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Philip Morris continues to expand in the markets of tobacco heating systems
Philip Morris continues to expand in the markets of tobacco heating systems The largest manufacturer of tobacco products, Philip Morris International Inc. (PM), has released a report for the second quarter of 2021. The company's revenue showed an increase of 14% y/y, to $7.59 billion, slightly short of the general market forecast. Due to cost optimization, operating profit increased by 14.6% y/y, to $3.13 billion, exceeding investors' expectations. EPS was slightly below the average estimates and amounted to $1.39, showing an increase of 11.2% y/y.The volume of supplies of tobacco products and tobacco heating systems increased by 6.1% y/y, showing a stronger increase compared to 2019-2020. In particular, for the first time in a long time, the supply of traditional tobacco products increased by 3.2% y/y, to 156.1 billion units, and the Middle East and Africa became the main regions for growth (+11.6%). However, it is worth taking into account the low base of the second quarter of 2020, during which the introduction of quarantine restrictions began.The direction of alternative smoking devices and tobacco heating systems increased by 30.2% y/y, to 24.4 billion units, primarily due to the expansion of the largest markets of presence - the EU and Eastern Europe (+64% and +33%, respectively). The number of IQOS users amounted to more than 20 million, most of whom stopped smoking traditional cigarettes. The company continues to expand in the markets of tobacco heating systems: its share increased by 1.4% in the quarter and amounted to almost 8% of the total addressable market, providing a further field for growth.Management has announced a new share repurchase program worth up to $7 billion over three years, which will begin in the third quarter of 2021. In addition, the company's management published a forecast for 2021, in which it raised expectations for key financial indicators. In particular, revenue is projected to increase by 6-7%, as well as an increase in operating profitability by 2%. Adjusted EPS for the full year is expected to increase by 12-14%, to $5.79-5.89. Due to the increasing importance of alternative smokeless devices, the company depends on global semiconductor supply chains. However, management pointed out the limited impact of the current global shortage of these spare parts for consumer devices.It is worth noting that Philip Morris is actively reducing its debt burden, as well as increasing its adjusted EBITDA margin. At the moment, the ratio of total debt to adjusted EBITDA is 2.09, whereas at the end of 2020 it reached 2.51. A similar dynamics is noted in the ratio net debt/adjusted EBITDA: 1.74 compared to 1.93 at the end of 2020.We view the Philip Morris report positively, noting strong results for the second quarter and an increase in management forecasts for 2021. Over the past six months, PM shares have generally traded better than many securities of "value" companies, adding 18%. However, we believe that the potential impact of positive factors has already been taken into account in the quotes. As a result, our target price for PM shares is $92.
Jul 22, 2021 Read
Alibaba Stock Analysis
Alibaba Stock Analysis During the week, the company's securities grew by almost 3%. On Wednesday, it became known that Alibaba and Tencent can open their ecosystems to each other. This step was a reaction of tech giants to the tightening of regulation by the Chinese authorities. By the end of the week, the foreign policy background had a negative impact.Forecast: The technical picture on the daily chart is not yet on the side of the growth scenario. At the beginning of the week, the share price of Alibaba may fall to the level of$206. Until the price returns above $215, it is premature to consider the option of forming an upward movement.The scenario of consolidation within the $206-213 range for the upcoming week is a priority.Due to the complexity of the company's relations with the Chinese authorities, long-term investment in Alibaba securities is accompanied by increased risks.Analysts' consensus forecast for Alibaba shares is at $292 per share, which is 37% higher than the last close of $212. The securities are available for trading under the BABA ticker.
Jul 19, 2021 Read
Shares of confectioners are updating historical highs. Two of the best chips in the industry
Shares of confectioners are updating historical highs. Two of the best chips in the industry Chocolate papers are in a growing trend. The shares of the two largest companies in the industry: Mondelez and Hershey-updated their absolute peaks in the last session.The Hershey CompanyIt was founded at the end of the XIX century as a chocolate factory in the town of the same name in Pennsylvania. Today it is the second largest confectionery corporation in the United States (more than $37 billion) and one of the largest in the world. He owns 17 factories in 10 countries.M&M's candies, which have been popular on the market for 70 years, are also the brainchild of the company. However, the production rights now belong to competitors from Mars Incorporated (they were originally partners). In total, Hershey's portfolio includes about three dozen brands.In May, the company bought the young star of the confectionery industry Lily's Sweets for $425 million. On the basis of this brand, Hershey's plans to develop the production of organic sweets based on vegetable raw materials with a low sugar content. The corporation plans to expand further by purchasing promising market players.Mondelez InternationalThe largest chocolate chip in the United States by size. The company is now worth 90 billion in the market, being next to Booking, Uber and Micron. It is ranked 108th in the Fortune 500 ranking. He has been conducting his business since the beginning of the 1920s, that is, for almost a whole century.The Mondelez portfolio includes such well-known brands as Milka, Côte d'Or, Toblerone and Cadbury. In addition to chocolate production, it has a wide range of children's and dairy products, ice cream, bottled water and animal feed.The company is very active in the field of M&A. The last of the major acquisitions is the Greek Chipita S.A., which occupies a leading position in the sweets market of Central and Eastern Europe (the flagship brand is 7DAYS, known for its croissants). The deal with Mondelez took place at the end of May and was worth $2 billion.Financial indicatorsBoth companies showed positive revenue dynamics in the first quarter of 2021, largely due to expansion into new brands. In addition, both keep a good trend due to the growth of product inflation in the United States and the reduction of production costs due to automation and digitalization.Hershey's strategy allowed to increase turnover and profit faster than Mondelez, but forecasts for the current quarter say that the figures will be comparable for both companies and quite moderate against the background of the beginning of the year.In terms of business efficiency, as well as in terms of debt load and liquidity indicators, Hershey is the leader. The company has more opportunities in terms of inorganic growth: it can buy up small competitors at lower costs for itself. Mondelez, apparently, will have to work hard to reduce costs in order to keep up.The two companies have a comparable dividend amount. A little less than 50% of net profit is now spent on payment in favor of shareholders. Cheaper by Mondelez multipliers. The paper has an average analyst target for shares above 7% of the current price. Hershey is more overbought and left by 3%; above the consensus forecast.Dynamics of sharesSince the beginning of the year, Hershey's shares have been on par with the broad market, showing an increase of just over 18%. Mondelez shares have risen within 10% over the same period. This backlog has been accumulating over the past two years, despite the fact that for 10 years in a row, the papers followed each other quite clearly.The last week there has been a tendency to change leadership. Overheating at Hershey led to the fact that Mondelez grew by 2% against 1.8% at the competitor. The positive dynamics in the broad indices are likely to continue to drive both securities, but Mondelez's growth may be stronger, since a serious open gap from Hershey remains.The main thingThe shares of the two largest US confectioners are in an uptrend. Last week, the growth of Mondelez and Hershey securities accelerated in favor of the former. Fundamentally, Hershey looks better, but local overheating is more pronounced in its shares, and this can slow down growth.Mondelez has more room for maneuver both in terms of margin growth and debt reduction. As a result, any positive can lead to a rapid growth of shares following a competitor. The last week of the month will be important for both papers. Mondelez reports on July 27, Hershey on the 29th.
Jul 19, 2021 Read
Bitcoin and cryptocurrencies have collapsed — what's going on?
Bitcoin and cryptocurrencies have collapsed — what's going on? Bitcoin fell sharply on Sunday morning below $51,000, losing about $8,000 (13%) in 20 minutes.The decline began at the beginning of the trading day, when the first cryptocurrency fell below $60,000. Bitcoin and cryptocurrencies have collapsed — what's going on? Bitcoin has been losing more than 10% since the beginning of the day. Altcoins decline even more: Ripple (XRP) has collapsed by more than 20%, Litecoin losses are approaching 20%.The result of these movements was the liquidation of $9.12 billion in traders' positions over the past 12 hours. Bitcoin accounts are about half of the total value. During the day, the volume of liquidations reached $9.81 billion, which was the largest value in the history of the crypto market.The number of liquidated traders is estimated at more than a million. The scale of today's movement was largely influenced by the cascading liquidation of long positions, which is also evidenced by the sharp change in funding rates for futures on negative values.On Friday, the hashrate of the leading bitcoin mining pools fell sharply amid problems with the supply of electricity after explosions and flooding in coal mines in several provinces of China.Popular trader Ton Weiss, suggested that this news caused a panic in the market. He himself called this moment a good time to buy an asset.Analyst Willy Wu notes that the price and hashrate of Bitcoin have always been correlated, so the fall is associated with power outages in China.Larry Cermak, head of research at The Block, disagrees with these conclusions, suggesting that the reason for the drop was the natural exhaustion of the market and disappointment with the price of the Coinbase listing.In the network, meanwhile, rumors are spreading that the US Treasury Department is preparing to charge several financial institutions for money laundering through cryptocurrencies. The source of the information is called lawyers who are familiar with the plans of the working group of US Treasury Secretary Janet Yellen.A lawyer specializing in cryptocurrencies, Jake Czerwinski, considers this information unreliable.The sharp growth of Dogecoin and other altcoins in recent days is a worrying sign for the entire market as a whole, as it indicates that at this stage after the successful direct listing of Coinbase, everyone who wanted to buy BTC has already bought it.
Apr 18, 2021 Read
BTC, ETH and XRP Price Analysis, April 16
BTC, ETH and XRP Price Analysis, April 16 BTC/USDBitcoin, 1H chartYesterday, the bears tried to push the pair below the two-hour EMA55, but support was felt around the 62000.00 USD mark, which helped the price to stay in consolidation.Late in the evening, buyers tried to restore the price to the zone of the absolute maximum, but met resistance on the approach to the level of 64000.00 USD. In an overbought market, it will be difficult for the bulls to continue the race. Today, weak selling pressure may be limited to the moving average of EMA55, but the level of average prices will not be able to contain a powerful bearish momentum. In this case, the price will sink to the level of 61000.00 USD. ETH/USDEthereum, 1H chartYesterday, the price of Ethereum managed to stay above the level of 2400.00 USD, and tonight the pair tested the level of 2500.00 USD, setting a new absolute maximum at the point of 2548.93 USD. Today, it is possible to increase sales volumes. In this case, the price of ETH will roll back to the blue trend line.   XRP/USDRipple, 1H chartYesterday, trading volumes on Ripple declined, and the price of XRP could not stay in the ascending channel. The pair moved in a sideways range with support around the 1690 USD mark. At volumes below the average level, buyers will not be able to test the psychological level of $2 per coin.  If today the bears push through the orange support of 1690 USD, the price will sink to the area of 1500 USD.
Apr 16, 2021 Read
BANK OF JAPAN EXPECTS MODEST ECONOMIC RECOVERY
BANK OF JAPAN EXPECTS MODEST ECONOMIC RECOVERY The head of the Japanese Central Bank, Haruhiko Kuroda, said that the country's economy will grow thanks to a gradual recovery in global demand. However, this economic growth is likely to be modest. The coronavirus pandemic continues to have a negative impact on the Japanese economy. Since the fall of last year, the increase in the number of diseases in the country has accelerated, which puts pressure on the consumption of services. Haruhiko Kuroda noted that in two of the nine regions of the country, the situation remains very difficult. The quarterly report of the Japanese Central Bank shows a growing discrepancy between the state of exporting companies and companies engaged in retail trade. The former benefit from the rapid growth of demand for Japanese products from foreign customers. At the same time, the retail chain is still under pressure from falling consumer demand. The report notes an increase in sales of Japanese cars against the background of the recovery of the car market in the United States. Smartphone manufacturers are also showing good dynamics. The Japanese economy managed to recover from the downturn due to the growth of export orders. However, weak vaccination rates with an increasing number of diseases are clouding the economic outlook.USDJPY is 108.83 and trend is bearish.
Apr 15, 2021 Read
AUSTRALIA'S JOBLESS RATE FELL TO 5.6% IN MARCH
AUSTRALIA'S JOBLESS RATE FELL TO 5.6% IN MARCH The Australian economy is gradually recovering from the crisis caused by the coronavirus pandemic. Against this background, the unemployment rate continues to decline. According to the country's statistics office, it was 5.6% in March, which is only 0.4 percentage points higher than the figure recorded in Australia before the outbreak of the pandemic. The number of new jobs was 70,700 in March. Employment reached a record high of 66.3%. At the same time, employment among women has already slightly exceeded the pre-pandemic level. Bjorn Jarvis, who heads the Australian Bureau of Statistics, said that the recovery in the number of jobs in the regions of the country is uneven. The leaders are the states of Washington and Queensland, where the number of jobs is already higher than before the crisis. This was facilitated by the recovery of investment in mining enterprises. The economic growth rate in these states exceeds the growth rate in other regions of Australia.AUDUSD is 0.7745 now and trend is bullish.
Apr 15, 2021 Read
Large funds on CME buy Bitcoin on correction
Large funds on CME buy Bitcoin on correction According to the COT (Commitments of Traders) reports provided by the Commodity Futures Trading Commission (CFTC) - for the week ended last Tuesday:Large speculators (NON-COMMERCIAL) reduced the net position for the sale of bitcoin contracts by 0.25 thousand contracts to 2.42 thousand. Large speculative players began to reduce the net position for sale after a two-week build-up.Small speculators (NONREPORTABLE POSITIONS) reduced the net position to buy bitcoin contracts by 0.30 thousand contracts to 2.05 thousand Small speculators began to reduce the net position to buy also after a two-week build-up.Hedgers (COMMERCIAL) increased their net position to buy bitcoin contracts by 0.05 thousand contracts to 0.37 thousand. Hedger operators are increasing their net buy position for the second week in a row, and for 3 weeks out of the last 4.Open interest increased by 0.54 thousand contracts to 10.49 thousand.The bearish index of large speculators (the ratio of the number of contracts for sale to the number of contracts for purchase) fell by 0.12 to 1.44 for the week.Summary: COT reports on bitcoin reflect the growth of bullish sentiment among major speculators. Large funds actively increased purchases, taking advantage of the corrective decline, which led to a reduction in the net position for a decline in BTC by 9% for the week. At the same time, the net position began to decline from the maximum levels for the last month. The continuation of this trend may contribute to the growth of the cryptocurrency.At the same time, large funds continue to increase sales, and some of them are hoping for a continued decline in bitcoin.Small speculators in the last week mostly reduced purchases. Small speculators have been marked by an increase in bearish sentiment, but this group of traders usually does not have a significant impact on the market.Hedgers have been increasing their net position for 3 weeks out of the last 4, aimed at reducing bitcoin. Among hedgers who trade more long-term, bearish sentiment on the cryptocurrency continues to grow.Note: COT report data is fundamental and is mainly used for medium and long-term trading. Large speculators, NON-COMMERCIAL (banks, investment funds) usually trade according to the trend. Small speculators, NONREPORTABLE POSITIONS-usually do not have much influence on the market. Hedgers, COMMERCIAL (operators, large companies) usually trade against the trend. The net position is the difference between the number of buy and sell contracts. Open interest is the sum of all open positions in the market.
Mar 28, 2021 Read
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