November 25, 2024 16:35 GMT
CONSUMER CYCLICALS: Revisit to Q3 Earnings (x2)
CONSUMER CYCLICALS
(Consumer & Transport)
6 names we were most concerned for on levels. All of them reported rough results but with mixed impact on credit. Couple of asides;
- Airlines are facing better conditions sector wide into 4Q. It does not change the issues Air-France and Lufthansa are facing - but it does give them favourable conditions to navigate a turnaround. We also underestimated the power of German retail bid on Lufthansa - we effectively ignore it for RV heading forward.
- Electrolux year-on-year gain is as it rolls weak comparisons from a rough last year where it clocked a sizeable operating loss. BS is levered into high net-3x handle but it has tagged (a now less than €870m) in non-core assets to be divested - proceeds could help delever into the net mid-2-handle. Co is BBB Neg and curve does now price the downgrade (including 28/30s finally flipping positive) - but we continue to encourage caution.
- Whirlpool guidance shows some more yoy stability and is not as rocky as peers. We still question co's BS governance and stated based on recent history.
- The staffers, Adecco and Randstad, we have touched on before. Randstad is low levered so we have less concern but Adecco is not. It trades wide for its ratings now but we encourage caution till we see more stability.
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