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WHAT'S ON TAP
HOT OFF THE PRESS
Retail sales post fifth straight monthly gain
May’s retail sales matched estimates, rising 1% despite muted volume growth…
… on broad-based gains at the category level, led by a 3% jump in sales at gas stations and fuel vendors…
… which continue to take retail wallet share. With groceries holding steady M/M…
… discretionary spend continues to bleed share, hitting a two-year low after becoming elevated post-pandemic.
Brookfield does $7B battery storage deal
After $7B of real estate deals earlier in the week, Brookfield (BAM) is staying active - announcing the $7B acquisition of Aypa Power through its second transition fund…
… with co-investment from Brookfield Renewable (BEP). The acquired platform is North America’s largest, with 6.5 GW of operating and under construction storage…
… plus a >20 GW development pipeline, as the technology gets deployed rapidly alongside renewable power…
… where Brookfield has also been active, with its recent $4B take-private of Boralex.
ON OUR RADAR
GAINERS & LOSERS
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FirstService (FSV) fell over 7% on Q2 results, which missed top line estimates despite improving organic growth in the residential segment…
… driven by continued weakness in roofing (down 10% organically) and restoration, which pushed FirstService Brands into negative organic growth for the quarter.
While management expects end market challenges to persist, they see value in shares at current multiples…
… highlighting the discount to smaller private players…
… we see the valuation of our large, diversified enterprise trading at a meaningful discount to smaller private market businesses in our respective industries.
… and deploying nearly $250M into buybacks, which should continue at its current valuation.
Apotex (APTX) fell 8% Wednesday on Trump’s plan to introduce 100% tariffs on generic drug imports in 2028 and double that figure in 2029…
… as the administration looks to reshore manufacturing ahead of what’s expected to be an accelerating back half of the decade for category growth.
The company would sit squarely in the scope of those measures, with over half of its generics revenue coming from south of the border…
… so there could be some near-term choppiness here, given the stock is up 35% since its $1B IPO in June.
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