Raphael Stevens

Ford CEO Jim Farley urged Wall Street to forget about Tesla as the future of the auto industry, arguing investors should instead focus on Ford’s “Pro” fleet business.
Ford Pro is made up of the automaker’s traditional fleet and commercial businesses as well as emerging telematics, logistics and other connective operations for business customers.
Ford expects the Pro unit’s pre-tax earnings to increase to between $8 billion and $9 billion this year, the automaker said earlier this month.

Ford Motor Co., CEO Jim Farley gives the thumbs up sign before announcing Ford Motor will partner with Chinese-based, Amperex Technology, to build an all-electric vehicle battery plant in Marshall, Michigan, during a press conference in Romulus, Michigan February 13, 2023.
Rebecca Cook | Reuters

DETROIT – Ford Motor CEO Jim Farley on Thursday urged Wall Street to forget about Tesla and its FSD driver-assistance systems as the future of the auto industry, contending investors should instead focus on the Detroit automaker’s “Pro” fleet business.
Farley compared the unit, which roughly doubled pretax earnings last year to $7.2 billion, to where Deere & Co. was seven years ago. The farm equipment maker’s stock has increased by about 235% since then.

“If you’re looking for the future of the automotive industry, stop looking at FSD and Tesla. Look at Ford Pro. It’s got half a million subscribers with 50% gross margin,” Farley said during a Wolfe Research conference.
Ford Pro is made up of the automaker’s traditional fleet and commercial businesses as well as emerging telematics, logistics and other connective operations for business customers – ranging from local plumbers and electricians to massive corporations. It also includes parts and services for businesses.
Ford expects the Pro unit’s pretax earnings to increase to between $8 billion and $9 billion this year, the automaker said earlier this month. That compares with earnings expectations for the company’s “Blue” traditional business of about $7 billion to $7.5 billion and projected losses in its Model e EV business of $5 billion to $5.5 billion.
Tesla does not break out revenue or earnings from its premium driver-assistance software, marketed as its Full Self-Driving Beta, FSD or FSD Beta. Many Wall Street analysts have speculated that such software could bring in tens of billions of dollars per year by 2030.

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Ford Motor, Tesla and Deere & Co. stocks over the last seven years

Ford has said it expects revenue from telematics and other nontraditional subscription services to increase to $2,000 per vehicle annually, or about $167 a month, for Ford Pro in the years ahead. Farley reiterated Thursday that 20% of Pro’s overall revenue is expected to come from such services by 2026.

Farley reiterated that Ford Pro is undervalued within the automaker. Some on Wall Street agree.
Morgan Stanley’s Adam Jonas last week called Ford Pro the company’s “Ferrari,” referring to the extremely profitable luxury sportscar manufacturer that was significantly undervalued before being spun out of Fiat Chrysler in 2016.
“I remember a time when Fiat owned Ferrari, and I had a valuation of about $4 billion on it. Now Ferrari is worth $80 billion today, and the business was totally ignored by investors when it was part of Fiat,” Jonas said during Ford’s quarterly earnings call earlier this month. “Now Ford has a Ferrari, it’s called Ford Pro. And I think we agree, people are ignoring the cash cow.”
Jonas, a longtime Tesla bull, contended the business is being overlooked because profits from it are being siphoned to fund Ford’s “EV science project.”
Some investors may be skeptical of Farley’s comments. The Ford executive has previously discussed Ford being a growing competitor to Tesla with its vehicles and technologies, but that, in general, has largely not occurred yet.
Ford is delaying or cutting spending by billions of dollars on EVs, including domestic battery production, amid slower-than-expected adoption of its current models as well as significant losses on its electric vehicles. The company is in the middle of developing its next-generation EVs that it promises will be profitable within a year of going on sale.
Farley said Thursday that while EV demand is slower than expected for consumers, fleet customers are actually adopting all-electric vehicles faster than the company had anticipated.
The Pro operations are a major part of Farley’s “Ford+” restructuring and growth plan. The unit is led by Ted Cannis, who is considered a successful utility man within the company.
“We always had a super successful pro-business … but there was no focus on it,” Farley said. “I think people are just starting to see [it].”
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The total wealth of Americans under 40 surged by 80%, to $9.5 trillion, between the first quarter of 2019 and the third quarter of 2023, according to a study by the New York Federal Reserve.
The biggest driver of the wealth gains for younger generations was stocks, according to the study.
Granted, those under 40 are still the poorest of the generations.

Younger generations grew their wealth much faster than older Americans after the pandemic began, thanks largely to stocks, according to a new study.
The total wealth of Americans under 40 surged by 80%, to $9.5 trillion, between the first quarter of 2019 and the third quarter of 2023, according to a study by the New York Federal Reserve. The wealth increase far outpaced that of older generations. Americans between the ages of 40 and 54 saw their wealth increase just 10% over the same period, and those over 55 had wealth gains of 30%.

The biggest driver of the wealth gains for younger generations was stocks, according to the study. Americans under 40 saw the value of their financial assets increase by 50% since 2019, while those 55 or older saw only a 20% increase.
The study said that younger generations received larger stimulus checks during the pandemic and used the funds in part to buy stocks. For those under 40, corporate equities and mutual funds made up 25% of their financial assets as of the third quarter of 2023 — up from 18% in 2019 — the fastest growth of any age group.
“The under-40 group experienced a much greater increase in equity portfolio share than the older groups did,” the study said. “This increased exposure to equities — the fastest-growing financial asset class during the period — enabled younger adults to record higher growth in both financial assets and overall wealth. This shift in portfolio composition toward equities likely reflects the fact that younger adults, being farther away from retirement, can afford to invest in risky assets at a higher rate than older adults.”
Granted, those under 40 are still the poorest of the generations. Their total wealth of $9.5 trillion is a fraction of the wealth held by those 40 to 55, at $29 trillion. Wealth for those over 55 totals $104 trillion. The disparity is largely the result of the life-cycle of wealth, where every generation builds wealth as they get older.
A study led by Rob Gruijters, an associate professor of education and international development at England’s University of Cambridge, found that the median millennial had 30% lower wealth than the median boomer at the age of 35 — $48,000 vs. $63,100.

Still, with the real-estate market out of reach for many millennials and Gen Z buyers, stocks have become the most important wealth builder. As the stock market hovers near record highs, the wealth gap between the younger and older generations may continue to narrow.
“We find that faster wealth growth among younger adults has led to a limited narrowing of age-based wealth disparities over the past four years,” the study said.
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True Religion, the Y2K-era jeans brand that managed to survive two bankruptcies, is exploring a sale.
A wide range of consumer-focused private equity firms and a number of large, publicly traded apparel companies have been targeted as potential buyers.
The company, known for its stitching and horseshoe logo, has made inroads with an entirely new customer base, and a survey conducted by the company says it has high customer loyalty.

A True Religion brand storefront.
True Religion

The hedge fund that owns True Religion is exploring a sale of the Y2K-era jeans brand as it returns to growth and profitability after emerging from its second bankruptcy, CNBC has learned. 
True Religion sales jumped about 20% to around $280 million last year, and it brought in $80 million in earnings before interest, taxes, depreciation and amortization, people familiar with the matter said. 

It’s unclear what valuation True Religion is seeking, but it could sell for a mid-single-digit multiple of its EBITDA, said the people, who spoke on the condition of anonymity because the discussions are private.
The sale process began in January and the sellers have targeted a wide range of consumer-focused private equity firms and a number of large, publicly traded apparel companies as potential buyers, the people said. 
Farmstead Capital Management, True Religion’s owner, has hired Baird to run the sale process. 
Baird and True Religion declined to comment on the sale.
True Religion, best known for disrupting the jeans industry in the early 2000s with its signature stitching, embroideries, and smiling Buddha and horseshoe logos, has been on a roller-coaster journey over the last decade or so. 

When it emerged on the Los Angeles fashion scene in 2002, consumers were embracing maximalist styles from brands like Von Dutch and Juicy Couture. True Religion’s flashy jeans became a staple item among A-listers like Jessica Simpson and Britney Spears. 
At the time, the jeans retailed for about $200 to $300 a pair, and True Religion found its niche catering to female consumers who made about $200,000 annually and tended to shop at high-end department stores like Neiman Marcus, Bloomingdales and Saks Fifth Avenue, CEO Michael Buckley said.
True Religion went public in 2003 and made headlines for its growth and profits. But as the decade wore on, it faced increased competition from cheaper alternatives such as Gap and Forever 21.
By the time the 2010s hit, athleisure was taking off and denim had started to fall out of favor. The brand was taken private in 2013 and by 2017, it was bankrupt. 
True Religion eventually emerged from that bankruptcy and did so again in 2020 after it filed for a second time at the height of the Covid pandemic. However, these days, the brand’s trips through Chapter 11 are in the rearview mirror. 
Buckley, who helmed the company during its 2000s heyday and returned in 2019, has transformed True Religion into a leaner machine. The brand still focuses on its maximalist roots, but has dialed into a new consumer as Y2K-era styles make a comeback. 
True Religion’s primary shoppers are diverse with an average income of $60,000 to $65,000. Its typical price point for jeans has come way down to less than $100 a pair, which is in line with competitors like Levi Strauss and Gap, and better suited for its customer base.
“You have to know who your consumer is. The previous management, before I came back, was still trying to market to who they thought that customer was in 2010,” Buckley told CNBC during a recent interview. “Like, they left the brand. There’s a lot more followers out there [today] than there is, you know, call it the early adopters that wanted this brand back then.” 
True Religion recently conducted a market research survey and found its net promoter score, which measures customer loyalty, is more than 10% higher than its competitor peer set, including mega brands like Levi’s, Nike, Michael Kors and Ralph Lauren. 
Buckley said True Religion has the potential to be a billion-dollar brand. Over the next few years, he plans to double its revenue by focusing on its digital sales, expanding its product assortment and winning over female shoppers.
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Intuitive Machines’ Nova-C lunar lander launched from Florida on SpaceX’s Falcon 9 rocket, beginning the IM-1 mission.
If fully successful, the IM-1 cargo mission would be the first U.S. lunar landing in more than 50 years.
The Intuitive Machines lander is expected to spend about eight days traveling to the moon before descending to the surface.

A SpaceX Falcon 9 rocket carrying the Nova-C lander for the IM-1 mission launches from pad 39A at the Kennedy Space Center at 1:05 a.m. EDT on February 15, 2024 in Cape Canaveral, Florida.
Paul Hennessy | Anadolu | Getty Images

Texas-based Intuitive Machines’ inaugural moon mission began early Thursday morning, heading toward what could be the first U.S. lunar landing in more than 50 years.
Intuitive Machines’ Nova-C lander launched from Florida on SpaceX’s Falcon 9 rocket, beginning the IM-1 mission.

“It is a profoundly humbling moment for all of us at Intuitive Machines. The opportunity to return the United States to the moon for the first time since 1972 is a feat of engineering that demands a hunger to explore,” Intuitive Machines vice president of space systems Trent Martin said during a press conference.

Intuitive Machines’ Nova-C lander “Odysseus” deploys from the upper stage of SpaceX’s Falcon 9 rocket to begin the IM-1 mission.

The IM-1 lander, named “Odysseus” after the mythological Greek hero, is carrying 12 government and commercial payloads — six of which are for NASA under an $118 million contract.

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NASA leadership emphasized before the launch that “IM-1 is an Intuitive Machines’ mission, it’s not a NASA mission.” But it marks the second mission under NASA’s Commercial Lunar Payload Services (CLPS) initiative, which aims to deliver science projects and cargo to the moon with increasing regularity in support of the agency’s Artemis crew program.
The agency views CLPS missions as “a learning experience,” NASA’s deputy associate administrator for exploration in the science mission directorate, Joel Kearns, told press before the launch.
“Success of every landing is never assured,” Kearns said. “NASA is using CLPS to get our science investigations and technologies tests done on the moon surface and to develop a commercial community of robotic landing service providers for Artemis.”

Intuitive Machines outlined 16 milestones it hopes to achieve with IM-1, with landing successfully representing the final step. So far, the company confirmed IM-1 has achieved two of those milestones — launch and separation from the rocket.
The IM-1 lander is expected to spend about eight days traveling to the moon before descending to the surface on Feb. 22. The mission is targeting the “Malapert A” crater, about 300 kilometers from the moon’s south pole. After landing, Intuitive Machines aims to operate Odysseus on the surface for up to seven days.
Intuitive Machines’ stock has doubled since the beginning of the year, but at $4.98 a share at Wednesday’s close, it’s about half of the price it was when the company’s stock debuted in February 2023 on the Nasdaq after a SPAC merger.

Intuitive Machines’ Nova-C lunar lander on display at NASA’s Marshall Space Flight Center.

Last month, Japan became the fifth country to land on the moon, following Russia — then the Soviet Union — the U.S., China and India.
Governments and private companies alike have made more than 50 attempts to land on the moon with mixed success since the first attempts in the early 1960s, and the track record has remained shaky even in the modern era. 
Last year, Japanese company ispace made its first attempt to land on the moon, but the spacecraft crashed in the final moments. Last month, U.S. company Astrobotic got its first moon mission off the ground but encountered problems shortly after launch. The flight was cut short and failed to make a lunar landing attempt.
Even though Astrobotic’s recent attempt didn’t succeed, Kearns said that NASA was “really happy with how open and transparent” the company was about the mission and its learnings from it.
“[Astrobotic] did a virtual meeting with all the other CLPS companies, to brief the other CLPS companies about what they found,” Kearns said.
More attempts are on the way. NASA expects U.S. companies to launch additional missions this year, while China plans to launch another lunar lander in May.  More

The key question for pay TV distributors such as Comcast, Charter and DirecTV is whether they’ll be able to offer customers the same skinny sports bundle as the joint venture recently announced by Disney, Warner Bros. Discovery and Fox.
Privately, leaders at the latter three companies have begun to hear complaints from some distributors, who are concerned the new bundle will lead to increased cable TV cancellations.
Early conversations haven’t been particularly substantial because limited information has been disclosed about the joint venture’s strategy.

A Major League Baseball logo at Angel Stadium in Anaheim, California, May 22, 2022.
Ronald Martinez | Getty Images

It’s been about a week since Disney, Warner Bros. Discovery and Fox announced a new joint venture to offer live sports outside the traditional cable bundle, and pay TV distributors are still trying to figure out just how disruptive the new service will be.
The key question for distributors such as Comcast, Charter and DirecTV is whether they’ll be allowed to offer the same skinny bundle of linear networks that Disney, Warner Bros. Discovery and Fox announced will be available to consumers later this fall. That bundle includes ABC, ESPN, ESPN2, TNT, TBS, Fox, FS1, FS2, and a handful of other cable channels that showcase sports.

If Disney, Warner Bros. Discovery and Fox allow distributors to offer the same product, in addition to the standard cable bundle, there’s likely to be minimal consternation about the joint venture. But it’s not clear that will be the case, given that may defeat the purpose of its existence.
In 2023, Charter began offering a package of cable networks that didn’t include sports to lower the cost of cable TV for customers who only wanted news and entertainment. Offering sports to only those people who want to watch sports is good for distributors, but it’s harmful to programmers, who benefit from the millions of households that pay for sports but don’t watch them.
That’s why, logically, the new sports joint venture only makes sense if the three media companies bar distributors from offering the same product.
So far, the largest pay TV distributors haven’t spoken publicly about the forthcoming bundle because they’re still gathering information on the joint venture’s plans, according to people familiar with their thinking, who asked not to be named because the discussions have been private.
Privately, however, leaders at Disney, Warner Bros. Discovery and Fox have begun to hear complaints from some distributors, who are concerned the new skinny bundle will lead to increased cable TV cancellations, according to people familiar with the matter.

Terms of agreement

Pay TV distributors typically strike most-favored-nation deals with programmers that allow contracts to be replicated among like partners. It guarantees that a company such as Disney can strike a deal with DirecTV that’s similar to its deal with, say, Dish.
If the sports joint venture refuses to allow distributors the same terms as it’s offering retail customers, distributors could either refuse to carry their networks when carriage renewal deals are up or even sue, according to Craig Moffett, an analyst at MoffettNathanson.
“The distributors have been begging for the right to offer cheaper and skinnier bundles, especially bundles that would segregate expensive sports from cheaper non-sports programming, for at least two decades, and they’ve been met with a brick wall,” Moffett said. “At the very least, this would seem to violate the most favored nation clauses that prohibit the programmers from offering better terms and conditions to another distributor, even if that distributor is a JV [joint venture] of the programmers themselves. I would be surprised if there aren’t some lawsuits.”
Disney, Warner Bros. Discovery and Fox all rely on the pay-TV distributors for the bulk of their revenue.
And while some stand to indirectly benefit from the potential popularity of the joint venture — Charter and Comcast, for example, could see a boost to their broadband businesses, since the digital app would require high-speed internet service for best performance — others, such as DirecTV, Dish and YouTube TV stand more directly in the crosshairs and could lose video subscribers.
Still, early conversations between distributor executives and leaders at Disney, Warner Bros. Discovery and Fox haven’t been particularly substantial, because limited information has been disclosed about the strategy of the joint venture, which hasn’t been formally named or even legally agreed upon by the companies.
“The formation of the pay service is subject to the negotiation of definitive agreements amongst the parties,” Disney, Warner Bros. Discovery and Fox said in a statement last week.
No leader for the joint venture has been named yet, although one has tentatively been selected, according to people familiar with the matter. Puck reported Tuesday the front-runner is former Apple executive Pete Distad.
Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.
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