%. US rod patents expire 2027

- BALANCE SHEET: debt $8,553M less cash $1,132M = net debt $7,421M = 4.17x TTM adj EBITDA $1,780M. Avg rate 4.90%, avg maturity 4.1yr, $3,486M wall in 2028. H1 FCF $253M; dividend $0.02/qtr

- FY26 framework (Feb, never revised — no call): ~$6.2B revenue, ~$1.9B adj EBITDA. H1 did $3,018M / $876M, so H2 needs ~$1,024M (+17%)

What to watch: Bullish: the remaining regulatory clearances landing (spread should compress toward 1%), or US Nexplanon returning to growth in Q3/Q4. Bearish: a second request or CFIUS review, a Sun Pharma financing problem, or a third straight quarter of double-digit US Nexplanon decline into the 2027 patent expiry. We'd want the arbitrage at ~$12.60.

Also on YouTube: @ChargedAlpha

DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

Tempus AI, Inc. (TEM) Q2 2026 — Q2 2026 = the three months ended 30 June 2026, reported after the close on 30 July. Revenue $382.5M vs $314.6M (+22%): Diagnostics $289.3M (+20%), Data & Applications $93.2M (+28%, Insights +36%). Gross margin 64.4% from 62.0%. But operating expenses grew 25.5% against revenue at 21.6%, so the LOSS FROM OPERATIONS WIDENED to $(75.9)M from $(61.8)M. GAAP net income $5.6M — the first ever — includes $98.5M of UNREALISED gains on marketable securities. Guidance RAISED to $1.595-1.605B. The stock opened at $46.30 (the high of the day) and closed $43.87, down 0.95%.

Tempus reported its first profitable quarter, raised guidance, and won an FDA approval — and the stock still closed red. The $5.6M profit contains $98.5M of unrealised securities gains; strip it out and the quarter is a loss, with an operating loss that got $14.1M WIDER. Stock comp grew 141% to 14.5% of revenue, and first-half operating cash burn got worse, not better.

THE CALL: AVOID (3/5, A REAL FRANCHISE AT A PRE-PAID PRICE) — base-case value ~$20.9 vs ~$43.87 today.

KEY METRICS:

- Revenue $382.5M vs $314.6M (+22%). Diagnostics $289.3M (+20%, oncology volume +31% accelerating from +28%); Data & Applications $93.2M (+28%), Insights +36%. MRD volume 9,000 tests vs 6,500

- Gross profit $246.5M (+26%); GAAP gross margin 64.4% from 62.0%; diagnostics gross margin 62.6% from 58.8% — real operating leverage

- BUT opex grew faster than revenue: SG&A $225.8M (+25%) = 59% of revenue; R&D $52.6M (+26%); tech R&D $43.9M (+27%). Total opex $322.4M vs $256.8M = +25.5% vs revenue +21.6%

- LOSS FROM OPERATIONS WIDENED to $(75.9)M from $(61.8)M. Non-GAAP operating loss only $(2.7)M; non-GAAP NET loss $(7.7)M

- GAAP net income $5.6M (first ever) includes $98.5M of UNREALISED gains on marketable securities — the reconciliation reverses $(97.4)M of 'fair value changes'. The profit is a securities gain, not an operating result

- Stock comp $54.1M vs $22.5M = +141% on +22% revenue; with payroll tax $55.6M = 14.5% of revenue. Adjusted EBITDA of $8.0M exists because that $55.6M of pay is excluded

- CASH BURN GOT WORSE: H1 operating cash flow $(80.8)M vs $(61.5)M. Receivables absorbed $50.6M; deferred revenue swung from +$36.8M to -$12.5M

- Balance sheet: $820.7M cash + marketable securities vs $1,360.7M of convertible debt = ~$540M NET DEBT. Book equity $444.9M less $782.6M goodwill+intangibles = NEGATIVE $338M tangible. Accumulated deficit $2,516.1M. Completed $460M of 0.0% converts due 2032; interest expense halved to $10.3M

- GUIDANCE RAISED: FY26 revenue $1.595-1.605B (~25% growth), adjusted EBITDA ~$65M — but H1 adjusted EBITDA was only $5.2M, so ~92% of it (~$59.8M) is back-loaded into H2

- CATALYSTS: FDA approval of tumor-only xT CDx (first lab with CDx approval for both tumor-only and tumor-normal profiling) migrates tissue testing to ADLT pricing; ~$200M of new data licences signed (BioNTech, Daiichi Sankyo, Level Set Bio, Incyte); first oncology foundation model delivered to AstraZeneca; agreed to buy Personalis at $16.25/sh (~$1.5B EV), closing late Q4 26/early 27, EXCLUDED from guidance

- THE FAIR COUNTERPOINT: at a 65.7% non-GAAP gross margin, covering $254.0M of quarterly non-GAAP opex PLUS the $55.6M of stock comp it excludes needs ~$471M of quarterly revenue — ~$1.9B a year, only ~18% above the guide. Tempus is genuinely close to true breakeven

- OUR DCF at 10.5%, mid-year timing, on $540M net debt, charging stock comp as a REAL cash cost (so shares held at 180M, not diluted): bear $7.00 / base $18.10 / bull $40.30; weighted 25/50/25 = ~$20.90 vs $43.87. Even the BULL case is 8% BELOW the close

- REVERSE DCF: at $43.87, equity $7.91B and EV $8.45B = 5.3x the revenue guide and ~130x the adjusted-EBITDA guide. That requires ~$870M of 2031 free cash flow — a 26% post-stock-comp margin — or ~$7.4B of 2031 revenue, or a 7.4% cost of capital on a stock with a beta of 3.5

- STREET: Buy consensus (8 buy / 5 hold / 0 sell), average target $71.33, median $64.50, range $59-$100; cross-checked at $67.23 and $72.38, Cowen raised to $71 on 15 July. That is ~63% ABOVE the close. We DIFFER

What to watch: Bullish triggers: a Q3 that actually delivers the margin step-up (~$59.8M of the ~$65M full-year adjusted EBITDA guide sits in H2), or operating cash flow that stops deteriorating. Bearish confirmation: SG&A growing faster than revenue again, an equity raise to fund the $1.5B Personalis deal, or any trim to the $65M adjusted-EBITDA guide. We'd look again nearer ~$28.

Also on YouTube: @ChargedAlpha

DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

Exxon Mobil Corporation (XOM) Q2 2026 — Revenue was ~$116.0B against a ~$98.4B consensus. GAAP earnings $14,525M ($3.48/sh) vs $4,183M ($1.00) in Q1; adjusted $14,680M ($3.52) — SHORT of the ~$3.68 estimate. Operating cash flow $23.6B; free cash flow $17,236M in one quarter — more than all of 2025's $23,612M. The stock closed $155.46, down 0.96% from $156.97, after running ~15% in thirty days.

Earnings more than tripled sequentially — and almost none of it was the company's doing. Brent averaged roughly $103/bbl in Q2 (April $117, May ~$107, June $85) on the US-Iran conflict and disrupted Strait of Hormuz shipping. Underneath, execution was elite: a real Permian record above 1.8 Moebd on a planned 9% CAGR to 2030, Guyana at ~900 kbd gross with a fifth FPSO sailed for 4Q26 startup, and $16.3B of structural cost savings. But reported production FELL to 4,514 koebd, the 'highest in two decades' claim excludes lost Middle East volumes, and the $37.6B annualised distribution run-rate sits above our $29.0B mid-cycle owner free cash flow. An oil major's valuation is a price call as much as a company call, so we state our deck: Brent $72/bbl real.

THE CALL: REDUCE (3/5, AN ELITE BUSINESS AT A WAR-PREMIUM PRICE) — base-case value ~$128.0 vs ~$155.46 today.

KEY METRICS:

- OUR CALL: REDUCE 3/5 — DCF fair value ~$128 vs the $155.46 close (-17.7%). Street: Hold, $167.85 avg (22 buy/28 hold/5 sell of 55); a wider ~30-analyst panel averages $173.32. Street low $123-$131 brackets ours.

- DCF: mid-cycle owner FCF $29.0B at a Brent $72/bbl REAL deck; +6% 5yr (volume+cost, not price), +2.5% 5yr, 1.5% terminal, 8.0% discount -> EV $567.8B less ~$32B net debt / 4,175M shares = ~$128. Bear ($60 deck) $68 · Bull ($85 deck) $191 · prob-weighted $129.

- REVERSE DCF: $155.46 requires mid-cycle owner FCF of $34.8B — a Brent deck near $80/bbl held flat in real terms forever — or a ~6.9% cost of capital.

- CROSS-CHECK: on annualised Q2 it is 7.2x EV/DACF and a 10.6% FCF yield (looks cheap); on MID-CYCLE, 11.6x vs a 6-9x history and 4.8%. The mid-cycle DCF drives the verdict.

- PRINT: revenue ~$116.0B vs ~$98.4B est. GAAP EPS $3.48 ($14,525M); adjusted EPS $3.52 ($14,680M) MISSED the ~$3.68 consensus. Q1 2026 was $1.00 GAAP / $2.09 adjusted.

- CASH: FCF $17,236M in the quarter ($19,935M YTD vs $14,233M); cash capex $6,787M ($12,974M YTD).

- SEGMENTS (adjusted): Upstream $9,189M (from $6,265M), Energy Products $4,099M (from $2,799M), Chemical $1,214M (from $110M), Specialty $969M (from $651M); corporate & financing -$791M.

- PRODUCTION: 4,514 koebd, DOWN from 4,594 in Q1 — the 'highest in two decades' claim EXCLUDES lost Middle East volumes. Permian a genuine record >1.8 Moebd (9% CAGR to 2030); Guyana ~900 kbd gross, 5th FPSO sailed, +250 kbd 4Q26.

- RETURNS: $9.4B distributed — $4.3B dividends + $5.1B buybacks ($37.6B annualised vs $29.0B mid-cycle owner FCF). Q3 dividend $1.03, payable Sep 10; $4.12/yr = 2.65% yield. Shares 4,331M -> ~4,175M.

- BALANCE SHEET: $47.7B debt less $8.4B cash = $39.2B net debt (Mar 31), ~$32B pro forma; debt-to-capital under 16%. Structural cost savings $16.3B vs 2019, targeting $18B by 2030.

- BACKDROP: Brent averaged ~$103 in Q2 (Apr $117, May ~$107, Jun $85) on the US-Iran/Hormuz disruption. Identified items: $1,365M reserve additions + $194M Middle East.

What to watch: Bullish: Brent above $85 into 2027 without a conflict premium (-> ~$191), or Guyana FCF inflecting early. Bearish: buyback cut below $15B/yr, Permian growth under 9%, or Brent in the $60s two quarters running. We'd buy nearer ~$115 (~15x mid-cycle EPS, 3.6% yield).

Also on YouTube: @ChargedAlpha

DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

Moderna, Inc. (MRNA) Q2 2026 — Q2 2026 = the three months ended 30 June 2026, reported 31 July. Revenue $145M vs $142M — but NET PRODUCT SALES FELL to $94M from $114M while other revenue (grants, collaboration, stand-ready manufacturing) rose to $51M from $28M. Operating expenses $960M. Loss from operations $(815)M. Net loss $(782)M, better by $43M. GAAP EPS $(1.97) vs $(2.13) — in line; the beat was on revenue (~$127M expected). Cash and investments $6.9B. The stock closed at $54.82, DOWN 5.35%, eight cents off the low of the day.

A revenue beat closed down 5% because mRNA-1403, Moderna's norovirus vaccine, did NOT meet the criteria for early success at its Phase 3 interim. The $6.9B cash figure is also stale — $950M was paid in JULY on the Q1 litigation settlement, and year-end cash is guided to $4.7-5.2B.

THE CALL: SELL (4/5, A PLATFORM PRICED AS A FRANCHISE) — base-case value ~$16.25 vs ~$54.82 today.

KEY METRICS:

- Revenue $145M vs $142M — but NET PRODUCT SALES fell 18% to $94M; other revenue rose 82% to $51M. US $87M / intl $58M

- Cost of sales $93M (-22%): $41M inventory write-downs + $23M unutilised capacity + $11M royalties — 69% of COGS is not the cost of product. Gross margin 36% GAAP, ~80% ex those charges

- R&D $651M (-7%) = 4.5x total revenue. SG&A $216M (-6%). Total opex $960M vs $1,049M. Operating loss $(815)M

- The $43M y/y improvement, exactly: revenue +$3M, opex +$89M; then interest income -$14M, other -$27M, tax -$8M — 100% of it came from spending less

- Cash + investments $6,910M at 30 Jun vs $591M long-term debt = ~$6.32B NET CASH. $950M PAID IN JULY on the settlement -> pro-forma ~$5.96B

- 1H26: revenue $534M, net loss $(2,125)M, operating cash flow $(1,156)M, capex $99M, SBC $224M; retained earnings $7,223M -> $5,098M

- 2026 GUIDANCE: revenue up to +10% on 2025's $1,944M (<=$2.14B); cost of sales ~$1.7B (incl. $0.9B litigation charge); R&D ~$2.9B; SG&A ~$1.0B; year-end cash $4.7-5.2B; ~55% of 2H revenue in Q3

- SEASONALITY — DO NOT ANNUALISE Q2: Q2'25 $142M, Q3'25 $1,016M, Q4'25 $678M, Q1'26 $389M, Q2'26 $145M. Trailing twelve months $2,228M

- PIPELINE: mFLUSIVA PDUFA 5 Aug (unanimous VRBPAC) = a 5th product; mCOMBRIAX authorised in the EU; mRNA-1403 norovirus MISSED its Phase 3 interim; intismeran with Merck in 9 Phase 2/3 trials, adjuvant melanoma fully enrolled (ASCO: 49% lower risk of recurrence or death vs KEYTRUDA alone)

- PATH TO PROFITABILITY: recurring cost base ~$4.7B. At a 72% gross margin Moderna needs ~$5.4B of revenue to cover $3.9B of R&D+SG&A — ~2.5x the 2026 guide, or a ~60% cut to R&D and SG&A

- OUR DCF at 11.5%, mid-year timing, on $6.32B of net cash: bear $2.60 / base $15.90 / bull $30.50; weighted 25/50/25 = ~$16.25 vs $54.82. Even the BULL case is 44% below the close

- REVERSE DCF: at $54.82, equity $21.75B and EV ~$15.43B (6.9x trailing revenue). That requires ~$3.65B of sustainable 2032 free cash flow — ~$14.6B of revenue at a 25% margin, 7x this year's guide — or a 5.1% cost of equity

- STREET: Hold across 27 analysts (7 buy / 16 hold / 4 sell), average target $46.11, median $45.00 — already 15.9% BELOW the traded price

What to watch: Bullish triggers: a clearly positive Phase 3 adjuvant melanoma read-out for intismeran (fully enrolled, data possible in 2026), or mFLUSIVA approved on 5 August and taking real share of the US flu market in its first season. Bearish confirmation: a Q3 revenue miss (55% of second-half revenue is guided into that one quarter), any equity raise or convertible, or an Analyst Day on 12 November that still contains no breakeven date. We'd look again nearer ~$25.

Also on YouTube: @ChargedAlpha

DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

Haleon plc (HLN) H1 2026 — H1 2026 = the SIX MONTHS ended 30 June 2026 vs H1 2025 — UK issuers report halves, not quarters. Revenue £5,602M, +2.6% ORGANIC; adjusted operating profit £1,364M, +8.2% CER; adjusted EPS 10.3p, +12.0% — but REPORTED operating profit FELL 2.6%. 1 HLN ADS = 2 ordinary shares, all $ at GBP/USD 1.3487. ADR $9.87.

One number did the damage: 2.6% organic growth against Haleon's own 4–6% ambition, and 2.1 of those 2.6 points were PRICE, not volume. Yet gross margin hit 66.5% (+140bps), free cash flow is heading toward £2.0B — a 6.2% yield — and leverage is finally at target.

THE CALL: BUY (3/5, CHEAP ENOUGH, SLOW ENOUGH) — base-case value ~$11.29 vs ~$9.87 today.

KEY METRICS:

- ADS RATIO: 1 HLN ADS = 2 Haleon ORDINARY shares. 8,820,906,422 ÷ 2 = 4,410M ADSs × $9.87 = $43.5B market cap. Every per-share figure Haleon reports must be DOUBLED. One FX rate: GBP/USD 1.3487

- OUR DCF, IN STERLING: £2.0B owner FCF base, +6% 5yrs then +4% 5yrs, 2.25% terminal, 8% discount. EV £44,424M − £7,513M net debt = £36,911M ÷ 8,820.9M shares = 418.4p ×2 = £8.368/ADS at 1.3487 → $11.29. Bear $7.51, bull $14.26

- REVERSE DCF: at $9.87 the price only requires owner FCF to compound at 4.34% a year for five years, then under 3% — below Haleon's worst delivered year

- WALL STREET: a 17-analyst LONDON panel averages 417p ×2 = £8.349 ×1.3487 = $11.26, vs our $11.29. Range 325p (Deutsche Bank, Sell) to 512p (Berenberg, Buy); Barclays 475p, Goldman 440p, RBC 370p. Beware screens quoting per-ORDINARY-share targets against the ADR

- Revenue £5,602M vs £5,480M: +2.2% reported, +2.6% ORGANIC — 2.1% price, only 0.5% volume/mix. Q2 was better: +3.1%, split 1.7% price / 1.4% volume

- Adjusted gross margin 66.5% (+140bps CER); adjusted operating profit £1,364M (+8.2% CER), margin 24.3% vs 22.7%; adjusted EPS 10.3p (+12.0%) = 20.6p per ADS ≈ 27.8c. BUT REPORTED operating profit FELL 2.6% to £1,172M and reported EPS fell 4.5% to 8.5p

- CATEGORIES: Oral Health £1,838M +7.3% (33% of revenue); Pain Relief £1,323M +2.1%; Respiratory £850M −4.7% on weak cold & flu; VMS £849M +1.9%; Digestive £490M +2.4% organic, −0.2% reported on FX; Skin £252M +1.6%

- REGIONS: North America £1,830M +2.0% organic but −1.1% REPORTED on sterling; EMEA & LatAm £2,416M (43%) +1.9% = 3.0% price vs MINUS 1.1% volume; APAC £1,356M +4.7%, of which 4.9pts was VOLUME

- FCF £769M (+£35M) = £1,044M operating cash −£110M PP&E +£21M disposals −£30M intangibles −£8M minorities −£174M interest paid +£26M received. FY2025 £1,913M → FY2026 near £2.0B = 6.2% yield on £32.3B

- Net debt £7,513M = 2.5x adjusted EBITDA, and Haleon says 2.5x IS optimal — the deleveraging story is OVER. £457M of the £500M buyback done; dividend 2.4p +9%; shares 8,952M → 8,821M

- GUIDANCE: FY2026 organic 3–5% UNCHANGED. Medium-term ambition is 4–6% — FY2025 delivered 3.0%, H1 2026 delivered 2.6%. Two years short

- ENGINE vs CATCH: an £800M supply-chain savings programme to 2030 = 50–80bps of gross margin a year, and 73% of the business gained or held share (60% in FY2025). But net capex (£140M, ~2.5% of revenue) is guided to c.4% — ~£170M a year out of FCF

What to watch: Bullish: organic growth above 3.5% in the 29 October trading statement, with volume carrying half of it. Bearish: a cut to the 3–5% organic guide, or group volume/mix turning negative beyond Europe. We'd add near ~$8.90 — a 7% FCF yield, just above the $8.70 June low.

Also on YouTube: @ChargedAlpha

DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

Sony Group Corporation (SONY) Q1 FY2026 — Q1 FY2026 = the 3 months ended 30 June 2026, Q1 of the fiscal year ending 31 MARCH 2027. Sales ¥2,837.8B, +8.2% reported but about MINUS 1% in constant currency. Operating income ¥476.5B, +40.2%, a record Q1, margin 16.8% vs 13.0%. Net income ¥342.2B, +32.1%. Diluted EPS ¥57.82 vs ¥42.84 = $0.36 per ADS (1 ADS = 1 common share, FX ¥159.0). FY2026 operating income guided UP to ¥1,720B from ¥1,600B. The ADR traded near $23.30, +2.4%.

That forecast excludes the 2026 Kumamoto Earthquake of 28 July, three days before the print: Sony's Kumamoto Technology Center suspended production, and Sony says the impact cannot yet be reasonably estimated. It is a disclosed, unquantified hit to the segment that delivered half the profit growth. PlayStation earned ¥202.0B (+37%) on FLAT sales with hardware, software and playtime all down, lifted by US tariff refunds and ¥19.1B of currency. And only about 53% of forecast operating income becomes free cash flow.

THE CALL: HOLD (3/5, RECORD QUARTER, FULL PRICE) — base-case value ~$22.9 vs ~$23.3 today.

KEY METRICS:

- ADS RATIO: 1 SONY ADS = 1 common share (5,965.3M issued less 92.9M treasury = 5,872.5M out). All $ at USD/JPY 159.0

- Sales ¥2,837.8B (+8.2% reported, about −1% CONSTANT CURRENCY); yen averaged ¥159.3 vs ¥144.6; FX added ¥81.7B to G&NS sales alone

- Operating income ¥476.5B (+40.2%), record Q1, margin 16.8% vs 13.0%; pre-tax ¥477.5B; net income ¥342.2B (+32.1%); EPS ¥57.82 = $0.36/ADS

- Game & Network Services: sales ¥937.1B (FLAT), OI ¥202.0B (+37%) on US tariff refunds + ¥19.1B FX; PS MAU 125M (+2%), playtime −4%

- Imaging & Sensing: sales ¥512.7B (+26%), OI ¥122.2B (+125%) on customer/product MIX, not units; adj. OIBDA ¥188.7B vs ¥120.1B

- Music: sales ¥562.0B (+21%), OI ¥105.9B (+14%); USD streaming +10% recorded / +8% publishing

- Entertainment, Tech & Services: sales ¥543.9B (+2%), OI ¥42.6B FLAT — only flat because FX added ¥9.5B while memory costs rose

- Pictures: sales ¥315.1B (−4% yen, −13% in USD), OI ¥24.8B (+33%); Crunchyroll past 21M subs

- FY2026 GUIDANCE RAISED (year to 31 Mar 2027): sales ¥12,500B, OI ¥1,720B (from ¥1,600B, +18.8% y/y), net income ¥1,210B, OCF ¥1,500B; dividend ¥35 from ¥25

- THE 2026 KUMAMOTO EARTHQUAKE (28 July) is NOT in that forecast — the Kumamoto sensor fab suspended production; Sony says the impact cannot yet be reasonably estimated

- Financial Services SPUN OFF 1 Oct 2025 → discontinued operation; five segments now, not six

- 30 Jun 2026: cash ¥2,170.0B less ¥1,204.2B debt = NET CASH ¥965.8B (~$6.1B); equity ratio 52.2%

- Q1 cash: operating ¥197.4B (DOWN from ¥253.9B) less ¥137.9B capex = ~¥59.6B FCF; content +¥160.8B, inventory +¥129.4B, tax ¥129.1B

- Capital return: ¥127.5B buyback and 184.5M shares CANCELLED (6,149.8M → 5,965.3M issued)

- Our DCF, in YEN: owner FCF ¥920B (¥1,500B guided OCF less ~¥580B capex), +8% 5yrs then +4%, 2.25% terminal at 8.5% → EV ¥20,403B + ¥965.8B net cash ÷ 5,872M shares = ¥3,639 = ~$22.90/ADS

What to watch: Bullish triggers: a second FY2026 upward revision in November that absorbs the Kumamoto impact and still rises, or Imaging & Sensing operating income tracking above ¥500B against the ¥420B guided. Bearish confirmation: Kumamoto restoration slipping past Q2, ET&S operating income falling below ¥120B for the year against ¥150B guided, or a further cut to mobile-sensor volumes. We'd buy nearer ~$19.50 — where the ADR actually traded on 25 June 2026.

Also on YouTube: @ChargedAlpha

DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

AbbVie Inc. (ABBV) Q2 2026 — Revenue was $16.990B, +10.2% y/y (+9.5% operational), above the ~$16.77B consensus. Adjusted diluted EPS was $3.65, +22.9%, ahead of ~$3.60. GAAP diluted EPS was $2.03 vs $0.52. Adjusted operating margin 48.3%; adjusted tax rate 14.7%. Then AbbVie CUT full-year adjusted EPS guidance from $13.91-$14.11 to $13.87-$14.07 — a $13.97 midpoint vs ~$14.12 consensus. The stock closed near $251.90, about 2.2% below the prior $257.41 close and just under the $263.30 52-week closing high set two sessions earlier.

The cut is not operational, and the company said so: $0.14 of dilution from the proposed $10.9B Apogee Therapeutics acquisition, partially offset by $0.10 of overperformance. Strip Apogee out and the guide went UP a dime. What matters more is the shape underneath. Skyrizi ($5,505M, +24.4%) and Rinvoq ($2,525M, +24.5%) are now 47% of all revenue and annualise above $32B — AbbVie has already replaced Humira, which fell 35.9% to $756M. But oncology went backwards (-1.5%) on Imbruvica -29.4%, and aesthetics fell 0.9% operationally. The GAAP-to-adjusted gap is $1.62 a share, $1,518M of it a contingent-consideration mark. And US exclusivity on Skyrizi (~2033) and Rinvoq (~2034) is the date that sets the terminal value.

THE CALL: HOLD (3/5, EXCELLENT QUARTER, ALREADY IN THE PRICE) — base-case value ~$241.0 vs ~$251.9 today.

KEY METRICS:

- Revenue $16,990M, +10.2% reported / +9.5% operational; US $12,861M (+9.3%), Int'l $4,129M (+12.8%)

- Adjusted diluted EPS $3.65 (+22.9%) vs ~$3.60 est; GAAP diluted EPS $2.03 vs $0.52

- GAAP-to-adjusted bridge $1.62: intangible amortisation $1,689M ($0.81) + contingent-consideration mark $1,518M ($0.83)

- Immunology $8,786M (+15.1%): Skyrizi $5,505M (+24.4%), Rinvoq $2,525M (+24.5%), Humira $756M (-35.9%)

- Neuroscience $3,228M (+20.3%): Vraylar $1,071M, Botox Therapeutic $1,042M, Ubrelvy+Qulipta $742M, Vyalev $256M (>100%)

- Oncology $1,650M (-1.5%): Venclexta $771M (+11.6%), Imbruvica $532M (-29.4%), Elahere $211M (+33.1%)

- Aesthetics $1,282M (+0.3% reported, -0.9% operational): Botox Cosmetic $728M (+5.2%), Juvederm $245M (-6.0%)

- Margins: adjusted gross 84.7%, adjusted operating 48.3%, adjusted R&D 13.6% of revenue, adjusted tax rate 14.7%

- Acquired IPR&D and milestones $291M in Q2 ($0.17); $1,035M YTD ($0.58) — excluded from guidance beyond Q2

- FY26 adjusted EPS guidance cut to $13.87-$14.07 from $13.91-$14.11 ($0.14 Apogee dilution less $0.10 overperformance)

- Trailing free cash flow ~$20.9B; dividend $1.73/qtr ($6.92/yr, ~2.75% yield) costs ~$12.3B a year

- Net debt ~$63.5B at Mar 31 2026 ($72.86B debt less $9.39B cash), ~1.8x adjusted EBITDA; shareholders' equity -$6.66B

- Apogee Therapeutics acquisition ~$10.9B, closing Q3 2026 — zumilokibart (IL-13, atopic dermatitis) and APG273

- Our DCF: owner FCF base $21.0B, +8% five years then +3%, 2.25% terminal at 8.0% — EV $490.8B, fair value ~$241

What to watch: Bullish triggers: combined Skyrizi + Rinvoq above $36B in 2027, or a Phase 3 readout giving AbbVie a credible post-2034 immunology franchise. Bearish confirmation: aesthetics declining operationally a fourth straight year, acquired IPR&D above $2.5B in 2026, or an adverse US pricing outcome. We'd buy nearer ~$215 (~15x forward earnings).

Also on YouTube: @ChargedAlpha

DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

BrightSpring Health Services, Inc. (BTSG) Q2 2026 — Revenue $3,873M, +23.0% (beat ~$3.66B by 5.9%). Adj EBITDA $205.5M, +44.2%. Adj EPS $0.45 vs $0.22 (13% beat). FY26 guidance RAISED. Leverage 2.15x. And the stock fell ~15% to ~$61.60 from a $72.88 close.

BrightSpring beat on every line and raised guidance on both - and the stock fell about 15%. All figures are continuing operations (Community Living divested 3/30/26). Revenue $3,873M (+23.0%) beat the ~$3.66B consensus by 5.9%; adjusted EBITDA $205.5M (+44.2%) at a 5.3% margin; adjusted EPS $0.45 vs $0.22. But prescriptions dispensed were FLAT (-0.1%) - all the growth is revenue per script (+22% to $314.20). Home & community pharmacy revenue FELL 8% to $540M on a ~$50M IRA hit, guided at ~$45M/qtr for the rest of 2026. Q2 operating cash flow was $43.9M ($144M ex a ~$100M one-time tax) on $205.5M of adj EBITDA. And the guide implies H2 revenue of ~$3,888M a quarter against the $3,873M just printed - flat. At ~$61.60 the EV is $15.2B, 18.3x FY26 adj EBITDA, against a peer set nearer 14x. Our DCF gives ~$45.50; even our BULL case ($54) is below the price. SELL, 4/5.

THE CALL: SELL (4/5, A GREAT QUARTER AT THE WRONG PRICE) — base-case value ~$45.5 vs ~$61.6 today.

KEY METRICS:

- Q2 2026 = 3 months ended June 30, 2026; reported pre-open 2026-07-31

- CONTINUING OPS ONLY - Community Living divested 3/30/26

- Revenue $3,873.1M, +23.0% vs $3,147.7M - beat the ~$3.66B consensus by 5.9%

- Gross profit $492.7M, +31.5%; gross margin 12.7% vs 11.9% - a DISTRIBUTION margin

- Adjusted EBITDA $205.5M, +44.2%; margin 5.3% vs 4.5% (beat ~$195.7M)

- Adjusted EPS $0.45 vs $0.22 (13% beat); GAAP continuing-ops EPS $0.39 vs $0.04

- Operating income $130.4M vs $48.6M; net income (cont. ops) $86.6M vs $8.5M

- Pharmacy Solutions $3,407M (+22%), segment EBITDA $180M (+44%), 5.3% margin

- Specialty & infusion ~$2.87B, +30%; scripts +31%; 155 limited-distribution drugs

- Scripts 10,844,038 vs 10,851,773 = -0.1% FLAT; rev/script $314.20 (+22%)

- Home & community pharmacy $540M, -8% - ~$50M IRA hit, ~$45M/qtr ahead, ~$200M FY26

- Provider Services $466M (+30%), EBITDA $75M (+33%), 16.1% margin - 3x pharmacy

- Home health $278M (+51%); census 46,448 (+54%); Amedisys/LHC ~$78M rev, $8M EBITDA

- Q2 CFFO $43.9M ($144M ex ~$100M one-time tax); capex $29.0M; reported FCF $14.9M

- H1 CFFO $166.9M included a $240.0M inventory release ($815.2M to $575.0M)

- Cash $550.4M vs ~$2.21B debt+leases = net debt ~$1.66B; leverage 2.15x (2.27x at 3/31)

- $300M term loan repaid, repriced to SOFR+200; Moody's Ba3, S&P BB- (both upgrades)

- KKR secondary in June + $60.0M / 1,026,465-share buyback; tangible book ~-$1.0B

- FY26 guide RAISED: revenue $15,100-15,425M; adj EBITDA $820-845M; CFFO ~$600M

- Implied H2: ~$3,888M revenue/qtr vs $3,873M printed - FLAT; EBITDA midpoint only +$22.5M

- Our model: owner FCF $440M; DCF $45.50 base, $26 bear, $54 bull (9.25%); PW ~$43

- At ~$61.60: EV $15.2B = 18.3x FY26 adj EBITDA vs a ~14x peer set; reverse DCF needs 17.9%/yr

- Street: $72.71 avg, $79 median, $49-$90, 12 Buy/0 Hold/0 Sell - all PRE-print

What to watch: Bull: prescription VOLUME growth above 3% (scripts were flat) would make this a unit-economics story rather than mix, moving the base case toward $56; plus Q3 cash flow that puts the ~$600M FY guide in reach without another working-capital release. Bear: FCF conversion below 40% of adj EBITDA, 2027 commentary annualising the IRA drag beyond ~$200M, or a further KKR secondary into strength. Any two and fair value is nearer $35. We'd start looking at $40.

Also on YouTube: @ChargedAlpha

DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

Tyler Technologies, Inc. (TYL) Q2 2026 — Revenue $645.1M, +8.2% (below the ~$648.0M consensus). Non-GAAP EPS $3.08, +0.9% (a 3c beat); GAAP EPS $2.23, +10.5%. GAAP operating income $95.1M, DOWN 0.5%. SaaS $230.6M, +21.7%. ARR $2.24B, +8.2%. FCF $118.5M, +34.7%. Stock closed $323.31 on 7/30, ~47% below its Aug-2025 high.

Tyler Technologies' Q2 2026 has three headlines that contradict each other. Revenue $645.1M (+8.2%) MISSED the ~$648.0M consensus. Non-GAAP EPS of $3.08 beat by 3 cents - but grew only 0.9%. And GAAP operating income was $95,095K against $95,596K a year ago: operating profit FELL 0.5% on revenue up 8.2%. Gross margin expanded (45.8% to 47.6%) - the cloud transition is working - then R&D +23.6% and G&A +22.4% ate all of it. The +10.5% GAAP EPS is carried by a one-off $25.0M gain on remeasurement of the For The Record equity stake plus a 4.7% smaller share count; strip the gain and pre-tax income fell 6.7%. ARR is $2.24B but growth decelerated from 10.4% in Q1 to 8.2%, and transaction revenue grew just 3.5%. The cash was genuinely excellent: FCF $118.5M, +34.7%, a record Q2, and the board authorised another $1.5B of buybacks after retiring 5.6% of the company YTD. Our DCF on owner free cash flow (FCF less ~$165M of SBC) gives ~$355 against the $323.31 close - about 10% up, which is a fair price, not a margin of safety. HOLD, 3/5.

THE CALL: HOLD (3/5, THE DE-RATING IS DONE, THE RE-RATING IS NOT EARNED) — base-case value ~$355.0 vs ~$323.31 today.

KEY METRICS:

- Q2 2026 = three months ended June 30, 2026; reported after the close 2026-07-29

- Total revenues $645.1M, +8.2% - BELOW the ~$648.0M consensus

- Non-GAAP EPS $3.08 (+0.9%, a ~3c beat); GAAP EPS $2.23 (+10.5%)

- GAAP operating income $95,095K vs $95,596K - DOWN 0.5% on revenue +8.2%

- GAAP EPS flattered by a one-off $25,048K equity remeasurement gain

- Ex that gain, pre-tax income $95.6M vs $102.5M, DOWN 6.7%

- Gross margin 47.6% vs 45.8% GAAP (50.4% vs 48.9% non-GAAP) - cloud transition IS working

- R&D +23.6% to $62.8M; G&A +22.4% to $93.7M - that is where the gross margin went

- Non-GAAP operating margin 25.7% vs 26.5%; adjusted EBITDA margin 27.3% vs 28.4%

- Recurring revenue $559.5M = 86.7% of total; ARR $2.24B, +8.2% (Q1 2026 ARR grew 10.4%)

- SaaS $230.6M, +21.7% - 22 consecutive quarters above 20%; record SaaS and total bookings

- Transactions $223.1M, +3.5%; Maintenance $105.8M, -5.6%; Prof. services $63.2M, +7.8%

- CFFO $124.4M (+26.5%); FCF $118.5M (+34.7%), 18.4% margin - a record Q2

- Buyback: 1,622,762 shares/~$505M; 5.6% retired YTD; new $1.5B authorisation, ~$1.745B capacity

- $1.4B 0.50% converts due 2031 (5/14), $1.2B net; capped call conversion price $655.77

- For The Record acquired 4/14, ~$212.7M cash - AI legal transcription, 3rd-largest deal

- New 5-yr $1.0B revolver (5/28) replaces the $700M facility; net debt now ~$440M

- FY2026 guide: revenue $2.535-2.575B, non-GAAP EPS $12.95-13.20, FCF margin 26-28%, R&D $245-250M

- June 9 investor day raised 2030 targets to ~$3.35B ARR and ~$1.15B free cash flow

- Our model: owner FCF (FCF less SBC) $525M base; DCF $355 base, $215 bear, $500 bull; PW $343

- Street: $435.73 avg target, median $440, range $340-$543, 25 Buy/12 Hold/0 Sell - all PRE-print

What to watch: Bull: one quarter with non-GAAP operating margin UP year on year - that proves the cloud gross margin survives the R&D cycle and reaches the bottom line; base case then moves toward $430. Also transaction revenue growth back above 6%. Bear: ARR growth below 8%, another quarter of non-GAAP EPS growth under 2%, or any trim to the 26-28% FCF margin guide. Any two and fair value is nearer $260. Real buyers at $275.

Also on YouTube: @ChargedAlpha

DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.