In today’s briefing:
- Japan Tobacco/Vector Group: Possible Bump-Up?
- Lowe’s Companies: A Dive Into Its Brand Strength & Market Position! – Major Drivers
- Oddity Tech: ~34% Downside Risk As Growth Will Slow Down
- Deere & Company: These Are The 4 Biggest Challenges In Its Path! – Major Drivers
- Estée Lauder Companies: A Tale Strategic Pricing & Precision Marketing! – Major Drivers
- Lumentum Holdings Inc.: Expansion in High-Speed Optical Transceivers & Other Major Drivers
- Madison Square Garden Sports Corp.: Enhancements in Fan Experience and Venue Utilization As A Critical Growth Lever! – Major Drivers
- Medtronic plc: Are Its Investments in Robotics with Hugo Robotic-Assisted Surgery System Yielding Results? – Major Drivers
- Paycor HCM Inc.: Their Expanded Enterprise and Embedded Partnerships Is Driving Our Optimism! – Major Drivers
- Tapestry Inc.: A Story Of Enhanced Brand Building & Consumer Engagement! – Major Drivers
Japan Tobacco/Vector Group: Possible Bump-Up?
- JT plans to acquire 100% of Vector Group at $15.00/share, a 29.9% premium. The offer requires over 50% acceptance, with Board support and completion expected by late 2024, pending approvals.
- The shares go ex-dividend on August 30, with payment on September 12. Adjusted for the dividend, shares trade at a -0.4% gross spread. My fair value estimated is $15.92/share.
- Consensus sets a target price of $16/share. JT may consider raising its offer to this level (6.67%), especially if they see Vector as a strong long-term investment.
Lowe’s Companies: A Dive Into Its Brand Strength & Market Position! – Major Drivers
- Lowe’s Companies’ second quarter 2024 earnings outlined a mixed performance amid challenging market conditions, reflecting both the strengths and weaknesses of its current business strategy.
- The company reported Q2 sales of $23.6 billion, with comparable sales down by 5.1%.
- This decline was attributed to a decrease in demand for Do-It-Yourself (DIY) projects, partially mitigated by solid performance in the Professional (Pro) segment and a growth in online sales.
Oddity Tech: ~34% Downside Risk As Growth Will Slow Down
- Oddity Tech, owner of famous global brands IL MAKIAGE and SpoiledChild, is growing slower than in 2022 and 2023. The overall growth will slow down to ~20% y/y in 2025.
- According to my estimates and SEC filings, private equity firm L Catterton, the largest shareholder, reduced its stake in Oddity Tech to 18.4%, down from ~42% prior to an IPO.
- I see ~34% downside risk in Oddity Tech stock as growth will slow down and the company will launch new brands only in the second half of 2025.
Deere & Company: These Are The 4 Biggest Challenges In Its Path! – Major Drivers
- Deere & Company reported its third-quarter earnings, revealing a mixed financial performance amid varied market conditions across its segments.
- Despite a tough macroeconomic environment, the company maintained a disciplined approach, particularly in managing inventory and costs, which was evident from an equipment operations margin of 18.5%.
- However, the reduced demand in both agricultural and construction sectors, coupled with price competition, led to a decline in net sales and revenues by 20% and 17% respectively, totaling $11.387 billion and $13.152 billion.
Estée Lauder Companies: A Tale Strategic Pricing & Precision Marketing! – Major Drivers
- Estée Lauder Companies’ fiscal 2024 results reflect a challenging environment particularly impacted by market conditions in China and the Asia-Pacific region.
- The fiscal year witnessed a 2% contraction in organic sales, with a modest gross margin expansion and a decline in adjusted operating margin by 120 basis points to 10.2%.
- The company’s performance in various regions displayed disparity, with noted declines in Mainland China contrasted by growth in EMEA (Europe, the Middle East, and Africa) primarily due to a recovery in Asia travel retail.
Lumentum Holdings Inc.: Expansion in High-Speed Optical Transceivers & Other Major Drivers
- Lumentum Holdings, a provider of optical and photonic solutions, reported mixed performance in its fourth quarter fiscal year 2024 results.
- The company experienced a decrease in both the Cloud & Networking and Industrial Tech segments but made significant progress in expanding its customer base and advancing its technology for future growth, particularly in high-speed optical transceivers and datacom components.
- Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.
Madison Square Garden Sports Corp.: Enhancements in Fan Experience and Venue Utilization As A Critical Growth Lever! – Major Drivers
- Madison Square Garden Sports Corp. (MSG Sports) has presented a robust financial performance in its fiscal 2024 fourth quarter and year-end earnings, reflecting effective management and promising developments within its operations.
- The company, as part of its year-end declarations, showcased record-setting revenues exceeding $1 billion and an adjusted operating income of $172 million.
- These figures surpassed the previous fiscal year’s outcomes, underscoring the company’s financial growth trajectory.
Medtronic plc: Are Its Investments in Robotics with Hugo Robotic-Assisted Surgery System Yielding Results? – Major Drivers
- Medtronic PLC reported its fiscal 2025 first-quarter results, reflecting a sustained performance trajectory with key financial metrics meeting or exceeding expectations.
- Highlights from the earnings call emphasize continued growth across several of Medtronic’s business segments, along with strategic advancements in product innovations and global market expansions.
- Revenue growth was reported at 5.3%, surpassing the midpoint of guidance, with significant contributions from the Cardiovascular, Neuroscience, and Diabetes segments.
Paycor HCM Inc.: Their Expanded Enterprise and Embedded Partnerships Is Driving Our Optimism! – Major Drivers
- Paycor’s fourth quarter and full year 2024 earnings call, which ended on June 30, 2024, reflects a company strategically navigating its growth amidst an evolving market landscape.
- With an 18% revenue growth for the quarter and a 19% increase for the fiscal year, Paycor appears to have successfully executed its strategic initiatives.
- The company managed to increase the average number of employees on its platform by 9% and expanded the amount earned per employee per month by 6%, signaling efficient scaling and value addition.
Tapestry Inc.: A Story Of Enhanced Brand Building & Consumer Engagement! – Major Drivers
- Tapestry, Inc. reported its fourth quarter earnings where it demonstrated notable strengths internationally with a 6% growth led by significant contributions from various regions including Europe, Other Asia, and Japan.
- However, modest revenue declines in North America, coupled with more challenging conditions in Greater China, posed challenges in otherwise robust financial outcomes.
- Revenue in Greater China grew by 3% overall for the year but showcased declines in the latter half.
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