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Real Estate – Turning Up the Heat, Media Weekly – Earnings Season Surprises, ASML, Givaudan, Centamin, Brewin Dolphin, Harworth, Ted Baker, Market Highlights
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Givaudan reported 1H21 results, with sales in line with company-complied consensus but with EBITDA beating by 3%. Fine Fragrance and Food Service are staging recovery as economies re-open, benefiting growth, though these only account for 16% of group revenues and there is some potential for cannibalisation. Expect slower 2H21 growth rates. Raw material inflation should not be a concern with 1% guided for FY21, which can be mitigated through annual learning benefits. We upgrade our FY21 organic sales growth rates, as well as group margin by 50bps following 1H strength. Target price increases to CHF 4,025. Valuation is rich - PEG ratio of 4.4x on FY20-23E CAGR EPS. HOLD.
Givaudan Givaudan SA
Looking at Givaudan’s figures, one might get the impression the pandemic is gone. The company reported a strong set of figures, against a quite weak basis, but management has guided for some raw material price increases for FY. The growth dynamic is expected to slow down in H2 and profitability should be burdened by higher raw material costs. Despite the beat in our estimates, this scenario is already accounted for in our figures. Consensus was beaten on the profitability level.
Morgan Sindall, Volution, Wickes, Judges Scientific, DWF, Medica, Safestyle, Market Highlights
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SAS - More inflation than people expect but transitory, Healthcare this Week – Vaccines Work, Air France-KLM, Serco, Dixons Carphone, Stagecoach, HSS Hire Group, Market Highlights
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Givaudan’s trading statement gave a mixed picture as its businesses reported a strong organic growth primarily driven by emerging markets and well supported by mature markets. But the party was muted when the development was reported in CHF. The appreciation of the Swiss franc will be an issue in 2021, especially in H1. The strong organic momentum exceeded our slightly moderate expectations and was above consensus.
INITIATION - Virgin Wines UK, Redrow, Liberum Climate Portfolio – ESG Bubble?, easyJet, Plus500, Babcock, SolGold, SigmaRoc, SourceBio, Cake Box, Market Highlights
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