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👉 Week in Review — Too Long; Didn’t Read:
Key Earnings Announcements:
Delta generated $1.8B in operating cash flow.
PepsiCo is a value investor’s best friend right now.
Constellation Brands is suffering from the continued popularity of sobriety.
Investor Events / Global Affairs:
Another tariff scare caused the market to flash crash on Friday afternoon.
The IRS announced new tax brackets for 2026.
OpenAI has made unbelievable moves to make itself the most important private company in the world.
Navan is getting ready for its IPO.
Economic Updates:
Economic updates are few and far between due to the government shutdown.
Consumer credit data shows that borrowing rose by its smallest increase in six months.
Happy Sunday.
In case you’re new around here, I’m Austin Hankwitz — I’ve been publishing earnings analysis on publicly-traded companies for over half a decade. My podcast, Rich Habits, has hit #1 on Spotify’s Business Podcast chart four times since it’s inception only two years ago.
At the start of 2023, I began my journey of building a $2M Dividend Growth Portfolio from scratch. This twice-weekly newsletter is how I keep you all updated on my progress.
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👉 Portfolio Updates (YTD Performance):
We experienced our first material pullback in the markets this week due to some “Trump tweets” about tariffs. In the short-term, this pullback is very much welcomed. The markets have essentially “gone vertical” since the April lows — hopefully this pullback is what we need to reset expectations and risk appetite.
If you’re looking to take advantage of this pullback, like myself, consider learning more about commodities. I think this chart does a wonderful job illustrating the deep correlation between Gold prices and the equal-weighted commodity index — specifically the recent disconnect.
If you’re looking for new positions to add to your portfolio — palladium, copper, coal, and potash are interesting to me.
The monthly income section of the portfolio remains stable and consistent.
The cryptocurrency section of the portfolio experienced a “flash crash” of sorts — with some alt coins dropping as much as -80%. Lucky for us, these coins completely reversed and are back around previous prices. Ethereum finds itself around $4,000 at the moment, and I couldn’t be more excited.
I still firmly believe Bitcoin, Ethereum, and various alt coins still haven’t experienced a “blow-off top” and we’ll see continued momentum over the coming weeks and months. Again, my target range to sell Bitcoin is between $135-150K, ETH between $5,500-7,000, and other alt coins +50% from here.
I do not believe this “AI Bubble” has popped. I believe we have more upside to be had, if that means new highs in Q4 or Q1 — no one knows.
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👉 Key Earnings Announcements:
Delta generated $1.8B in operating cash flow, PepsiCo is a value investor’s best friend right now, and Constellation Brands is suffering from the continued popularity of sobriety.
Delta Air Lines (DAL)
Key Metrics
Revenue: $16.7 billion, an increase of +6% YoY
Operating Income: $1.7 billion, an increase of +21% YoY
Profits: $1.4 billion, an increase of +11% YoY
Earnings Release Callout
“Momentum is continuing into the final stretch of our Centennial year, positioning us to deliver strong December quarter earnings. Looking to 2026, Delta is well positioned to deliver top-line growth, margin expansion and earnings improvement consistent with our long-term financial framework."
My Takeaway
Delta delivered strong Q3 results, reaffirming their dominance in the US airline sector — reflected by record revenue and better-than-expected profitability. A key driver of Delta’s outperformance was the shift in mix toward premium travel and ancillary revenue.
Premium cabin revenue grew +9%, while main cabin sales declined -4%. The loyalty / co-brand American Express revenue stream also grew double digits. The company managed to hold non-fuel unit cost growth to nearly flat, while benefitting from an -8% cost reduction in fuel — together these dynamics helped boost revenue while bringing down costs.
Delta generated $1.8B in operating cash flow, $883M in free cash flow — and the firm paid down debt. Looking ahead, weak unit revenue trends in the Atlantic region and continued macro uncertainty remain risks that could test whether this quarter’s earnings are sustainable as we turn that calendar.
Intrigued, but no shares.
PepsiCo (Pep)
Key Metrics
Revenue: $23.9 billion, an increase of +3% YoY
Operating Income: $3.6 billion, compared to $3.9 billion last year
Profits: $2.6 billion, compared to $2.9 billion last year
Earnings Release Callout
“Our reported net revenue growth accelerated and reflects the resilience of our international business, improved momentum within North America Beverages and the benefits of our portfolio reshaping actions.”
My Takeaway
Volume trends in North America are weak, as their overall beverage volumes continue to decline. Their International markets drove much of their revenue growth, with local pricing strategies taking hold — smaller pack formats, flavor localization, etc.
Within the US, their “healthier” beverages showed strength, alongside resilient demand for signature snack brands. Cost pressures — tariffs, input inflation, and logistics costs — continued to push down their margins. The company also announced a leadership change — set to appoint Steve Schmitt as their new CFO (formerly Walmart’s finance head).
Activist investor Elliott Management has acquired a $4B stake in the company and is pressuring PepsiCo to streamline operations, consider refranchising bottling operations, and exit underperforming brands.
As you can see above, I think Pepsi is undervalued. I think if you’re someone looking for some “non-AI” stocks in your portfolio that have strong earnings potential (especially now that Elliott Management is involved) — PepsiCo could be the stock you’re looking for.
There’s a world where this is a $200 / share stock in 2026.
Adding to my watchlist.
Constellation Brands (STZ)
Key Metrics
Revenue: $2.5 billion, compared to $2.9 billion last year
Operating Income: $874.0 million, compared to $1.2 billion last year
Profits: $486.1 million, compared to $1.2 billion last year
My Takeaway
Unfortunately, Constellation Brands continues to experience substantial headwinds, specifically in their wine and spirits business. Revenue declined -6%, and profits fell by -41%. This signals that despite efforts to manage costs and stabilize core brands, consumer softness and structural shifts in alcohol demand are weighing heavily.
Looking ahead, the company is guiding cautiously. They have revised their guidance to reflect organic net sales declines of -4-6%, and anticipate comparable operating profit declines of -9-11%.
For now, Constellation’s ability to hold its beer business and manage declines elsewhere will be critical to its near-term stability. Their biggest risks — Hispanic consumer demand, tariffs and import duties, secular shifts away from alcohol — will be critical to their near-term stability.
No shares.
👉 Investor Events / Global Affairs:
Another tariff scare caused the market to flash crash on Friday afternoon, the IRS announced new tax brackets for 2026, OpenAI has made unbelievable moves to make itself the most important private company in the world, and Navan is getting ready for its IPO.
Markets Flash-Crash on New Trump Tariff Threats
Source: Financial Times
President Trump announced an additional 100% tariff on Chinese goods and new export controls on critical software starting November 1, escalating tensions between the world’s two largest economies. The move followed reports that China planned sweeping export restrictions on key products and rare earth materials, raising fears of renewed trade disruption. Trump suggested he could reverse the tariffs if China backed off its rare earth limits and said a meeting with Xi Jinping later this month was still possible.
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