Five interesting things that Hodges Capital research analysts discovered this week...
#1 NO WHEY: Non-fat dry milk (NFDM) powder prices hit record highs in April 2026, driven by intense demand and constrained supply. Prices have surged from approximately $1.18/lb. at the beginning of 2026 to over $2.20/lb. in mid-April. According to the National Milk Producers Federation, American consumers are increasingly seeking higher-protein products such as cottage cheese and Greek yogurt. Production of these high-protein dairy staples grew 5% and 7%, respectively, in February. With over 70% of NFDM typically exported, U.S. prices now sit significantly above those in Europe and New Zealand. However, with U.S. prices elevated relative to other exporters, shipments to contested markets are expected to decline in the coming months.
#2 SMART MONEY: According to American Banker, large banks’ venture investments in AI companies have grown at a compound annual growth rate of 21% since 2023. Wells Fargo, Citi, and Goldman Sachs are the most active U.S. bank investors in AI companies, in that order.
#3 GREAT EXPECTATIONS: First-quarter earnings growth expectations have held steady at 14.4% since the start of the year. However, the sector mix has shifted further toward technology and financials. According to Strategas, growth expectations for technology are now 46%, while financials are roughly half that at 23.3%. Given the outsized contribution from these two sectors, misses during earnings season could meaningfully weigh on the broader index. Full-year 2026 earnings growth expectations continue to trend higher, now sitting at approximately 18%. Looking at sector contributions, technology is expected to account for roughly 60% of total earnings growth in 2026, followed by financials and energy at around 8% each.
#4 WEIGHT-LOSS WINDFALL: According to an article in The Daily Upside, Eli Lilly is reinvesting its weight-loss drug windfall to broaden its platform. Of the $19 billion in fourth-quarter revenue, more than $7 billion came from Mounjaro and $4 billion from Zepbound, both GLP-1 drugs. JPMorgan analysts estimate that 25 million Americans will be using GLP-1s by 2030, up from 10 million this year and 6 million last year. Lilly is deploying these profits through acquisitions, including Centessa Pharmaceuticals ($7.8 billion), Orna Therapeutics ($2.4 billion), and Ventyx Biosciences (over $1 billion). Most recently, Eli Lilly announced plans to acquire Kelonia Therapeutics in a deal valued at up to $7 billion.
#5 FDA TURNS TO AI: According to a Wall Street Journal article, the U.S. Food and Drug Administration is exploring the use of artificial intelligence to accelerate clinical trials by streamlining the process of collecting and submitting study data. Traditionally, medical centers involved in trials extract data from electronic health records and enter it manually into data-capture systems. The drug developer then reviews and submits the data to the FDA. This summer, the FDA plans to pilot a new approach that could modernize this decades-old process. Under the program, AI would extract data directly from electronic records and submit it in real time to both the FDA and the pharmaceutical company. The agency has announced two “proof of concept” real-time trials—one for an AstraZeneca drug and another for an Amgen drug—while also soliciting public comments for a broader pilot program.
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