4Q25 Earnings Updates:  Part Three – WMT, TMUS, HD, NXST, VICI

Walmart (WMT): Walmart’s 4Q25 wrapped up a great year for the company and the stock. The company’s underlying business remains resilient, with U.S. same-store sales up about 4.6% and overall revenue growing roughly 5.5% year-over-year, in line with expectations, driven by strength in grocery, e-commerce, and higher-margin areas like advertising and membership income. Profit margins were generally stable, supported by a favorable mix and improved inventory management. e-commerce continued to grow at a healthy double-digit pace, improving profitably, reflecting Walmart’s expanding digital and store-fulfilled delivery capabilities. Looking ahead, the company issued guidance for modest net sales and operating income growth for the coming year, but commentary amid signs of consumer caution and economic uncertainty.  The company typically guides conservatively and even though the guidance was a little below consensus expectation, it came as little surprise.  The shares sold off on the report, mainly reflecting profit taking after the shares moved nearly 20% higher this year on top of a gain of 23% in 2025.  Northlake remains constructive as our investment thesis of profit-enhancing alternative revenue streams, market share gains among low- and high-income customers, and consistent execution in the core store business remain intact.  The elevated valuation of the shares reflects these positives, so we expect a slower pace of gain for the shares.  WMT remains a core holding.

Home Depot (HD): HD delivered an upside surprise in earnings per share on revenue that was generally in line with expectations, with slightly positive comparable sales growth marking an improvement from the trends we’ve seen over the past year. Gross margins came in better than expected, though that benefit was offset by higher SG&A expenses, and management noted that some of the fourth-quarter EPS strength will reverse in the first quarter of 2026 due to expense timing.  There is no change to the full-year 2026 guidance issued a few months ago. Performance continues to be led by the Pro customer, which is outperforming DIY. eCommerce grew 11%, suggesting the company’s increased focus on digital investments is gaining traction. The stock has rallied roughly 10% year to date, helped by market rotation, lower mortgage rates, and early signs of stabilization in the housing market, but a more sustained housing recovery will be necessary to drive renewed earnings growth and support a move toward our $425 target, or about 17 times 2027 estimated earnings. Management appears to have stabilized operations and financial performance following last year’s missed expectations for a second half rebound. We continue to view Home Depot as a core holding, with improvement in the housing economy serving as the key catalyst for the next leg higher in the shares.

T Mobile USA (TMUS): T-Mobile delivered a mixed quarter, with solid financial results but slightly softer subscriber additions due to higher churn, reinforcing ongoing concerns about competitive intensity in the wireless market. That said, the bigger story was the new three-year outlook introduced by the CFO, which was constructive on EBITDA and, most importantly, free cash flow, and suggested that the competitive environment has likely peaked and should normalize over time. T-Mobile continues to generate the strongest growth profile in the telecom sector, even as the stock’s valuation premium has narrowed, setting the stage for potential recovery if execution remains steady. The updated free cash flow guidance implies room for a meaningfully larger share repurchase program beyond the recently announced increase. Deutsche Telekom, which owns more than 50% of the company, is not expected to sell shares, amplifying the impact of buybacks. In our view, the three-year framework—especially the upside embedded in free cash flow—reinforces T-Mobile’s position as the best-in-class growth story in U.S. telecom and provides a foundation for improved stock performance as investor confidence rebuilds.

Nexstar Media Group (NXST): Nexstar delivered a good fourth quarter with constructive guidance, reinforcing the idea that broadcast fundamentals have stabilized across core advertising, subscriber trends, and both gross and net retransmission revenue, while management continues to execute on disciplined cost control. Confidence remains high that the Tegna transaction will close by the end of the second quarter, and pro forma free cash flow per share of over $50 underscores the earnings power of the combined company.  In response to an analyst question about Tegna’s digital advertising efforts, management even hinted at potential upside to previously discussed synergies. Leverage is expected to move quickly from roughly 4x back to under 3x, which should reopen flexibility for capital returns. At today’s levels, the shares imply roughly a 20% free cash flow yield, which supports a $250 valuation in our framework, while a move to a 15% or 10% yield would suggest materially higher values of $333 and $500, respectively. Given Nexstar’s expanding national reach and subsequent scale benefits, the growth of the CW Network and NewsNation, stabilizing broadcast trends, and a clear path to deleveraging, we believe a valuation below a 20% free cash flow yield is reasonable over time, particularly as debt declines. Investors are also being paid to wait with a dividend yield above 3%, ongoing dividend growth, and the potential for renewed buybacks once leverage returns to target levels.

VICI Properties (VICI): VICI delivered another steady quarter, with AFFO up mid-single digits both for Q4 and the full year, and 2026 guidance calling for continued growth to roughly $2.42–$2.45 per share, reinforcing the durability of the triple-net model. Guidance was a little below street expectations but excludes any new deals of which several have been signed but not closed or agreed upon.  Growth continues to be driven by disciplined reinvestment of free cash flows, including $2.1 billion of committed capital in 2025 at an attractive ~9% initial yield, while share dilution remained minimal. Management’s tone was consistent: focused on tenant operating health, portfolio diversification, and risk management, particularly around Caesars exposure, while characterizing a Las Vegas slowdown as normalization rather than deterioration. The balance sheet remains strong for a REIT at roughly 5x net debt to EBITDA with ample liquidity, and upcoming maturities appear well laddered. Analysts pressed on tenant concentration, loan book risk, and deal pacing, but management maintained a cautious and deliberate stance, emphasizing simplification of lease structures and steady portfolio optimization. Overall, VICI continues to execute its playbook—stable cash flow growth, conservative underwriting, and selective expansion—supporting the view that this remains a high-quality income compounder with visible earnings growth and manageable risk as it scales. A negotiation of certain leases within Caesar’s regional casino portfolio would likely produce minimal dilution and go a long way to unlocking the value we see at VICI into the mid to upper $30s.

WMT, TMUS, HD, NXST, and VICI are widely held by clients of Northlake Capital Management, LLC, including in Steve Birenberg’s personal accounts.  Steve is sole proprietor of Northlake, a registered investment advisor.  Northlake’s regulatory filings can be found at www.sec.gov.