Reuters: The Senate is near its first vote on healthcare.
Reuters: Dell (NASDAQ:DELL) is betting on corporate spending for its recovery.
Reuters: Time Warner’s (NYSE:TWX) AOL showed that the worst is not over for media job cuts.
Reuters: China cyber-spying against the US will probably grow. Read More
We are right at a week away from the highly awaited Black Friday for 2009’s holiday and Christmas season. As you likely know, this is THE day that retailers look forward to all year and critically depend upon as an anchor to how each retailer’s full year earnings results turn out. You may already be tired of Christmas ads and the holidays haven’t even arrived yet. With over 10% unemployment, a recession-end that doesn’t feel like a recession-end, a very tight discretionary spending budget, and a general lack of consumer confidence, it is no surprise at all that the focus for the Holiday Season in 2009 is one of deals and thrift.
These are not in any particular order, but the promotions have been reviewed at Wal-Mart Stores Inc. (NYSE: WMT), Best Buy Co. (NYSE: BBY), Costco Wholesale Corporation (NASDAQ: COST), Target Corp. (NYSE: TGT), Kohl’s Corp. (NYSE: KSS), Gap Inc. (NYSE: GPS), Macy’s, Inc. (NYSE: M), and Nordstrom Inc. (NYSE: JWN). There is also already promotion between MasterCard Incorporated (NYSE: MA) and Amazon.com Inc. (NASDAQ: AMZN). Admittedly, this is just a sampling of major outlets.
What is amazing is just how much of the deal-making is already out before the holiday season starts as retailers key off of each other. It is almost impossible to avoid thinking how such a promotional Christmas and Holiday Season in 2009 is going to add pressure to margins at almost all the first-line retailers.
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The earnings season is mostly winding down, but we still have a slew of retail earnings in the apparel and home categories. On Thursday alone, we have earnings from Dick’s Sporting Goods Inc. (NYSE: DKS), Foot Locker Inc. (NYSE: FL), Gap Inc. (NYSE: GPS), Ross Stores, Inc. (NASDAQ: ROST), Sears Holdings Corporation (NASDAQ: SHLD), The Buckle (NYSE: BKE), The Children’s Place Retail Stores, Inc. (NASDAQ: PLCE), Wet Seal Inc. (NASDAQ: WTSLA), Williams-Sonoma (NYSE: WSM), and Zumiez, Inc. (NASDAQ: ZUMZ).
We have compiled data and analysis here using Thomson Reuters consensus estimates, recent metrics offered by the companies, relative performance, and more. As with what we have seen at most retail and apparel earnings this week and last, many of these are richly valued and probably cannot just hope to please the bulls by meeting estimates on cost cutting and inventory management and then giving cautious guidance.
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It seems that earnings season is winding down, but next week we have many of the key retail and apparel players reporting earnings. Saks Incorporated (NASDAQ: SKS), BJ’s Wholesale Club Inc. (NYSE: BJ), Gymboree Corp. (NASDAQ: GYMB), and Ann Taylor Stores Corp. (NYSE: ANN) are all reporting next week. Next Thursday may feel like a retail and apparel earnings bonanza as we have Dick’s Sporting Goods Inc. (NYSE: DKS), Foot Locker Inc. (NYSE: FL), Gap Inc. (NYSE: GPS), Sears Holdings Corporation (NASDAQ: SHLD), The Children’s Place Retail Stores, Inc. (NASDAQ: PLCE), Wet Seal Inc. (NASDAQ: WTSLA), and Zumiez, Inc. (NASDAQ: ZUMZ) all reporting earnings in one day.
We have provided estimates from Thomson Reuters, recent sale store sales data, share performance, and added color on what else to consider where applicable.
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These are this Monday’s top ten analyst calls with upgrades, downgrades, and initiations in Wall Street research calls:
Adobe Systems (NASDAQ: ADBE) Raised to Buy at Goldman Sachs.
Ariad Pharmaceuticals (NASDAQ: ARIA) Raised to Overweight at JP Morgan.
Blackstone Group (NYSE: BX) Raised to Outperform at KBW.
Charles River Labs (CRL) Cut to Equal Weight at Barclays.
Gap Inc. (GPS) Cut to Equal Weight at Barclays.
Red Hat (NYSE: RHT) Cut to Neutral at Goldman Sachs.
Capstead Mortgage (NYSE: CMO) Raised to Outperform at KBW.
RadioShack (NYSE: RSH) Raised to Outperform at Credit Suisse.
Veeco Instruments Inc. (NASDAQ: VECO) Started as Overweight at Piper Jaffray.
VeriSign (NASDAQ: VRSN) Cut to Sell at Goldman Sachs.
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Jon C. Ogg
November 9, 2009
There are a number of ways to rank brand values. One of the most important is the level at which a brand contributes to the market value of a public company.
24/7 Wall St. asked Corebrand, the brand research and consulting firm, to look at the top 100 brands based their contribution to market capitalizaton. Using this method, the hardest working brand was Hershey (NYSE:HSY), followed by Coca-Cola (NYSE:KO) and Harley-Davidson (NYSE:HOG)
Corebrand described the process briefly to 24/7 Wall. St.
24/7 Wall St.: Corebard often refers to the brands on this list as the”hardest working brands”. How did you come to that description?
Corebrand: There are a lot of people measuring and examining the “strongest brands” or the “most valuable brands”. Our opinion is that examining one without the other is somewhat meaningless. How “strong” a brand is nice to know but not very relevant unless you understand how that strength benefits business. Similarly, “value” is little more than a measure of corporate size unless you understand the drivers of that value and how to influence it. By examining the strength of the brand and it’s contribution to total market value, we can help companies and their leadership manage that strength and value over time.
24/7 Wall St.: Is there any advantage or disadvantage to having a brand value be a very large percentage of market cap in the present and as an indication of a company’s future performance?
Corebrand: The brand will need to be in balance with the rest of the company’s assets. A company should strive to have it’s brand strong enough to fend off competitors or changing market conditions but not so strong that it becomes overly dependent on the brand as a single driver of value. If a company can achieve and maintain its appropriate maximum strength without becoming over-dependent, it will see greater returns in bull markets and retain greater value in bear markets.
The list: Read More
Gap Inc. (NYSE: GPS) hits a yearly high of $22.54. Fellow retailers Polo Ralph Lauren (NYSE: RL), American Eagle Outfitters (NYSE: AEO) and J. Crew Group (NYSE: JCG) also hit yearly highs.
Goldman Sachs (NYSE: GS) hits a yearly high of $184.30 on analyst enthusiasm for underwriting and mergers and acquisitions businesses. Credit Suisse (NYSE: CS) and Morgan Stanley (NYSE: MS) also hit yearly highs.
Google (NYSE: GOOG) hits a yearly high of $501.13 after a wave of price target increases on optimistic outlook for web advertising, including today’s increase by the brokerage Canaccord Adams.
Palm Inc. (Nasdaq: PALM) rallies to a yearly high of $17.12 on rumors that Nokia (NYSE: NOK) may be looking to bid on the handset maker.
24/7 Wall St.
Several consulting firms post annual figures for the world’s most valuable brands. The two best known are probably the Interbrand and BrandZ surveys. They are notably different, up until now at least. BrandZ includes a number of large brands from Asia. Interbrand does not.
24/7 Wall St. has put together a list of the most valuable brands of 2009 by looking at valuation calculations from a number of sources. Then a base valuation was taken from the 2008 Interbrand data to fix values for this year and changes from last.
Most methods take into account the future earnings of a brand for its parent company. This is fundamentally a guess particularly during a turbulent period in the global economy. Interbrand’s rule is that a brand most get at least a third of its revenue from outside its country-of-origin. That is arbitrary, particularly as it apply to brands in China.
24/7 Wall St. has made the assumption that the value of most brands have been hurt log-term by the deep recession. Forward earnings estimates for many of the firms on this list show that. Those brands which post value improvements show much more modest increases than they would be in a stable economy.
Looking at the Interbrand list from last year, it is fair to ask why firms like Nissan, Wal-Mart (WMT) and Red Bull are not present.
Because the brands on this list are taken from names on the Interbrand survey, we have not made a calculation about which companies may be new to their list in 2009 or which may drop off.
Public firms which are part of this ranking include (KO)(IBM)(MSFT)(GOOG)(GE)(NOK)(TM)(INTC)(MCD)(DIS)(HPQ)(AXP)(C)(HMC)(ORCL)(AAPL)(SNE)(PEP)(HBC)(NKE)(UPS)(FDX)(SAP)(DELL)(JPM)(GS)(KL)(EBAY)(SI)(F)(AIG)(AMZN)(CAT)(AVP)(RIMM)(GPS)(TIF)(BP)(SBUX)(JNJ)(MAR)(V)
The 100: Read More
Gap Inc. (NYSE: GPS) is holding its own considering the past few years. The apparel retail giant reported a slight gain in quarterly earnings, although this is on the heels of a 7% decline in revenue from a year ago. The company is enjoying the same earnings yield as other retailers via costing cutting and expense management.
The retailer owning the Gap, Banana Republic, and Old Navy earned $228 million,or $0.33 EPS, versus $0.32 EPS a year ago. Revenue was $3.25 billion, down from $3.5 billion a year ago. Thomson Reuters had consensus at $0.32 EPS and $3.23 billion in revenues.
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These are the top ten analyst upgrades and downgrades we have seen from Wall Street firms early this Monday morning:
Allergan (AGN) Raised to Outperform at Baird.
Burger King (BKC) Cut to Neutral at JP Morgan.
Franklin Resources (BEN) Raised to Buy at Goldman Sachs.
Gap (GPS) Raised to Overweight at Barclays.
Genzyme (GENZ) Cut to Neutral at UBS.
Huron (HURN) Cut to Hold at Deutsche Bank; Cut to Underperform at Oppenheimer; Cut to Underperform at Baird.
3M (MMM) Raised to Buy at Goldman Sachs.
Sovran Self Storage (SSS) Cut to Underperform at Oppenheimer.
Wendy’s (WEN) Raised to Buy at UBS.
United Therapeutics (UTHR) Cut to Hold at Jefferies.
Jon C. Ogg
August 3, 2009
These are some of the top analyst downgrades or cautious calls we have seen early this Tuesday morning:
JON C. OGG
Micro-blogging platform Twitter has 32 million users, which is an increase from about 2 million a year ago, according to research mentioned in The Wall Street Journal. Some Internet measurement services show that figure increasing 50% to 100% month-over-month. While it is not clear that Twitter will become as large as social networks, MySpace and Facebook or video-sharing site YouTube, the company could certainly have 50 million visitors by the end of the year. Read More
Reuters: Chrysler is already seeing positive effects from bankruptcy.
Reuters: The US is working with GM (GM) on a Chapter 11 filing as the June1 deadline looms.
Reuters: Pimco’s Gross says US is at risk of losing its AAA rating.
Reuters: The US closed BankUnited and sold it to private equity interests.
Reuters: AIG’s (AIG) Liddy stepped down as CEO.
Reuters: The trillion dollar bailout is beginning to shake market confidence in the US economy.
Reuters: New reports show the US has a bumpy road ahead as it moves toward recovery. Read More
Gap Inc. (NYSE: GPS) may be seeing some cheer despite another round of lower earnings and revenues. The clothing and apparel retailer posted earnings of $0.31 EPS, or $215 million. This is down from $0.34 EPS a year ago and is slightly above the $0.30 estimates from Thomson Reuters. Revenues were $3.127 billion, down from $3.38 billion a year ago while estimates were $3.14 billion. Amazingly, at least some of the downward trends are abating.
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These are some of the top pre-market analyst comments and analyst upgrades from Wall Street early this Tuesday morning:
Cardinal Health (CAH) Started as Buy at Jefferies.
Central Garden (CENT) Raised to Hold at Jefferies.
Chico’s FAS (CHS) Raised to Equal Weight at Barclays.
Gap Inc. (GPS) Raised to Equal Weight at Barclays.
Helen of Troy (HELE) Raised to Hold at Jefferies.
Principal Financial (PFG) Raised to Neutral at Credit Suisse.
STEC (STEC) Raised to Overweight at Thomas Weisel.
TJX Cos. (TJX) Raised to Overweight at Barclays; Raised to Neutral at Credit Suisse.
JON C. OGG
Twelve of the Fortune 500 CEOs are women. Just twelve. Over the next year, that number is likely to go up considerably because of a confluence of economic and financial factors that have not existed in years. The first of those is that because of the economy there will probably be higher turnover rates of chief executives at large companies. Next, there are a relatively large number of extremely talented women in the tier of senior management just below the CEO level. Many of these women who are in the No.2 or No.3 spots at their firms are the same age or older than their current CEOs. It is then very unlikely that they will become CEO at their current firm. Read More
A taxpayer gets a refund check under the new stimulus program and then spends most of the money. That trend may help retail sales for the current quarter, but it will not help companies like Gap (GPS) and Dillard’s (DDS) over the longer term.
The bump-up in retail sales may also mislead investors into thinking that it is safe to wade back into retail shares which have been depressed since the last holiday season. Read More
According to Reuters, some members of Congress were unhappy with Defense budget cuts.
Reuters reports that Americans are more optimistic about the economy since Obama came into office, according to a New York Times/CBS poll.
Reuters reports that the US deficit was near $1 trillion in the government’s fiscal first half.
Reuters reports that Congress is set to curtail risky mortgages.
Reuters reports that a quarter of companies globally are set to freeze wages. Read More
The land of analyst upgrades and positive research calls from Wall Street looks pretty thin early this Monday morning:
Church & Dwight (CHD) Raised to Outperform at Oppenheimer.
Gap Inc. (GPS) Raised to Conviction Buy List at Goldman Sachs.
Regeneron (REGN) Raised to Buy at Piper Jaffray.
Vodafone (VOD) Raised to Buy at RBS.
JON C. OGG
This week 24/7 Wall St. is picking several stocks from major sectors that are likely to double off of their lows we have recently seen. Today, let’s discuss the retail sector. We are also including two food companies that have suffered along with the rest of the retail sector.
Today’s review includes Abercrombie & Fitch Co. (NYSE: ANF), Macy’s, Inc. (NYSE: M), Sears Holdings Corporation (NASDAQ: SHLD), Sonic Corp. (NASDAQ: SONC), and Whole Foods Market, Inc. (NASDAQ: WFMI).
Read More
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