AutoZone, Ashtead, GameStop, and more set to report earnings Tuesday

Investing.com -- Fitch Ratings has affirmed all ratings for Tyson Foods, Inc. and The Hillshire Brands Co., including their Long-Term Issuer Default Ratings at ’BBB’ with a Stable outlook.

The credit rating agency also maintained Tyson’s Short-Term IDR at ’F2’, citing the company’s strong business profile with significant scale and product diversification across beef, chicken, pork, and prepared foods segments.

Tyson’s EBITDA has rebounded to approximately $3.6 billion in fiscal 2025, up from $2.2 billion in fiscal 2023, driven by strong chicken segment growth and stable prepared foods performance. This improvement helped reduce the company’s EBITDA leverage to 2.4x by fiscal 2025 year-end, down from 3.1x in fiscal 2024.

Fitch projects fiscal 2026 EBITDA at about $3.4 billion, reflecting anticipated weaker beef results and some moderation in chicken performance, partially offset by higher prepared foods earnings.

The beef segment continues to face challenges, posting an adjusted operating income deficit of nearly $425 million in fiscal 2025. Fitch expects beef losses could approach $500 million in fiscal 2026 and may remain at a moderate deficit in fiscal 2027, as cattle inventories remain at decades-low levels with meaningful herd growth not expected until 2027 at the earliest.

In contrast, Tyson’s chicken segment delivered strong performance in fiscal 2025, reaching approximately $1.5 billion in adjusted operating income, up from $1 billion in fiscal 2024. This improvement reflected operational enhancements, network optimization, volume growth, and lower feed costs.

The prepared foods segment has maintained consistent operating performance, generating around $900 million in adjusted operating income over the past three years, with potential to rise to the mid-$900 million range in fiscal 2026.

Fitch expects Tyson will maintain a balanced capital allocation framework that will allow EBITDA leverage to trend toward the low-2x area, aligning with the company’s long-term net leverage target of 2x.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Investing.com -- The U.S. housing slump will extend through 2026, with Barclays expecting another 9% fall in single family construction.

Analysts said market remains too imbalanced for investors to rely on a cyclical rebound. Affordability strains, slowing migration, weaker employment trends and elevated inventories continue to weigh on demand, limiting the impact of modest rate cuts and leaving homebuilder shares exposed to sharp swings in sentiment.

Though multifamily starts to rise 7%. Renovation and repair spending is expected to grow 2%, and existing home sales 6%. But Barclays says these improvements are not enough to offset ongoing pressure in new residential construction.

The industry is more likely headed for an L shaped recovery marked by a prolonged stretch of subdued activity rather than a quick snap back, as per Barclays.

Large cap builders remain expensive relative to their return outlook, even after underperforming the S&P 500 in 2025.

With valuations still elevated, the group lacks room to adjust production fast enough to navigate a drawn out slowdown.

Barclays downgraded Lennar to Underweight and kept Toll Brothers at Underweight, saying both are priced for a recovery that is unlikely to materialise soon. DR Horton and Pulte stay at Equal Weight.

Value in the sector is now largely concentrated in small and mid cap builders, upgrading KB Home to Overweight to join Taylor Morrison Home as its preferred picks. It said KB Home offers better flexibility and alignment with the shifting market.

With homebuilders constrained, Barclays turned to building products, distributors and brokerage firms as more resilient ways to gain exposure.

It raised Skyline Champion to Overweight, calling it the clearest affordability play as policymakers pursue housing initiatives. Compass was lifted to Overweight on expectations its potential transaction with Anywhere Real Estate could reshape residential brokerage.

Investing.com -- Fitch Ratings has affirmed Saudi Aramco’s Long-Term Foreign- and Local-Currency Issuer Default Ratings at ’A+’ with Stable Outlooks, the agency announced Monday.

The rating is constrained by Saudi Arabia’s sovereign rating, reflecting the close links between the company and its majority shareholder. Fitch assessed Saudi Aramco’s Standalone Credit Profile at ’aa+’, while its Short-Term IDR of ’F1+’ is equal to that of the sovereign.

Saudi Aramco, Saudi Arabia’s national oil company, maintains a strong financial profile with robust pre-dividend free cash flow generation and conservative financial policies. The company’s business profile features exceptional production scale, vast reserves, low production costs, and expanding downstream operations.

The oil giant’s proved reserves stood at 250 billion barrels of oil equivalent at the end of 2024, providing capacity to sustain government-directed production levels until its concession expires in 2057. Its hydrocarbon production costs rank among the world’s lowest due to favorable geology, advantageous reservoir locations, and economies of scale.

In 2024, Saudi Aramco produced 12.4 million barrels of oil equivalent per day, including 10.3 million barrels per day of liquids. The company directed 53% of its crude oil to its downstream operations, which include refining and petrochemical complexes.

Fitch expects Saudi Aramco’s EBITDA net leverage to remain between 0.1x and 0.4x from 2025 to 2028, maintaining a more conservative financial position than oil majors like Shell plc and BP plc.

The company paid $84.6 billion in progressive base dividends plus $0.9 billion in performance-linked dividends in 2025. Under Fitch’s oil price assumptions, Saudi Aramco may face some negative free cash flow after capital expenditures and dividends, with EBITDA net leverage rising from an estimated 0.1x at the end of 2025 to around 0.4x by the end of 2028.

Fitch has lowered its 2025-2027 oil price assumptions due to moderating market fundamentals driven by significant oversupply. Production growth is expected to substantially exceed demand increases, with global supply expanding by 3.1 million barrels per day in 2025 and 2.5 million barrels per day in 2026, while demand growth is forecast at only 0.8 million barrels per day in both years.

Saudi Aramco is 81.48% owned directly by the Saudi Arabian government and 16% by the Public Investment Fund and its wholly owned subsidiaries. The company plays a vital role in Saudi Arabia’s economy, with oil revenues expected to account for 54% of the government’s budget revenue in 2025.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.