Analytics (2) 21.07.26

The following basket includes three companies that have already released their 2nd quarter of 2026 and 1st half year results. They represent different sectors but have shown solid financial performance in previous periods. Short-term risks include a possible Fed rate hike in the second half of the year and the ongoing Middle Eastern conflict which moves oil price upwards. However, we believe both factors are largely priced in. The market may still fall in the short term, but once these pressures ease, the longer-term trend could reverse.

Taiwan Semiconductor Manufacturing Company [Internal score 74/100] is a Taiwanese technology giant and the world’s largest contract chip manufacturer. Its customers are Apple, NVIDIA, AMD, Qualcomm, and others. TSMC controls over 90% of the global market for advanced processors. Moreover, all flagship AI accelerators (including the NVIDIA H100, H200, and Blackwell) are physically manufactured at TSMC fabs.

According to its latest financial report, TSMC reported a 36% y-o-y increase in quarterly revenue to $40.2 billion, while its net profit soared 77.4% to $22.1 billion. TSMC gross margin was 67.7%, and net margin was 55.6%. The company raised its full-year 2026 revenue growth forecast to 40%+ in dollar terms (previously expected around 30%).

The company announced its plans to invest another $100 billion in expanding its US capacity. The total amounts planned to invest in the US reached $265 billion. The number of planned factories in the US would increase to six.

Citigroup Inc [Internal score 91/100] is the sixth-largest U.S. bank by market capitalization ($234 billion). 66% of its loan interest income (28% of all interest income) comes from retail loans, with credit cards accounting for the majority of its book value (45%). The average consumer loan rate is 9.8% per annum. Its net interest margin (2.7% in 2Q26) is higher than that of its peers. Citi has a high COR due to the large share of retail loans in its loan portfolio. Its P/E (15.3x) is below the market average (16.9x).

The latest financial report shows that adj. Net Revenue of the Citigroup increased 14.3% y-oy and equals to $24.8B. Net income exceeds the level of $5.4B almost twice higher than for the same period of 2025. The net income margin ratio is 22%. The amount of total assets increased 11% y-o-y to the value of $2894B.

United Airlines Holdings [Internal score 70/100] is one of the largest airlines in the world which operates a network of hubs in the US (Chicago, Denver, Houston and others) and has historically maintained its leadership among American airlines. United is implementing its largest fleet renewal plan, purchasing hundreds of airplanes from Boeing and Airbus.

Recently United presented its financial results for the passed quarter. According to the data revenue for the quarter is 16% up y-o-y and total is $17.7B. Net income for the quarter is on level of $648M. EBITDA parameter exceeds $1.7B.

United Airlines expects to absorb nearly $6B in extra jet fuel expenses this year due to surging global oil prices. Even though United tries to mitigate the impact of oil prices on travelers by raising $3.7B in new liquidity as insurance against geopolitical uncertainty and oil spikes. Moreover, UAL expects 2026 adjusted earnings of $9 to $11 per share, compared with its April forecast of $7 to $11.

All three stocks fell on the day despite beating estimates: TSMC dropped nearly 7%, Citigroup over 4%, and United about 4%. That gap between strong results and weak share reaction is exactly the setup this basket is built for. The next FOMC meeting on 28-29 July should clarify the rate picture, with markets currently leaning towards a hold. On oil, the US-Iran ceasefire has already broken down and Brent has pushed above $90, so that risk is now playing out rather than just being feared, which leaves less room for a fresh negative surprise.