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Quick Thoughts – PM Investor Day, Revised Guidance

In conjunction with the company’s investor day, PM offered revised 2014 EPS guidance: EPS in the range of $4.87 to $4.97 versus a prior estimate of $5.09 to $5.19; The lowered guidance ($0.22 per share at both the high and

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The Role of Branch Networks and Information Scale in the Coming Deposit Re-price Cycle

“The customer who likes to visit a branch is less price sensitive than a customer whose relationship is online-only. Banks haven’t fully understood that if I have a branch in this neighborhood, it reduces price sensitivity[1].” Frank Rohde, CEO of

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Mobile Wallets: The Battle for Control of Point-of-Sale and Opportunity for FIS

Amazon’s announcement of the Fire ‘phone yesterday, along with the launch last October of pay-with-Amazon (allowing customers to use their Amazon credentials to pay on other e-commerce sites), raises the possibility of an Amazon wallet leveraging the firm’s 250mm cards-on-file

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Quick Thoughts – KO, Rumor, Trees and the Forest

The push back that we received when we included KO in our list of consumer staples M&A candidates was fairly intense – but not unexpectedly so – KO isn’t a controversial stock at this point, but rather one that investors

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Quick Thoughts – Early iBeacon Trials are Encouraging for Apple

Digital wallet-provider LevelUp reports that mobile payments volume increased 22% over 30 days at the 50 merchants where it installed iBeacon. As discussed in our May 30th note, “Apple vs. Banks in Mobile Payments: Update”, the focus of iBeacon is

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ADS, AXP and JPM: The Bank Edge over Online Advertising and Payments Platforms

There is a secular shift in advertising from generic brand advertising on broadcast channels to data-enabled direct marketing on digital channels. Our colleague, Paul Sagawa, reported on the shift in a research note of June 9th titled “The Revolution in

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Quick Thoughts: JPM – Cyclical Improvement in NIM and FICC will Lever over Flat-to-Down Expenses for a 2015 EPS Beat

JPM’s economic model is to sustain a tangible ROE of 15-16% despite lifting the CET1 ratio (to 10-10.5% from the current 9.6%) by levering higher net interest income over flat-to-down expenses (for a 55% efficiency ratio vs. 59% in 2013);

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And the Winner is…TSN’s Bankers?

In news that appears to put an end to the saga of Hillshire Farms (HSH), TSN has emerged as the “winning” bidder with a $63 per share offer. o   This implies a 15.7x multiple of EV to TTM EBITDA, rarefied

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The Shift from Signature Debit and Prospect for a Bank-Owned PIN Debit Network

The debit business in the US is unsustainable. Durbin-regulated banks are losing money on signature debit as the swipe fee has fallen to 24 cents/transaction (from a pre-Durbin 59 cents) vs. Fed estimates for fraud and processing costs at 30

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Impact of European Monetary Policy on Bank Margins in the US

European monetary policy matters to bank net interest margins in the US because the risk of disinflation has collapsed European bond yields (to 1.6% on the 10-year from 2.2% at end-2013) dragging down US Treasury yields (to 2.6% on the

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