March 14, 2025

In the Loop – March 14, 2025

“In The Loop” is designed to give you a short update reflecting major developments, earnings, and investment trends across some core Equity Income and Growth holdings. All clients should be aware that individual buy/sell recommendations will be conveyed directly to you on an individual basis. Have a great weekend.

Wednesday’s CPI report was unequivocally good news, reinforcing our view that slowing growth helps cool inflation. Meanwhile, with the S&P 500 down nearly 10%, the risk-reward tradeoff appears favorable—historically, corrections of this magnitude, absent a recession, tend to be followed by double-digit rallies within three months over 80% of the time. However, buying the dip remains tricky due to two key factors: the lack of technical evidence of a washout and ongoing uncertainty around tariffs and trade policy. The trade dispute with Europe is still unfolding, national security concerns over chip exports to China persist, and tariff rollbacks in Canada and Mexico remain insufficient to declare tariff risks fully priced in. More risk-tolerant investors may consider deploying some cash, as potential upside could be double the downside through year-end, with consensus S&P 500 fair value target at 6,325—about 14% above yesterday’s close. That said, investors already near benchmark risk should remain patient, waiting for clearer technical bottoming signals and further clarity on trade policy before making significant moves.

Company Updates
Amgen (AMGN)

Amgen has launched two critical late-stage trials for its experimental weight-loss injection, MariTide, marking a major step toward entering the growing obesity market. Unlike competitors’ weekly weight-loss drugs, MariTide is a monthly injectable GLP-1 drug that helps regulate appetite and blood sugar. The phase three trials include 3,500 overweight or obese individuals without Type 2 diabetes and 999 with the condition. Earlier Phase-2 trials showed up to 20% weight loss in a year, with no plateau, positioning MariTide as a strong potential rival to Novo Nordisk and Eli Lilly’s treatments.

Automatic Data Processing (ADP)

The ex-dividend date for ADP is March 14th, with the payment date set for April 1st.

Broadcom (AVGO)

Broadcom reported quarterly earnings that significantly exceeded analyst expectations, driven by strong AI-related revenue growth in both semiconductor solutions and infrastructure software. The company issued upbeat guidance, forecasting continued AI revenue strength as hyperscalers increase capital expenditures. Despite recent stock declines in line with the broader AI sector downturn, analysts remain bullish, with some predicting Broadcom’s AI revenue could double by 2027. Several Wall Street brokerages have raised price targets, reiterating “Buy” ratings and suggesting the pullback presents a buying opportunity.

IBM (IBM)

IBM has outperformed other tech stocks amid market volatility, bolstered by strong long-term guidance projecting higher-than-expected annual revenue growth for 2026-2027. The company’s transition from traditional hardware to software and services—supported by strategic acquisitions—is strengthening its market position and financial performance. In a legal victory, IBM recently won its case in a U.K. court against Swiss tech firm LzLabs, which it accused of illegally reverse-engineering its mainframe software.

LyondellBasell (LYB)

The ex-dividend date for LyondellBasell was Monday, with a payment date scheduled for March 17th. Separately, the company plans to expand propylene production at its Channelview Complex near Houston. Construction is set to begin in Q3 2024, with operations expected by late 2028. The new unit will produce 400K metric tons of propylene annually, create 750 construction jobs at peak, and add 25 permanent positions. The facility will convert ethylene into propylene, a key component in polypropylene and propylene oxide, essential materials used in food packaging and medical devices.

Lockheed Martin (LMT)

As the world’s largest defense contractor, Lockheed Martin plays a central role in U.S. and allied military strategy. Its dominance in military aircraft, missile defense, space systems, and cybersecurity ensures stable, long-term demand, supported by government-backed contracts and rising global defense budgets. Heightened geopolitical tensions in Europe are driving additional orders for its F-35 fighter jets, PAC-3 missiles, and HIMARS systems. Lockheed’s financial strength is evident in its $176 billion backlog, steady revenue growth, and robust cash flow. The company prioritizes shareholder returns through dividends and aggressive buybacks. Despite recent stock gains, analysts see further upside, with Lockheed’s strategic importance, financial resilience, and low volatility making it a compelling long-term investment in an uncertain world.

Verizon (VZ)

Verizon faced heavy selling pressure on Tuesday after warning of potentially weak subscriber growth in Q1 2025, citing softening consumer demand and rising competition. While the company reaffirmed confidence in its full-year financial guidance, its candid admissions about these headwinds unsettled investors, triggering a stock decline that also weighed on its telecom peers. In a broader context, DA Davidson noted that many companies are issuing softer guidance due to elevated economic uncertainty and weakening consumer sentiment.

We remain focused on navigating market trends and positioning portfolios for long-term growth and resilience.
Share this article:

Formidable Asset Management (“Massey Romans Capital”) is an investment adviser registered under the Investment Advisers Act of 1940. The information presented in the material is general in nature and is not designed to address your investment objectives, financial situation or particular needs. Prior to making any investment decision, you should assess, or seek advice from a professional regarding whether any particular transaction is relevant or appropriate to your individual circumstances. Although taken from reliable sources, the Firm cannot guarantee the accuracy of the information received from third parties.

The opinions expressed herein are those of the Firm and may not actually come to pass.