Brand measurement is a popular exercise. Several major business magazines run brand value lists. The annual Brand Z and Interbrand lists always get heavy press coverage. Companies are concerned about their rankings and what they will brag to customers, investors, and consumers about how the world sees their products and services. The Tiger Woods fiasco brought up the issue of how much a brand’s value can be undermined by a rapid and negative change in the fortunes of an important endorser.
Most brand valuation analysis focuses on dollar value, sales and earnings momentum, and how much an individual brand helps a company’s market capitalization. 24/7 Wall St. looked at several major systems to determine brand value and the brand lists based on them. We then looked at the future earnings forecasts for those companies and the recent movement in their stock prices to decide which brands should have the most appreciation in their values in 2010. 24/7 used brand valuations from Brand Z and Interbrand to set 2009 values and then made its own adjustments based on anticipated 2010 improvement. Each brand on the 24/7 list is expected to have an increase in value of least 20% next year.This list is restricted to brands based in the US.
1. Amazon (NYSE:AMZN) has increased its dominance among e-commerce companies, and holiday figures show that traffic to its website is running well ahead of the No.2 shopping destination, Walmart.com. Amazon should sell about two million of its Kindle e-readers this year and there is no competitor that is likely to blunt the increasing sales of the Kindle or the e-books and e-magazines that Amazon sells. Amazon’s share price is up 150% over the last year compared to the NASDAQ, which is up 40%. The stock has continued to outperform the market over the last three months as well. Brand value: $25 billion.
2. BlackBerry, the smart phone made by RIM (NASDAQ:RIMM), maintains its dominance over all of its competitors, and its recent earnings show that its profitability is still increasing and its subscriber base is rising quickly. RIM’s market cap is $40 billion, which as a multiple of sales is extraordinary. The Blackberry may not be competition-proof, but Apple (NASDAQ:AAPL) and the Google (NASDAQ:GOOG) Android do not seem to be taking away its momentum. Brand value: $35 billion.
3. Nike (NYSE:NKE) shows no signs of losing its spot as the world’s premier sportswear company. Its earnings were especially strong in the last quarter. Worldwide future orders are up 4% to $7 billion for the period from December 2009 to April 2010. Brand value: $20 billion.
4. Goldman Sachs’ (NYSE:GS) brand dropped rapidly during the credit crisis and some brand analysis companies pushed down their valuations of the firm by as much as 40%. Last quarter, Goldman posted record earnings and most of its investment banking businesses are doing better than they were before the federal government had to step in and support the financial industry. Congress and some taxpayers are unhappy with Goldman’s compensation practices, but Wall St. has always paid winners well. Brand value: $13 billion.
5. Oracle’s (NASDAQ:ORCL) dominance in the enterprise software industry is growing despite competition from Microsoft (NASDAQ:MSFT), SAP (NYSE:SAP), and Salesforce.com (NYSE:CRM). Oracle’s profits were up 13% in the last quarter even in a market where IT spending is slow. License revenue and support sales are up 14%. Oracle has strengthened its business in the server software industry substantially by buying Sun. Brand value: $26 billion.
6. JPMorgan Chase (NYSE:JPM) is another example of a financial services company that had its brand valuation battered during the credit crisis. It is viewed by investors and customers alike as the most successful money center bank. Its CEO Jamie Dimon is considered the strongest senior manager in the industry. JPMorgan’s stock has outperformed its peers Citigroup (NYSE:C), Wells Fargo (NYSE:WFC), Bank of America (NYSE:BAC). The company paid back its TARP funds earlier than the other banks. Dimon is conservative in his guidance, but the company results show that future earnings should be impressive. Brand value: $15 billion.
7. Google share price has risen as it has become clear to investors that the company’s earnings were only slightly dented by the recession and the performance of its core text advertising business is recovering very rapidly, which should improve earnings sharply. Several Wall St. firms have raised their earnings estimates for the company and its stock price has more than doubled from its 52-week low. Google’s move into the mobile operating system business with its Android open-source product is making the company one of the most important providers of software for smartphones and that should extend its search dominance from the PC to the mobile environment. Brand value: $140 billion.
8. Ford (NYSE:F) was pushed off most top 100 brand value lists along with GM as US sales of domestic cars dropped more than a third in 2009 and the market share of American cars kept dropping in their own country. US brands were replaced on brand list by nameplates including Nissan, Porsche, and Honda (NYSE:HMC). Ford is the only American vehicle manufacturer that can claim it has engineered a complete turnaround. It is likely to make money in its home market next year. Its line-up of new fuel-efficient cars has gotten strong reviews from industry experts and is selling well. Ford’s stock is up almost seven times from its 52-week low. Brand value: $28 billion.
9. Avon’s (NYSE:AVP) sales were up for the first through the third quarters of 2009. The same was true with operating income. Avon’s stock price has more than doubled off lows. Despite a poor economy, Avon’s revenue was essentially flat in the last quarter at $2.6 billion. Analysts estimate revenue will rise 10% next year to $11.4 billion. EPS should rise from $1.72 to $2.22. Brand value: $14 billion.
10. McDonald’s (NYSE:MCD) is extending its dominance in the world’s fast food business. Same-store sales have been modestly increasing, but that they have impressively risen every month during the recession. Revenue is Europe and Asia are rising quickly, and the company is making inroads in China. McDonald’s is adding close to 200 stores a year in the world most populous market. The company has been aggressively buying back stock and increasing returns to shareholders. Earnings per share are expected to rise from $3.96 in 2009 to $4.14 next year. Brand value: $75 billion.
Douglas A. McIntyre