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☆ Breakingviews: Fed makes inflation fight Joe Biden’s problem
▼ + stars: | 2022-09-21 | by ( John Foley | ) www.reuters.com time to read: +4 min

For now, the Fed thinks it can manage this without a hard landing. Even so, Powell is correct to say that inflation is worse than even a reversal in growth. Around half of small businesses now say inflation is their biggest challenge, according to the U.S. Chamber of Commerce, and the public agrees, a Pew survey showed in May. The Fed said in a statement that inflation remained elevated, echoing its previous statement in July, with “modest growth” in spending and production. In its updated set of economic projections, the Fed forecast 4.4% unemployment in 2024, compared with its previous forecast of 4.1%.

☆ Ralph Lauren sells luxury at too steep a discount
▼ + stars: | 2022-09-19 | by ( ) www.reuters.com time to read: +2 min

A man walks past Ralph Lauren Corp.'s flagship Polo store on Fifth Avenue in New York City, U.S., April 4, 2017. REUTERS/Brendan McDermidNEW YORK, Sept 19 (Reuters Breakingviews) - Ralph Lauren (RL.N) laid out a promising financial outlook for investors on Monday. Since 2018, Ralph Lauren has closed more than two-thirds of its wholesale business by halting sales to department stores such as Belk, slashed promotions and lifted its average unit price 60%. The House of Polo trades at 10 times expected 2025 net profit, per estimates on Refinitiv, compared to Burberry’s (BRBY.L) 15 times and Prada’s 20 times. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ U.S. railways steer clear of crisis
▼ + stars: | 2022-09-15 | by ( ) www.reuters.com time to read: +2 min

TORONTO, Sept 15 (Reuters Breakingviews) - The narrowly averted shutdown of U.S. rail services should avoid widespread economic damage, at least for now. A rail shutdown could potentially be six or seven times as costly as the February shuttering of the Ambassador Bridge route connecting Windsor, Ontario and Detroit. Biden has plenty of competing priorities on his plate, including battling inflation and looming midterm Congressional elections read more . (By Sharon Lam)Register now for FREE unlimited access to Reuters.com RegisterFollow @Breakingviews on Twitter(The author is a Reuters Breakingviews columnist. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Adobe’s $20 bln deal uses ample creative license
▼ + stars: | 2022-09-15 | by ( Jeffrey Goldfarb | ) www.reuters.com time to read: +3 min

The design technology titan is acquiring startup Figma for $20 billion, using roughly half cash and half shares, in a deal that will significantly beef up its online collaboration capabilities. Even if it doubled again in 2023, it would represent just 4% of the $20 billion that analysts expect Adobe to generate, according to Refinitiv. Register now for FREE unlimited access to Reuters.com RegisterThis math suggests Narayen has used too much creative license. And yet even then Adobe saw fit to double up on the $10 billion Figma valuation from June 2021, per PitchBook, and shell out an eye-popping multiple of sales. CONTEXT NEWSAdobe said on Sept. 15 it had agreed to buy digital design rival Figma for about $20 billion, paying about half in cash and half in shares.

☆ Starbucks’s high-octane plan has warm impact
▼ + stars: | 2022-09-14 | by ( Amanda Gomez | ) www.reuters.com time to read: +3 min

NEW YORK, Sept 14 (Reuters Breakingviews) - Starbucks (SBUX.O) is brewing up a high-octane solution for a low-impact problem. The $101 billion coffee chain spent a chunk of its investor day on Tuesday discussing ways to help its restless U.S. workforce. A judge in Tennessee last month ordered the company to rehire employees who supported unionizing – an order Starbucks plans to appeal, Reuters reported. The National Labor Relations Board, a federal agency tasked with protecting employees’ rights, is fielding complaints against the coffee chain. CONTEXT NEWSStarbucks held its investor day on Sept. 13.

☆ Disney doesn’t need Loeb to kick ESPN out the door
▼ + stars: | 2022-09-12 | by ( Jennifer Saba | ) www.reuters.com time to read: +3 min

NEW YORK, Sept 12 (Reuters Breakingviews) - Pushy investor Dan Loeb has changed his mind, somewhat, about Walt Disney (DIS.N). He is backing off his demand that the $210 billion entertainment giant run by Chief Executive Bob Chapek sell sports network ESPN. Amid the glad-handing of Disney devotees, Chapek, talking to reporters, maintained that ESPN is still a fit for the Magic Kingdom. On a multiple more than rival Fox (FOXA.O) but less than Netflix (NFLX.O), Disney could fetch $40 billion for ESPN. CONTEXT NEWSActivist investor Dan Loeb said in a tweet on Sept. 11 he is backing off his push for Walt Disney to spin off cable sports network ESPN.

☆ T-Mobile US transmits clear signal to investors
▼ + stars: | 2022-09-09 | by ( ) www.reuters.com time to read: +2 min

NEW YORK, Sept 9 (Reuters Breakingviews) - T-Mobile US (TMUS.O) is sending a clear signal about the benefits of being bigger. The $182 billion company announced a $14 billion share buyback program on Thursday, reflecting the fact that both profit and subscriber numbers are rising. Fears that mobile prices would rise when T-Mobile acquired SoftBank’s Sprint have not materialized, allaying at least one of the potential objections to the merger. Last quarter, it raised its forecast for additional subscribers for this year to as high as 6.3 million from a previous high of 5.8 million. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Electronic Arts won’t be a multiplayer M&A game
▼ + stars: | 2022-08-26 | by ( ) www.reuters.com time to read: +1 min

NEW YORK, Aug 26 (Reuters Breakingviews) - Electronic Arts (EA.O) is a tempting target but finding the right players might be harder to master. On Friday, CNBC reported that Amazon.com (AMZN.O) is not expected to make a bid for the video-game maker read more , knocking down an earlier report about a potential deal. Still, it’s not hard to see why the publisher behind the FIFA franchise could be in play. Microsoft’s $69 billion move for Activision Blizzard (ATVI.O) bodes well for EA read more . On the same multiple applying estimated EBITDA for the fiscal year ending March, it would imply that EA is worth over $50 billion.

☆ Peloton investors gear up for a volatile ride
▼ + stars: | 2022-08-25 | by ( ) www.reuters.com time to read: +2 min

TORONTO, Aug 25 (Reuters Breakingviews) - Investors in Peloton Interactive (PTON.O) hardly ever know what kind of workout they’ve signed up for. Shares in the exercise-bike maker sank over 18% on Thursday morning after it posted a $1.2 billion net loss for the three months to June, about four times the deficit for the same period of 2021. The slide wiped out an equivalent percentage gain a day earlier after Peloton said it would begin selling its bikes and other accessories on Amazon.com (AMZN.O) in the United States. McCarthy isn’t sitting idle — roughly a third of the company’s quarterly loss was due to restructuring charges. Thursday’s slide shrinks Peloton’s enterprise value to just over $3 billion, after deducting roughly $500 million in net cash.

☆ Time to demolish old ideas about infrastructure
▼ + stars: | 2021-08-10 | by ( Gina Chon | ) www.reuters.com time to read: +4 min

WASHINGTON, Aug 10 (Reuters Breakingviews) - A once-in-a-generation vote on U.S. infrastructure means it might finally be time to stop talking about infrastructure – or think more creatively about what the word means. Democrats will now turn to a $3.5 trillion splurge on healthcare, schools and the environment that Republicans resisted in the smaller plan. One problem is an outdated idea of what infrastructure really means. If infrastructure is a priority, anything that gets more output out of Americans deserves the label. It includes $110 billion for roads and bridges, $65 billion to expand broadband access and $55 billion for water supplies.

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