Ticker Reports for March 26th
5 Spin-Off Stocks That Could Reward Patient Investors in 2026
Spin-offs are a great tool for businesses, helping them rationalize ongoing business, focus on growth, and unlock shareholder value. The key question is whether a separation changes how investors might evaluate the original company, the new company, or both as standalone stories.
FedEx on Track to Deliver Value-Building Savings
FedEx’s (NYSE: FDX) spin suggests both the original and new companies are buyable. The spin-off separates the freight business from the core package delivery business, enabling both companies to trade at freer valuations. The critical takeaway for potential investors in the freight company is that it may trade at a 50% or higher premium to the original. The hurdle for the freight business is 2026 headwinds, including tepid demand, margin pressure, and expansion costs.
Takeaways for investors in the original FDX include improvements in operational quality, cash flow, and the reliability of capital returns. FedEx’s capital return is significant, comprising dividends, dividend growth, and aggressive share buybacks. Buybacks reduced the count by more than 2.5% year-to-date as of the end of fiscal Q3 2026. Analysts are lifting price targets ahead of the split, indicating a Moderate Buy with potential to hit new highs by mid-year.
KBR Split Enhances Focus, Unlocks Growth Avenues
KBR’s (NYSE: KBR) split and spin-off, scheduled for completion in the back half of 2026, aims to separate its Sustainable Technology Solutions business from its government business. The new company will comprise the Mission Technology Solutions group, which includes defense, security, and space applications. Among the reasons for this spin is the unlocking of value; the spinco may experience a 100% to 200% price gain based on the original’s 9X multiple. Defense specialists such as Lockheed Martin (NYSE: LMT), Northrop Grumman (NYSE: NOC), and RTX (NYSE: RTX) trade at well over 20 times earnings.
While the spinco will focus on defense contracts and execution of its massive backlog, the ongoing business will focus on higher margin sustainable energy technologies. The leaner company will benefit from speedier decision-making and financial flexibility, enabling it to continue investing in its future. Analyst revisions are mixed in 2026, but the trend is stable, leaving the rating at Hold and the consensus price target forecasting about a 50% upside.
Medtronic to Spin-Off High-Growth Diabetes Unit
Medtronic (NYSE: MDT) plans to spin off its high-growth diabetes unit later this year, a move that, at face value, seems counterintuitive. However, the diabetic unit is a consumer-oriented business while the core is business-to-hospital, presenting challenges for the combined company. The result will be a pure-play diabetic equipment and supply company, able to compete effectively in its high-growth market, and with the potential for takeover.
The remaining company will focus on high-growth, higher-margin businesses such as cardiovascular and robotic surgery. Robotic surgery is the future of medicine, with leaders such as Intuitive Surgical (NASDAQ: ISRG) sustaining double-digit growth rates and steadily improving operational quality. Twenty-six analysts rate this stock as a Moderate Buy, coverage is increasing, the sentiment is firm, and the consensus price target forecasts more than 25% upside as of late March.
Keurig Dr Pepper: Grows to Split, Unleashes Global Powerhouses
Keurig Dr Pepper (NASDAQ: KDP) has struggled for years as strengths and weaknesses in the soda business offset strengths and weaknesses in the coffee business. Now, the company plans to make another coffee acquisition, then spin the coffee bundle into a pure-play for investors. The combined business will experience supply chain efficiencies and unlock growth opportunities, specifically in the high-margin coffee pod industry.
The ongoing business will be a soda-and-beverage pureplay, unencumbered by coffee-specific issues, with an enhanced financial profile. It will be able to focus on its higher-margin businesses and growth, including acquisitions, and is expected to be completed in April. Analysts are bullish on this stock, rating it a Moderate Buy and raising price targets ahead of the spin-off. The consensus price target reported by MarketBeat forecasts close to 35% upside, while the high-end of price targets adds double digits.
Honeywell Splits to Enhance Focus With 2 Pureplay Businesses
Honeywell (NASDAQ: HON) aims to split its aerospace business into a more focused pure-play unit. It will service defense and commercial contracts, execute on a record backlog, and improve cash flow while the original business focuses on industrial automation. Industrial automation is the linchpin of the Industrial Revolution 4.0 and the nexus of Internet of Things (IoT), robotics, and AI. The spin allows it a more flexible financial position, enabling strategic acquisitions to sustain growth long-term.
Analyst trends suggest the group is most bullish on this stock. MarketBeat’s data reflects swelling coverage, firming sentiment pegged at Moderate Buy, and an uptrend in the price targets. Consensus forecasts call for a 10% upside in late March, and the trends point to the high end and are likely to remain strong through year-end.
Ticker Revealed: Pre-IPO Access to "Next Elon Musk" Company
Ticker Revealed: Pre-IPO Access to "Next Elon Musk" Company
S&P 500 Rebalancing: 3 Key AI Stocks Earn Their Spot in the Index
The S&P 500 has officially completed its latest quarterly rebalancing, with four new stocks entering the index and four exiting. Given the current market environment, it is unsurprising that three of the index's additions are companies closely tied to the artificial intelligence (AI) data center buildout.
Let’s walk through the stocks that received the cold shoulder and the exciting names that are entering the index. These changes became effective before the market open on March 23.
MTCH, MOH, LW, PAYC Get the Boot, SATS Gets In
Below are the four stocks that the S&P 500 has removed:
- Dating app operator Match Group (NASDAQ: MTCH)
- Low-income managed healthcare provider Molina Healthcare (NYSE: MOH)
- Frozen potato product company Lamb Weston (NYSE: LW)
- Payroll and human resources software company Paycom Software (NYSE: PAYC)
All of these names have dropped 60% or more from their all-time highs, putting their market capitalizations near or below $7 billion. S&P Dow Jones Indices notes that to be eligible for addition to the S&P 500, a company must have a market capitalization of $22.7 billion or more. Although this is not a requirement for continued membership, companies that have fallen below this threshold are typically eligible for removal.
Even after these four stocks lost their place in the index, many stocks that remain in it will have market caps below $22.7 billion. However, to prevent large, abrupt turnovers in the S&P 500, S&P Dow Jones Indices tends to make only around four removals and additions per quarter.
Outside of the three AI stocks, the S&P 500 has added EchoStar (NASDAQ: SATS). The company, which owns Dish TV, has seen its stock price rise by around 300% in the past 52 weeks. This comes as the firm has been selling valuable spectrum licenses, primarily to Elon Musk’s SpaceX.
Owning spectrum licenses gives a company the right to send signals over certain radio frequencies, which is essential for telecommunications. Through its deal with SpaceX, Echostar now owns approximately 2.8% of the company. Thus, investors see it as a way to gain indirect exposure to Musk’s massive private space firm.
LITE & COHR: Optics Giants Enter the S&P After Massive Gains
AI stocks Lumentum (NASDAQ: LITE) and Coherent (NYSE: COHR) are taking their place in the index, with these names putting up astounding performances recently. Lumentum is up nearly 1000% in the past 52 weeks, while Coherent is up more than 250%. Both of these companies have been the beneficiaries of a key shift taking place in data center networking.
Networking equipment connects different data center components together, allowing them to communicate. Traditionally, and still today, networking equipment uses copper wire, sending signals electrically. However, as the amount of information data centers process increases, there is a growing shift toward optical networking.
Optical equipment sends signals using light, allowing for faster speeds and less heat generation. However, it is also more expensive than copper and is currently seen as less reliable. For these reasons, data center operators want to keep using copper as long as they can, but a continued shift toward optical is somewhat inevitable. This long-term dynamic puts Lumentum and Coherent in enviable positions, as they are among the leaders in optical networking.
Notably, NVIDIA (NASDAQ: NVDA) recently invested $2 billion in both Lumentum and Coherent to support research and development and help fund manufacturing capacity investments. NVIDIA is also securing access to future capacity through these agreements. Overall, these agreements clearly show the vital role NVIDIA believes optical networking plays in the future of data center infrastructure.
VRT: The “Coolest” Addition to the S&P 500
After putting up an impressive gain of over 180% during the past 52 weeks, Vertiv (NYSE: VRT) will also enter the S&P 500. This comes as the firm is a leader in cooling solutions.
As data centers become more powerful and use more energy, they also produce more heat. This creates an increasing need for cooling, particularly liquid cooling solutions, like those Vertiv provides. Liquid cooling systems are more effective at transferring heat than air-cooled solutions.
In 2025, Vertiv’s total revenues grew by nearly 28%, the company’s fastest annual growth rate since going public. The future sales outlook continues to be strong, with the company recording a 2.9x book-to-bill ratio last quarter. The firm ended the year with a backlog of $15 billion, about 1.5 times its 2025 revenue.
The company also saw free cash flow growth of 64%, with the figure moving up to around $1.9 billion during the year.
SATS, LITE, COHR, VRT: The S&P 500’s New Kids on the Block
SATS, LITE, COHR, and VRT have achieved a big milestone in becoming included in the S&P 500. This does not guarantee the future performance of these names will be anything like their past performance. However, they have now clearly established themselves as among the most important companies in the world.
I tested Elon's AI against ChatGPT…one tech won
I tested Elon's AI against ChatGPT…one tech won
Meta Reportedly Plans 20% Layoff: A Sign of Weakness or Strength?
Despite putting up a very strong earnings report earlier in 2026, the year-to-date (YTD) performance of Meta Platforms (NASDAQ: META) has been anything but impressive. Overall, the Magnificent Seven stock is down nearly 9% YTD despite shares popping 10% the day following the company's earnings release.
Even recent reports of large cost-cutting measures couldn’t do much to help shares. On March 13, Reuters reported that Meta was planning layoffs that could affect 20% or more of its workforce. Meta rose just over 2% during the next trading day but has since given back those gains and more.
This tension creates a debate around whether potentially massive layoffs are a sign of weakness or strength for the tech giant. With huge capital expenditure (CapEx) spending, some view this move as a necessity in order to keep overall costs down. However, there is also reason to believe that this is part of Meta’s plan to drive internal efficiency using AI.
Meta’s Massive CapEx Causes Concern Amid Layoff Reports
In 2026, Meta plans to spend between $115 billion and $135 billion on CapEx as the company invests heavily in artificial intelligence (AI). At the midpoint, this would be a 73% increase from the $72.2 billion the firm spent on CapEx in 2025.
This is leading to the expectation that Meta’s free cash flow—one of the most important metrics in stock valuation—will plummet. Currently, analysts expect Meta to generate around $11 billion in free cash flow this year, which would represent an enormous decrease of nearly 75% YOY from 2025.
Given this dynamic, Meta is incentivized to lower costs, and 20% layoffs would go a long way in helping offset that reduction in free cash flow. However, the question is whether doing so is a reactionary move to counterbalance AI spending, or one that suggests Meta is reaping the benefits of AI efficiency. The company has made several statements that lean toward the latter interpretation.
Meta Touts Emerging AI Efficiency on Internal Workloads
In Meta's latest earnings call, CFO Susan Li noted that the use of AI tools is improving productivity within the organization. Specifically, she said that output per engineer had increased by 30% since the start of 2025, driven primarily by the adoption of agentic AI coding tools.
She went on to say that "power users" of these tools saw their output increase 80% YOY. Notably, Meta saw a “big jump” in agentic AI tool usage in Q4. Additionally, Li said that Meta expects the growth in productivity to accelerate in the first half of 2026. Ultimately, CEO Mark Zuckerberg said, "We're starting to see projects that used to require big teams now be accomplished by a single, very talented person." This underscores the potential that smaller teams can achieve the same output.
Overall, these statements sound like a company that is seeing real internal benefits from AI applications. The timeframe is also important within the context of the layoff discussion. Li notes that agentic tool usage increased dramatically in Q4, and that she expects productivity gains to accelerate in the first half of 2026.
This suggests that these benefits are recent and emerging. In turn, it implies that Meta isn’t simply holding layoffs in its back pocket as a last resort to offset spending. It is now seeing actual improvements in efficiency that lend credibility to a restructuring.
Li Expresses Concern Over AI Startups
Still, one statement made by Li at the Morgan Stanley Technology Conference is somewhat troubling for Meta. The CFO acknowledged that a company starting today would "use a lot of AI tools very differently." For Meta, a 20-year-old tech company, she noted that they do not want to "find ourselves behind companies that are being born today and that are AI-native from the very day of inception."
This points to the idea that Meta is somewhat fearful of AI-native tech startups that can be more efficient using AI tools from day one, suggesting that those firms may have an advantage over Meta, potentially because using AI to augment long-standing workloads is harder than using it to build from scratch.
That said, few question Meta’s dominance in social media. No matter how efficient AI-native firms are, replicating Meta’s massive user base of over 3.5 billion people is incredibly difficult.
If anything, Li’s statement pushes back on the idea that Meta is seeking layoffs due to its CapEx spending. Rather, the company simply sees AI adoption as a way to maintain its edge within an evolving tech landscape.
Meta Looks Undervalued as Shares Get Hit in 2026
Overall, the debate around Meta's potential layoffs stems from why the company is looking to cut costs. The idea that unsustainable CapEx is the main driver has some merit, but it also clashes with the efficiency gains the firm is seeing. Surging costs are one of the main overhangs on the stock. Thus, it feels counterintuitive that the market isn't rewarding the company for exploring cost-saving measures.
Still, the reports of 20% layoffs—which would likely equate to over 10,000 workers—remain unconfirmed. However, outlets have confirmed that the company just laid off several hundred workers. Investors are also digesting a separate legal overhang after a Los Angeles jury found Meta and Google liable in a social-media addiction case on March 25, with punitive damages still to be determined.
Amid all this, Meta has seen its shares fall to a forward price-to-earnings ratio near 20x, a level not seen since Liberation Day roiled the markets in April 2025.
The SpaceX "Backdoor" Stock
The SpaceX "Backdoor" Stock
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