The Breakup That Could Create a Market Winner

One of the oldest names in American industry, after years of being spread thin across too many lines, is carving out non-core units that could make the remaining business more profitable. We’re watching closely.

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Boston Scientific

Ticker: BSX | Market Cap: $145.3B | Catalyst: Investor Day targets and pipeline updates

Boston Scientific is preparing for its September 30 investor day, where Wall Street expects management to lay out an ambitious long-range plan targeting 10 to 12 percent annual sales growth through 2028. That would put it ahead of peers and extend an already strong track record of growth.

The pipeline is deep. Watchman’s Champion trial, Farapulse’s expansion in electrophysiology, and the SoniVie renal denervation platform are all expected to drive momentum. On top of that, Boston Scientific has been active with acquisitions, including recent deals in bioenvelopes and intravascular lithotripsy. Analysts are lining up with bullish calls, with some price targets as high as $125.

Valuation is full, with the stock already up nearly 10 percent this year, but medtech names like Boston Scientific are often rewarded for consistency. Investor day could provide the kind of catalysts that extend the run.

What you should watch: Growth targets set at investor day, adoption data on Farapulse, and updates on acquisitions. If management signals double-digit growth is sustainable, the premium multiple looks justified.

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Cintas

Ticker: CTAS | Total Assets: $80.6B | Catalyst: Post-earnings setup in a steady compounder

Cintas quietly runs one of the most durable models in business services. The latest quarter saw revenue rise 8.7 percent to $2.72 billion, narrowly topping estimates. Margins held steady at 22.7 percent, and while full-year EPS guidance came in a bit light, the top line remains strong.

The company is highly sensitive to employment growth and small business activity, making it a potential indirect beneficiary of rate cuts as borrowing costs ease and the economy steadies. Cintas has also compounded EPS at nearly 16 percent annually over the past five years, outpacing its solid revenue growth thanks to margin discipline and buybacks.

The market punished shares after earnings, but that could be an opportunity. When a business consistently generates high returns on invested capital and has pricing power, short-term wobbles often present attractive entry points.

What you should watch: Commentary on win rates in the small and mid-sized business segment, cash flow conversion in the next quarter, and margin resilience. If growth holds near 7 to 9 percent with stable margins, the long-term compounding story stays intact.

Cadence Design Systems

Ticker: CDNS | Market Cap: $97.3B | Catalyst: AI design boom colliding with valuation debate

Cadence is a pure play on the tools needed to design tomorrow’s chips. The stock has surged more than 20 percent this year and over 240 percent in the past five years, powered by its dominance in electronic design automation. AI has only added fuel, since new workloads demand advanced chip designs and packaging solutions.

The catch is valuation. Cadence trades at nearly 100 times earnings, and discounted cash flow models suggest it is priced more than 100 percent above fair value. Bulls argue that secular growth in AI hardware design justifies the premium, while bears worry that sentiment is running too far ahead of fundamentals.

This is a stock where execution and pipeline matter more than near-term multiples. As long as bookings growth, license renewals, and cloud-delivered design solutions keep gaining traction, the market will likely pay the premium.

What you should watch: Bookings momentum, backlog growth, and any commentary on cloud adoption of its tools. Strong operating cash flow and consistent renewals would justify holding onto the premium valuation.

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Constellation Brands

Ticker: STZ | Market Cap: $23.5B | Catalyst: Guidance reset and buyback support

Constellation Brands is in reset mode. Management lowered its full-year outlook, cutting EPS guidance to the $11.30 to $11.60 range and projecting a 4 to 6 percent drop in organic sales. Tariffs, softer high-end beer demand, and operating deleverage were the culprits.

At the same time, the company reaffirmed its $4 billion buyback program, with more than $600 million already deployed. That gives support to the share price even as volumes soften. Modelo and Corona remain dominant in U.S. beer, but buy rates have slipped, especially among Hispanic consumers who are central to the brand’s strength.

The stock is down 40 percent year-to-date, which creates a contrarian setup if management can stabilize demand and margins. The combination of a strong portfolio and capital returns may provide a floor while the turnaround plays out.

What you should watch: Trends in high-end beer consumption, gross margin stability, and cadence of buybacks. If volumes bottom and buybacks stay consistent, patient investors could see recovery potential.

DuPont de Nemours

Ticker: DD | Market Cap: $31.7B | Catalyst: Portfolio reset and electronics spin

DuPont is leaning into the breakup trade. The company is spinning off its electronics unit under the new name Qnity, while also divesting its Aramids business. Both are already classified as discontinued operations, signaling this is not just talk but execution in motion.

The plan is to create a cleaner, more focused company while redeploying capital into bolt-on acquisitions that support its strongest businesses. It is a big shift for a company that has often been criticized for carrying too many moving parts. Shares have rallied 14 percent over the past three months, though they are still down over the past year, suggesting momentum is building but skepticism remains.

Bulls point to DuPont’s exposure to high-growth areas like advanced packaging and high-performance computing, which tie directly into AI-driven demand for electronics. Combine that with a mid-2 percent dividend and steady buybacks, and you have the makings of a value unlock. Bears counter with risks tied to litigation, divestiture volatility, and the ever-present question of whether management can deliver consistent margin expansion.

What you should watch: Details on the Qnity spin-off, cash flow from the Aramids sale, and clarity on how bolt-on acquisitions will be funded. If DuPont proves it can simplify while also accelerating in growth niches, the re-rating could come faster than many expect.

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This week’s lineup has it all. A breakup story in industrials, a medtech giant gearing up for investor day, a business services compounder trading off earnings noise, a software leader riding the AI wave despite lofty multiples, and a beverage name resetting expectations with buybacks as a cushion.

Each comes with risk, but each also offers a clear path to upside if management executes. The key is to stay early, pick your spots, and let the catalysts guide your entries.

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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