Chicago, IL – June 21, 2023 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Monster Beverage MNST, Ford Motor F and Chipotle Mexican Grill CMG.
In this short Global Week Ahead, there are still more central bank decisions.
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The Bank of England is facing a stormy gilts market, while
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Turkey's new governor is expected to ramp up rates sharply at central bank meetings in the week to come
These should supply a fresh read on the health of the world economy.
Key policy makers also hit the road, with U.S. Secretary of State Antony Blinken just back from Beijing, and London and Paris hosting big summits.
Next are Reuters’ five world market themes, reordered for equity traders—
(1) U.S. Secretary of State Visited Beijing, China. Plus Other Events…
The first trip to Beijing in five years for a U.S. Secretary of State yielded a modest improvement between the world's top two economies.
Cautious optimism is in the air in London as well, where Western policy makers are gathering on June 21-22 for the Ukraine Recovery Conference to tackle issues from short-term financing, to long-term reconstruction costs.
The event is held after the breach of the huge Soviet-era dam on the Dnipro river, which experts warn will have a huge impact not only on Ukraine but also on global food security.
Meanwhile in Paris, the New Global Financing Pact on June 22-23 is the summit debut for newly appointed World Bank Chief Ajay Banga, who will be joined by heads of state from around the globe to discuss how financing, especially related to climate issues, can be structured for some of the poorest nations.
(2) The Bank of England (BoE) Faces Steep Policy Tradeoffs
The Bank of England could be facing its worst nightmare — an economy that's barely growing and the shadow of a 1970s-style wage price spiral.
Earnings are growing at their fastest clip on record, excluding the pandemic. The jobs market is tight, the cost of living is high and workers, both in the public and private sectors, are pushing for better pay to make ends meet.
Add to that a surge in the government's borrowing costs to their highest since 2008 and the pressure that is putting on an already-struggling mortgage market and the central bank's position is looking unenviable.
Markets show traders are placing an almost one-in-five chance the BoE will raise rates by half a point next week, up from near zero at the start of June. Even if the bank raises by this much, will it do the trick?
(3) Lots of Purchasing Manager Indices (PMIs) Arrive
A raft of decidedly hawkish noises from big central banks — including the Fed — has once again raised questions about how much central bank tightening is accelerating a global slowdown.
Cue Purchasing Managers' Indexes (PMIs) from around the world that will offer a fresh look into demand trends and evidence of the health of the manufacturing sector in the United States, Europe and Japan so far in June.
May reports showed bad news in many key regions. U.S. manufacturing contracted for a seventh straight month, as new orders continued to plummet amid higher interest rates.
PMIs for the Eurozone in May moved further into contraction zone — another gloomy sign for the region that tipped into a technical recession in the first quarter of 2023.
(4) The Reserve Bank of Australia (RBA) Supplies Latest Minutes
After back-to-back hawkish surprises at the Reserve Bank of Australia's past two policy meetings, investors will be keen to parse minutes from June's confab on Tuesday to gauge the risks of a third.
Right now, money markets put the odds of a hike, or a hold, at a coin toss for July, but either way, by November at the latest traders are certain rates will be 50 basis points higher than now.
With the cash rate already at a decade high, and RBA Governor Philip Lowe prioritizing reining in stubborn inflation over preserving jobs, recession risks are rising. May's blockbuster employment report could also provide more leeway for the RBA to tighten rates further.
Investors in Australia need to keep a close eye on key trading partner China as well, where a post-COVID recovery is already spluttering and Sino-U.S. tensions are simmering.
(5) Turkey’s New Central Bank Governor Supplies a Rates Decision on Thursday
Another debut is on the agenda for Hafize Gaye Erkan, Turkey's newly appointed central bank governor, who hosts her first rate-setting meeting on Thursday.
Analysts at leading investment banks expect her to start ramping up interest rates — currently at 8.5% — to anywhere up to 25% as part of a major reset of the country's economic policies. That is still some way short of the inflation rate, which dipped just below 40% in May.
Investors are keen to see how deep and lasting those changes will be after President Tayyip Erdogan clinched an election victory in late May.
Erdogan said his newly appointed Finance Minister Mehmet Simsek would take unspecified steps swiftly with the central bank, but that it was a mistake to suggest that he himself had changed his views on interest rates.
I see three important U.S. consumer stocks made it onto our #1 list this week.
(1) Monster Beverage:This Beverage-Soft Drinks company’s stock prices at $59, with for a market cap of $58.8B.
I see a Zacks Value score of F, a Zacks Growth score of F and a Zacks Momentum score of B.
Monster Beverage Corporation, headquartered in Corona, CA, is a marketer and distributor of energy drinks and alternative beverages. Incorporated in 1990 in Delaware.
Monster Beverage was previously known as Hansen Natural Corporation. In 1992, the company acquired the Hansen Beverage business.
On Jun 12, 2015, Monster Beverage closed a deal with The Coca-Cola Company (TCCC). Per this long-term strategic deal, Coca-Cola acquired an approximate 16.7% equity stake in Monster Beverage. Coca Cola also transferred ownership of global energy drinks business, which includes brands like NOS, Full Throttle, to Monster Beverage. In exchange, Monster Beverage transferred non-energy business to TCCC.
Monster Beverage reports results under three operating segments:
Monster Energy Drinks (92.4% of net sales in FY22): Monster Energy Drinks Segment includes the former Direct Store Delivery segments, excluding Peach Tea brand. This segment comprises mostly Monster Energy brand products.
Strategic Brands (5.6%): The Strategic Brands segment includes brands acquired from the “TCCC Transaction.” Monster Beverage observes the same business model with acquired brands as their previous owner.
Alcohol Brands (1.6%): Alcohol Brands segment includes various craft beers and hard seltzers purchased as part of its acquisition of CANarchy Craft Brewery Collective LLC on Feb 17, 2022 as well as The Beast Unleashed. It also sells kegged and ready-to-drink canned beers, hard seltzers and FMBs, primarily to beer distributors in the United States.
Other (0.4%): The Other segment includes the former warehouse segment and the Peach Tea brand. The segment also includes products acquired from the AFF Transaction that are sold to independent third-parties. On Apr 1, 2016, the company acquired the concentrate and flavor business of American Fruits and Flavors (AFF).
(2) Ford Motor: This is a $14 stock found in the Domestic Auto industry.
This company’s stock has a market cap of $57.8B.
I see a Zacks Value score of A, a Zacks Growth score of D and a Zacks Momentum score of A.
Dearborn, MI-based Ford is one of the leading automakers in the world. It manufactures, markets and services cars, trucks, sport utility vehicles, electrified vehicles, and Lincoln luxury vehicles.
Until 2022, Ford had three reportable operating segments: The Automotive segment (contributed 94.2% to total revenues in 2022), The Mobility segment (contributed 0.1% to total revenues in 2022) and The Ford Credit segment (contributed 5.7% to total revenues in 2022).
Effective 2023, Ford came up with a new operating model and reporting structure. As a result of this change, the business has the following segments: Ford Blue, Ford Model e and Ford Pro (combined, replacing the previous Automotive segment), Ford Next (previously the Mobility segment) and Ford Credit.
Ford Blue's core focus lies in the retail sales of Ford and Lincoln vehicles, encompassing both internal combustion engine (ICE) and hybrid models. The segment extends its offerings beyond just the vehicles themselves, also including service parts, accessories, and digital services for customers. With an emphasis on innovation, Ford Blue dedicates its efforts towards the advancement of Ford and Lincoln ICE and hybrid vehicles.
The core focus of Ford Model e centers around retail sales of electric vehicles (EVs), along with service parts, accessories, and digital services for customers. Ford Model e places a strong emphasis on advancing EV and digital vehicle technologies, as well as software development.
Meanwhile, Ford Pro will deal with commercial vehicles and services. Ford Pro engages in the sale of Ford and Lincoln vehicles, service parts, accessories, and services specifically tailored for commercial, government, and rental customers. This segment encompasses the sales of all essential Ford Pro vehicles, including the Super Duty and Transit range of vans in North America and Europe, as well as all Ranger sales in Europe.
Together, Ford Blue, Ford Model e and Ford Pro forms the Automotive segment of the company.
The Ford Next segment, previously known as the Mobility segment, primarily encompasses costs and investments related to emerging business initiatives. The Ford Credit segment deals with vehicle-related financing and leasing activities.
(3) Chipotle Mexican Grill: This is a $2,044 stock also found in the Retail-Restaurants industry.
This company’s stock has a market cap of $56.6B.
I see a Zacks Value score of F, a Zacks Growth score of A and a Zacks Momentum score of F.
A Delaware corporation, Chipotle Mexican Grill, together with its subsidiaries, operates quick-casual and fresh Mexican food restaurant chains.
The company was founded in 1993 by Steve Ells who started with a single restaurant in Denver, CO. The company offers a focused menu of burritos, tacos, burrito bowls (a burrito without the tortilla) and salads. Chipotle restaurants feature free-range, hormone-free pork, natural chicken and other meat products cooked through traditional methods and served in a unique atmosphere. Chipotle classifies its restaurants as end-caps (at the end of a line of retail chains), in-lines (in a line of retail chains), free-standing units and others.
Chipotle, being one of the most recognized fast-casual Mexican restaurant chains in the United States, had a good share of negative publicity throughout 2016 due to an issue of food-borne illnesses that surfaced toward 2015-end. As a safety measure, the company was forced to close several outlets. In order to chalk out a viable business strategy, Chipotle discarded its former co-CEO model and appointed former Yum! Brands' executive Brian Niccol as the CEO.
The company is committed to using high-quality real ingredients, classic cooking techniques and distinctive interior design to serve customers. As of Dec 31, 2022, the company owned and operated about 3,187 restaurants across the United States, Canada, the U.K., France and Germany.
Chipotle’s marketing strategy shifted from a promotion driven decentralized approach in 2017 to a more central model designed to generate higher consumer awareness and attract guests. The company utilizes e multiple marketing channels, including national television, digital marketing, social media, fundraising, events and sponsorships to reach consumers. Delivery services are mostly made by third party service providers.
In 2018, Chipotle launched a loyalty program called Chipotle Rewards, which provides customers with the opportunity to earn bonus points or free food. Earned rewards generally expire one to six months after they are issued, and points generally expire if an account is inactive for a period of six months.
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