Credit Calls

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Credit Calls

enue releases in advance of a full semi-annual report

expected in the coming weeks. A few themes have emerged across our three sectors:

• HG Metals & Mining: Cost pressure in the Metals/Mining space due to inflationary

headwinds to input costs continues to be a theme early in Q2 after a challenging Q1. We

have seen mixed results on the cost side, with FCX and NEM both guiding costs to be a

bit heavier than expected. Realized pricing has driven strong cash flow generation,

supporting balance sheets that are conservatively levered. The production guides have

largely been unchanged.

• HG Homebuilding: Macro headwinds remain challenging and incentives are high as

margins remain subdued. However, we are seeing some signs of stabilization in margins

(albeit we acknowledge absolute margins are flattish sequentially despite higher

sequential top line, so we’re not seeing the seasonal uplift that we’d expect). PHM had

a strong quarter, supporting the narrative that builders with move-up and active adult

exposure continue to exhibit resilience.

• HG Paper & Packaging: PKG is the bellwether company in the paper and paperboard

space. Results were good this week, in our view, and while we are encouraged as to what

this could mean for the broader paperboard space, supply/demand balances and pricing

dynamics are still a question heading into the heart of reporting season. SON’s results

were ok, and we remain constructive on food/consumer-oriented applications for rigid

plastics.

High Grade Manufacturing: 2Q26 Earnings Rewind – Week of July 20 (Evan Piascik)

High Grade Manufacturing 2Q26 earnings kicked off this week with 11 credits

reporting results. The calendar is set to pick up next week with over 25 names expected to

report earnings.