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Carnival Corp. (CCL)
- 4Q23 Revenue: $5.4B, +40.6% YoY, beat estimates by $120M
- 4Q23 Non-GAAP EPS: –$0.07, beat estimates by $0.05
- 1Q24 Guidance: Adjusted EBITDA of approximately $0.8bn, more than double the first quarter of 2023; Net yields (in constant currency) up approximately 16.5% compared to the first quarter of 2023 with occupancy returning to historical levels. FY2024 Guidance: Adjusted EBITDA of approximately $5.6bn, over 30% growth compared to 2023; Net yields (in constant currency) up approximately 8.5% compared to 2023, with full year occupancy returning to historical levels; Adjusted cruise costs excluding fuel per ALBD (in constant currency) up approximately 4.5% compared to 2023.
- Comment: Carnival Corp. beat revenue estimates despite a small loss, thanks to strong and steady demand for cruises, especially among younger travelers. This is due to the affordability of cruises compared to overseas vacations. Booking volumes reached record highs around Black Friday and Cyber Monday, indicating a promising recovery and growth for 2024. All major Carnival products have better bookings and higher prices for the peak summer season, suggesting a positive outlook for the company. Anticipated interest rate cuts, coupled with increased consumer spending, are predicted to further bolster Carnival’s sales in the coming year. 2Q24 recommended trading range: $17 to $24. Positive Outlook.
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AEON Co. (M) (AEON MK)
ESG 2.0: Addressing concerns
Above average ESG score
AEON’s ESG score is above average at 56 (out of 100) under our proprietary ESG scoring methodology. It does not provide GHG emission breakdowns (scope 1, 2 & 3) but has identified key areas of environmental concern to address within its internal sustainability policy. Our earnings estimates, BUY call and TP of MYR1.60 (19x FY24E PER, mean) are unchanged.
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Venture Corp ($13.65, unchanged): According to latest research by International Data Corporation (IDC) published last week, with the global demand for artificial intelligence (AI) and high-performance computing (HPC) exploding, coupled with the stabilizing demand for smartphones, personal computers, infrastructure, and resilient growth in automotive; the semiconductor industry is expected to usher in a new wave of growth.
We believe Venture Corp is poised to benefit from the aforementioned macro trends as it rides on the forthcoming upturn of the overall semiconductor industry which is slated to take place in 2024. At S$13.65, market cap for Venture Corp is S$3.9bln, P/E is 10.8x, current P/B is 1.4x, dividend yield is 5.5% and its present net cash position of S$956.5mln equates to around 24% of current market cap. Given the positive outlook, we thus recommend “Accumulate” on Venture Corp
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Nike Inc. (NKE)
- 2Q24 Revenue: $13.39B, +0.5% YoY, miss estimates by $40M
- 2Q24 GAAP EPS: $1.03, beat estimates by $0.18
- 3Q24 Guidance: Expect reported revenue to be slightly negative as it laps tough prior year comparisons, and sales to be up low single digits in the fourth quarter. FY24 Guidance: expects full-year reported revenue to grow approximately 1%, compared to a prior outlook of up mid-single digits; expects gross margins to expand between 1.4 and 1.6 percentage points.
- Comment: Nike’s wholesale business has been under persistent pressure as retailers place fewer orders amid a weaker demand. Online sales also remain weak, forcing the company to boost promotions and sales in an attempt to attract shoppers. Sales in China have also slowed as the economy has stumbled. The company announced its plans to cut costs by about $2 billion over the next three years as it lowered its sales outlook to reflect increased macro headwinds, particularly in Greater China and EMEA. As part of its plan to cut costs, Nike said it’s looking to simplify its product SKUs, increase the use of technology and automation, streamline the overall organization by reducing management layers and leverage its scale “to drive greater efficiency.” 3Q24 recommended trading range: $90 to $115. Negative Outlook.
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