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 | 8:37PM EDT Mercury Systems Inc. (MRCY): First Take: Qtr improved sequentially; guidance implies a transition window for foreseeable future Bottom line: MRCY F4Q24 revenue, EBITDA and free cash flow are above. consensus, in a year where key metrics ended up well below original expectations on a full-year basis. The company did not provide a full set of FY2025 guidance ranges as it has in the past. It pointed to flattish revenue and a low double digit adjusted EBITDA margin in FY2025, then a ...

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 ...

13 August 2024 | 8:37AM EDT Market Intelligence: US Morning Update Click "here" to listen to the US Morning Call. Stocks in Asia traded higher Tuesday, led by Japan's Nikkei 225 (+3.5%) as it resumed trading after a long weekend. Mainland China's markets also ended higher, despite weak loan in demand in 2Q (see: "China: PBOC Q2 Surveys: Weaker loan demand; more willingness to spend on travel; muted house price expectations"). Australia's ASX also eked out a minor gain on the back of rebounding business surv ...

14 August 2024 | 12:28AM BST 2131d4eaf4cb4d50b1d51c8af07b64b4 Carlsberg (CARLb.CO): First Take: Solid organic EBIT growth in H1 despite A&P step-up; guidance raised Carlsberg reported strong H1 organic EBIT growth at +4.6%, in-line with company-compiled consensus. Group reported a strong +160bps gross margin expansion to 46.3% (vs Visible Alpha Consensus Data 45.6%) allowing it to increase marketing spend by 20% y/y. CEE&I grew EBIT organically by +14.1% (vs +6.4% cons), while Asia increased by +5.3% (vs +5 ...

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 ...