Catalyst Watch – CARR, CVX, DY, NYXH, TRAK
Carrier Global (CARR) – The company will be hosting an Investor Day tomorrow, May 19th, in New York City where expected speakers will include CEO David Gitlin and CFO Patrick Goris. Following the company’s “well-executed” divestitures in 2024, RBC Capital analyst Deane Dray says Carrier will have its first opportunity to showcase its core HVACR portfolio and leverage to multi-year secular trends involving heat pumps, datacenter (both legacy air conditioning and new capabilities in liquid cooling through its partnership with STL/ZutaCore), smart/connected buildings, and expanding aftermarket/services with a 5x-10x revenue multiplier. They expect to see refreshed five-year growth targets but no changes to 2025 guidance given the company just posted Q1 results on May 1st.
Chevron (CVX) – Last week, Raymond James held an Energy Bus Tour in Houston, Texas where they had the opportunity to meet with numerous management teams. As for Chevron, one of the main topics surrounded the Hess Corp (HES) arbitration. According to analyst Justin Jenkins, management remains consistent and optimistic on a positive outcome from the HES arbitration process, with the hearing set for May 26th. There is a 90-day period after the hearing where a decision is made, and Raymond James expects the transaction to close shortly after that.
Dycom Industries (DY) – For those not familiar, Dycom provides various specialty contracting services to telecom and utility providers throughout the U.S. These services include but are not limited to aerial, underground, and wireless construction. In a note from May 15th, Raymond James analyst Frank Louthan said he believes the NTIA (National Telecommunications and Information Administration) will issue guidance on its reforms to the BEAD program by mid-June. “We believe this will allow DY to trade on the fundamentals once the actual impact from BEAD is known. Despite the fact that the BEAD fiber subs are irrelevant to the future opportunities for the company, the fate of this program has largely moved the stock over the last 12 months. Furthermore, we believe the administration is going to go so far as to remove all the Biden administration rules that were not in the statute, which could require varying amounts of adjustment to state plans. Most states are not very far along in the process, but some may have to go so far as revising them with their legislatures.”
Nyxoah (NYXH) – This medtech company is focused on the development and commercialization of the Genio system, a solution for patients with moderate-to-severe obstructive sleep apnea (OSA). The Genio system received the CE-Mark approval in 2019 and started generating revenue in Europe in July 2020. Now, the main catalyst for shares remains FDA approval of Genio, which would allow Nyxoah to enter the current $900M U.S. HGNS market. On May 14th, Stifel analyst Jonathan Block would write, “On the earnings call, management provided a good amount of color on what remains to be done – recall the “approvable” letter was attained in late-March – and it appears we might be entering the final stages, which would align with our prior approval/ approvable diligence. To be clear, a final approval in the coming months is pivotal. Genio wants to be the second entrant in the U.S. HGNS market and a ramp to U.S. commercial sales may help mitigate the cash burn rate throughout 2026. In short, some issues are still outstanding but if approval comes shortly – and the label is differentiated – we would expect it to act as a catalyst for shares.”
ReposiTrak (TRAK) – This is a software provider that offers cloud-based applications and services that address e-commerce, supply chain, food safety, and compliance activities. According to Maxim analyst Tom Forte, current FDA guidelines require food retailers, including their suppliers, to become compliant regarding traceability of products by CY26 or face fines, brand risk, and tort risk. There are 275K global facilities subject to FDA guidelines. ReposiTrak’s services enable companies to prove compliance ‘from farm-to-fork.’ The opportunity: 70% of suppliers do not have an IT department and many companies do the administrative work internally. TRAK provides a cloud-based, cost-efficient solution to ensure compliance. Key customers are regional grocers, mass merchants, and wholesalers. “We believe ReposiTrak is in the early stages and starting to show traction on capitalizing on a ramp in food retailers’ efforts to comply with the FDA’s Food Safety Modernization Act (FSMA) Section 204 mandates.”