Equity Research 6 January 2020 FOCUS Barclays Capital Inc. and/or one of its affiliates does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. This research report has been prepared in whole or in part by equity research analysts based outside the US who are not registered/qualified as research analysts with FINRA. PLEASE SEE ANALYST CERTIFICATION(S) AND IMPORTANT DISCLOSURES BEGINNING ON PAGE 44. Restricted - Internal Global Consumer Staples 20 for 2020 Not another year-ahead document: Rather than start the year with a dry Staples outlook report, we thought it would be more instructive to task each of the Barclays Global Staples analysts with writing a pithy two-pager on their highest conviction ideas for the current year. The idea could be a stock, a theme, a possible piece of M&A, management change or anything Staples-related which could shape the 2020 debate. More than 35 ideas were submitted, but were condensed down to the 20 most actionable. Conviction ideas: Of the 20 that made the cut, six were single-stock ideas, with two each from Beverages, Food and US Staples. In Beverages, Laurence Whyatt argues that there is an attractive Heineken margin story with consensus too low (Heineken: FY20: the year of margin expansion, 6 Jan 2020), and also Pernod where he believes that there is a good chance that it will upgrade guidance at the H1 stage. In US Staples, Lauren Lieberman argues that P&G’s renaissance is just at the beginning and Coca-Cola could become the next P&G. Warren Ackerman looks at AB Foods, believing it is misunderstood and that it could see further gains in 2020. He also looks at Nestle’s top-line performance gaps and what needs to happen to get to 5% OSG long term. Management change: Unilever, Reckitt, Kraft Heinz and Henkel all appointed new CEOs in 2019. Three of the 20 ideas relate to this theme. HPC analyst Iain Simpson argues that RB will retain its HyHo division for now, and that despite a new CEO at Henkel it still remains the favourite to acquire the Coty Professional assets. US food analyst Andrew Lazar makes the case that the new Kraft Heinz CEO has significant cost-saving fuel to fund a material increase in investment to drive its ailing top line and stabilise EBITDA in 2020. After Unilever lowered sales guidance before Christmas, citing EM challenges, we look at Chinese regulatory changes around animal testing, which may impact cosmetics. Tobacco and Food Ingredients: Tobacco analyst Gaurav Jain argues that US cig volume declines could surprise positively and the FDA news that Snus is less harmful than cigs is a game-changer. Ingredients analyst Arthur Reeves makes the case that the $45bn acquisition of Dupont’s nutrition business by IFF could spur food ingredients consolidation and that increased outsourcing from Staples companies will drive better Ingredients growth. Sector trends that could surprise: Agribusiness analyst Ben Theurer believes the African Swine Flu could really bite in 2020. Warren Ackerman looks at the rapid growth of oats in plant-based dairy, and Ewan Mitchell and Lauren Lieberman discuss the regulatory landscape in soft drinks. The team also look at the increasing efforts that the sector has made in recent years to stem the tide of disruptors, as well as at early signs of life from some struggling US categories, such as yoghurt, frozen and US mass skin care. Finally, the team assess FMCG plastic commitments and conclude that they look a stretch, with costs likely to come in higher than expected. INDUSTRY UPDATE Americas Agribusiness NEUTRAL Unchanged European Consumer Staples NEUTRAL Unchanged U.S. CHPC & Beverages NEUTRAL Unchanged U.S. Food NEUTRAL Unchanged European Consumer Staples Warren Ackerman +44 (0)20 3134 1903 warren.ackerman@barclays.com Barclays, UK Iain Simpson +44 (0)20 7773 3616 iain.simpson@barclays.com Barclays, UK Laurence Whyatt +44 (0)20 7773 5324 laurence.whyatt@barclays.com Barclays, UK Gaurav Jain +44 (0)20 3555 2501 gaurav2.jain@barclays.com Barclays, UK U.S. Food Andrew Lazar +1 212 526 4668 andrew.lazar@barclays.com BCI, US U.S. CHPC & Beverages Lauren R. Lieberman +1 212 526 3112 lauren.lieberman@barclays.com BCI, US Americas Agribusiness Benjamin M. Theurer +52 55 5241 3322 benjamin.theurer@barclays.com BBMX, Mexico Barclays | Global Consumer Staples 6 January 2020 2 Contributing Authors European Consumer Staples Warren Ackerman +44 (0)20 3134 1903 warren.ackerman@barclays.com Barclays, UK European Consumer Staples Arthur Reeves +44 (0)20 7773 3622 arthur.reeves@barclays.com Barclays, UK European Consumer Staples Iain Simpson +44 (0)20 7773 3616 iain.simpson@barclays.com Barclays, UK European Consumer Staples Laurence Whyatt +44 (0)20 7773 5324 laurence.whyatt@barclays.com Bar...
发表评论取消回复