Earnings season is gaining momentum as results from major U.S. companies highlight a contrast between consumer pressure and strength tied to global travel demand, with Procter & Gamble posting mixed earnings and cutting its annual outlook while GE Aerospace beat expectations on robust aftermarket and servicing activity.
BNN Bloomberg spoke with Justin Elliott, portfolio manager at Caldwell Investment Management, about investor reaction to the earnings reports, his constructive view on equities in 2026 and stock ideas linked to long-term structural growth.
Key Takeaways
- Procter & Gamble’s results showed continued reliance on pricing rather than volume growth, reflecting pressure on lower-income consumers and limited organic growth momentum.
- GE Aerospace benefited from strong aftermarket demand as airlines extend the life of existing fleets amid ongoing aircraft delivery delays.
- Equity markets remain supported by expected rate cuts, resilient earnings growth and improving liquidity despite geopolitical and policy-related volatility.
- Market leadership is broadening beyond mega-cap technology stocks, with valuations outside the largest names viewed as reasonable on a longer-term basis.
- Select opportunities exist in automated brokerage platforms and aerospace suppliers positioned to benefit from global trading activity and long-term industrial demand.
Read the full transcript below:
ANDREW: We got earnings from two prominent U.S. companies today as earnings season heats up. Procter & Gamble posted mixed results and cut its annual earnings forecast, while aircraft engine giant GE Aerospace came in with better-than-expected profits thanks to rising demand for air travel. Let’s get more from Justin Elliott, portfolio manager at Caldwell Investment Management. Justin, thank you very much for joining us. We really appreciate it. Give us your take on the P&G earnings first, if you would.
JUSTIN: Yeah, P&G earnings were a bit of a continuation of trends we’ve seen in recent quarters, where a lot of their growth has been driven by pricing, but they’re losing share on the volume side. If you think about P&G and their brands — things like Tide Pods, for example — they’re typically more premium priced.
We know the dynamics going on in the U.S. right now, with a K-shaped economy that’s particularly pressuring lower-income consumers. That means those consumers are looking for more affordable options and are trading down to more value-oriented brands. That’s taken some wind out of P&G’s sales and has been a negative for their organic growth outlook.
We don’t really think that’s going to change. We expect lower-income consumers to remain pressured in the near to medium term, which makes it difficult for P&G to accelerate organic growth. There were a few bright spots, including China returning to growth after being a challenging market.
Overall, the beat and guidance were driven more by factors like a reduced tariff impact and favourable foreign exchange, rather than stronger underlying demand. We don’t view that as a particularly high-quality beat. To get a meaningful re-rating in the stock, we’d like to see top-line growth pick up, which we think will be challenging. The stock has been trading at its cheapest valuation in about five years, which reflects many of these dynamics. But without stronger organic growth, we think the outlook remains muted.
ANDREW: Is this a stock you would consider just buying and forgetting about? It was a classic blue-chip holding for years in the United States.
JUSTIN: There’s still a lot of brand value across their portfolio. We just think there are better growth opportunities elsewhere in the market. If you have a longer-term horizon — say five years — and P&G is able to overcome tariff headwinds and improve organic growth, the stock could re-rate over time. But in the near to medium term, those growth challenges are likely to remain an impediment. We’d view it more as a hold unless you have a longer-term outlook.
ANDREW: GE Aerospace is a very different company and operates in a near oligopoly globally for aircraft engines. Is this a stock you’d be tempted to hold for the long term?
JUSTIN: GE’s earnings had a couple of nitpicks as well. One of the bigger investor concerns was the relatively flat margin outlook for the engine division. That’s largely driven by supply chain issues affecting Boeing and Airbus, which are limiting production ramp-ups and trickling down to suppliers like GE.
When new aircraft generations are introduced, engines are often sold at a loss in order to secure long-term service contracts, where the margins are earned over time. Delays in aircraft deliveries push out that higher-margin service revenue and pressure near-term margins.
That said, there’s a very long production pipeline ahead. Boeing and Airbus both have roughly 10-year backlogs, which supports a strong long-term outlook. In the meantime, airlines are keeping older planes in service longer, which is driving higher-margin aftermarket and service revenue.
The pullback we’re seeing today looks more valuation-driven. The broader aerospace aftermarket supply chain is trading at elevated multiples, reflecting that long-term growth profile. We would be long-term holders of the stock. We do prefer some other names in the space, which we hold in our funds, but we see the sector as attractive overall.
ANDREW: You have a couple of stock ideas for us. Interactive Brokers — just remind us what they do and what draws you to that name.
JUSTIN: Interactive Brokers is a fully automated brokerage platform that caters to retail and more sophisticated investors. They reported earnings yesterday and showed very strong growth in their user base. That’s being driven by their technology-focused model and the use of APIs, which allow international financial firms to plug directly into their platform.
That’s helped them expand internationally and grow accounts at roughly 30 per cent year over year in recent quarters. Despite that growth, penetration remains low — about four million accounts today versus an estimated 60 to 80 million sophisticated investors globally. We see a long runway for continued market share gains.
ANDREW: And finally, another aerospace name — Howmet Aerospace, HWM in New York. Give us a brief rundown on why you like that company.
JUSTIN: Howmet is a key supplier further down the aerospace supply chain, providing components for aircraft engines and structural parts. They’ve seen very strong demand in their spare parts business, which ties back to airlines extending the life of existing fleets due to production delays for new aircraft.
That aftermarket demand should remain durable until production rates sustainably increase. They also have a growing business tied to power generation, benefiting from AI-driven data centre expansion. Howmet supplies turbine blades used in gas turbines that help power data centres as operators look for alternatives while waiting for grid connections.
We see strong visibility there over the next five years and like the overall outlook for the stock.
ANDREW: Thank you very much, as ever. It’s great hearing from you, Justin.
JUSTIN: Thanks for having me on.
ANDREW: Justin Elliott, portfolio manager at Caldwell Investment Management Ltd.
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This BNN Bloomberg summary and transcript of the Jan. 22, 2026 interview with Justin Elliott are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
