G-255 Earnings Summary Reporting 2Q Results with Trading Indicators for July 25, 2025
TotalEnergies (TTEFP Aa2/A- attractive short)
Lloyds Banking Group (LLOYDS A3/BBB+ attractive long)
BNP Paribas SA (BNP Baa1/A- attractive long)
Deutsche Bank (DB Baa1/BBB attractive long)
Union Pacific (UNP A3/A- attractive short )
Hyundai Motors (HYNMTR A3/A- attractive long)
American Airlines (AAL BA2/BB- attractive long)
Honeywell (HON) A2/A-, attractive short)
Roche (ROSW Aa2/AA+ attractive long)
Keurig Dr. Pepper (KDP Baa1/BBB attractive short)
LVMH (MC FP Aa3/AA- attractive long)
Nestle (NESVNX Aa3/AA- attractive long to attractive short)
BT Group (BT/A Baa2/BBB attractive short)
Intel (INTC Baa2/BBB attractive short )
Earnings Summaries with G-255 Credit and Equity Trading Model Indicators
TotalEnergies (TTEFP Aa2/A- attractive short) Earnings Summary:
Total reported 2Q revenue that fell -7.5% and earnings that fell 20% YoY.
• 2Q E&P operating cash flow fell -29% YOY
• 2Q LNG operating cash flow fell -10% YoY
• Only Integrated Power and Marketing and Services divisions showed positive cashflow in 2Q 2025.
• Guidance is for improved but declining operating results for the remainder of 2025.
Financial Position:
• TTEFP operating cash flow was €8.5 bil in 1H 2025 v. €11.2 bil in 1H 2024.
• Company used balance sheet to repurchase equity and pay dividends in 2025.
• Total Energy (TTEFP) Free cash flow was -€3.056 billion in the first half of 2025 v €958mm) in the first 6 months of 2024
• Net debt rose by 20% QoQ and 100% YoY to €27 billion.
Trading Model Indicator: There are 13 TTEFP liquid USD bonds total $15.9 billion and 10 have attractive short trading indicators from our systematic credit trading model. The TTEFP 3.461 07/12/49 bond has the greatest spread widening potential. .
Equity Indicator: The systematic trading model sees TTE FP equity and an attractive attractive short trading recommendation at €53.11 per share.
Lloyds Banking Group (LLOYDS A3/BBB+ attractive long) Earnings summary:
reported 3.5% 2Q revenue growth and 32% operating earnings growth YoY.
• 2Q Net interest income grew 5% YoY.
• 2Q Investment Bank income rose 9%.
• 2Q Credit was improving.
• LLOYDS guidance is unchanged with an ROE of 13.5%
Financial Position:
• LLOYDS Tier 1 capital at 6/30/25 was 13.8% vs. 13.5% at the end of Q1 and 14.0% a year ago.
• Total loans rose roughly 2.4% YoY £ 475 bil.
• Deposits rose 2% QoQ and are £21 bil higher YoY @ £501 bil.
• On balance sheet liquidity rose and LLOYDS now has net cash on its balance sheet.
Trading Model Indicator: There are 39 liquid bonds (fixed and floating - bank notes, senior holdco, subordinated bonds, and perpetuals) totaling $41.3 billion. There are 5 undervalued systematic credit trading trading indicators and 2 attractive long indicators with the LLOYDS 7 1/2 PERP the most attractive.
Equity Indicator: The model views LLOY LN equity as an attractive long trade at £73.8 per share.
BNP Paribas SA (BNP Baa1/A- attractive long) Earnings summary:
reported 2.5% 2Q revenue growth and 3% earnings growth YoY.
• 2Q Net interest income grew 2.5% YoY.
• 2Q Investment Bank income rose 4%.
• 2Q Credit was improving.
• BNP guidance is for 5% + revenue growth for 25-26.
Financial Position:
• BNP Tier 1 capital at 6/30/25 was 12.5% vs. 12.5% at the end of Q1 and 13.03% a year ago.
• Total loans rose roughly 1.2% YoY @ € 941 bil.
• Deposits rose 2% QoQ and are € 36 bil higher YoY @ € 1.36 Tr.
• On balance sheet liquidity rose and BNP has net cash on its balance sheet.
Trading Model Indicator: There are 44 USD BNP liquid bonds (fixed and floating - bank notes, senior holdco, subordinated bonds, and perpetuals) totaling $57.5 billion. The only credit trading model indicators showing any undervalued bond is the BNP 7 3/8 PERP.
Equity Indicator: The model views BNP (BNP) FP equity as an attractive long trade at €74 per share.
Deutsche Bank (Baa1 / BBB, attractive long) Earnings summary:
reported 6% 2Q revenue growth and their highest 2Q operating earnings in the bank's modern history.
• 2Q Net interest income grew 34% YoY.
• 2Q operating income from all 4 operating divisions rose by more than 10% YoY
• 2Q Credit quality was improving.
• DB guidance focused on ROE and guided to 10%.
Financial Position:
• Deutsche Bank Tier 1 capital at 6/30/25 was 14.2% vs. 14% at the end of Q1 and 13.5% a year ago.
• Total loans fell roughly 4% lower QoQ and are € 10 bil lower YoY @ € 472 bil.
• Deposits fell roughly 2% lower QoQ and are € 12 bil higher YoY @ € 653 bil.
• While on balance sheet liquidity fell and ST debt rose by € 12 bil, Deutsche Bank (DB) still has net cash on its balance sheet.
Trading Model Indicator: There are 25 DB liquid bonds (fixed and floating - bank notes, senior holdco, subordinated bonds, and perpetuals) totals $27.5 billion. There are no DB credit trading model indicators showing any undervalued bonds.
Equity Indicator: The model views DB equity as an attractive long trade at €26 per share.
Union Pacific (UNP A3/A- attractive short ) Earnings Summary:
UNP Financial reported 2Q revenue that rose 2.45% YoY, while earnings rose 12.13% YoY.
• 2Q Bulk Freight revenue rose 10% YoY.
• 2Q Industrial Freight revenue rose 4%
• 2Q Intermodal + Auto Freight revenue fell 4%
• Company 2025 guidance was unchanged – mid single digit revenue growth and $4 - $5 bil of share repurchase.
Financial Position:
• Operating cashflow rose 11% YoY in the first half of 2025 Deposits fell by $3.6 billion QoQ and $4.5 billion YoY to $148 billion.
• Free cashflow rose 14% YoY.
• Share repurchase rose 150% YoY.
• After capex, share repurchase and dividend payments UNP net debt rose by $342 mm QoQ and $1 bil YoY.
Trading Model Indicator: 11 of the 24 secondary USD UNP bonds have a market capitalization of $900mm or more. All of them carry and overvalued trading indicator. None of the bonds are yet indicated as attractive short by our systematic model.
Equity Indicator: The trading model sees UNP equity as an attractive long trade its current price of $220 per share.
Hyundai Motors (HYNMTR A3/A- attractive long) Earnings Summary:
2Q revenue rose 7% and earnings that fell -22% YoY.
• 2Q Unit sales rose by 2% .
• 2Q Eco – Friendly Unit sales grew 30%.
• 2Q SUV/PV/CV Unit sales rose 1%.
• 3Q guidance was for 2% Unit sales growth.
Financial Position:
• 1H Operating cashflow fell 8% to owing to US tariffs and change in product mix.
• 1H Dividend paid dropped -19% to KRW 2332 bil.
• 1H Total Debt fell -1.4% to KRW 154,243 bil.
Trading Model Indicator: There are 55 secondary USD HYNMTR Capital, Finance and Opco bonds in circulation. At present the systematic trading model indicators show only 3 (all with less the 3% coupons) as undervalued. The entire HYNMTR USD credit curve trades on average within 11.56% of its 52 week tight credit spread.
Equity Indicator: The trading model sees 005380 KS equity as an attractive long trade at KRW 207000 per share.
American Airlines (AAL, Ba2/BB-, attractive Long) Earnings Summary:
American Airlines reported flat 2Q revenue and earnings that fell -16.46% YoY.
• 2Q revenue seat miles rose 1.4%.
• 2Q available seat miles rose 4.8%.
• 2Q revenue / ASM fell 6.4%.
• 3Q guidance was very confusing as was full year earnings guidance.
Financial Position:
• 1H Operating cashflow rose +3% to $3.4 billion.
• 1H free cash flow rose 11% to $2.5 billion.
• Overall liquidity rose and net debt due to seasonality of the business.
Trading Model Indicator: There are 11 secondary USD AAL bonds that our systematic model would trade from a long perspective. However, just of the 5 outstanding USD secondary bonds have a market capitalization above $750 million, none have undervalued trade indicators. The trading model would participate in any new AAL supply.
Equity Indicator: The trading model sees AAL equity as an attractive long trade at its current price of $11.46 $ per share.
Honeywell (HON, A2/A-, attractive short) Earnings Summary:
Honeywell reported 2Q revenue that 8% YoY, and net earnings that were flat.
• 2Q Aerospace Technologies revenue rose 13% YoY
• 2Q Industrial Automation revenue fell 4% YoY
• 2Q Building Automation revenue rose 5%
• 2H "Organic" revenue guidance rose to 4-5% from 2-3% while "adjusted earnings" guidance rose 3% to 6-8% for the year.
Financial Position:
• 1H Cashflow from operations rose 1% to $1.9 bil Deposits fell by $3.6 billion QoQ and $4.5 billion YoY to $148 billion.
• 1H free cash flow after acquisitions was -$1.888 bil. While dividends and share repurchases rose by $1.6 bil to $2.446 bil.
• Overall Honeywell (HON) net debt has grown 250% over the past 3 years to $25.8 billion while operating income has grown 10% over the same period to $1.8 billion for the quarter.
Trading Model Indicator: There are 28 secondary liquid USD HON bonds only 5 have short trade indicators from our systematic model. This owes to below 2% coupons on 4 other bonds. The HON 4 1/2 01/15/34 has the greatest spread widening potential according to our trading model.
Equity Indicator: The trading model sees (HON) equity as a short trade at is current price of $225/share.
Roche (ROSW Aa2/AA+ attractive long) Earnings Summary:
Roche reported 1H revenue that rose 4% YoY and operating income that rose 14%.
• 1H Pharma revenue rose 8.6% YoY.
• 1H Diagnostics revenue rose .3% YoY. .
• ROSW guidance remains single digit revenue growth and dividend increase for 2025.
Financial Position:
• Operating cashflow fell -24% to CHF 6.1 bil in first half 2025.
• Free Cash Flow -41% to CHF 3.39 bil.
• After Capex, share repurchase and dividends total debt fell CHF 1.6 bil QoQ and -CHF $1.4 billion YoY.
• Net debt remains -CHF 4.6 bil YoY.
Trading Model Indicator: There are 23 liquid secondary USD ROSW bonds and 16 bonds have market capitalization greater than $900mm. At present, those 16 bonds trade on average @ +7.6% to their 52 week tight credit spread. Hence, our systematic trading model does not have any undervalued indicators for the ROSW trading curve at present levels.
Equity Indicator: The trading model sees ROG SW equity as an short trade @ CHF $275/share.
Keurig Dr. Pepper (KDP Baa1/BBB attractive short) Earnings Summary:
Keurig Dr. Pepper reported 2Q revenue that rose 6.4% YoY and operating income that rose 4%.
• 2Q Refreshment Beverages revenue rose 10.5% YoY.
• 2Q US Coffee revenue fell -.2% YoY.
• 2Q International revenue fell -1.8% YoY.
• KDP guidance remains single digit revenue growth for 2025.
Financial Position:
• Operating cashflow fell 12% to $640mm in first half 2025.
• Dividends and share repurchases exceeded free cash flow by 160% or $250mm.
• After Capex, share repurchase and dividends total debt rose by $115mm QoQ and $1.25 billion YoY.
• The past 3 years net debt has grown 50% to $15.3 billion while company revenue has grown 17% over the same period of time.
Trading Model Indicator: All 4 of the liquid secondary USD KDP bonds with market capitalization greater than $900mm have overvalued trade indicator readings from our systematic trading model. However, just 2 KDP bonds have a systematic trading model short trade indicator, the KDP 4 1/2 04/15/52 has the greatest spread widening potential.
Equity Indicator: The trading model sees KDP equity as an short trade @ $35/share.
LVMH (MCFP Aa3/AA- attractive long) Earnings Summary:
LVMH reported 1H revenue that fell -4% YoY and "underlying" operating profit decline of -15%.
• Wine & Spirits revenue fell -7%.
• Fashion and Leather revenue fell -8%.
Financial Position:
• Free cash flow rose 30% to €4 billion in 1H.
• LVMH balance sheet continues to de-leverage.
Trading Model Indicator: There are no USD secondary bonds in circulation.
Equity Indicator: The trading model avoids MC FP equity owing to declining cash flow.
Nestle (NESVNX Aa3/AA- attractive long to attractive short) Earnings Summary:
Nestle reported 1H revenue that fell -1.8% YoY and "underlying" operating profit decline of -7%.
• Coperating margin of 19.3% fell 150 bp YoY
• Company guidance remains for increases "organic growth" and flat YoY profitability.
• Nestle did acknowledge the impact of trade tariffs on net results.
Financial Position:
• Operating cashflow fell to CHF 6.2 billion from CHF 8.1 billion in the first half of 2024.
• Free cash flow fell 40% to CHF 2.3 billion YoY.
• After Capex, share repurchase and dividends total debt rose by CHF 2 bill in 1H 2025 for Nestle. Net Debt climbed by CHF 4.4 bil to CHF 60 billion.
Trading Model Indicator: There are 25 secondary USD bonds and 11 with market capitalization greater than $900mm. However, just 1 of the 11 outstanding USD secondary bonds have a systematic trading model short trade indicator, the NESNVX 3 5/8 09/24/28.
Equity Indicator: The trading model sees NESN SW equity as an avoid indicator owing to its share price and declining cash flow.
BT Group (BT/A Baa2/BBB attractive short) Earnings Summary:
BT reported 1Q revenue growth decline of -3% and reports earnings on March 31 and September 30 of each year.
• BT (BT/A) did report a decline in "adjusted EBITDA" for the quarter without of course, disclosing the adjustments.
• BT Group confirmed all fiscal 2026 and multi-year financial outlook metrics, including expectations for a 3% revenue decline to £4.9 bil and a 10% fall to £468 mm in PTP for the 12 months ending March 31, 2026
Financial Position:
• BT (BT/A) was re-levering its balance sheet as of 31 March.
Trading Model Indicator: There are 7 liquid secondary BT (BT/A) USD bonds. Two bonds have a market cap above $750 mm and both have short trade indicators. The trading model sees the BRITEL 3 1/4 11/08/29 as the bond with the most spread widening potential.
Equity Indicator: The model views BT equity as an attractive attractive short trading recommendation at its current price of GBP 220 per share.
Intel (INTC, Baa1/BBB, attractive short) Earnings Summary:
Intel reported 1Q revenue that was flat YoY with an operating loss of -300mm.
• 1Q Computing Revenue down -8%
• 1Q Data Center and AI revenue rose 8%
• 1Q Intel Foundry revenue rose 7%
• Company guidance for slow reduction of operating costs with revenue remaining flat for 2Q 2026.
Financial Position:
• 2Q operating cashflow was -$800mm which is -$400mm more than 1Q f2025
• INTC is not paying dividends or repurchasing shares
• After Capex, Intel net debt rose $500mm QoQ and $5.8 bill YoY.
Trading Model Indicator: INTC has 35 secondary USD bonds with market cap of $43.8 billion. 21 of those bonds have systematic trading model indicators of overvalued. 5 bonds have attractive short trading indicators. The INTC 5.2 02/10/33 has the most potential spread widening according to our trading model.
Equity Indicator: The trading model sees Intel (INTC) equity as an attractive short trade at its current price of $22.63 per share.
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