Trefis Top 5 – May 18 Insights (EXPE, ALK, COH, REV, RIMM)

+17.49%
Upside
42.01
Market
49.36
Trefis
ALK: Alaska Air logo
ALK
Alaska Air

To wrap up today’s action, we launched on Alaska Air Group (NYSE:ALK) with a near $80 price estimate, and analyzed a quick upside/ downside scenario for Coach Inc. (NYSE:COH). We also looked at Expedia’s (NASDAQ:EXPE) partnership with South African Airways and assess how this plays in the with the recent trend of airlines partnering up with online travel agencies. Following that we look at Revlon’s (NYSE:REV) earnings which showed some recovery in sales after struggling the past few years, which is encouraging though the debt levels are still concerning. Finally, we discuss Research in Motion’s (NASDAQ:RIMM) launch of RIM Banking on Blackberry 7 OS to help drive sales and profit margins.

Alaska Air Group Coverage Launch: $79.80 Trefis Price Estimate

Alaska Air Group (NYSE:ALK) carries more than 23 million passengers per year to more than 90 destinations and provides freight and mail services, primarily within the state of Alaska and along the West Coast. The company was founded in 1985 and operates through its two main subsidiaries Alaska Airlines and Horizon Air. It competes with other airline majors like Delta Air Lines (NYSE:DAL), Southwest Airlines (NYSE:LUV), American Airlines (NYSE:AMR) and United Continental (NYSE:UAL). We break Alaska Air down to 4 main business units which we detail below and set a $79.80 price estimate for Alaska Air, which is almost 20% ahead of market price.

Relevant Articles
  1. Should You Pick Alaska Air Stock At $37 After Q4 Beat?
  2. Will Alaska Air Stock Rebound To Its Pre-Inflation Shock Highs of $70?
  3. What’s Next For Alaska Air Stock After A 24% Fall This Year And A Downbeat Q3?
  4. Which Is A Better Pick – Alaska Air Or UAL Stock?
  5. What’s In The Cards For Alaska Air’s Q2?
  6. Should You Buy Or Avoid Alaska Air Stock At $52?

See article

An Upside / Downside Scenario for Coach

Coach Inc.’s (NYSE:COH) most important business division – handbags – accounts for roughly 57% of the company’s stock value. Coach is a leading American marketer of luxury lifestyle handbags and other fashion accessories for both men and women and competes with other premium apparel and accessories players like Polo Ralph Lauren’s (NYSE:RL), Liz Claiborne (NYSE:LIZ) and Ann (NYSE:ANN). See a potential upside and downside scenario below. You can drag the trend lines to create your own scenario and see its impact on the stock price estimate.

See article.

After AirAsia, Expedia Now Partners With South African Airways

Expedia (NASDAQ:EXPE) recently announced a private-label partnership with South African Airways (SAA), the leading airline carrier in Africa. This follows a trend of online travel agencies offering hotel bookings on airlines’ websites, and now Expedia will provide hotel bookings at each of the 35 destinations served by SAA. [1] The announcement comes soon after Expedia’s joint venture with AirAsia, the leading budget carrier in Asia. (See Expedia Partners With AirAsia) We believe these moves will help it compete against other leading online travel agencies such as Priceline (NASDAQ:PCLN), Orbitz (NASDAQ:OWW) and Travelocity.

See article.

Revlon Earnings Show Recovery Underway, Debt Levels Should be Next Focus

Revlon (NYSE:REV) continues to draw almost half of its sales from the U.S. where not only has the economic recovery from the downturn has been slow but the inflationary macroeconomic environment has also added pressure to profit margins for all companies including competitors like L’Oreal (PINK:LRLCY), Procter & Gamble (NYSE:PG) and Unilever (NYSE:UL). Despite this, Revlon has not only posted positive sales growth in its latest earnings, but also improved gross margins, which partly funded an expanded marketing and advertising budget. We review some of the key factors determining its 2011 outlook below.

See article.

RIM Banking on the Blackberry 7

Research in Motion (NASDAQ:RIMM) has historically maintained a strong profit margin of 40% on its BlackBerry smartphones. However, over the past two years, its margin has slipped slightly to 37% due to increased competition from Google’s (NASDAQ:GOOG) Android-based smartphones, Motorola Mobility (NYSE:MMI), Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL) in the rapidly expanding smartphone market.

See article.

Notes:
  1. South African Airways selects Expedia affiliate network to power hotel offering, Travel Daily News, May 10’ 2011 []