Morningstar (MORN) – $14B market cap; $47M ADV: We removed Morningstar from the U.S. Focus List as the stock breached support along its
100-DMA and has been lagging the broader market since addition. It reported mixed Q3 FY24 results in October. Organic revenue growth
decelerated to 10% y/y, for the first time since Q4 FY22, which could have weighed down on investor sentiment. Next support is at its 200-DMA
(-2%). Fundamental & Technical note
Author: vipin khare
O’Neil Capital Equipment Sector Weekly
Cintas (CTAS; CTAS US) – $74B market cap; $317M ADV: We removed Cintas from the U.S. Focus List as the stock breached its 200-DMA following its Q2 FY25 results. The company has always surprised positively on the revenue front since Q4 FY19. However, this is the first time it has delivered in-line revenue, which could have weighed on investor sentiment. The company has highlighted that price increases are becoming difficult as inflation is coming down. Next support is at $176.44 (-3%).
O’Neil Capital Equipment Sector Weekly
Cintas (CTAS): Reported Q2 FY25 results. Revenue (+8% y/y) was in line with estimates, and EPS (+21% y/y) beat estimates by 7%. The stock breached its 200-DMA on above average volume post the print and
is trading below all its key moving averages. Support is at its recent low of $181.15 (-4%). It is 17% off its 52-week high.
O’Neil Capital Equipment Sector Weekly
Taylor Morrison Home (TMHC; TMHC US) – $7B market cap; $50M ADV: We removed Taylor Morrison Home from our U.S. Focus List as the
stock breached its 100-DMA on below average volume. Investors have been concerned about the company’s weaker-than-expected gross margin
outlook, due to continued pricing pressure as mortgage rates remain elevated. XHB, the homebuilders index, has also breached its 100-DMA,
indicating broader negative sentiment for the group. Next support for TMHC is at 200-DMA (-1%). Fundamental & Technical note
O’Neil Capital Equipment Sector Weekly
WEG (WG3.BR; WEGE3 BZ) – $39B market cap; $57M ADV: We added WEG to the Emerging Markets Focus List as the stock retook support
along its 50-DMA after bouncing off its 100-DMA recently. WEG is one of the world’s largest producers of electric motors. It also manufactures
transformers, generators, and systems for renewable energy. Rising investments in renewable energy and e-mobility end markets, expansion in
international markets, and depreciation of the Brazilian Real are the key growth drivers. Consensus expects revenue and EPS CAGR of 16% and
12%, respectively, in FY23–26. Fundamental & Technical note
O’Neil Capital Equipment Sector Weekly
Symbotic (SYM), a provider of AI-powered robotic systems for supply chain management, trimmed its Q1 FY25 revenue guidance by 3% and adjusted EBITDA guidance by 52%. The
move comes after the company said some accounting errors led to accelerated revenue recognition in FY24. It expects revenue and adjusted EBITDA for FY24 to be impacted by
$30M–40M. Annual report filing to be delayed. The stock gapped down ~33% following the announcement and breached all its key moving averages on more than 10x the a
O’Neil Capital Equipment Sector Weekly
Taylor Morrison Home (TMHC) – $8B market cap; $63M ADV: We added Taylor Morrison Homes to the U.S. Focus List as the stock is making new highs after
breaking out of a stage-three, six-week flat base. The company is the fifth largest homebuilder in the U.S. Diversified offerings catering to various demographics, including entry-level and built-to-rent segments, and unique land acquisition and lot development strategy are the key growth drivers. Additionally, a fall in the 10-year Treasury yield O’Neil Capital Equipment Sector Weekly williamoneil.com • services@williamoneil.com • 800.545.8940 2 could potentially lower mortgage rates, thereby improving buyer demand. Consensus expects revenue and EPS CAGR of 7% and 14%, respectively, in FY23– 26. Fundamental & Technical note
O’Neil Capital Equipment Sector Weekly
Rheinmetall (RHMX.DE) – $28B market cap; $157M ADV: We added Rheinmetall to the Developed Markets Focus List as the stock broke out of a
stage-three, 30-week consolidation base on above average volume. Rheinmetall is Germany’s largest defense manufacturer and the world’s largest
artillery ammunition producer. Accelerated defense spending across Europe, massive demand for 155mm artillery shells since the start of the Ukraine
war, and expansion in the U.S., the world’s largest defense market, are the key growth drivers. Consensus expects revenue and EPS CAGR of 28%
and 45%, respectively, in FY23–26.
O’Neil Capital Equipment Sector Weekly
ABB India (AB.IN; ABB IN) – $17B market cap; $30M ADV: We booked a 50% gain and removed ABB India from the Emerging Markets Focus List as the stock breached its 200-DMA on above average volume. It
has been lagging after reporting a weak Q3 2024 print last week. Revenue and adjusted EPS missed estimates by 12% and 3%, respectively. Revenue growth has decelerated over the past couple of quarters due
to a slower pace of backlog execution. Next support is at INR 6,245 (-8%).
O’Neil Capital Equipment Sector Weekly
Praj Industries (PNS.IN; PRJ IN) – $1B market cap; $13M ADV: We removed Praj Industries from the Emerging Markets Focus List as the stock breached support along its 50- and 100-DMA. The company reported weaker-than-expected Q2 FY25 results on Friday. The slow pace of execution impacted revenue growth in the ethanol segment. The government’s relaxation on the use of sugar for ethanol production in late August has not resulted in any significant activity in the market, which could have weighed down on investor sentiment. Next support is at INR 650 (-9%), followed by its 200-DMA (-13%). Fundamental & Technical note
