Daily Brief United States: Palantir Technologies , S&P 500 INDEX, Base Oil, Fortress Biotech, Klarna Group, SpringWorks Therapeutics Inc, Wheaton Precious Metals, JAKKS Pacific and more

• Palantir,  the secretive US tech giant, has dropped 30% in the past month, but with a PER of over 150 times, it could well have much, much further to fall.
• In the past year, no company executives have bought shares in this firm. Plenty have sold, though. In fact, as a group, they’ve dumped $3 billion worth of the stock.
• Here’s what Palantir does, what it should earn, its current valuation – and what all of that should tell you as an investor.

• In our 2/25/25 Compass, we discussed our expectation for near-term downside as the S&P 500 and Nasdaq 100 (QQQ) displayed several bearish short-term developments. 
• The  downward pressure has brought the S&P to the bottom of our range at 5600-5670.
• Friday’s and Monday’s tape action alleviated oversold conditions as strong demand was a clear positive. We need the 5500-5600 level to hold in order to remain constructive.

• Asia’s base oils prices extend rise versus feedstock/competing fuel prices.
• Increasingly firm margins coincide with closed arbitrage to more distant outlets like Americas, and less feasible arbitrage to logistically-closer markets like India and Middle East.
• Firm margins and closed arbitrage point to tight supply.

• Checkpoint Therapeutics is being acquired by Sun Pharma for $4.1/share plus a non-transferable CVR worth up to $0.70/share.
• The CVR payout depends on EU approval of Unloxcyt, with four scenarios based on approval timing and dosing schedule.
• Shareholder approval is likely due to FBIO’s control and Armistice Capital’s support, with a 66% premium over pre-announcement levels.

• Their total revenue was $1.90 billion, $2.28 billion, and $2.81 billion and their net profit (loss) was ($1.04 billion), ($244 million), and $21 million in 2022, 2023, and 2024, respectively.
• The company was once valued at $46 billion in a SoftBank-led funding round. Klarna saw its valuation slashed by 85% in 2022 to $6.7 billion in its most recent fundraising.
• The company made headlines when CNBC reported that Klarna will be the exclusive provider of buy now, pay later loans for Walmart (WMT US).

• SpringWorks Therapeutics represents a highly attractive risk-reward opportunity with substantial upside potential from an imminent acquisition.
• The company is currently in play with confirmed acquisition talks and multiple signs pointing to a transaction at a significant premium to current levels.
• Current price: $50, Target price: $70-85, representing approximately 50% upside with limited downside risk.

• Seasonal boost in US base oils demand could be more muted than expected, with uncertainty about end-user consumption incentivizing buyers to maintain lower stocks.
• Seasonal rise in demand typically cuts surplus supplies and often coincides with plant maintenance work, like this year.
• Stronger demand and tighter supply typically give refiners more leverage to adjust prices to reflect those firmer fundamentals.

Wheaton’s adjusted EPS for Q424 exceeded our prior expectations by 1.9%, largely due to better average realised prices for its precious metals. As a consequence, it recorded record revenue, record adjusted EPS and record cash flow for both Q4 and FY24 and raised its quarterly dividend by 6.5%, or 1c/share. It ended the year with US$134.4m more net cash on its balance after its contingent payment to Salobo was delayed into FY25. We have upgraded our forecasts for FY25 very slightly. However, after a quarter in which production outstripped sales by a material amount in Q4 (against the historical trend), there is also the potential for an accelerated ‘flush through’ effect of production into sales earlier than normal in the current year.

• We are reiterating our Buy rating and $40 price target, and updating our projections after meeting with JAKKS management.
• We note since our last publication, the U.S. government has placed an additional round of 10% tariffs on China, JAKKS main manufacturing supplier.
• Further, given the current uncertain economic environment and worries over consumer spending, we believe the company’s key non-movie driven top line growth drivers will continue at a measured pace.

Wheaton’s adjusted EPS for Q424 exceeded our prior expectations by 1.9%, largely due to better average realised prices for its precious metals. As a consequence, it recorded record revenue, record adjusted EPS and record cash flow for both Q4 and FY24 and raised its quarterly dividend by 6.5%, or 1c/share. It ended the year with US$134.4m more net cash on its balance after its contingent payment to Salobo was delayed into FY25. We have upgraded our forecasts for FY25 very slightly. However, after a quarter in which production outstripped sales by a material amount in Q4 (against the historical trend), there is also the potential for an accelerated ‘flush through’ effect of production into sales earlier than normal in the current year.