Daily Brief United States: Amer Sports , Cpi Card Group, EURO/US DOLLAR, Vera Bradley, Eventbrite Inc, Natural Gas, USD, Synaptics Inc and more

• Amer Sports (AS US) is a global iconic sports and outdoor brand group. Amer has launched an NYSE IPO to raise US$1.6-1.8 billion at a US$16.00 to US$18.00 price range.
• We previously discussed the IPO in Amer Sports IPO: The Bull Case, Amer Sports IPO: The Bear Case and Amer Sports IPO: Valuation First-Look. 
• We revise our forecasts to reflect the FY23 preliminary estimates and long-term growth targets. Our valuation analysis suggests that Amer is fairly valued at the IPO price range. 

• Amer Sports announced it plans to raise up to $1.8 billion at $16 to $18 per share, targeting a valuation of up to $8.7 billion. 
• We estimate the company to generate revenue of $5.6 billion (up 23.5% YoY) and operating profit of $285.7 million (down 13.7% YoY) in 2024. 
• We would pass on this IPO due to lack of valuation merits, highly leveraged balance sheet, and inconsistent profit margins, despite its solid sales growth in the past several years. 

Key points (machine generated)

• CPI Card Group’s debt-to-equity ratio is around 4.5x, higher than ideal but manageable with their cash flow generation.
• The smallcap downturn has affected the stock negatively, but the current valuation of CPI Card Group is deemed attractive, with a 20% free cash flow yield and 4.6x EV/EBITDA.
• With strong cash flow, reasonable debt management, and potential share buybacks, it is expected that the stock will increase in value when market sentiment improves.

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• The market is pricing in a 25 basis point cut in the June meeting, with additional easing expected to reach a neutral level by the first half of 2025.
• The ECB is expected to remain on hold at the upcoming meeting, with the focus on their updated views on growth, inflation, and any forward guidance.
• The sell-off in recent weeks has been driven by the repricing of monetary easing expectations, but the strategic over duration stance remains comfortable, particularly in the medium term.

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• We are reiterating our Buy rating, $10 price target and projections for Vera Bradley after visiting stores in Long Island and Connecticut.
• We believe, after a solid Holiday, Vera Bradley management has adopted two tracks: aggressively clearing older goods at both the full price and outlets stores, including material levels of goods from the back room and providing hints of the upcoming beach/Spring collection for February.
• We believe Vera Bradley is continuing to evolve under CEO Jackie Ardrey and her team to a more relevant and wider customer base, and we reiterate our Buy rating and $10 price target for VRA.

• EB is leveraging its balance sheet to solidify the top position as an event marketplace. 
• The pricing plan at EB is not much different than its peers and we view it as more of EB catching up to the rest of the other event sites.
• The pricing model should become a source of revenue and adjusted EBITDA growth. EB’s competitors have different pricing plans that can make it costly for event creators

• In a soft-landing economic environment, history suggests that commodity indexes stay stable around the first rate cut then trend higher six months after.
• Historically, industrial metals tend to lag energy by several months.
• By contrast, prices of precious metals, especially gold, generally rise six months after the first rate cut then hit a temporary plateau —something we saw even during the extremes of the 2008 financial crisis and the recent pandemic. 

• The market is pricing in aggressive rate cuts by the Fed, but the data does not fully support this expectation.
• The dollar has performed well this week, and further upside is plausible due to low-grade US exceptionalism and underwhelming global economic data.
• The focus on the Fed and US rates is important, but the non-US side should not be overlooked, as there is a stark difference in initial conditions between the US and other G7 rate curves. The rate differentials could lead to a convergence with the US catching up to other rate curves, resulting in a volatile and high-impact dollar trend.

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• This is our first report on intuitive human interface solutions provider, Synaptics Incorporated.
• In its First Quarter 2024 Financial Results , the management addressed the current standing of the company and projected future expectations.
• Despite the challenging market conditions, Synaptics remains optimistic about its business and expects to see improvements in 2024.