GDP UP AGAIN LOOKS LIKE NO RECESSION AHEAD

🇺🇸 The U.S. Economy Bounced Back — But There’s a Twist

After shrinking earlier this year for the first time in 3 years, the U.S. economy grew 3% in the second quarter of 2025. That’s stronger than expected (experts thought it’d be 2.6%).

💥 Why Did the Economy Shrink First, Then Grow?

• In early 2025, a huge spike in imports (buying goods from other countries) made the economy look weaker because imports subtract from the GDP math.

• This surge happened because of Trump’s new tariffs (extra taxes on foreign goods), which made businesses rush to buy stuff before prices went up.

• In Q2, imports dropped, so GDP looked better, but some economists say this bounce is kind of an “economic mirage” — not the full picture.

🧠 What’s Really Happening?

• Experts say the economy is still healthy overall, but slowing a bit behind the scenes.

• A key measure of real economic strength (called “private sales”) grew just 1.2%, the slowest since 2022.

🛒 What’s Causing the Slowdown?

• Tariffs are making some stuff more expensive.

• Stricter immigration policies may also slow business and job growth.

• Lower oil prices recently also dragged down growth a bit.

📉 Are We Heading for a Recession?

• Back in April, people were freaking out about a possible recession (66% chance).

• Now? Only 17% chance according to betting site Polymarket — meaning most people think the worst is behind us.

💡 Bottom Line

The U.S. economy looked bad, now looks better, but it’s a bit of a fakeout due to trade drama. Big tariffs and policy changes are still shaking things up, but so far, no recession — just slower growth and some warning signs to watch.

💳Visa (V) — Payments powerhouse

• Q3 FY2025 Results: Revenue $10.17 B (+14% YoY) beat consensus (~$9.85 B). Adjusted EPS $2.98 vs. ~$2.85 expected.

• Stock reaction: Despite strong results, shares fell ~2.3–3% in after-hours. Still up ~11–12% YTD.

• Recent performance: Historically steady growth, low volatility, consumer spending resilience even in downturns.

• Analysts: Mostly Buy / Overweight, targets around $245–260 (current ~$235)

• Fundamentals:

  • P/E forward: ~25–27×

  • EPS (trailing): ~$10

  • P/S: ~12–14×

  • Dividend yield: ~0.7% (payout ratio ~25%)

  • Debt/Equity: very low (~0.3)

  • Profit margin: ~50%

  • Free Cash Flow: massive, supports dividend & buybacks

• Investor sentiment: Short-term cautious (due to steady guidance), mid/long-term bullish thanks to innovation and volume growth.

• Major holders: Vanguard, BlackRock, State Street (among top 5 institutional owners).

🚬Altria (MO) — Smokefree comeback story

• Q2 2025: Adjusted EPS $1.44 vs. $1.39 expected; revenue $5.29 B up 0.2% vs. consensus decline. 👍

• Stock reaction: Shares climbed ~4.7%, heading for the highest close since 2018.

• Drivers: Strong demand for on! nicotine pouches (+26.5% YOY), offset traditional tobacco decline.

• Analysts: Mostly Hold / Moderate Buy; price targets around $65–70 (current ~$62)

• Fundamentals:

  • P/E: ~12–13×

  • EPS trailing: ~$5.35–5.45 guided for full-year

  • Dividend yield: ~7%+

  • P/S: ~2×

  • Debt/Equity: moderate (~1.0)

  • Profit margin: ~30–35%

  • Free cash flow: strong, supports high dividend

• Outlook: Short-term bullish (better-than-feared), mid-term stable with smoke-free transition, long-term depends on regulatory & market share trends.

• Major holders: Berkshire Hathaway (holds large stake), Vanguard, BlackRock.

🗄️ADP — HCM tech steady-as-she-goes

• Q4 FY2025 (ended June 2025): Revenue $5.05 B, adjusted EPS $2.23 both slightly above consensus ($5.05 B / ~$2.22). 👍

• Stock reaction: Shares ticked up ~1% post-earnings; recent performance roughly flat relative to market.

• Recent trend: ~6% YoY revenue growth, EPS up ~6–7%; stable client base, recurring revenues.

• Analysts: Mostly Hold, some Buy. Zacks Rank #3 (Hold). Price targets around $215–230 (vs. ~$205 current).

• Fundamentals:

  • P/E: ~28–30×

  • EPS trailing: ~$8

  • P/S: ~6×

  • Dividend yield: ~2.3%

  • Debt/Equity: moderate (~0.7)

  • Profit margin: ~15–17%

  • Free cash flow: steady ~1.1–1.2 B

• Outlook: Viewed as mid/long-term stable dividend stock, short-term neutral.

• Major holders: Vanguard, BlackRock, T. Rowe Price.

🕹️Electronic Arts (EA)— Gaming firm delivering

• Q1 FY26: Revenue $1.90 B (+6.5% YoY, beat); EPS $0.98 vs ~$0.91 → solid beat . Guidance limited growth for FY26: revenue guidance ~$7.3 B below est, EPS guidance ~$3.44 also lighter

• Stock reaction: Rose ~3.5% on bookings beat and strong launch pipeline

• Trend: Consistent performance from sports titles like EA Sports FC and Madden.

• Analysts: Mixed; some bullish on upcoming slate, others cautious on slowing bookings. Price targets ~$150‑160; some hold, some buy.

• Fundamentals: P/E ~25× currently, profit margin ~20.8%, free-cash-flow margin ~26% (down from 60% prior), debt minimal.

• Rating: Buy / Hold for growth investors. Mixed short-term, mid/long-term cautiously optimistic.

• Top holders: Vanguard, BlackRock, Fidelity.

🍫Mondelez (MDLZ) — Snack giant riding pricing power

• Q2: Revenue $8.98 B vs $8.84 B forecast; EPS $0.73 vs $0.68 expected → beat. Despite this, shares fell ~3% after hours; though up ~16% YTD

• Pricing jumped 13.8 pp in Europe, but volumes slipped — North America volumes down ~2.4 pp. Guidance for 2025 organic sales growth ~5%, adjusted profit to drop ~10%.

• Analysts: Caution growing — repeated misses in revenue, pricing may erode volume. Consensus PT ~$74 (~5% upside). Rated Hold

• Fundamentals: P/E ~18–20×, P/S ~3–4×, margin moderate-high (~11–12%), dividend yield ~2.5–3%, debt low.

• Rating: Hold—short-term okay, mid-term price pressure risk, long-term steady snack demand.

• Major holders: Vanguard, BlackRock, State Street.

☕ Starbucks (SBUX) — Coffee chain in turnaround mode

• Q3 FY25: Revenue rose 4% YoY to $9.46 B (beat est ~4%), but adjusted EPS $0.50 vs consensus ~$0.65 → miss, same‑store comps down ~2% → miss expectations

• Stock reaction: Shares fell ~1.8% after hours, then recovered ~3% following management’s upbeat turnaround plan talk

• CEO Niccol is investing $500 M into staffing, phasing out mobile-only stores, planning “coffeehouse of the future,” and product innovations like protein cold foam — aiming to rebuild brand and margins over time

• Analysts expect current EPS ~$0.64. The miss reflects deep margin issues and operating changes underway

• Fundamentals: P/E ~33–34×, PEG high (~4.7), net margin ~8.6%, EPS decline, dividend yield low (~2–2.5%), debt moderate.

• Rating: Hold with cautious optimism. Short-term bearish, mid-term turnaround viewer, long-term depends on execution and China recovery.

• Major holders: Vanguard, BlackRock, State Street.

🧴 Ecolab (ECL) — Hygiene services provider missing slightly

• Q2: EPS $1.89 vs $1.90 expected → missed by $0.01; revenue ~$4.03 B ~inline or slightly beat. Organic sales growth ~3%, gross margin ~44.8% ↑. Guidance reaffirmed for FY25. Shares dipped modestly after report. 

• Analysts like Seaport trimmed estimates but still positive; William Blair cautious; valuation considered high by some. 

• Fundamentals: P/E ~25–28×, P/S ~4×, dividend yield 1.7%, free cash flow steady ($1B/year), debt/Equity moderate (~0.7), profit margins ~15–20%.

• Rating: Hold. Short-term cautious due to slim miss; mid/long-term value depends on execution in new verticals.

• Major holders: BlackRock, Vanguard, Wellington.

🥫Kraft Heinz (KHC) — Food giant struggling

• Q2 2025: Reported net loss $7.82 B (mostly one‑time impairment), GAAP EPS –$6.60; Adjusted EPS $0.69, beating ~0.64 estimates. 👍 on earnings, but real damage.

• Stock reaction: Mild bounce post-earnings beat, but market remains concerned.

• Business context: Facing weak volume, changing consumer habits, high costs, and big impairments.

• Analysts: Mixed – some see cash flow and restructuring potential, others bearish. Zacks notes good surprise history but shaky fundamentals.

• Fundamentals:

  • P/E: ~12× trailing on adjusted basis

  • EPS trailing: ~$2.50

  • P/S: ~1×

  • Dividend yield: ~4% (previously higher but under pressure)

  • Debt/Equity: high (~1.5)

  • Profit margin: slim (~5%)

  • Free cash flow: modest, recent impairment hits cash

• Outlook: Bearish short-term on structural issues; mid-term depends on turnaround execution; long-term speculative.

• Major holders: Berkshire Hathaway (holds ~24%), Vanguard, BlackRock.