Ticker Reports for February 6th
Billions in Buybacks: 4 Stocks Rewarding Shareholders Now
These four large-cap stocks recently announced buyback programs that are moderate to massive in size when compared to their market capitalizations. I’ll break down these new programs, as well as other important developments around these firms looking to return capital back to shareholders. All market capitalization figures are as of the Feb. 5 close.
Regeneron Pharmaceuticals: Solid Buyback Capacity, Dips Toes Into Investment Income
Regeneron Pharmaceuticals (NASDAQ: REGN) just posted strong results in its full-year 2024 earnings release and the initiation of a moderately sized buyback program. The program comes in at $3 billion. When added to the company’s still remaining buyback authorization, its total buyback capacity comes in at $4.5 billion, or 6% of its market capitalization. Regeneron is not only starting a buyback program but also paying shareholders investment income.
The firm announced the initiation of a quarterly cash dividend program. The first payment will come in at $0.88 on Mar. 20 to shareholders of record as of Feb. 20. This gives the company an indicated dividend yield of around 0.5%. Although it's nothing to write home about, anything is an improvement over 0%. Regeneron shares rose nearly 5% after earnings with beats on both revenue and adjusted earnings per share (EPS).
PayPal: Big-Time Buyback Authorization Announced
When it comes to buyback program announcements, PayPal’s (NASDAQ: PYPL) is massive. The firm announced in its year-end 2024 earnings report that its Board of Directors authorized a $15 billion stock repurchase program. The firm has about $5 billion left from its 2022 buyback program. Now, it has nearly $20 billion in total buyback authority. Eith the company worth around $79 billion as of the Feb. 5 close, its total buyback authority is equal to around 25% of its value.
Despite beating analysts' estimates on revenue, earnings, and guidance, shares dropped sharply post-earnings. The approximately 13% drop came as certain underlying metrics of the business concerned markets. The biggest reason for this concern is that the company fell short of expectations for its branded total payment volume. PayPal Checkout is a PayPal-branded checkout option that many merchants use because it can reduce friction in completing sales.
PayPal’s Chief Executive Officer has stated, “Branded checkout is an essential and important part of our business, and it is the number one priority for us." Underperforming expectations on a metric like this can spook investors, even if total revenue and earnings beat. Most Wall Street analysts lowered their price targets post-earnings, but a few raised them.
UBS: Buybacks Authorized After Strong Profits, Uncertainty Lingers
Starting off 2025 with a moderately sized buyback program authorization is UBS Group (NYSE: UBS). The Swiss financial services giant announced a $3 billion buyback authorization. This represents a moderate 3% of the company’s overall market capitalization. The company says it is looking to buy back $1 billion worth of stock in the first half of 2025 and $2 billion in the second half. The buyback announcement comes as the company blew past expectations in its latest quarterly results. The company's net profit hit $770 million, helped by strong performance in its investment banking division.
However, it is important to note that the company’s buyback plans are not set in stone. The Swiss government is currently considering new capital requirement rules for banks in its country. Regulations that overburden the company could jeopardize its ability to actually execute its buyback plan. More information about this regulation could arrive in May. UBS expects the public consultation period to start then.
Jacobs Solutions: Large Buyback Capacity, Backlog Up Substantially
Jacobs Solutions (NYSE: J) has announced a buyback program that is very significant compared to the firm's overall value. That is especially true when adding the new $1.5 billion authorization to the remaining $271 million in buyback capacity from its 2023 program. Overall, the company’s total buyback capacity is equal to nearly 11% of its $16 billion market capitalization. Jacobs works in the consulting industry and has expertise in many different areas. These include climate change, energy transition, connected mobility, buildings and infrastructure, integrated water management, and biopharmaceutical manufacturing.
Last quarter, the company saw revenue increase by 5%; however, adjusted EPS fell by over 8%. The company’s backlog increased by 19%, up to nearly $22 billion. This is around ten times the company’s quarterly revenue, indicating strong demand for its services.
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3 Steel Stocks to Gain Strength as Tariffs Reshape the Market
Investors have had to deal with a lot of uncertainty lately in the stock market as President Trump has rolled out the latest rounds of tariffs, targeting goods traded with China, Mexico, and Canada first. These policies have created a common view for investors that leans on inflation coming back and domestic business demand falling off a cliff. However, there is evidence to prove this won’t be the case.
As of February 2025, recent economic data has come out to prove that domestic business activity is set up to do nothing but go up from here. However, not all domestic industries are made equal, as the manufacturing sector will likely take the lead in bullish price action for the coming quarters. With this in mind, investors should consider today’s list of steelmakers for their portfolios.
Starting with shares of Nucor Co. (NYSE: NUE), a clear discount has attracted new institutional buyers to seek exposure in this stock moving forward, starting the wave into steelmakers. The same characteristics of low downside and double-digit upside can be seen in United States Steel Co. (NYSE: X) as well as in Steel Dynamics Inc. (NASDAQ: STLD) to keep portfolios exposed to all the upside in this new rotation.
Why Institutions Like Nucor Stock
The manufacturing PMI index for the months of December and January has shown promising data when it comes to demand for the primary metals industry, and that’s where stocks like Nucor come into play. Most think that tariffs will hurt domestic business, but here’s why that might not be the case.
As international large-cap stocks have to deal with increased costs, concessions, and better prices will be offered through smaller domestic names like today’s list. At $31.2 billion in market cap, Nucor is well below the industry's mega-cap names and favors the tailwinds building for domestic supply chains.
This is why those at the Bank of New York Mellon decided to boost their holdings in Nucor stock by as much as 6.6% as of February 2025. This new allocation brought the bank’s position to a high of $195.9 million today, giving investors another bullish factor to lean on when they start forming their buying thesis.
Wall Street analysts felt comfortable enough to keep a consensus price target of $163.1 per share on Nucor stock, calling for a 22.3% upside from today’s price. Considering the stock has traded down to 66% of its 52-week high, this bullish call is all the more rare since analysts typically avoid boosting stocks that have been beaten down recently.
Markets Know United States Steel’s Value
There has to be a reason why the government blocked a takeover deal from Japan’s Nippon Steel Co. (OTCMKTS: NISTF), keeping United States Steel an independent business. The reason is that the current price is too cheap to give away.
At 79% of its 52-week high, United States Steel has yet to reflect the true value of future earnings, which will soon be reflected in the company’s financials. Investors can reiterate that view by checking where Wall Street analysts are forecasting earnings per share (EPS) from today’s net loss of $0.18 a share.
For the second quarter of 2025, analysts expect United States Steel to deliver up to $0.96 in EPS, a significant swing from today’s net loss that should be reflected in the stock’s price for the coming months. Seeing this potential upside, it made sense for allocators at the Massachusetts Financial Services Co. to boost their holdings by 26.5% as of November 2024.
With this new addition, the group now holds $162.5 million worth of United States Steel stock, or 2% of the company's current ownership.
Price Action Favors Steel Dynamics Stock
After steel stocks outperformed during a week full of tariff announcements, investors can see shares of Steel Dynamics stock leading the pack in today’s list by reaching 83% of its 52-week high.
Being in bullish territory is only the beginning since Wall Street analysts will likely boost this name first, given how much momentum it has gained.
Over the past month alone, Steel Dynamics stock has outperformed the broader S&P 500 by as much as 8%.
This is not an easy task and will probably become the norm for the following months. With this momentum in mind, seeing the company’s short interest fall over the past quarter shouldn't be a surprise.
With a 1.3% decline in the past month alone, this fall in short interest is a clear sign of bearish capitulation in the face of all the bullish tailwinds building up for Steel Dynamics stock and others on today’s list.
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Alphabet's 8% Drop Might Be the Entry Opportunity of the Year
Alphabet Inc (NASDAQ: GOOGL), the parent company of tech giant Google, has been on a remarkable upward trajectory over the past year, with its stock climbing as much as 40%. However, yesterday’s 8% dip following the latest earnings report has caught the attention of savvy investors.
With the stock still up 30% from the same time last year, this pullback, driven by concerns over cloud revenue growth and increased capital expenditures, might just be the golden entry point many have been waiting for. As we’ll see below, there are several reasons for investors on the sidelines to be excited. Let’s jump in and take a look.
Fundamental Performance
To start with, let’s break down Alphabet’s latest earnings report from Tuesday. While it was a solid update overall, a small revenue miss took the spotlight. Despite consistently surpassing analyst expectations throughout 2024, revenue came in $170 million below consensus this time - a rare stumble that weighed on the stock. However, beyond that slight disappointment, there were plenty of bright spots worth paying attention to.
Net income, for example, jumped 28%, which helped push Alphabet’s EPS up 31% year on year, while free cash flow remained strong at nearly $25 billion for the quarter. Most importantly, search and ads continued to grow in the face of rival search options like ChatGPT.
This would have been a key metric that Wall Street was watching closely, and so its latest performance would have been well received. On the whole, aside from the revenue miss, the impressive figures served to highlight Alphabet’s resilience and adaptability in a competitive landscape.
Bullish Analyst Updates
For those investors who love to grab a bargain, the multiple bullish stances from analysts covering Alphabet stock suggest this recent dip is indeed more of a speed bump than a roadblock. Consider that just last week, the teams at both Wedbush and Oppenheimer reiterated their Outperform ratings, along with $220 and $225 price targets, respectively.
From where Alphabet shares closed on Wednesday, that’s pointing to a targeted upside of almost 20%. Needless to say, this would also result in shares being back trading at all-time highs.
Their bullish outlook was echoed yesterday when, in a note to clients, Pivotal Research expressed confidence in Alphabet’s post-earnings valuation, emphasizing the strength of its assets. They acknowledged the need for patience as management continues to deliver in search and YouTube and address the deceleration in cloud growth, but they still reiterated their Outperform rating and $225 price target.
Potential Concerns
Of course, a surprise revenue miss is never a good thing, and concerns were flagged on how the last quarter saw some hefty expenditure from the company, which raised eyebrows. When considering how Alphabet posted a quarter-on-quarter decline in cloud revenue and investors looking at the rapid advances (at minimal costs) from China-based AI startup DeepSeek, a big capital-spending surprise isn’t likely to sit well.
In that context, yesterday’s drop is somewhat understandable, and it will be concerning if Alphabet can’t show some payoff soon. Investors should keep a close eye on how these investments translate into tangible returns in the coming quarters while at the same time recognizing that it’s fair to think yesterday’s drop might mean it’s all priced in now already.
Getting Involved
Alphabet’s current technical setup also supports the theory that this is an enticing opportunity for those of us looking to add some tech to our portfolios. The stock bounced off a level of support yesterday and closed well above the lows. This has created a strong, potentially only a short-term, foundation to launch a comeback rally in the coming days.
In addition, an RSI of 46 indicates that Alphabet stock has a ton of room to run if things start taking off. Remember, the S&P 500 is still up around highs, a risk-on sentiment still prevails, and Alphabet is still Alphabet. It’s not often that it drops 8% in a single day, so it could well be the time to be brave.
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