Investment Rating - The report assigns a 12-month price target of R$19 for Natura&Co, indicating an upside potential of 16% from the current price of R$16.38 [16]. Core Insights - Natura&Co reported robust growth in the Natura brand in Brazil, with sales exceeding expectations by 9%, although adjusted EBITDA only beat expectations by 3% due to lower profitability in Latam and weak performance at Avon International [2][3]. - The company continues to face challenges with negative free cash flow of -R$675 million, but management expects to reduce leverage in the second half of 2024 through cash generation and EBITDA growth [3][10]. - The corporate restructuring of Avon Products Inc is a focal point for investors, with potential implications for Natura&Co's operations [3][11]. Summary by Sections Financial Performance - Natura&Co Latam revenues grew by 10% year-over-year, driven primarily by the beauty category, despite a 19% decline in the unified representative base [4][6]. - The Natura brand in Brazil saw sales growth accelerate to 15% year-over-year, while Avon brand sales in Brazil dropped by 1% [6][7]. - Adjusted EBITDA margin increased by approximately 85 basis points, primarily due to improved gross margins in the Latam operation [9]. Corporate Restructuring - Avon Products Inc filed for Chapter 11 in the US, with Natura&Co committing to provide US$43 million in debtor-in-possession financing to support Avon during the restructuring process [11][12]. - Natura&Co plans to bid US$125 million to acquire Avon’s operations outside the US, contingent on a court-supervised auction process [12]. Market Outlook - The report highlights the importance of cash generation and working capital management, noting that accounts receivable have increased due to a higher share of Natura Brazil and productivity representatives [3][10]. - Management anticipates improvements in logistics and inventory management in the second half of 2024, which may lead to temporary volatility in service levels [8].

13 August 2024 | 5:05PM EDT Mosaic Co. (MOS): Management meeting highlights Phosphate market optimism and cost initiatives; Buy We hosted a virtual meeting with MOS management today (8/13), including CEO Bruce Bodine, CFO Clint Freeland, and EVP of Commercial Jenny Wang, Overall, we come away encouraged by management's optimism on Phosphate (P) markets and internal production/cost initiatives as we head into the 2H. The discussion focused primarily on MOS' P operations, where management emphasized tight glo ...

Investment Rating - The report maintains a "Buy" rating for Melco Resorts & Entertainment Ltd. (MLCO) with a 12-month price target of $9.70, indicating an upside potential of 87.6% from the current price of $5.17 [2][3]. Core Insights - The report highlights that MLCO's market share in Macau is expected to improve due to reinvestment in product and service quality, despite facing higher costs [4][6]. - The company has experienced a decline in non-gaming revenue but managed to grow its gaming revenue by 6% quarter-over-quarter, reflecting successful property upgrades and new initiatives [4][5]. - Management is cautiously optimistic about the business outlook, noting improved GGR momentum in late July and August, with daily GGR reaching $653 million in the first two weeks of August [6][7]. - The report revises FY24E-26E EBITDA estimates down by 6% to 5% due to lower margins and GGR trends, but expects EBITDA to reflect market share momentum moving forward [8]. Financial Summary - MLCO's total revenue is projected to grow from $3,775.2 million in 2023 to $5,140.4 million by 2026, with EBITDA increasing from $961.7 million to $1,346.1 million over the same period [3]. - The company reported a net debt of $6.0 billion with a net leverage ratio of 5.3x, indicating stable financial health despite refinancing activities [5][6]. - The report notes that MLCO's GGR market share improved by 0.7 percentage points quarter-over-quarter to 15%, with specific properties showing varied performance [5][7].

13 August 2024 | 2:07PM EDT Midday Market Intelligence: disinflation-nation US stocks are trading higher on Tuesday as investors digest a softer-than-expected July PPI report ahead of tomorrow's CPI release. back to micro? The producer price index (PPI) increased by 0.1% in July, somewhat below expectations, with the PPI excluding food and energy remaining unchanged (vs. consensus +0.2%) and the PPI excluding food, energy, and trade services increasing 0.3% (vs. consensus +0.2%) (see "USA: Core Producer Pri ...

13 August 2024 | 10:29AM BRT Latin America Metals & Mining: Good 2024; Leverage Concerns and Weak Capex Execution Remains CSNA3 (Sell) EBITDA of R$2.6B (+35% α/q and +17% γ/γ) was 4% above GSe (+13% vs. Bloomberg consensus) mostly due to stronger steel earnings (beat on cost and product mix). CMIN3 (Sell) EBITDA of R$1.6B (+44% q/q and +47% y/y) came broadly in line with GSe, but 8% above consensus. We expect a slightly positive reaction for both CSN and CMIN. Steel weakness has been driven by a combination ...

Investment Ratings - Bata India has been downgraded from Sell to Neutral [12] - Honasa Consumer Ltd. has been upgraded from Sell to Buy [12] - Cytokinetics Inc. has been downgraded from Buy to Neutral [13] - Hypera Pharma has been downgraded from Buy to Neutral [13] - Triumph Group has been downgraded from Buy to Neutral [13] - Ducommun Inc. has been upgraded from Neutral to Buy [13] Core Insights - The report highlights a significant increase in July global debt issuance volumes, which grew by 67% year-over-year, indicating strong refinancing activity [19] - The report anticipates a 0.16% increase in core CPI for July, with a year-over-year rate of 3.20%, driven by declining used car prices and moderating airfares [7] - The upcoming US elections are expected to have substantial policy implications, with a Democratic sweep likely resulting in increased corporate tax rates and fiscal transfers to households [6][5] - The report notes that the market is currently tracking ahead of the expected issuance volume for the year, with a positive outlook for SPGI due to its leverage to debt issuance volume strength [19] Market Performance - Asian markets showed positive performance, with Japan's Nikkei 225 rising by 3.5% [4] - European equities started the day directionless, influenced by economic sentiment in Germany and the UK unemployment rate [4] - The report indicates that the US presidential race is currently viewed as an even contest between former President Trump and Vice President Harris, with a divided government being a likely outcome [5]

Investment Rating - The report assigns a "Buy" rating for Carlsberg with a 12-month price target of DKK 1,100, indicating a potential upside of 36.7% from the current price of DKK 804.40 [10][11]. Core Insights - Carlsberg reported strong organic EBIT growth of +4.6% in H1, with a gross margin expansion of +160bps to 46.3%, allowing for a 20% year-on-year increase in marketing spend [1][2]. - The company raised its organic EBIT growth guidance to +4% to +6%, up from a previous range of +1% to +5%, reflecting confidence despite unfavorable weather conditions in Western Europe [2][9]. - The report highlights that Carlsberg's valuation is undemanding, trading at 12.9x CY25 P/E and 8.3x EV/EBITDA, excluding the expected accretion from Britvic [3][9]. Summary by Region Western Europe - Western Europe, accounting for 51% of FY23 sales, experienced a volume decline of -3.0% in Q2 due to poor weather, leading to an organic revenue decline of -1.3% [6]. - The region's organic operating profit grew by +1.0%, supported by higher revenue per hectoliter despite increased marketing costs [6]. Asia - Asia, representing 32% of FY23 sales, saw organic revenue growth of +4.7% in Q2, with beer volumes increasing by +1% [7]. - Despite significant marketing investments, organic operating profit grew by +5.3%, with strong performance in the premium portfolio in China [7]. Central & Eastern Europe and India (CEE&I) - CEE&I, which contributed 18% to FY23 sales, reported total volume growth of +6.0% in Q2, with organic revenue growth of +9.8% [8]. - The region's organic operating profit increased by +14.1%, driven by strong performance in Ukraine and solid growth in the premium portfolio [8].

13 August 2024 | 10:19PM HKT 2131d4eaf4cb4d50b1d51c8af07b64b4 China Banks Gov. bonds supported July TSF, lowering both bank asset yields and capital consumption The July TSF data suggests strong government credit demand but weak corporate and retail. This trend has not changed since 2H23, but we highlight: 1) Slower growth of both loans and deposits. New loans to the real economy came in at Rmb -0.08tn, with new corporate and retail deposits coming in at Rmb -0.8tn in July 2024. 2) Further diverging yoy gro ...

13 August 2024 | 8:01PM EDT 2131d4eaf4cb4d50b1d51c8af07b64b4 CAE Inc. (CAE.TO): F1Q25 First Take: mixed results Bottom Line: CAE F1Q25 results are mixed. Revenue beat FactSet consensus by 2% in each business segment, but total segment EBIT is below on a softer Civil margin. The utilization rate in Civil remains high, and its book-to-bill was 1.31X in the quarter as demand remains strong. Defense posted its highest margin in over a year and owns 50% of a JV that booked a 25-year contract worth $11bn. The com ...

13 August 2024 | 7:40PM GST 2131d4eaf4cb4d50b1d51c8af07b64b4 CEEMEA Chemicals Names with growth optionality to outperform 2H24 outlook: remain selective in the space Following 2Q24 results, we update our numbers to incorporate the latest financial/operational metrics from the quarter. We see the combination of elevated feedstock costs and high freight cost weighing on margins in 2H24, while a focus on operational efficiency and volume improvement along with higher ethane/methane availability in 4Q could sup ...