Daily Brief United States: Southern Copper, Axalta Coating Systems, Green Thumb Industries , Lovesac Co and more

• Copper inventory on the COMEX surpassed 400,000 tons on Friday, marking an increase of 330% from the beginning of the year, amidst speculation of a levy of tariffs.
• The Department of Commerce has issued a proclamation imposing a 15% tariff in 2027, with the rate increasing to 30% by 2028, implying a LME-Comex Spread of >3000 USD/ton.
• In addition to the sucking up of copper inventory into the US, we have supply shortages (see: Grasberg To Weigh On Copper Supply In The Medium-Term, March To 12k USD/Ton )

• The Akzo–Axalta merger provides strong industrial logic and substantial synergies, but value allocation favours Akzo via its large dividend and greater synergy share, driving emerging Axalta shareholder resistance.
• Axalta trades above adjusted deal value, implying a 2–3% bump. Artisan and Shapiro opposition increases pressure to improve terms, but current pricing already embeds bump expectations, making arbitrage unattractive.
• At €26.21, expected returns are negative across scenarios without a larger, near-certain bump. Break risk dominates, making the trade unattractive. Recommendation: avoid initiating AXTA-long/AKZO-short positions until spread materially widens.

• Leading U.S. Multi-State Operator with Strong Brand Portfolio: Green Thumb Industries is a vertically integrated cannabis company with a significant presence across 14 U.S. states, operating over 100 retail stores and 20 manufacturing facilities. Its brand portfolio, including Rythm, &Shine, and Dogwalkers, is well-recognized and caters to a wide range of consumers.
• Path to Profitability and Positive Cash Flow: Unlike many peers in the cannabis industry, Green Thumb has demonstrated a consistent ability to generate positive net income and operating cash flow. This financial discipline allows for strategic expansion and investment in its brands and retail footprint.
• Positioned for Future Growth from Regulatory Tailwinds: The ongoing trend of cannabis legalization at the state level and the potential for federal rescheduling present significant growth opportunities. Green Thumb’s established presence in key limited-license states positions it to capitalize on these regulatory shifts.

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• Lovesac is a niche, direct-to-consumer furniture company with a strong brand identity centered on its patented, modular “Sactionals”and premium “Sacs.”
• The company’s growth is driven by its unique “Designed for Life”philosophy, emphasizing sustainable, adaptable products that foster a loyal, repeat customer base, with approximately 47% of transactions from existing customers.
• While exhibiting strong long-term revenue growth, the company faces significant near-term headwinds from a challenging macroeconomic environment, increased competition, and margin pressure from promotional activity.

This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.