Systematic Credit and Equity G-255 Earning Summary for October 15, 2025
Abbott Labs (ABT, Aa3/AA= attractive long credit and equity) reports 3Q results
ABT 3Q 2025 revenue growth of 6.9% YoY and operating earnings rose 10.6% YoY
3Q Operating Metrics
Nutrition revenue rose 4.2% YoY
Diagnostics revenue fell -6.6% YoY
Medical Devices revenue rose 14.8% YoY
Pharma revenue rose 7.5% YoY
Total International sales rose 7.6% YoY
Company reaffirmed 2025 guidance for both revenue and earnings.
Financial Position:
Abbott does not release balance sheet data until they file their 10-Q in November. However, the Abbott balance sheet has been de-levering for six of the last six fiscal quarters.
Total Debt on the ABT balance sheet is just under $15 billion through the second quarter of 2025.
ABT did not employ balance sheet to repatriate returns to shareholders in 2Q 2025.
Credit Trading Model Indicator: Company has not sold debt since 2020. There a 12 USD Abbott bonds totalling $11.9 billion . There are no ABT trading indicators that are undervalued or attractive long.
Recent new ABT supply: None
Equity Indicator: ABT equity is attractive long below $131 per share.
Bank of America (BAC A1/A- attractive short credit/attractive long equity) reported 3Q earnings.
Revenue rose 10% YoY while operating earnings rose 20% YoY
BAC is retaining capital and
3Q Deposits fell slightly QoQ and rose 4% YoY.
3Q Asset quality is declining slightly QoQ and flat YoY.
3Q Client assets rose +4% in the quarter and 11% YoY.
3Q Loan growth was flat QoQ and 8% YoY.
3Q Net interest income rose 4% QoQ and 9% YoY
3Q Sales and trading rose 6% QoQ and 9% YoY
Financial Position: Tier 1 capital is 11.6 % vs 11.5 % at June 30 and 11.9% @ September 30, 2024. Bank of America did not grow its trading book and returned capital by shrinking its on – balance sheet risk. BAC returned $7.4 billion to shareholders in the quarter while balance sheet leverage risk rose, but CET 1 capital improved. Net Debt on the Bank of America balance sheet rose $26 billion QoQ and $80 billion YoY.
Credit Trading Indicator: The BAC secondary trading USD curve has 70 liquid bonds (floating and fixed rate bank notes and Senior Holdco and Subordinated bonds and Perp) totaling $186 billion with 36 overvalued and 29 short trade indicators.
Recent new supply: 7/21/25 BAC 6 ¼ PERP (+235.10bp vs T 3 â 06/30/30 trades +13bp to NIP
Equity Trading Indicator: Bank of America (BAC) equity is attractive long below $47.91/shr
Morgan Stanley (MS, A1/A attractive short credit/attractive long equity) reported 3Q quarter earnings
Revenue rose 9% YoY while operating income rose 43% YoY
MS is retaining capital YoY
3Q Deposits rose 4% QoQ and 11% YoY.
2Q Asset quality was declining QoQ and YoY.
3Q Client assets rose 9% QoQ and 18% YoY.
3Q Loan growth rose 4% QoQ and 16% YoY.
3Q Net interest income rose 4% QoQ and rose 9% YoY
3Q Trading income rose 6% QoQ and 25% YoY
3Q Investment Banking income rose 38% QoQ and rose 43% YoY
Financial Position: Tier 1 capital is 15.7% vs 15 % at June 30 and 15.1% @ September 30, 2024
Morgan Stanley (MS) will not release full 3Q balance sheet data prior to filing its 10-Q in November. As of June 30, MS used balance to repatriate cash to shareholders. Morgan Stanley returned $2.7 billion to shareholders in dividend and share repurchases.
Net debt on the MS balance sheet as of June 30 had grown by $36 billion YoY.
Credit Trading Indicator: The MS secondary USD trading curve has 78 liquid bonds (fixed and floating rate bank notes, Sr. Holdco and subordinated bonds and Perp) totaling $178 billion with 56 overvalued trade indicators and 12 short trade indicators.
Recent new supply: April 14, 2025 MS 5.664 04/17/36 +128/10Y currently trading -40bp to NIP
Equity Trading Indicator: MS equity is an attractive long trade below $144.35
PNC Corp (PNC , A3/A- attractive long both credit and equity) reported 3Q quarter earnings
Revenue rose 4% YoY while operating income rose 21% YoY
PNC is retaining capital YoY
On September 8, 2025, PNC announced an agreement to acquire FirstBank for implied consideration of $4.1 billion, with an expected close in early 2026
3Q Deposits rose 2% QoQ and 2% YoY.
3Q Asset quality is improving QoQ and YoY.
3Q Client assets rose 8% YoY.
3Q Loan growth rose 1% QoQ and 2% YoY.
3Q Net interest income rose 3% QoQ and 7% YoY
3Q Non – interest income rose 8% QoQ and 12% YoY
Financial Position: Tier 1 capital is 10.6% vs 10.5 % at June 30 and 10.3% @ September 30, 2024
Company used balance to repatriate cash to shareholders in 3Q 2025. PNC Returned $1 billion of capital through common dividends and share repurchases.
Net debt on the PNC balance sheet continues to fall YoY by -$4 billion and by -$7.4 billion QoQ
Credit Trading Indicator: The PNC secondary USD trading curve has 37 liquid bonds (fixed and floating rate bank notes, Sr. Holdco and subordinated bonds and Perp) totaling $46 billion with 6 undervalued and no attractive long trades.
Recent new supply: July 17, 2025 PNC 5.373 07/21/36 ( 11nc10) +92/10Y currently trading -4bp to NIP
Equity Trading Indicator: PNC equity is an attractive long at its current price
Prologis (PLD, A2/AA attractive short credit and attractive long equity) reports 3Q results
Prologis reported 3Q 2025 revenue growth of 5% YoY and Funds From Operations (FFO) that rose 4.2% YoY
3Q Operating Metrics
65mm square feet of lease + 30% YoY
Period end Occupancy 95.3% vs 95.9% in 3Q 2024.
Retention 77.2% vs. 75.7% in 3Q 2024.
Same Store rent 5.2% v. 7.2% in 3Q 2024
Company reaffirmed square footage and rental guidance for 2025.
Company raised 2025 guidance for a third straight quarter as 2025 revenue is now expected to be 5.4% - 5.9% YoY
Financial Position:
The nature of the Prologis business requires the use of financial leverage. Hence total debt on the PLD balance sheet has grown in every quarter since 4Q 2020 (Covid). This does not portent additional risk as the vast majority of the company's assets is owned real estate.
Net Debt on the PLD balance sheet rose 6% YoY to $22 billion.
Prologis used its balance sheet to help repatriate roughly $1 billion to shareholders in 3Q 2025. The 5Y net PLD equity dividend growth rate is 12%
Credit Trading Model Indicator: There are currently 29 liquid secondary USD PLD bonds totalling $16.6 billion . 2 trading indicators are overvalued and there no short trade indicators.
Recent new PLD supply: PLD 5 ¼ 05/15/35 issued May 5, 2025 +103/10Y and currently trades -29 bp to NIP
Equity Indicator: PLD equity is attractive long below $111.94 per share.
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