News

The New Zealand market (NZX 50 Index, +1.1%) rose on the back of large gains from Mainfreight (+5.6%) and Fisher & Paykel Healthcare (+3.7%). The former adding to its +4.5% rally last Friday, after revising upwards its estimated revenue for the 26 weeks to 30 September +32.5% to $3.01 billion.  

Pool Corp (NYSE: POOL) continues to report strong results, beating the street’s EPS estimates by 2.6% ($4.76 vs $4.64) and revenue estimates by 1.1% – $1.62B of revs vs. an expected $1.60B. Mgmt guided for FY EPS of $18.50-19.05. The earnings beat comes from a combination of higher prices (driven by inflation) and increased demand (+10%) largely from the “sun belt” (the lower southeast to southwest region of the US). Taking a macro outlook we’ve typically seen sales driven by higher prices (Dominos, Nike) so to see a product where the underlying demand is growing buoys our confidence, especially given the global macro environment. We reiterate our BUY rating.

LVMH reported strong Q3 results, tallying up revenues of 19.76B euros vs. analyst estimates of 18.83B euros. Its nine-month results grew 28% YoY (20% organic growth, +8% currency-related). All its segments reported double digit growth; in particular fashion & leather goods continues to grow well (though decelerated +10% from Q1) and demand for watches and jewelry continues apace, suggesting the company’s recent acquisition of Tiffany is working well.

The New Zealand market (NZX 50 Index, -0.3%) declined on Friday and was closed for trading Yesterday in observance of Labour Day. 

The New Zealand market (NZX 50 Index, -0.8%) was dragged down by market anticipation for a 75-basis-points rate hike from the Reserve Bank of New Zealand in one month’s time. 2 and 10-year Bank swap rates are now at 12 and 14-year highs, respectively. Additionally, commercial banks, starting with ANZ and Westpac, are increasing mortgage rates.  

Johnson and Johnson (NYSE: JNJ) posted better than expected results this morning, beating analyst’s estimates slightly to report $23.4B in revs and EPS of $2.55 vs. analyst estimates of $2.49. We maintain our HOLD rating.

The New Zealand market (NZX 50 Index, +0.6%) rose on the back of the huge rally in Freightways (+5.9%).  The global dairy trade index (-4.6%) slumped overnight, with whole milk powder (-4.2%) and skim milk powder (-6.9%) cratering. Dairy stocks were mixed with A2 Milk (+1.0%) up, Fonterra Shareholders’ Fund units (0.0%) flat, and Synlait (-1.0%) falling. 

Netflix (NFLX) reversed their trend of decelerating subscriber growth, adding +2.4M subscribers in Q3. The stock rallied +14% in after-hours trading on the news. Revenue grew 5.9% to $7.93B, whilst net profit fell 3.5% to $1.4B. Notably Netflix’s operating margin fell to 19.3% from 23.5% YoY. Management attributed this largely to the strong US dollar relative to other currency. Management expects operating margin in Q4 to be ~4.2% vs. 8.2% a year earlier, as the strong US dollar continues to weigh. We think this is cautiously optimistic news for the embattled streamer, but we note that the valuation is still relatively high compared to peers such as WarnerBrothersDiscovery, Paramount and Disney. We remain NEUTRAL on the stock.