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Posted March 13, 2026 at 9:15 am
This week, we cover Regeneron Pharmaceuticals, Inc. and The Kroger Co. On Monday, REGN’s stock closed 2.86% higher after the firm announced that its licensed Olatorepatide obesity treatment has demonstrated positive phase 3 results in Chinese patients. KR’s share price surged by more than 5% last Thursday despite muted forecasts after the firm’s new CEO, Greg Foran, announced plans to boost the retailer’s market share.
If the oil price were to remain above $80 for a sustained period (over 6 months), we think consumer and corporate mindsets may switch towards structural concerns over higher fuel prices, impacting disposable income and corporate profitability. We look at six categories of sustainable themes, seeing which firms are most exposed, and how these firms look from an EVA perspective.
Things can change quickly in markets; March so far can be summed up as marked by extreme volatility. End-of-February global aggregate data showed that, heading into the conflict in the Middle East, EVA Momentum (growth) had been moving sideways in Q1, within touching distance of turning positive. The pattern for the three EVA Drivers, i.e., top-line growth and P&L Margin expansion somewhat offset by a ratcheting up in new investment is expected to continue through 2026. EVA Momentum is not expected to finally turn positive until the beginning of 2027, as the recovery timing suggested by EVA-adjusted consensus has been pushed back a few months.
EVA Momentum accelerated significantly through 2025 and has moved closer to historically high levels as of February-end, driven by all three EVA Drivers moving favorably: very strong sales growth, expanding EBITDAR Margin, and improving asset efficiency. However, Valuations are very elevated at this stage, especially in the Large Cap space, with investors pricing-in high expectations of sustained incremental EVA creation going forward. These high expectations leave little room for disappointment and are reflected in continued global defense spending.
For this week’s improvers in the PRVit framework, we take a deep dive into three firms: Eiffage SA (FGR FP); The Cooper Companies, Inc. (COO); and BOX, Inc. (BOX).
In Europe, cheap Value continued to trend up through mid-February and then rolled over in the latter half of the month, although it remained net positive for February. Since the conflict with Iran began on February 28th, cheap Value has been underperforming and Quality has improved, driven by Risk (low-Risk outperforming high-Risk). The U.K. followed a similar factor performance trajectory, although Value slipped enough to be net negative for February.
Through the second week of March, we see Risk working everywhere as the Middle East conflict has curbed investors’ appetite for Risk. PRVit generated alpha in the U.K., AxJ, and the Emerging Markets. Profitability worked well in Europe, the U.K., and Japan. Quality worked in Europe, the U.K., and Japan. Cheap Value outperformed expensive Value in the U.S. and the Emerging Markets.
In our January Global Energy sector Roadmap report and again in the February 26th U.S. sector report, we stated that the price of oil remains a key indicator for improving EVA for the Energy sector. Below an oil price of $60 (WTI), the Energy sector has historically struggled to earn a return above its cost of capital (as indicated by negative EVA Margin) and has also struggled to produce EVA growth (positive EVA Momentum). Equally, when oil prices are above $80, the industry has seen strong EVA Fundamentals as shown in our chart of the week above. This week we take a look at the Renewables & EV Themes.
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Originally Posted on March 12, 2026
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