Trefis Insights from Last Week – Consumer, Retail & Automotive
Insights from the Week – Consumer, Retail & Automotive (Week of Feb 14-18)
This past week we wrote on how Wal-Mart (NYSE:WMT) could shake up the music industry and take a bite out of Apple (NASDAQ:AAPL) if it started selling music and movies online. We also explored how mobile payments might boost Starbuck’s (NASDAQ:SBUX). In the consumer space, we took a closer look at a potential Unilever (NYSE:UL) and Colgate (NYSE:CL) tie up, which has been again rumored as a possibility, and we took a look at Kraft’s (NYSE:KFT) margins with concern over increasing input costs. In autos, we discussed our sanguine outlook for Ford (NYSE:F) despite some one-off items that weighed on recent earnings, and we launched coverage of General Motors (NYSE:GM) with a price estimate of $45. Among our retailers we looked at Coach (NYSE:COH) and American Eagle (NYSE:AEO) following earnings amid a mixed scorecard for the industry and an uneven outlook across other softline retailers.
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- Skin Care Drives Estee Lauder in 2010; Margin Improvement Further Lifts Stock Value on February 18, 2011
Estee Lauder draws over 40% of its sales from skin care and recorded 15% growth in revenues from this segment during 2010 due in part to improved market share …
- McDonald’s Sales Momentum into January Could Prompt Stock Upside on February 18, 2011
McDonald’s encouraging comparable store sales performance has been driven by both increased average spend per customer visit as well as a rise in customer traffic at its restaurants …
- American Eagle Still Lagging Competitors After Holiday Season on February 18, 2011
American Eagle’s growth trends have been lagging behind competitors like Gap, A&F and Aeropostale in December and January, as well as for the full fiscal 2010…
- Why Unilever Could Bid for Colgate and Why Now on February 16, 2011
Colgate’s strong balance sheet could allow Unilever or another suitor to raise debt against Colgate’s assets in the event of a takeover …
- Sizing Up Coach’s Downside on February 16, 2011
While shifting production to new regions might help Coach cut down on production costs going forward, the initial expenditure required to set-up production capabilities or establish ties with manufactures could pose a near-term headwind to profit margins …
- New Coverage: $45 Trefis Price Estimate for General Motors on February 16, 2011
After GM sold its majority stake in Ally financial, GM’s vehicle lease business contributed only 5% to GM’s total valuation, but we expect GM’s vehicle leasing business to grow and become increasingly more valuable following the acquisition of AmeriCredit …
- Ford Cruising in Right Direction Despite Earnings Speed Bump on February 15, 2011
Lower sales volumes in Europe were driven by Ford’s focus on maintaining profit margins and its decision to reduce its participation in certain low margin businesses …
- Higher Input Prices Will Restrain Kraft’s Margin Outlook on February 15, 2011
Kraft has lowered its earnings forecasts for 2011 and expects revenue growth to be driven more by higher prices than higher volumes …
- New Mobile Payment System Could Increase Starbucks’ Customer Traffic on February 14, 2011
Apart from this, the spending needs to cover cost of initial implementation of the technology as well as ongoing security fixes could weigh on Starbucks …
- What is the Potential Upside if Wal-Mart Gains Ground on iTunes? on February 14, 2011
Wal-Mart is already a source of significant income for studios by selling their DVDs and has massive scale to be competitive in electronic sell-through as well …