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Barclays: Expect Improved Guidance for Profitability and Leverage

With 2013 results and cost-cutting measures on Feb 11th, we expect Barclays to announce: (i) a 5-year target for a low-to-mid-teens return-on-equity replacing the current anemic target for a return in excess of the cost-of-equity, estimated at 11.5%, by 2016;

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CVS to Tobacco – It’s You, Not Me

CVS has announced that it will cease to sell tobacco products in its stores by October 1st, believing that the sale of tobacco products is inconsistent with the company’s role as a healthcare provider. CEO Larry Merlo noted “We’ve come

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SYY – Profitable Sales Growth Remains Elusive

SYY reported Q2 earnings this morning, and the results provide a useful framework to reiterate some of our ongoing concerns that we have highlighted in our prior work. Sales increased 4.1% (consensus contemplated a 5.2% increase, so a revenue miss

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V and MA: Quantifying Concentration and Disintermediation Risk

Conversion of the Chase consumer credit portfolio to V, which apparently had not begun in 2013, will represent a 2%+ headwind to global growth for MA in 2014 (and 6-7% headwind to US growth) assuming 80% of the portfolio migrates

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COF: Guidance Conservative; Reiterate 2015 EPS of $7.70 and $90 Price Target

We view COF’s guidance for 2014 pre-provision earnings (PPE) of $9.8bn as conservative and reiterate our 2015 EPS estimate of $7.70 (versus consensus of $7.33) and our price target of $90. Consensus appears to discount a flat net interest margin

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Mobile Wallets: Structural Advantage of MCX over Apple, Google, PayPal, and Square

Mobile wallets are on the cusp of mass adoption: the WSJ reports that AAPL is looking to allow consumers to use iOS mobile devices to pay for physical goods outside Apple stores with their iTunes accounts; Google Wallet will by-pass

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KMB and PG – Better Than Feared and Better Than the Rest

Both KMB and PG reported earnings this morning and both stocks are enjoying significant, positive reactions on both a relative and absolute basis. The strength of the reactions likely is rooted in several factors that extend beyond the quality of

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MCD and SBUX – Opposite Ends of the Growth Spectrum

Both MCD and SBUX printed EPS results yesterday and, expectations aside, the two prints stand in stark contrast to each other. MCD beat consensus EPS by $0.01, but came in light of consensus revenue, with year over year growth of

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Quick Thoughts – V/MA: It’s the Routing Rules that Matter

On Friday, Visa rallied near 5% on oral arguments in front of an appeals court where judges appeared to support the Fed’s debit interchange cap of 21-24 cents/transaction in possible conflict with a district court ruling of end-July that the

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BAC: Room to Run as Rising Net Interest Margin Levers over Declining Expenses and Share Count

On the last earnings call, BAC guided to a tangible ROE of 14% “as we look out over three years” based on a 1% ROA and tangible equity/assets ratio “that’s just over 7%” (7.5% in the last quarter). In practice,

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