Abrdn’s battered model may yet start to shine 4 Nov 2022 The British group meshes staid fund management with technology platforms for savers and wealth managers. The latter are growing and benefitting from higher interest rates. CEO Stephen Bird’s turnaround has a long way to go, but an undemanding valuation leaves plenty of upside.
King Icahn’s Crown stake invites regular activism 3 Nov 2022 The activist has an 8.5% stake in the drinks-packaging firm, which had a tough last quarter that caught its CEO off guard. A campaign at Crown is different than his recent one at McDonald’s – it has real financial teeth. Plus preying on management mistakes gave Icahn his throne.
For your consideration: Warner-Discovery part two 3 Nov 2022 Since the companies behind “House of the Dragon” and Shark Week merged, it has trimmed its outlook, written down Batgirl and Elmo content, and lost nearly half its market value. For boss David Zaslav, big may not be big enough. A deal with Paramount or NBC would be worth a look.
UK tech flops expose perils of IPO forecasts 2 Nov 2022 E-commerce group Made.com has all but collapsed little more than a year after issuing sunny targets in an 800 mln pound float. Stock market duds Deliveroo and Funding Circle had optimistic guidance. When initial public offerings restart, investors should ignore the projections.
Capital Calls: DuPont, Dollar stores, Twitter 2 Nov 2022 Concise views on global finance: The chemicals company takes an unexpected but welcome M&A break; Dollar General is being sued for practices that raise questions about pricing power; and Elon Musk plans to charge micro-bloggers for blue checks to help cover his huge deal costs.
Exxon and Apple are in a similar boat 28 Oct 2022 Exxon’s quarterly profit was its largest ever, at $20 bln, and nearly as high as Apple's. But the oil giant, once the world's most valuable firm, is worth a fifth of Apple. Newfound respect for earnings, and the recognition that beliefs are fleeting, could partly close the gap.
It’s hard to squeeze pet food out of Colgate tube 28 Oct 2022 Pushy investor Dan Loeb makes a valid point that the toothpaste maker’s Hill’s division would be worth more as a stand-alone company. Breakingviews’ calculations suggest a potential 16% uplift in value. There also would be some adverse effects, however, which undermine the case.
Apple isn’t safe when neighborhood is aflame 27 Oct 2022 The iPhone maker’s steady growth and policy of returning cash looks far more attractive than cyclical and splurging peers like Meta Platforms. Yet a rising dollar and declining consumer demand are making Apple’s valuation far less attractive than it used to be.
Adidas’s Kanye West bet is still in credit 27 Oct 2022 The 18 bln euro sportswear maker severed ties with the musician over offensive comments. In this Viewsroom podcast, Breakingviews columnists discuss how the financial benefits to Adidas nevertheless outweighed the costs. That may spur other brands to pursue outspoken stars.
Energy crisis gives beermakers a lasting hangover 26 Oct 2022 Heineken’s shares fell 10% after reporting weaker-than-expected sales. Inflation is eroding punters’ disposable income, making it harder for brewers to raise prices like in previous crises. Soaring costs for fuel and wheat, which bite next year, pose a further threat to margins.
Alphabet properly preps its books for a downturn 25 Oct 2022 The company’s quarterly revenue growth slowed to 6%, the worst performance since the pandemic. But compared to rivals, the $1.3 trln giant taps a variety of sources for ad dollars and has been comparably conservative with hires. A looming downturn will be a little less painful.
Capital Calls: Adidas 21 Oct 2022 Concise views on global finance: The 19 bln euro sportswear maker slashed its 2022 revenue outlook, dragging shares down 10%.
Tesla’s Apple-sized goals have cash risks 19 Oct 2022 The electric-vehicle leader’s growth keeps it on track to have iPhone-like dominance of its industry. That could justify its $700 bln valuation, unless worrying signs that demand might be flagging transpire. In that context, returning cash to shareholders is a bad idea.
P&G’s pricing power hangs by a floss 19 Oct 2022 The $300 bln maker of Pampers and Puffs charged more in the latest quarter without scaring off too many customers. It’s a good sign, but some of its brands are weaker and costs are rising at a faster pace. As a lens into the global consumer, the results are cause for concern.
Mobileye sees IPO market with surprising clarity 18 Oct 2022 Five years after buying the auto tech developer, Intel is taking it public again. A shaky market and the chipmaker’s special voting stock support the swift 68% drop in valuation expectations, to the same $15 bln it originally paid. Desperation has a way of sharpening focus.
Goldman’s brainwaves are best left for its clients 18 Oct 2022 The Wall Street firm’s consumer bank Marcus – now being dismantled – was a good idea that was executed better by others. With a new revamp, Goldman is sticking to what it does best: marketing to companies instead. Its third-quarter earnings show that’s enough.
Debt adds to the heap of media problems 18 Oct 2022 Disney, Paramount and Warner Bros.’ leverage ratios are above the median for peers as the chances for a recession increases. That's as an economic slump pressures advertising and subscriptions. It bodes ill for cash gobbling streaming services.
Capital Calls: Netflix struts 18 Oct 2022 Concise views on global finance: The $109 bln streaming service reversed its subscriber losing streak and reminded rivals of its first-mover advantage.
Kroger clumsily bags up Albertsons grocery goodies 14 Oct 2022 The $25 bln acquisition of its smaller rival anticipates $1 bln of annual savings, but uniting the second- and third-largest U.S. supermarkets also raises regulatory concerns. Despite promised price cuts, wage hikes and store disposals, shareholders’ trolleys are the fullest.
Capital Calls: Soy sauce activism 12 Oct 2022 Concise views on global finance: Foshan Haitian, China’s largest producer of cooking’s brown gold, loses $8 bln in value after consumers complain about ingredients.