iShares US Consumer Services
Latest iShares US Consumer Services News and Updates
Why more Europeans could be eating at McDonalds and Yum!
Employment could be turning around The below chart shows employment growth for countries in Europe. The Eurozone, which only includes countries using the euro (so, excluding the United Kingdom and Russia), has been experiencing a declining growth rate over the past two years. While the overall growth was in positive territory from mid-2010 to mid-2011, […]
Syria strike would raise gas prices and reduce restaurants’ sales
Why higher gasoline prices can reduce people’s leftover spending at restaurants, which will negatively affect restaurant sales.
Analysts Revised the Price Target after McDonald’s Earnings
Wall Street analysts set a price target of $125.1 for the next 12 months with a return potential of 5% from the closing price of $119.2 on January 25.
Why Investors Should Watch Macao’s Unemployment Rate
Unemployment rate The unemployment rate indicates the percentage of the labor force that is currently unemployed but actively seeking employment. In 2000, the unemployment rate in Macao peaked at 7%. Since then, tremendous growth in the gaming industry has helped reduce employment in Macao. Unemployment averaged 3.8% between 1996 and May 2017. Between January and […]
Chipotle Delivers: It Brings Back Carnitas
On September 28, Chipotle’s management announced that it was able to resume serving carnitas in 90% of Chipotle’s restaurants.
Macao Revenue Beats Expectations by a Wide Margin
May revenue marks a high point According to the Gaming Inspection and Coordination Bureau, Macao’s gross gaming revenue has risen 23.7% YoY (year-over-year) to 22.7 billion Macao patacas, or $2.8 billion. The revenue growth beat analysts’ estimate by a wide margin. Analysts had forecast Macao’s May revenue to grow 16.5% YoY. May marks the tenth consecutive […]
Walgreens’s Deal with Rite Aid Still on, but Delayed
In October 2015, Walgreens Boots Alliance (WBA) announced its intention to acquire Rite Aid (RAD) for a total enterprise value of $17.2 billion.
Analysts’ Views on Delta Air Lines after Its Traffic Release
Analyst upgrades Delta Air Lines (DAL) has already received four downgrades since its traffic release yesterday. Imperial Capital reduced its target price from $54 to $50, Deutsche Bank has reduced its target price from $62 to $59, Cowen & Co. has reduced its target price from $66 to $60, and UBS has reduced its target […]
Pizza Companies: Why Stock Prices Are Struggling
Since the beginning of 2017, Papa John’s, Domino’s Pizza, and Yum! Brands have returned -16.2%, 15.1%, and 20.7%, respectively.
Must-know: Will Charter (CHTR) bid for Time Warner Cable (TWC)?
While Charter has openly and aggressively pursued Time Warner, any deal would likely be difficult to execute and fraught with risks.
Wall Street Analysts’ Recommendations for Southwest Airlines
At present, 35.3% of the analysts tracking the Southwest Airlines (LUV) stock have “strong buy” ratings, another 35.3% have “buy” ratings, and 29.4% have “hold” ratings on the stock.
Will Dunkin’ Brands’ 2Q17 Earnings Boost Its Stock Price?
Dunkin’ Brands, the owner of the Dunkin’ Donuts and Baskin-Robbins brands, is scheduled to announce its 2Q17 earnings before the market opens on July 27, 2017.
Will Starbucks’s Fiscal 3Q17 Earnings Boost Its Stock Price?
Starbucks (SBUX) is scheduled to announce its fiscal 3Q17 earnings after the market closes on July 27, 2017. Starbucks’ fiscal 3Q17 extends from April 3, 2017.
Macao to See High Growth In Hotel Room Supply
New inventory The new integrated resorts opened last year by Melco Resorts & Entertainment (MLCO) and Wynn Resorts (WYNN), and those slated to open in the next two years, are set to increase Macao’s hotel inventory by more than a third. At the end of April, Macao had approximately 37,000 rooms. This figure is expected […]
Are New Integrated Resorts Expanding Macao’s Market?
Increasing market In the past four months, Macao’s gross gaming revenue has grown. Many analysts believe that the growth is not coming from cannibalization of existing casinos, but growth in the overall market size due to a shift to the mass market. Macao’s revenue grew 18% YoY (year-over-year) in February and March, followed by a […]
How Much Upside Is Left in Starbucks’s Stock Price?
Starbucks’s (SBUX) share price has been soaring since it announced its fiscal 4Q16 results on November 3, 2016. Let’s explore why.
Macy’s Could Benefit from Higher Demand for Consumer Electronics
Macy’s is likely to benefit from its partnership with Best Buy given the growing demand for consumer electronics.
Analyzing Macao Casinos’ Valuation
Current industry valuation As of June 23, 2017, the Macao casino industry’s valuation stands at 12.1x. However, the average valuation for 2017 is much lower, at 11.3x. However, this valuation is a definite improvement from the lows seen in 2015, when the industry valuation averaged at 9.6x. The industry saw its highest valuation of 16x […]
Can McDonald’s Same-Store Sales Turnaround Continue in 4Q15?
By focusing on product innovations, a value menu, and time-limited offerings, McDonald’s increased same-store sales in 3Q15 globally. Analysts expect this trend to continue in 4Q15 as well.
Are McDonald’s higher sales in Europe part of a larger trend?
In this series, we uncover the key indicators investors should know to help them stay calm and position themselves correctly in the restaurant market. Investing is an art and a science. There is no secret formula.
Where Is Foot Locker Investing for Future Growth?
Over the last five years, Foot Locker’s (FL) capex (capital expenditures) has risen as the company has focused on growth (IWF) initiatives.
Six Flags Entertainment: An overview of the largest theme park
Six Flags Entertainment Corp. (SIX) is the world’s largest regional theme park company with $1.1 billion in revenue and 18 parks across North America.
Why Six Flags’ operating cash flows are prone to fluctuation
Six Flags Entertainment’s (SIX) operating cash flows are largely driven by attendance and per capita spending levels.
Must-know: How Six Flags generates its revenues
Six Flags derived 55% of its revenues from theme park admissions for the last 12 months ended September 30, 2014.
Must-know: A look into Six Flags’ debt-to-equity ratio
Industry debt-to-equity ratio is about 5.5. Six Flags’ debt-to-equity ratio of 4.0 shows the company aggressively finances operations with debt capital.
Share price performance for Six Flags since bankruptcy recovery
Six Flags’ share price on May 10, 2010, reflects $7.36 per share, the price of new common stock upon the company’s emergence from bankruptcy.
Why a soft restaurant performance index is negative for sales
Investors can interpret the decline in the index for July as a somewhat negative indicator for companies like McDonald’s Corp. (MCD).
3.2 Million Americans Quit Their Jobs in February
The “Job Openings and Labor Turnover Survey” (or JOLTS) data for February was reported on April 13, and it contains information about job openings and total separations.
Non-Manufacturing Sector Grew for 98th Consecutive Month
In March, the service sector continued to grow but at a slower pace.
Why the US Workforce’s Quit Rate Has Remained High
January’s JOLTS (Job Openings and Labor Turnover Survey) data, which contains information about job openings and total separations, was reported on March 16.
How Walgreens’s International Businesses Performed in 1Q18
In this part of our series, we’ll discuss the performance of Walgreens Boots Alliance’s (WBA) Retail Pharmacy International and Pharmaceutical Wholesale businesses in 1Q18.
Domino’s Stock Rises on Stock Upgrade
On January 4, Credit Suisse and Oppenheimer upgraded Domino’s Pizza (DPZ) from “market perform” to “outperform,” which appears to have increased investors’ confidence, leading to a rise in the stock price.
What’s Driving Wendy’s Stock Price
In this series, we’ll look at analysts’ earnings and revenue estimates for the next four quarters. We’ll also review Wendy’s valuation and analysts’ recommendations.
What Rising Services Activity Means for the US Economy
After reaching a lifetime high in October 2017, the ISM (Institute of Supply Management) non-manufacturing index fell 2.7 percentage points to 57.4%.
This ISM Index Hit a Lifetime High in October
For October, service sector activity rose at a pace not seen since the inception of the report. The non-manufacturing index reached a lifetime high of 60.1.
How Investors Can Assess Priceline’s Increasing Leverage
At the end of 2Q17, Priceline (PCLN) had $6.4 billion cash on its balance sheet.
Priceline’s Valuation: What Is Priced In?
Priceline (PCLN) trades at a forward PE (price-to-earnings) multiple of 25.2x.
Walgreens: Strong US Pharmacy Sales
Walgreens’ (WBA) Retail Pharmacy USA division includes its retail and pharmacy operations in the US. It accounted for ~74% of Walgreens’ 4Q17 top line.
Why Investors Are Optimistic about Dunkin’ Brands’ 3Q17 Earnings
Dunkin’ Brands (DNKN) plans to announce its 3Q17 earnings on October 26. On October 19, DNKN stock was trading at $55.96 for a 6.5% return potential since its 2Q17 earnings report.
Delta Air Lines’ Traffic Growth Puts On A Positive Show
Traffic growth Delta Air Lines’ (DAL) total traffic grew at a significantly higher pace than its capacity. Capacity growth is a major driver for airlines. Traffic growing at a higher pace than capacity growth is good news as it signals higher demand and improves capacity utilization. In August 2017, Delta’s traffic grew 6.9% YoY (year-over-year). […]
Macao Casinos Hope Hotel Supply Will Drive Demand
Macao’s casinos are trying to change Macao from a gaming-only destination to more of a Las Vegas–like destination.
What Unemployment Numbers Tell about Macao Casinos
In 2000, the unemployment rate in Macao peaked at 7.0%. Since then, tremendous growth in the gaming industry has helped reduce unemployment.
Are the New Integrated Resorts Increasing Macao’s Market?
Macao’s gross gaming revenue growth in the past four months has many analysts believing that the growth is driven by the shift to the mass market.
Macao July Revenues Saw Highest Growth in 2017, Beat Expectations
According to the Gaming Inspection and Coordination Bureau, Macao’s gross gaming revenues have risen 29.2% YoY to MOP 23.0 billion ($2.9 billion).
Jack in the Box Stock Rose despite Weak Fiscal 3Q17 Earnings
Jack in the Box (JACK) posted its fiscal 3Q17 earnings results on August 9. The company posted adjusted EPS (earnings per share) of $0.99 on revenues of $357.8 million.
Why Shake Shack’s 2Q17 Earnings Failed to Impress
The New York–based fast-casual restaurant chain Shake Shack (SHAK) posted its 2Q17 earnings on August 3. Here’s what you need to know since then.
Will Wendy’s 2Q17 Earnings Boost Its Stock Price?
Wendy’s (WEN) is all set to announce its 2Q17 earnings before the market opens on August 9, 2017.
Chipotle Hopes to Bounce Back after Strong 2Q17 Earnings
Chipotle Mexican Grill (CMG) posted its 2Q17 earnings on July 25, 2017. The company posted an adjusted EPS of $2.32 on revenues of $1.17 billion.
Why the Fed Isn’t Satisfied with Labor Market Conditions
Despite the strong growth in employment numbers, the Fed’s latest monetary policy report had some comments about slow wage growth.
Investors Are Optimistic before Domino’s 2Q17 Earnings
Domino’s will announce its 2Q17 earnings before the market opens on July 25. In 1Q17, Domino’s posted adjusted EPS of $1.26 on revenues of $624.2 million.
Walgreens’s Pharmacy USA Division Delivers Superb 3Q17 Performance
The Retail Pharmacy USA division accounted for ~75% of Walgreens Boots Alliance’s (WBA) top line in 3Q17.
Wall Street Sees a 22% Upside in Walgreens
Walgreens is covered by 25 Wall Street analysts. The company has received a rating of 2 on a scale of 1 (strong buy) to 5 (sell). It has 72% “buy” and 28% “hold” recommendations and no “sell” recommendations.
Southwest Airlines’ Capacity Growth Is Slowing
In May 2017, Southwest Airlines’ (LUV) capacity rose 4% year-over-year (or YoY). This rise was lower than the 7.6% YoY rise it recorded in April 2017.
How Does Chipotle’s Valuation Multiple Compare to Peers?
For this analysis, we have considered the forward PE (price-to-earnings) multiple due to high visibility in Chipotle Mexican Grill’s (CMG) earnings.
Analyzing McDonald’s Valuation Multiple
As of May 24, 2017, McDonald’s was trading at a PE multiple of 22.6x—compared to 21.3x before the announcement of its 1Q17 earnings.
How JACK’s Valuation Multiple Compares with Its Peers
For the next four quarters, analysts are expecting JACK to post EPS growth of 9.4%.
Strong 1Q17 Earnings Boost Shake Shack’s Valuation Multiple
As of May 5, 2017, Shake Shack was trading at a forward EV-to-sales ratio of 3.4x, as compared to 3.1x before the announcement of its 1Q17 earnings.
How Papa John’s Valuation Multiple Compares with Its Peers
For the next four quarters, Wall Street analysts expect Papa John’s to post EPS growth of 11.7%, which could have been factored into Papa John’s current stock price.
What Investors Are Willing to Pay for Marriott International
Marriott (MAR) currently trades at a forward EV-to-EBITDA multiple of 14.5x.
Chart in Focus: Marriott’s Dividend Payout in 2017
Marriott (MAR) has an indicated dividend yield of 1.8%, which is the lowest among its peers.
Will Shake Shack’s 1Q17 Earnings Boost Its Stock Price?
New York–based fine-casual restaurant Shake Shack (SHAK) is all set to announce its 1Q17 earnings on May 4, 2017.
Strong 1Q17 Performance Drove Chipotle’s Valuation Multiple
Before the announcement of Chipotle’s 1Q17 earnings, analysts expected EPS (earnings per share) of $8.93 for the company over the next four quarters.
Here’s What Just Boosted McDonald’s Stock Price
McDonald’s posted its 1Q17 results on April 25, reporting EPS of $1.47 and revenues of $5.68 billion. Its EPS rose 19.4% on a YoY, and its revenue fell 3.9%.
How Domino’s Valuation Multiple Compares to Peers’
Since the announcement of 4Q16 earnings on February 28, 2017, Domino’s forward PE multiple has fallen from 36.2x to 32.3x.
How Starbucks’s Valuation Compares to Peers
For the next four quarters, analysts are expecting Starbucks to post EPS growth of 12.8%.
Where McDonald’s Valuation Multiple Stands Next to Peers
As of April 19, 2017, McDonald’s was trading at a PE multiple of 21.1x, as compared to 19.9x before the announcement of its 4Q16 earnings.
How Panera’s Valuation Compares to Peers
On April 5, 2017, JAB Holdings had offered to buy Panera Bread for $7.5 billion.
Chipotle’s Valuation Multiple Rose on Investor Optimism
As of April 13, 2017, Chipotle was trading at a PE multiple of 50.9x compared to 47.2x before its 4Q16 earnings announcement.
How the Economy and Markets Could React to Tax Reforms
The US Fed has gradually increased interest rates without spooking the fixed income markets and continues to project future hikes.
Macao’s Gaming Revenues Posted Double-Digit Growth in February
Macao’s casinos reported their seventh consecutive month of revenue growth in February 2017. Casinos’ February revenues rose 18% year-over-year (or YoY) to ~$2.9 billion.
What the Momondo Acquisition Means for Priceline and Expedia
Momondo is estimated to have generated $125 million in revenues for the last 12 months, which means a price-to-sales multiple of 4.4x.
Priceline’s String of Acquisitions Continues with Momondo
Earlier this month, the Priceline Group (PCLN) signed a deal to acquire Momondo Group. Priceline will acquire all outstanding shares of Momondo for $550 million in an all-cash deal.
McDonald’s Raises Its Dividends for 4Q16
Dividends In September 2016, McDonald’s (MCD) announced dividends of $0.94 for the fourth quarter, taking the total dividend for 2016 to $3.61. This dividend represents a year-over-year growth of 5.0% from the $3.44 reported in 2015. For the next four quarters, analysts expect McDonald’s to pay dividends of $3.76, which represents a growth of 5.6% […]
Walgreens Boots Alliance’s SWOT Analysis ahead of 1Q17 Results
Let’s wrap up this series on Walgreens (WBA) with a brief SWOT (strengths, weaknesses, opportunities, and threats) to gauge the company’s standing.
What Do Priceline’s Key Metrics Suggest?
From 2012 to 2014, Priceline Group’s (PCLN) gross bookings grew at an average of 30%. For 2015, accounting for the strong US dollar, growth was just 10%.
Assessing the Paradigm Shift in the Fiscal Policy
Fiscal policy has turned more expansionary, with stress on fiscal spending and monetary easing, thereby flooding the financial markets worldwide with huge liquidity.
LUV Plans to Stay on Track to Achieve Its Utilization Guidance
In 2015, LUV’s approach to prudent capacity growth yielded better utilization of capacity. Its load factor rose from 82.5% in 2014 to 83.6% in 2015.
Walmart’s Efforts to Boost its Revenue
In fiscal 1Q17, which ended on April 30, 2016, Walmart’s overall revenue increased by 0.9% to $115.9 billion.
How Was Walgreens’s Retail Pharmacy Business Performance in the US?
Walgreens (WBA) operates close to 8,200 pharmacies in the US. It is closely followed by CVS Health (CVS), which operates slightly fewer than 8,000 pharmacies.
Are Indicators Suggesting an Economic Turnaround?
Over the past few years, China’s economic growth witnessed a significant slowdown. In the first quarter, the economy fell to 6.7%.
Why India Is a Jewel among the BRICs Right Now
India is a bright spot within the BRICs and stands out in a world where economic growth is sparse.
Why China’s Slowdown Is the Biggest Worry in US Markets
A slowdown in growth there has been blamed in part for the slide in oil given that China is the biggest consumer of the commodity.
Effect of China’s Economic Transition on Consumer-Driven Model
The big theme of 2015 was the Chinese (FXI) (MCHI) economic transition from an investment- and manufacturing-led growth to a consumption- and services-driven economy.
Inside the Store Expansion Plans of Off-Price Retailers in 2016
By the end of fiscal 2015, TJX Companies had 2,697 off-price stores in the US under the names T. J. Maxx, Marshalls, HomeGoods, and Sierra Trading Post.
What Are the Traditional Measures of Labor Productivity?
Labor productivity is an important tool to measure the strength of a country’s economy. Policymakers often use this indicator to compare output efficiency during a particular period.
Why Returns Will Likely Be Far from Uniform within Asset Classes
During the last few years, return dispersions within asset classes have been dramatic.
How Will Jack in the Box’s Qdoba Perform in 1Q16?
The Qdoba Mexican Eats management has set 1Q16 guidance for company-operated restaurants at 0% to 2% while the analysts expect it to be around 1.3%.
Unit Growth and Dunkin’ K-Cup Sales Drove 4Q15 Revenue Growth
Dunkin’ Brands (DNKN) earns its revenue from five different channels: Dunkin’ Donuts US, Dunkin’ Donuts International, Baskin-Robbins US, Baskin-Robbins International, and others.
Which Factors Affect the Valuation Multiple of Brinker International?
Since 4Q15, the PE multiple of Brinker International has been declining.
How Could Falling Consumer Confidence Affect the Hotel Industry?
The Conference Board Consumer Confidence Index as of November 2015 was 90.4 compared to 102.6 in September 2015.
Growth in Demand, Limited Supply Drove US Hotel Occupancy Rates
Occupancy rates, which measure hotel capacity utilization, saw unprecedented growth in 2015. November 2015 occupancy rates saw a year-over-year growth rate of 3.2%.
Nordstrom’s Expansion Plans for Off-Price Rack Business
On January 7, 2016, Nordstrom (JWN) announced its plans to open an off-price Nordstrom Rack store in Braintree, Massachusetts, in fall 2016.
Just How Much Does Marriott International Stand to Benefit from the Starwood Acquisition?
Marriott’s acquisition of Starwood will likely help Marriott double its international portfolio while diversifying its global presence.
Investor Essentials: Understanding Hyatt’s Valuation Multiple
Hyatt’s EV/EBITDA has moved in line with the median valuation multiple of its peers. Hyatt, with rare exceptions, has always traded at a discount to the median valuation multiple of its peers.
Hyatt’s Retail Investors Have Skewed Voting Power
As of January 31, 2015, Hyatt had 36.8 million Class A shares entitled to one vote and 111.4 million Class B shares entitled to ten votes.
Introduction to Hyatt’s Select Service Brands and Other Brands
Hotels that offer accommodation with limited services and amenities are called select service hotels. Hyatt (H) operates about 37,500 rooms and two brands under this segment.
An Overview of Hyatt Hotels’ Competition
Some of Hyatt’s competitors—Hilton (HLT), Marriott (MAR), Wyndham (WYN), and Starwood (HOT)—compete in all the segments: Hotels and Resorts, Residential Units, and Vacation Ownership Units.
Amazon Prime Now Has Added 4,000 New Items to Its On-Hour Delivery Service
On December 10, Amazon announced that it has added 4,000 new items to its Prime Now service, especially for the holidays, from toys to big-screen TVs.
Priceline and Expedia Control 90% of the US Online Travel Market
In the last ten years or so, Priceline and Expedia have acquired a variety of companies to consolidate their positions in the online travel market segment.
Why Is the Terror Attack in Paris Different?
Since the terror attack in Paris on November 13, France, Russia, and other nations have conducted air strikes in Syria. The air strikes are targeting ISIS militants.