iShares US Consumer Services
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, […]
Southwest Airlines Increases Third-Quarter Unit Revenue Guidance
Due to increasing crude oil prices, Southwest Airlines (LUV) expects fuel costs to rise more in the third quarter.
After Walgreens’s 1Q17 Results, Wall Street Remains Positive
Analysts have a positive to neutral view on Walgreens and has rated its stock a “2” on a scale of “1-strong buy” to “5-sell.”
JCPenney Looks for Growth beyond Apparel
JCPenney’s (JCP) same-store sales declined by 0.4% in 1Q16 ended April 30, 2016.
Shake Shack Stock Rose on Increased Target Price by SunTrust
On January 3, 2017, Shake Shack was trading at $16.70, which represents an increase of 7.8% from its previous day’s closing price.
How Burlington Stores Is Gearing Up for Further Growth
Burlington Stores (BURL) posted strong results in 1Q16, which ended on April 30, 2016.
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.
Has Shake Shack’s Stock Bottomed Out?
Since the beginning of 2016, Shake Shack stock has fallen 16%. Overall, 2016 has been a tough year for fast casual restaurants due to the rise in wages and a slowdown in the US economy.
A Bird’s-Eye View of Wyndham Worldwide’s Largest Segment, Vacation Ownership
Wyndham Worldwide’s Wyndham Vacation Ownership segment is its largest business segment, accounting for 49.9% of its total revenues in 2014.
Are Troubles Over for the Gaming Industry?
The gaming industry has been heavily dependent on Macao, and the Chinese economy’s troubles don’t seem to be going away soon. Companies are finding new destinations in Japan and Korea to develop the next Macao.
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 low inflation reflects weak sales but is a long-term positive
CPI growth running below 2.0% The most widely reported inflation rate is the CPI (Consumer Price Index). Since May 2012, US consumer inflation (measured by the year-over-year change in the consumer price index) has generally stayed below 2.0%. In August 2013, the overall inflation rate stood at 1.5% compared to the same month last year, […]
Kohl’s 1Q16 Sales Fell amid Challenging Retail Environment
Kohl’s (KSS) disappointed its investors with lower-than-expected sales of about $4.0 billion in 1Q16.
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 […]
Macy’s Fiscal 4Q15 Margins Fall in Heavy Promotional Environment
In Macy’s fiscal 4Q15, which ended January 30, 2016, the company’s gross margin declined to 37.4% from 40.3% in fiscal 4Q14.
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 […]
TJX Companies’ Fiscal 1Q17 Sales Defy Retail Uncertainty
TJX Companies (TJX) delivered sales of $7.5 billion in the first quarter of fiscal 2017, which ended on April 30, 2016.
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.
Why Might Macy’s Margins Come Down in Fiscal 4Q15?
Aside from expected markdowns on merchandise, Macy’s margins in fiscal 4Q15 are likely to have been impacted by investments in several growth initiatives.
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.
Las Vegas Sands’ Valuation Multiple Could Change after Earnings
As of October 12, 2015, Las Vegas Sands’ (LVS) valuation multiple stands at 11.7x. This is lower than its average forward EV-to-EBITDA multiple of 16.14x.
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.
Could the BIN-WCN Merger Deal Get Competitive?
Two companies bidding against each other in a merger deal can easily lead from a 1% gross spread to a 10% gross spread for merger arbitrage professionals.
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 […]
Russia and Saudi Arabia Could Be a Game Changer
Russia and Saudi Arabia are the top two oil producers in the world. OPEC and Russia contribute 49% of the global crude oil production.
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.
Southwest’s Leverage Reduction: What It Means for Investors
In fiscal 2015, Southwest Airlines (LUV) generated ~$3.2 billion in cash flow from operations. For 1H16, LUV has already generated $2.7 billion of cash flow from operations.
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.
Why Are Investors Confident before JACK’s 4Q16 Earnings?
Jack in the Box (JACK) will announce its fiscal 4Q16 earnings after the market closes on November 21, 2016.
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.
Is Six Flags effectively employing its debt capital?
As of January 15, 2015, Six Flags’ ROIC and WACC stood at 9.2% and 5.9%, respectively. This shows that Six Flags is employing its debt capital effectively.
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.
Why Six Flags is returning capital to its shareholders
A fundamental goal of Six Flags is returning capital to its shareholders. It has paid quarterly cash dividends since the fourth quarter of 2010.
Six Flags Entertainment is expanding beyond America
On April 10, 2014, Six Flags announced that it’s expanding beyond America with a Six Flags–branded theme park at Dubai in the United Arab Emirates.
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.
Why Six Flags Entertainment is so profitable
Let’s look at why Six Flags Entertainment is profitable. Adjusted EBITDA was $429 million for the LTM, growing at 19.7% over a four-year period since 2009.
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.
Six Flags’ cash drops, but liquidity is higher than peers’
Six Flags’ fall in liquidity ratios is mainly due to the ~$460 million fall in cash and cash equivalents because of share repurchases and dividend payments.
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%.
Southwest Airlines’ Capacity Growth Is In Line with Its Target
In November 2017, Southwest Airlines’ capacity increased 2.5% year-over-year (or YoY) after recording growth of 1.7% in October.
Why Shake Shack Is Trading Close to Its 52-Week High
On December 8, SHAK hit a new 52-week high of $46.56 and closed at $46.30, which represents a 24.6% rise since the announcement of its 3Q17 earnings.
Has Papa John’s Stock Bottomed Out?
As of November 22, 2017, Papa John’s (PZZA) was trading at $57.0—near its 52-week low of $56.71, which the company hit on November 20, 2017.
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.
Will Darden’s Fiscal 1Q18 Earnings Boost Its Stock Price?
Darden Restaurants (DRI) will announce its fiscal 1Q18 earnings before the market opens on September 26, 2017.
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.
JACK’s Stock Price Is Experiencing Downward Momentum
Jack in the Box’s stock price rose 7.4% to $109.45 as of June 6, 2017. Since then, the stock has seen downward momentum.
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.
Comparing Valuation Multiples of Chipotle, Panera, Shake Shack
As of June 14, 2017, Shake Shack was trading at a PE multiple of 69.1x compared to 60.7x before the announcement of its 1Q17 earnings.
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.
Walgreens on the Street: What the Analysts Say after Fiscal 2Q17
Wall Street’s reaction to WBA’s second quarter results While Walgreens (WBA) delivered mixed 2Q17 results, CEO (chief executive officer) Stefano Pessina’s optimism about the pending Rite Aid (RAD) deal has been well received by the analyst community. John Heinbockel of Guggenheim maintained a “buy” rating on WBA, issuing a price target of $100. While Heinbockel […]
Delta Is Reducing Leverage: What It Means for Investors
The drop in fuel prices has helped to improve Delta’s profitability tremendously in 2015 and continues to do so in 2016.
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.