On 11/6 CRL reported 3Q19 results that were slightly below expectations on revenue and above on EBIT and EPS, generally in line with the preannouncement on 10/21. CRL lowered revenue guide by ~1% on FX and lower organic growth and raised EPS slightly on tax rate. The stock underperformed the XLV by 5.1% from preannouncement to the full earnings report, and has outperformed by 1.8% since.
Search Coverage List, Models & Reports
Search Results1-10 out of 24758
Merchant acquiring differs across geographies with cross border capabilities being more important in markets like Europe in comparison to the United States, eCommerce and omni-channel offerings becoming increasingly important globally, and integrated payments spreading from being primarily a U.S. phenomenon to seeing demand pick up across Canada, the UK, Australia and more. Regulatory and compliance requirements differ from country to country and a lack of knowledge with regards to navigating those requirements along with a country’s financial system and foreign language/culture can make it difficult to launch a business from scratch resulting in M&A or joint venture agreements as the chosen approach to gain exposure. We attempt to highlight and break-down some of these key differences, growth profiles and more, for investors in this note while focusing on Brazil in particular.
Our quarterly earnings quality (EQ) score is an objective way to identify potential accounting related short ideas and as a risk tool to avoid potential blow-ups in the portfolio. Our EQ Score uses seven financial ratios along with sentiment and valuation metrics to find potential underperforming stocks. The EQ Score ranges from a minimum of 0 (lowest quality) to a maximum of 100, and we rank companies within each sector on a relative basis, using ‘3Q 2019 reported financial information. This analysis covers ~2,000 companies, representing Russell 3000 companies with market cap’s over $250 million, excluding the FIN sector. See inside for details.
From our perspective, there are four major themes in IOCs right now: 1) IMO 2020 refining tailwinds; 2) the Aramco IPO; 3) a bottom in IOC group capex; and 4) and ongoing E&P de-rating. Oil demand growth fears are also thematic, but that’s not so much an Energy theme as a broad macro issue. We believe these four major themes set up well for XOM, with 2020 dividend coverage acting as a catalyst. Reiterate Outperform, $97 target.
Our Wolfe Tech Universe consists of about 270 companies, names with $3.5bn or more in market cap. We track earnings revisions for the universe and five major sectors, calculating upward less downward revisions divided by total revisions. Not surprisingly, tech earnings growth tracks revisions (Exhibit 1). We were surprised that revisions were net negative from 2013-15 when profit growth was positive, but it turns out this divergence was true for the overall market as well—analysts tend to be too optimistic. Tech earnings revisions have been negative for four consecutive quarters though less so the last two periods.
ALV suggested margins should inflect. And the Street already believes it.
We attended ALV’s CMD, which took place at the company’s massive Airbag and Airbag Inflator complex in Utah. Our key takeaway was that ALV expects a significant margin inflection over the next few years. We can buy-in to the turnaround argument (though we are not as bullish as ALV, as we are not optimistic regarding production growth). That said, our DCF suggests that this is already in the stock.
Europe volumes – Mixed signals between sell-out (sales) and sell-in (production)
While the October European SAAR was out earlier this month, we noted that ACEA’s full wrap-up release yesterday (11/19/19) said that Oct 2019 represented the highest October unit sales in 10 years. On the other hand, the latest IHS forecast for 4Q19 Europe production deteriorated to -4.6%, the 5th negative revision in a row.
We spent the early part of the week in Houston attending COP’s analyst day and meeting with senior management at EOG and CDEV. While sentiment clearly remains poor and the -6.2% Mon-Tues performance of the XOP only added fuel to the fire, the discussions were still lively with oil macro, the FCF vs. volume growth debate, efficiency gains, and the impact of ESG all on the agenda. Key takeaways below with more from each company meeting within.
The North Carolina Department of Health and Human Services (DHHS) announced today (11/19/19) it would suspend implementation of the managed care program for Medicaid members previously scheduled to launch Feb 1, 2020. The DHHS attributed the suspension to the fact that “the General Assembly adjourned last week without providing required new spending and program authority for the transition to managed care.” Also importantly, the department notes “once suspended, managed care cannot easily or quickly be restarted”, and thus, it “will not decide on a new go-live date until it has program authority within a budget that protects the health and safety of North Carolinians and supports the department’s ability to provide critical oversight and accountability of managed care.” Recall from initial awards by NC in February, AmeriHealth Caritas, ANTM, UNH, and WCG won statewide contracts while CNC’s provider-led plan Carolina Complete Health won Regions 3 and 5.
We thought TRP did a good job at its analyst meeting on Tuesday (11/19/19) highlighting its diverse, low-risk platform for reasonable, self-funded growth even under a more pessimistic gas/oil production environment. As expected the company moderated the long-term dividend growth potential to 5-7% in ‘22+ after 8%-10% through 2021. We remain Peer Perform; the company continues to be a premium story but the valuation appears fair and we are still worried on KXL risk in an election year.
SSS of 3.6% was below our 4.8% and Consensus 4.7%, although buyside expectations were low due to softer CC data. EPS of $2.53 was slightly ahead of consensus but missed our $2.58. HD lowered its comp outlook for the year but reaffirmed EPS growth guidance. Shares -5.4%.
- 1 of 2476
- next →