Daily Brief United States: NVIDIA Corp, Crude Oil, Red Cat Holdings , Chubb , Dollar General, Public Service Enterprise Group Inc, Lands’ End Inc, Build A Bear Workshop, Ormat Technologies, Ugi Corp and more

• NVIDIA’s Q2 revenue soared 122% to $30.04 billion, exceeding estimates, driven by unprecedented demand for AI-driven data center chips. 
• The data center segment grew 154% YoY, generating $26.3 billion, reflecting NVIDIA’s strong position in AI hardware with major contributions from cloud providers. 
• Despite approving a $50 billion stock buyback, NVIDIA’s shares fell 8% after-hours due to concerns over future chip supply and broader market trends, though the stock is up 150% YTD.

• For the week ending 23/Aug, US crude inventories fell by 846k barrels, while analysts expected a 2.7 mb drawdown. Gasoline stocks dropped more than expected, while distillate inventories unexpectedly rose.
• US natural gas inventories rise 35 bcf for the week ending 23/Aug, exceeding analyst expectations of a 33 bcf buildup. Inventories are 12.1% above the 5-year seasonal average
• Exxon expects global crude oil demand to remain around 100m bpd through 2050. Brokerages lowered target prices on Occidental and Halliburton.

• Paul Cerro, founder of the Cedar Grove Empire, discusses his investment in Redcat Holdings
• Redcat is a US-based drone manufacturer specializing in unmanned drones for military purposes
• Redcat is poised to potentially win a lucrative US Army contract, driving significant upside potential

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• Chubb Limited’s second-quarter earnings for the period ending June 30, 2024, revealed a robust financial performance, characterized by significant growth in premium revenue and substantial increases in both core operating and investment income.
• The insurer reported a core operating EPS of $5.38, marking a 9.3% increase from the previous year.
• This was supported by a growth in net premiums of 11.8% (or 12.3% on a constant dollar basis) facilitated by a diversified portfolio across geographical regions and business segments.

• I first wrote my Deep Dive on Dollar General back in August 2023.
• While I wasn’t initially excited about owning a piece of the company despite the stock being down 40% from peak then, I changed my mind when the stock went down another ~25% following 2Q’23 earnings.
• After today’s dismal earnings, the stock went down almost another 30% since 2Q’23 earnings. 

• Public Service Enterprise Group (PSEG) recently disclosed its second-quarter 2024 earnings, revealing a nuanced performance marked by both challenges and sustained strategic growth.
• The company reported a net income of $0.87 per share for this quarter, which marks a decrease from last year’s figures of $1.18 per share.
• The non-GAAP operating earnings stood at $0.63 per share, slightly below the previous year’s $0.70 per share.

• We are reiterating our Buy rating, $20 price target and projections with Lands’ End announcing 2QFY24 (July) results before the open on Thursday.
• We believe Lands’ End management, under CEO Andrew McLean has continued to refocus the company on driving higher returns via lower discounting, fashion and product newness and innovation, reduced overall inventories and licensing non-core categories and relationships.
• When combined with an increased emphasis on core winning categories such as swimwear and women’s bottoms in 2Q and shifting to outerwear in 2H, we believe Lands’ End is well positioned to drive near and longer term upside, and register returns we believe investors will find compelling.

• We are reiterating our Buy rating and $41 price target for BBW and materially raising our projections after the company reported record 2Q results which beat Street expectations on both the top and bottom line, as Build-A-Bear stores registered solid results, while the high margin Commercial and International Franchising segment began their expected material ramp a little earlier (and with greater impact) than we projected.
• Further, management continued to aggressively return capital to shareholders, purchasing 5% of BBW shares outstanding in FY24.
• With an early Halloween driving strong initial 3Q results, we believe management reiterating FY24 guidance for top line growth in low to mid single digits and low singled digit pre-tax income could prove conservative, and we reiterate our Buy rating and $41 price target for BBW.

• Ormat Technologies’ second-quarter earnings for 2024 demonstrated significant financial growth and solid operational performance across all its segments.
• The company reported a 9.3% increase in total revenues, which amounted to $213 million.
• This revenue growth was driven primarily by the Electricity segment, attributed to asset acquisitions and improvements at specific facilities.

• UGI Corporation reported improved financial results for the fiscal third quarter of 2024, reflecting progress in executing strategic priorities such as enhancing cost efficiencies, strengthening the balance sheet, and optimizing its portfolio.
• Adjusted earnings per share (EPS) for the quarter rose to $0.06 from $0.00 in the previous year.
• The company’s focus on sustainable cost savings and critical financing transactions bolstered their financial standing, with available liquidity by quarter-end reported at $1.9 billion.