• Re-tightening of oil markets has pushed Brent and WTI up >30% since early July, with both benchmarks now back in the $90s.
• Product prices have outpaced crude, but relative performance of Integrated producers has not kept pace with improving margins.
• Estimates have started rising, but we still see another ~5% upside to 2H26-27 cons cash flow for Integrateds/Majors at strip, while oil E&Ps are more in line.
• At $75 WTI, we estimate avg 2027 FCF yield of 10% for our oil coverage (11% oil E&Ps, 9% US Majors, 10% Canada). Intrinsically, the group is pricing in $70 WTI
• We prefer Integrateds & Majors with strong refining leverage (XOM, SU, CVE) and select oil E&Ps with positive rate of change (COP, DVN, PR).

BE 270AH

Compute is king

Demand is huge. 

"We believe the market fundamentally underappreciates the opportunity created in the demand for compute; we see this demand far outstripping supply. We remain, with a high degree of conviction, bullish on the potential for time-to-power solutions to ameliorate the power shortfall projected by global chip sales. This demand for compute, and thus, power, are only growing. We see many data points that indicate a growth rate in the demand for compute that exceeds than our current projections of the volume of compute produced by key AI chip players such as NVIDIA, Google, and Huawei. For example, a Google exec stated that the company likely needs to double compute every 6 months, with a result of "1,000x in 4-5 years" (a doubling every 6 months would in fact result in >1,000x compute within 5 years). To put this growth rate in perspective, in 2025-28, our projected CAGR in compute sold by NVIDIA is ~210% per year; extrapolated over a 5-year period to line up with the Google statement, in 5 years the compute accumulated would be ~300x rather than Google's >1,000x.

We project a 38GW power shortfall created by the demand for compute far outstripping the supply of available compute in 2026-28. With a substantial ramp in data center power demand we expect lengthy grid interconnection delays with some regions already experiencing 5- to 7-year wait times. With increasing grid constraints, we see an expanding TAM for "de-bottlenecking" solutions that can accelerate the access to power for large loads. The two fastest "time to power" strategies are (i) repurpose the existing grid access possessed by ex-Bitcoin companies and (ii) quick-to-deploy, scalable power generation."

PANW has been cranking revenue growth "On the forward guide, we expect management to guide to approximately ~23-24% FY27 revenue growth, above current consensus near ~21%, supported by continued core platform momentum and a fuller-year contribution from CyberArk and Chronosphere"

Christmas tree back to the 200dma 

MDA suggested that sales should grow at least ~50% y/y in 2027. We anticipate ~57% growth y/y (~15% pro forma), including ~16% growth at legacy MDA. Our updated model factors in both the BCT and CLS acquisitions; we assume an end of 4Q close for both deals. In 2027, we forecast ~$2.935bn of sales, including ~$252mn of contribution from BCT (+12% y/y) and ~$525mn from CLS (+13% y/y). We expect ~17% growth y/y at Satellite Systems excluding BCT; drivers include mid-teens y/y growth in Telesat contributions (including from the Aug. 2026 expansion award), and uplift from the recent RCM and MELCO wins. At Geointelligence, we forecast ~13% y/y growth excluding CLS. We also forecast ~11% growth y/y at Robotics (all organic).

The growth number was nuts and projecting it to be harder for AMD to compete with the NVDA ecosystem 

471 Still Safe? Cognitive dissonance in the Treasury market.

https://substack.com/home/post/p-213003376

America's Risky Debt: What Market's see that Policy Makers Don't

We see OKTA in a prime position to benefit from this emerging growth area as: 1) They are a platform agnostic solution, promoting Cross App Access, similar to how OAuth and SAML seeded their approach in traditional identity. 2) They have a fully formed product in market ahead of many peers, with new products like OIG / Okta for AI Agents ~30% of bookings, driving 40% ACV uplift. 3) Customer reach. With more than 20K customers already, in a prime position to be turned to as a resource, particularly as they point to early, large, Okta for AI Agents wins. 

We move our PT to $200 (from $180 prior), based upon 33X CY27 FCF (vs 30X prior), implying 9.6X EV/CY27 sales (vs 8.5X prior) – roughly in-line with the broader security group given an accelerating growth profile and meaningful AI opportunity. Our Bull case valuation moves to $235 (from $210 prior), implying 10.9X EV/CY27 sales, a premium to the broader group, though still a discount to platform security vendors given the more mature growth profile.

Earnings have been rough 

• Feb. 2024: +16.4%
• May 2024: +9.3%
• Aug. 2024: -6.4%
• Nov. 2024: essentially flat

• Feb. 2025: -8.5%
• May 2025: +3.3%
• Aug. 2025: -0.8%
• Nov. 2025: -3.2%
• Feb. 2026: -5.5%
• May 2026: -1.8%

Morgan claims NVDA is trading at a significan discount "At 17x FY28 EPS (below peers and the broader market) with multiple levers for upside, we continue to see a highly attractive risk reward, stay OW and Top Pick". Target $288. 

This chart has really held up.  Target $120 

• FCS sales inline with expectations (~$2.4M vs. cons: $2.6M); represents around a doubling of scripts q/q and set stage for SHTG label expansion next year.
• Priority review voucher (PRV) has potential to accelerate time to SHTG approval by shortening FDA review period by 4 months (6mo review vs. 10mo review).
• Comments on robust Ph3 SHASTA 3 and 4 studies limited to top-line results and detailed data remain on track to be presented at ESC (Aug 30th).
• Multiple catalysts are expected in September, which could drive additional upside, including initial data from ARO-DIMER-PA and ARO-MAPT.
• Following recent positive data in SHTG unlocking a large market opportunity, in our view, we reiterate our OW.

Uplift From Hidden CITGO Refining Value

Like TRGP l/t " TRGP delivered another strong quarter, supported by record Permian volumes, robust optimization activity, and continued strength across its integrated NGL value chain, reinforcing our positive view on the name. As our top pick and highest conviction long idea within midstream, we continue to view TRGP as the primary beneficiary of accelerating Permian associated gas production growth following further new basin takeaway capacity additions in 2H26, with strong execution likely to drive further upward consensus estimate revisions over the next several quarters."  Target $333

• Target $33; Think VTOL Ambulance service in places like Hawaii and commerical VTOL Taxi services.  Cargo, logistics, medical, military.   MV250
• 
  
• H500A motor continued rotation issue resolved with the FAA with no motor redesign required, derisking certification.

The most important update was the resolution of the H500A continued policy interpretation issue (see more here). Management noted the agreed path with the Federal Aviation Administration (FAA) requires no changes to the motor, shifting the remaining work toward execution of mechanical, software, and longer-duration tests under FAA oversight. Management characterized the program as being in “pure execution mode”, although FAA witness scheduling and data acceptance remain key timing variables. The CX300 eCTOL aircraft also reached an important milestone, with the FAA signing the final open issue paper and accepting 100% of the detailed design standards framework. BETA can now finalize compliance plans and advance preparations for TIA (Type Inspection Authorization) flight testing. Importantly, management said H500A timing has not negatively affected CX300 and that the two programs can progress concurrently. The work completed on the CX300 and H500A should also carry into the ALIA A250 eVTOL aircraft given significant design, certification, and production commonality.

• CX300 requirements definition complete; H500A motor timing is not delaying aircraft certification progress.
• eIPP operations began on July 10, with addt’l markets expected to come online over the next 4-6 weeks.
• MV250 aircraft unveiled at Farnborough Airshow as GE Aerospace partnership expands across defense and regional hybrid programs.
• FY26 revenue guide raised; adj. EBITDA outlook lowered on accelerated investment. Reiterate OW / PT of $33.

Long VLO, PSX, and MPC.  Refining supercycle 

Still looking good after the big volume Friday

Like this company l/t 

BETA develops and manufactures all-electric multi-mission aircraft with supporting infrastructure for sustainable flight. The company initially intends to certify an electric Conventional Take-off and Landing (CTOL) fixed wing aircraft (FAA cert. early 2027) followed by an electric Vertical Take-off and Landing (VTOL) lift and cruise aircraft (FAA cert. late 2027). Lower operating cost of electric aircraft compared to conventional aircraft and helicopters is attractive. BETA’s premier partners and its role as a supplier for other industry peers underscore its leading role. BETA has a strong set of strategic partners including GE Aerospace, Amazon, and United Therapeutics.

Starting to look good.  Target $40. 

X-energy and Centrus announceda definitive agreement for Centrus to provide enrichment services for LEU and HALEU. HALEU enriched at the American Centrifuge Plant in Piketon, Ohio will be supplied to X-energy's fuel fabrication campus in Oak Ridge, Tennessee. The announcement did not specify exact volumes nor timing of the agreement, but HALEU production is expected to scale in a phased approach to align with X-energy's commercial pipeline.

Our takeaway: While specifics were not disclosed, we think the agreement helps derisk concerns around HALEU supply for X-energy's 11.5GW pipeline. Recall, X-energy has noted it has secured the initial HALEU needed to support the Dow Seadrift site through the DOE's HALEU Availability Program, so we would expect Centrus' supply to support a portion of the deployment of Xe-100s to Amazon's sites. As reiterated on Centrus' 2Q earnings call yesterday, the company expects the first full cascade of centrifuges to come online in 2029 in Piketon.

OMDA great earnings +15 target $30 

We’re Overweight OMDA on a tipping point for cross-selling of multiple programs, which has positive implications for durability of growth and an inflection in margins. In addition to GLP-1 care track serving to extend momentum in its longest standing segment of Prevention and Weight Health (~75% of revenue), our checks point to positive customer feedback on Hypertension (~13%) and Diabetes (~12%). Omada is effectively leveraging technology and AI to scale the platform, leading to a ~25% increase in total members per coach. This can be seen in the meaningful 1100 bps expansion in GM to 63.2% the past 2 years and gives us confidence in the company’s longer term target of 70%+.