In today’s briefing:
- Ferrari: Classic Fisher Company, Almost Perfect Score on The Fisher 15 Framework
- Nissin Foods’ FQ4 Earnings: A Possible 59% Operating Profit Surprise?
- Aeon Will Own Japan’s Two Largest Supermarket Groups with Inageya Purchase
- [Coupang Inc. (CPNG US) Earnings Preview]: Market Share Solid Given Limited Competitive Threat
- Chipotle Mexican Grill Inc.: Improved Digital Capabilities & A 6
- Tesla Inc.: Price Cuts Along With Capacity Expansion Have Really Changed The Game – Key Drivers
Ferrari: Classic Fisher Company, Almost Perfect Score on The Fisher 15 Framework
- Ferrari NV (RACE IM) has been a steady compounder of earnings growing operating profits at 14% CAGR and sales volumes at 6% CAGR over the last 20 years.
- The company has expanded EBITDA margins from 25% in 2014 to 35% in 2022 and is expected to increase by another 300 bps in FY23 to 38%, as per guidance.
- At 41x/35x FY23e/FY24e, we conceded it is a tad expensive, but we would look at investing in this company over the long term.
Nissin Foods’ FQ4 Earnings: A Possible 59% Operating Profit Surprise?
- Nissin Foods Holdings (2897 JP) to report FQ4 results on May 10th with ¥158.5bn revenue and ¥8.1bn operating profit expected according to revised Feb 2023 guidance.
- Consensus predicts Nissin Foods’ operating profit to be ¥6.6bn from a revenue of ¥167.8bn, which is lower than the company’s latest annual guidance.
- Meanwhile, a higher FQ4 operating profit of ¥10.5bn is expected based on our analysis, exceeding consensus by 59%.
Aeon Will Own Japan’s Two Largest Supermarket Groups with Inageya Purchase
- Last year saw the consolidation of several supermarket chains in Shikoku and Chugoku by Aeon, creating Japan’s largest supermarket group.
- Now, Aeon has now announced that it will expand its existing stake in Inageya, rolling the company into USMH and creating another, even larger food operation and Japan’s biggest yet.
- Aeon is looking for dominance in Tokyo and may seek more acquisitions but rivals are unlikely to give it a free hand nor say no to acquisitions of their own.
[Coupang Inc. (CPNG US) Earnings Preview]: Market Share Solid Given Limited Competitive Threat
- We expect CPNG to report C1Q23 top-line and non-GAAP net income 2.0% and 4.8% vs. consensus, respectively.
- AliExpress became S. Korea’s most downloaded app after increasing spending, but product overlap with Coupang is limited, while other S. Korean competitors recorded declining MAU, in our understanding.
- South Korean economic indicators, including CPI and retail data, point towards a recovery. We maintain our BUY rating and US$19 TP.
Chipotle Mexican Grill Inc.: Improved Digital Capabilities & A 6
- It was a successful quarter for Chipotle Mexican Grill, reporting an all-around beat.
- The company’s quarterly sales were $2.4 billion and it retained about 80% of digital sales and has recovered almost 80% of in-restaurant sales.
- We give Chipotle Mexican Grill a ‘Hold’ rating with a revised target price.
Tesla Inc.: Price Cuts Along With Capacity Expansion Have Really Changed The Game – Key Drivers
- Tesla had a mixed quarter and failed to meet the high revenue expectations of Wall Street.
- Although automotive operating margin and gross margin both fell sequentially, the company delivered an earnings beat.
- In terms of the Cybertruck, Tesla continues to construct Alpha models of the Cybertruck on its pilot line for testing.
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