Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. We offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. 

Morningstar provides data on more than 500,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 16 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $180 billion in assets under advisement or management as of June 30, 2015. We have operations in 27 countries.

Download the Morningstar Fact Sheet : http://corporate.morningstar.com/US/documents/MarketingFactSheets/AboutMorningstarFactsheet.pdf

Thematic (Sector/Industry)

Australia Consumer discretionary / Thematic (Sector/Industry)

Consumers rejoiced in April, when <a href="https://www.smartkarma.com/entities/409" target="_blank" data-smartkarma-citation="entities:409:1">Amazon.Com Inc (AMZN US)</a> confirmed its intention to enter the Australian market with the full range of categories and across all services, including Marketplace, Prime Now, Pantry, and Fresh. This means the retail market is about to become a lot more competitive. We expect the newcomer to operate as a pure e-commerce player, accelerating the growth in the relatively small, but quickly growing online channel. In fiscal 2023, we forecast the online channel to capture around 40% of the incremental Australian retail sales that year, up from about 20% in fiscal 2016. By then, we expect online penetration of the overall retail market to double to 14%. The appeal of e-commerce to consumers differs across product categories, but we forecast that sectors with already high online penetration, such as consumer electronics and home appliances, will continue to be vulnerable.While we expect many companies in these sectors, which are underindexed in e-commerce, to be left behind, we think <a href="https://www.smartkarma.com/entities/645" target="_blank" data-smartkarma-citation="entities:645:1">Harvey Norman Holdings Ltd (HVN AU)</a> and <a href="https://www.smartkarma.com/entities/555" target="_blank" data-smartkarma-citation="entities:555:1">JB Hi-Fi Ltd (JBH AU)</a> , the Australian industry leaders in consumer electronics and appliances, will adapt to the ongoing trend of consumers switching to e-commerce. We estimate the companies to grow like-for-like sales in line with the overall growth rate of the sector, but we caution that the market appears to be pricing in a more optimistic scenario for Harvey Norman, in particularAnalysts: Johannes Faul, CFA, Angus Hewitt and R.J. Hottovy, CFA

Consumers rejoiced in April, when Amazon.Com Inc (AMZN US) confirmed its intention to enter the Australian market with the full range of categories and across all services, including Marketplace, Prime Now, Pantry, and Fresh. This means the retail market is about to become a lot more competitive. We expect the newcomer to operate as a pure e-commerce player, accelerating the growth in the relatively small, but quickly growing online channel. In fiscal 2023, we forecast the online channel to capture around 40% of the incremental Australian retail sales that year, up from about 20% in fiscal 2016. By then, we expect online penetration of the overall retail market to double to 14%. The appeal of e-commerce to consumers differs across product categories, but we forecast that sectors with already high online penetration, such as consumer electronics and home appliances, will continue to be vulnerable.While we expect many companies in these sectors, which are underindexed in e-commerce, to be left behind, we think Harvey Norman Holdings Ltd (HVN AU) and JB Hi-Fi Ltd (JBH AU) , the Australian industry leaders in consumer electronics and appliances, will adapt to the ongoing trend of consumers switching to e-commerce. We estimate the companies to grow like-for-like sales in line with the overall growth rate of the sector, but we caution that the market appears to be pricing in a more optimistic scenario for Harvey Norman, in particularAnalysts: Johannes Faul, CFA, Angus Hewitt and R.J. Hottovy, CFA

Australian Electronics Retailers Need to Embrace the Online Trend