Rose-colored Ray-Bans shade brand rehab realities 26 Jul 2024 EssilorLuxottica is paying $1.5 bln for Supreme, whose cachet suffered under Vans owner VF. Streetwear strays from the buyer’s eyewear expertise and the imputed return on capital looks modest. American Apparel also serves as one of many cautionary tales on fashion after it frays.
Paris Olympics warrant medal for budget restraint 26 Jul 2024 The French capital has forked out $9 bln on the Games, but compared to some previous hosts the cost overruns have not been excessive. Pre-existing infrastructure helped. Given France’s political ructions and high deficits and debt, such relative sangfroid is well timed.
Consumer titans have Covid-era issue, in reverse 26 Jul 2024 In the pandemic, Nestlé and Unilever’s higher prices were accompanied by falling sales. Now they are tempting consumers to buy more products, but prices are harder to budge. One issue hasn’t changed: the giants’ vulnerability to cheaper and healthier eating habits.
Anglo American has a job to exit post-BHP hole 25 Jul 2024 The $38 bln miner unveiled better-than-expected half-year earnings. But after fending off his Australian suitor, Anglo boss Duncan Wanblad has to give impatient investors good news on his self-help plans. Coal and diamond headaches make that increasingly hard to do.
Carmakers drive efficiency hopes into a ditch 25 Jul 2024 The shares of carmakers Nissan and Stellantis fell around 7% after weak results. The tough US market is hurting sales, erodes the European group’s high margins and hinders its Japanese peer’s turnaround. Unsold cars and cautious consumers mean any recovery will take time.
UMG pays steep price for platform addiction 25 Jul 2024 The $42 bln music group’s shares sank by more than 25% on Thursday, falling below their 2021 IPO. Lower-than-expected growth in subscription revenues underlines the company’s painful dependence on pricing decisions made by big players like Amazon or Apple.
Reckitt gives weak scrub to valuation stain 24 Jul 2024 The $40 bln Dettol maker is selling cleaning brands and pledging to exit its baby milk unit. The result should be a leaner company and less depressed share price. But the lack of a clear timeline limits the benefit and leaves investors fretting over infant formula litigation.
Euro-banks offer glimpse of possible bad-debt wave 24 Jul 2024 Deutsche upped its forecast loan-loss charge, contributing to a 7% share-price fall. BNP’s default provision spiked, and UniCredit’s has too in Germany. Most of the bad news relates to just a few specific corporate clients. But there will be more if rates stay higher for longer.
Porsche looks stuck in rival Ferrari’s slipstream 24 Jul 2024 The 64 bln euro group’s shares have stalled since a 2022 float, and its valuation trails the Italian group by miles. Competition in China and production snafus may hold it back. The risk is that investors value the 911 maker like a normal carmaker, rather than a luxury group.
French luxury’s China pain may be more evenly felt 24 Jul 2024 Headwinds from Beijing are affecting the performance of Hermès, LVMH and Kering. The three groups continue to operate in different leagues, but they share a common dependence on the People’s Republic. China’s shaming of luxury implies Hermès may be less insulated than before.
Bosch’s US deal blows cold air on EU growth 23 Jul 2024 The German industrial group is paying $8 bln to buy air-conditioning businesses from conglomerate Johnson Controls. The valuation looks good compared to where peers trade. For American castoffs to attract such a heavy capital outlay, however, is a bad omen for Europe’s prospects.
Mattel buyout would be fun but dangerous plaything 23 Jul 2024 Despite Barbie’s star power, the $7 bln toymaker’s sinking valuation has attracted suitor L Catterton. A deal can work but looks big enough to be a choking hazard for the LVMH-backed investment firm. Higher tariffs on Chinese suppliers also would make the financial game riskier.
Sabadell surfs interest-rate wave away from BBVA 23 Jul 2024 The Spanish bank reckons it can generate at least a 13% return on tangible equity this year and next. It makes BBVA’s 12 bln euro hostile all-share bid less attractive. Sabadell will still suffer if rates fall fast, but a higher offer seems more necessary by the day.
KKR-Eni biofuels deal is rich bet on governments 23 Jul 2024 The US investor could pay up to $14 bln for 25% of the Italian group’s bioenergy arm. That’s a big premium to listed peers, at a time when greener fuels made from crops are less favoured. Long-term growth rates mean it makes sense, but only if states keep assisting the market.
Boeing and Airbus headwinds are hard to escape 23 Jul 2024 The troubled US jet maker and its European rival aren’t delivering as many planes as customers want. On this Exchange podcast, AirInsight co-founder Addison Schonland explains how some problems stretch back to Covid, whether a third player can break the duopoly, and much more.
Rentokil flags debugged trend towards mega buyouts 22 Jul 2024 The $17 bln pest control company is being eyed by former BT CEO Philip Jansen, the Sunday Times says. More generous debt markets mean large takeovers are getting easier. But, while the returns on a Rentokil deal look juicy, shareholders may be wary of selling too cheaply.
Ryanair leads airline sector into strategic cloud 22 Jul 2024 The $17 bln carrier’s shares sank 15% after it warned of weaker summer fares. The airline had hoped slow delivery of planes would mean less competition, allowing it to hike prices and weather higher costs. If customers are now saying no, that’s a problem for the whole sector.
Vivendi only half-solves its valuation discount 22 Jul 2024 The 11 bln euro French media group is spinning off and listing pay-TV arm Canal+ in London and ad group Havas in Amsterdam. It should unleash value. Yet the remaining listed bits, holding media assets and a ragtag of investments, may just suffer from an even more acute markdown.
As rates fall, European banks can still rise 22 Jul 2024 Tight monetary policy turbocharged returns for lenders like $68 bln UniCredit. Yet lower interest rates don’t have to do the opposite. Central-bank cuts may boost loan demand and investment-banking fees, while keeping bad debt low, which should push up valuations.
Cyber meltdown points to downsides of efficiency 19 Jul 2024 A software update by $83 bln CrowdStrike grounded flights and disrupted financial markets. That’s possible because businesses work with a small number of providers, seeking lower costs. It supports rich tech valuations, but also heightens the risks of a catastrophic failure.