Biotech Stock Doubles on Blockbuster Deal

A healthcare giant is surging 9% on strong pharmacy sales, a biotech stock just doubled itself after securing a major $2.1 billion deal, and a tech firm is rallying on soaring data center demand and higher margins. Read on to know more.

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What to Watch

Earnings:

• Williams Companies, Inc. [WMB]: Aftermarket

• Cisco Systems, Inc. [CSCO]: Aftermarket

• AppLovin Corporation [APP]: Aftermarket

• Equinix, Inc. REIT [EQIX]: Aftermarket

• The Trade Desk, Inc. [TTD]: Aftermarket

• Robinhood Markets, Inc. [HOOD]: Aftermarket

Economic Reports:

• Initial Jobless Claims [Feb. 8]: 8:30 a.m.

• Producer Price Index [Jan]: 8:30 a.m.

• Core PPI [Jan]: 8:30 a.m.

Healthcare

CVS Shares Surging on Strong Q4 Profit Despite Medicare Losses

CVS Health [CVS] posted a stronger-than-expected fourth-quarter profit, driven by slowing medical cost growth and higher pharmacy revenues.

Despite missing earnings targets in the first three quarters of 2024, the healthcare giant’s results have boosted investor confidence, pushing its shares up over 9% in premarket trading.

The company’s adjusted earnings are $1.19 per share, down from $2.12 a year earlier but exceeding analyst projections of 93 cents.

CVS's healthcare benefits segment took a hit, recording a $439 million loss compared to a $676 million profit the previous year.

This decline is due to increased demand for medical services and revised Medicare Advantage plan ratings.

Challenges in the Medicare business continue, with CVS incurring a $1.1 billion charge in Q3 to account for potential shortfalls in premium coverage for future claims.

Its medical loss ratio—reflecting the percentage of premiums spent on claims—rose to 94.8%, in line with expectations.

Despite these setbacks, CVS has a 7.5% revenue jump in its pharmacy and consumer wellness division, reaching $33.51 billion due to increased prescription sales.

Under new CEO David Joyner, the company has implemented broad cost-cutting initiatives to improve profitability.

For 2025, CVS forecasts earnings between $5.75 and $6.00 per share, slightly below analysts’ $5.96 estimate.

Trading

CME Group Seeing Strong Q4 with 6% Revenue Growth and Record Trading Volumes

CME Group [CME] reported strong financial results for 2024, fueled by increased trading volumes across all asset classes.

The company’s total revenue of $6.1 billion for the year is a 10% increase from 2023.

Net income is at $3.5 billion, while diluted earnings per share (EPS) are $9.67. On an adjusted basis, net income is $3.7 billion, with EPS of $10.26.

Shares of the firm are up 2% in premarket trade today. For the fourth quarter, CME Group generated $1.5 billion in revenue, up 6% year-over-year.

Net income for the period stood at $875 million, translating to diluted EPS of $2.40, while adjusted net income reached $919 million with an adjusted EPS of $2.52—beating analyst expectations by $0.04.

Operating income for the quarter is at $947 million.

Average daily trading volume (ADV) for Q4 remained steady at 25.5 million contracts, with non-U.S. ADV increasing 5% to 7.6 million contracts.

The company saw strong demand across its interest rate, foreign exchange, agricultural, and metals markets.

In recognition of its strong performance, CME Group has increased its first-quarter dividend by 9% to $1.25 per share. The company has now returned over $28 billion to shareholders through dividends since 2012.

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Technology

Vertiv Exceeding Q4 Estimates with Strong Revenue Growth and Higher Margins

Vertiv Holdings Co. [VRT] reported fourth-quarter earnings surpassing expectations, driven by strong demand in the data center market and operational efficiency.

The company’s revenue of $2.35 billion is 26% higher than the prior year and exceeds analysts' projections of $2.16 billion.

Earnings per share (EPS) is at $0.38 on a diluted basis, while adjusted diluted EPS surged 77% year-over-year to $0.99, beating the expected $0.82.

Operating profit is up 60% to $457 million, with adjusted operating profit climbing 53% to $504 million.

The adjusted operating margin expanded by 380 basis points to 21.5%, reflecting improved commercial execution and manufacturing efficiency.

The company continues to experience robust growth, particularly in the Americas, where organic orders have increased by over 50% in the past year.

This momentum has been fueled by rising investments in hyperscale and colocation data centers.

Looking ahead, Vertiv projects full-year 2025 diluted EPS between $2.93 and $3.03, with adjusted diluted EPS expected to range from $3.50 to $3.60—representing a 25% increase at the midpoint.

Full-year revenue is anticipated to be between $9.13 billion and $9.28 billion, slightly higher than previous forecasts.

For the first quarter of 2025, Vertiv expects revenue between $1.9 billion and $1.95 billion, with organic growth ranging from 17% to 21%.

Adjusted operating profit is projected between $315 million and $335 million, reinforcing the company’s strong positioning in the growing digital infrastructure market.

Xilio Therapeutics, Inc. [XLO] - Last Close: $0.66

Xilio Therapeutics is a clinical-stage biotech company focused on tumor-activated immuno-oncology therapies.

Its shares are up 100%+ in premarket after announcing a collaboration and license agreement with AbbVie, securing $52 million in upfront payments and the potential for up to $2.1 billion in milestone payments and royalties.

Nxu, Inc. [NXU] - Last Close: $0.27

Nxu, Inc., is an energy storage and charging solutions company. Its shares are rallying premarket after shareholders approved a $323 million merger with Verde Bioresins, a key player in sustainable bioplastics.

Upstart Holdings, Inc. [UPST] - Last Close: $67.34

Upstart Holdings is an AI-driven lending platform that leverages machine learning to assess borrowers' creditworthiness beyond traditional FICO scores.

Its shares are soaring 25% in premarket trading after delivering blowout Q4 earnings, reporting $219 million in revenue, far exceeding the $181.9 million expected by analysts, and issuing strong guidance for 2025.

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Everything Else

• SoftBank’s Vision Fund struggles while Son bets big on the Stargate AI project.

• TE Connectivity invests $2.3 billion to expand its presence in the energy sector.

• Biogen expects revenue to decline in 2025 as challenges mount in key drug markets.

• Welltower's earnings surpass expectations again as senior housing demand rises.

• Gilead Sciences sees strong revenue growth as HIV and oncology sales rise.

• Energy Transfer's quarterly results fall short as revenue lags behind projections.

• DuPont boosts its 2025 profit outlook as electronics demand surges.

• Strong demand for online shopping drives DoorDash’s revenue growth in Q4.

• Falling food prices drive India’s inflation to a five-month low.

• Zepz layoffs hit IT teams as the company shuts down units in Kenya and Poland.

That’s all for today. Thank you for reading. If you have any feedback, please reply to this email.

Best Regards,

— Adam Garcia
Elite Trade Club

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