Daily Brief United States: Microsoft Corp, Haynes International, Servicenow Inc, Meta Platforms (Facebook), Amphenol Corp Cl A, Freeport Mcmoran, International Business Machines, Lam Research, Advanced Emissions Solutions I, Gold and more

• On 5 February, Acerinox SA (ACX SM) announced a friendly $61/share all-cash offer to acquire Haynes International (HAYN US), implied equity value $798 million, implied EV $970 million and 8.7% premium.
• The offer represents 1.5x EV/24e Sales, 10.1x EV/24e EBITDA (5.8x including run-rate estimated synergies of c.$71 million, seemingly quite large). The acquisition amounts to approximately 33% of Acerinox’s market cap.
• Acerinox is paying higher multiples than those at which Acerinox itself is trading. The deal should close. The shares of Haynes are already up 2.7% pre-market after Q1 results. Long.

• ServiceNow’s Q4 2023 earnings present a compelling story of growth powered by artificial intelligence (AI).
• The company reported subscription revenue growth of 25.5% at constant currency, 200 basis points above its guidance and cRPO growth of 23% at constant currency, also 200 basis points above its guidance.
• In addition, the company reported 168 deals greater than $1 million in net new ACV, a 33% increase from the previous year.

• So I took this weekend to update my models on Meta and Amazon. I just wanted to leave some brisk thoughts on these updated models.
• I will start with Meta today and will share my thoughts on Amazon tomorrow.
• You can find the updated model on Meta here which I encourage you to download to play around with your own narrative as you see fit.

• Amphenol Corporation announced its fourth quarter and full year results for 2023 with the company closing the quarter with sales of $3,327 million and record adjusted diluted EPS of $0.82.
• The company’s sales were up 3% in U.S. dollars for Q4, 4% sequentially, but down 1% organically compared to Q4 2022.
• In contrast, the full year saw a drop with sales of $12,555 million, which was a decline of 50 basis points in U.S. dollars and a 3% organic decrease compared to 2022.

• In FY 2023, Freeport-McMoRan reported solid operating results across its operations.
• A key highlight was its robust performance in Indonesia, where production levels improved for the fourth consecutive year and several new operating records were set.
• The company also reached several milestones, including achieving a target run rate for their leach production in the Americas and making significant progress on the Indonesian smelter project.

• The latest earnings of IBM revealed solid growth across all businesses for the last quarter of 2023, with a revenue growth of 3% and over $11 billion of free cash flow.
• The achievements and progress noted by IBM’s Chairman and Chief Executive Officer, Arvind Krishna, corroborate the company’s commitment towards strengthening its diversified business model.
• Key drivers of IBM’s success during the year 2023 were enhancements in its software portfolio and the bolstering of its consulting position.

• In the recent earnings, Lam Research Corporation demonstrated strong performance in the December quarter of 2023.
• Financial highlights include higher revenues, gross margin, operating margin, and EPS above guided ranges.
• Although overall wafer fabrication equipment (WFE) spending declined, the company almost doubled its EPS compared to the cycle trough in 2019.

Key points (machine generated)

• The EPA will be implementing regulations to reduce levels of PFAS chemicals in municipalities, due to the health risks associated with them.
• Major retailers like Amazon, Lowe’s, and McDonald’s are adopting policies to eliminate and prohibit the use of PFAS chemicals in their products.
• 3M, a major supplier of PFAS, agreed to a $10 billion settlement in June 2023.

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• Last week the World Gold Council published its figures for the fourth quarter of 2023.

• Gold demand for technology, electronics and other industrial use cases continued to improve in nominal and YoY terms – pointing to an economic rebound.

• “Technology demand proved another surprising element in 2023, churning out stellar growth in Q4, albeit from a low base.