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☆ Walmart’s ho-hum is the new fabulous
▼ + stars: | 2023-02-21 | by ( Jennifer Saba | ) www.reuters.com time to read: +3 min

NEW YORK, Feb 21 (Reuters Breakingviews) - At Walmart (WMT.N), boring is the new fabulous. But Walmart benefits from being big, established, and, importantly, profitable, and the latter can’t be said for Amazon.com’s (AMZN.O) retail business. As the shine comes off of technology companies, Walmart’s failures are an afterthought. Walmart’s commitment to keeping prices low is reflected in its operating margins that currently hover at a slim 3%. Walmart’s enterprise value to this year’s EBITDA, at 12 times, is a hair more than Amazon’s.

☆ Ukraine yet to make defence a safe investor haven
▼ + stars: | 2023-02-20 | by ( Lisa Jucca | ) www.reuters.com time to read: +6 min

MUNICH, Feb 20 (Reuters Breakingviews) - The West’s rush to supply weapons to war-torn Ukraine looks like a golden opportunity for defence companies to exit the ESG doghouse. As with air-polluting coal, socially-minded investors including pension funds and insurers - particularly European ones - have long excluded or heavily restricted investment in defence companies on ethical grounds. Risk committees, particularly at domestic banks, are now more frequently assessing the merits of financing defence companies, two senior bankers among the 850 or so conference participants said. Proponents of the approach argue military companies that help Ukraine perform a globally valuable social function by upholding democracy. The Munich Security Index, a global risk perceptions survey conducted before the conference, showed security concerns had replaced climate challenges as the top concern.

☆ Soccer’s new M&A binge will mostly benefit players
▼ + stars: | 2023-02-17 | by ( Streisand Neto | ) www.reuters.com time to read: +3 min

A Qatari consortium is set to make a $6 billion offer for Man Utd, home to stars including Marcus Rashford, Bloomberg reported on Thursday. The Financial Times reported that Iranian-American billionaire Jahm Najafi is preparing a $3.8 billion swoop on Harry Kane’s Tottenham Hotspur. The Qataris’ reported Man Utd offer of $6 billion would value the New York-listed club at 8.6 times trailing revenue. Man Utd, whose financial advisers are U.S. investment bank Raine Group, has set an initial Feb. 17 deadline for bids. The Financial Times on Feb. 15 reported that Iranian-American billionaire Jahm Najafi was preparing a $3.8 billion offer for Tottenham Hotspur.

☆ NatWest calls time on UK banks’ rate-hike party
▼ + stars: | 2023-02-17 | by ( ) www.reuters.com time to read: +2 min

But NatWest Chief Executive Alison Rose has brought that excitement to an end. It’s surprising that Rose thinks lending margins have maxed out already. Higher rates take a while to feed into revenue because so many borrowers have long-term or fixed-rate debt, which reprices slowly. That would be a cause for celebration among households and firms with spare cash, but it might bring the bank share-price party to an end. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Schneider CEO’s tenure is refreshingly sustainable
▼ + stars: | 2023-02-16 | by ( ) www.reuters.com time to read: +2 min

LONDON, Feb 16 (Reuters Breakingviews) - Schneider Electric (SCHN.PA) sells products like circuit breakers that help customers manage their energy consumption in a sustainable way. Jean-Pascal Tricoire’s leadership of the French industrial software group reinforces the image of long-term reliability. Peter Herweck, now the boss of Aveva, the British software group Schneider bought last month, will take over in May. Tricoire’s term is uncommon: only 19% of CEOs stay in the job for more than 10 years while the median tenure is just five years, according to a PwC study. Over the last two decades Schneider’s revenue has quadrupled to 34 billion euros.

☆ StanChart’s takeover defences are getting stronger
▼ + stars: | 2023-02-16 | by ( Liam Proud | ) www.reuters.com time to read: +4 min

This year, he reckons the bank will churn out a near-10% return, rising to more than 11% in 2024. But if Winters can convince investors his new targets are remotely plausible, he’ll have a stronger case for StanChart’s independence. A typical offer pitched 30% above the price before the latest takeover speculation would value StanChart at just three-quarters of forward tangible book value. StanChart’s stronger takeover defences may be a problem for its suitors. StanChart earned an 8% return on tangible equity (ROTE), excluding restructuring expenses and a writedown of goodwill on the bank’s balance sheet.

☆ Rothschild holdouts have little chance of a bump
▼ + stars: | 2023-02-14 | by ( ) www.reuters.com time to read: +2 min

LONDON, Feb 14 (Reuters Breakingviews) - The dynasty behind famed investment bank Rothschild & Co (ROTH.PA) has sided with France’s business elite to buy out minority investors on the cheap. Any potential holdouts, though, have little hope. If they miss that threshold, the Rothschild family can keep whatever shares they get. That means they could just try the whole thing again next year – but starting from a higher ownership base. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Economic war with China would be MAD
▼ + stars: | 2023-02-14 | by ( Hugo Dixon | ) www.reuters.com time to read: +7 min

Hopefully, fear of the economic equivalent will do a similar trick when it comes to a showdown with China. To see whether MAD will be enough to prevent war between America and China, look at just how disastrous such a conflict – which could be triggered by a Chinese invasion of Taiwan - would be. THREE SCENARIOSA Chinese invasion of Taiwan would lead to economic repercussions of a totally different order. A Chinese invasion of Taiwan would be hellish, but some scenarios would be especially ghastly from an economic perspective. Despite all these concerns, America might run the risk of economic war.

☆ KKR can limit the pain of Elliott's telco blitz
▼ + stars: | 2023-02-13 | by ( Pamela Barbaglia | ) www.reuters.com time to read: +4 min

Even so, KKR and Vodafone look insulated from the worst sort of Teutonic deal pain. Still, KKR – which has joined forces with Global Infrastructure Partners and will co-control Vantage with Vodafone – has some protections. Reuters GraphicsFollow @pamela_msg on TwitterloadingCONTEXT NEWSActivist investor Elliott Management disclosed a 5.6% stake in German phone masts company Vantage Towers on Jan. 31. The offer was recommended by Vantage Towers' management and supervisory board. Vantage Towers’ Chief Executive Vivek Badrinath is set to depart due to personal reasons.

☆ IMF’s outlook on Russia is too rosy to be true
▼ + stars: | 2023-02-10 | by ( Pierre Briancon | ) www.reuters.com time to read: +3 min

The international body recently estimated that Russia will avoid a recession in 2023 and expand by 0.3% after shrinking by 2.2% in 2022. The measures will not “significantly” affect Russia’s oil exports, the Fund says. That is a matter of intense debate among economists since oil prices remain below the cap set by the G7. Much will depend on the evolution of oil prices this year. But only a serious oil price rally, improbable in the context of the global economy’s “subpar growth” - to quote the IMF - could justify looking at Russia through rosy glasses.

☆ Credit Suisse CEO tries to bail out a leaky ship
▼ + stars: | 2023-02-09 | by ( Liam Proud | ) www.reuters.com time to read: +4 min

LONDON, Feb 9 (Reuters Breakingviews) - Chief Executive Ulrich Körner is doing what he promised at Credit Suisse (CSGN.S). The goal is to focus Credit Suisse on its steadier wealth-management and retail banking units. Revenue from trading equities was just $15 million, down 96% year-on-year, partly because Credit Suisse clamped down on risk. Clients pulled a net 111 billion Swiss francs of assets from the group during the three-month period. Credit Suisse shares were down 9.7% at 2.94 Swiss francs as of 1041 GMT on Feb. 9.

☆ Fertiliser boom reveals food security price power
▼ + stars: | 2023-02-08 | by ( ) www.reuters.com time to read: +2 min

LONDON, Feb 8 (Reuters Breakingviews) - A top fertiliser maker has emerged as the surprise winner of Europe’s energy crisis. Food security concerns helped Yara weather the crisis. That and a war in potash and wheat exporter Ukraine created scarcity, which drove up the price of its much-desired products. Before Wednesday’s 5% share bump, it traded on just 4 times its expected 2023 earnings. Now that Yara has proved it can weather a major crisis, this gap is likely to narrow.

☆ SoftBank is paying for Son’s past exuberance
▼ + stars: | 2023-02-07 | by ( ) www.reuters.com time to read: +2 min

LONDON, Feb 7 (Reuters Breakingviews) - Warren Buffett once advised investors to be fearful when others are greedy and greedy when others are fearful. In other words, Son and his dealmakers spent big when valuations were unsustainably high and then retreated as prices slumped. SoftBank’s family of startup-investing vehicles, including the two Vision Funds and a Latin America-focused one, have clocked up $6.6 billion of cumulative losses on their investments since 2017. In other words, Son is out of ammunition just when it would be the most useful. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ BNP investors deserve bigger slice of M&A windfall
▼ + stars: | 2023-02-07 | by ( Liam Proud | ) www.reuters.com time to read: +4 min

He’ll give 4 billion euros to investors through share buybacks, which roughly cancels out the hit to BNP’s earnings per share from ditching the U.S. division. The other 7.6 billion euros, or two-thirds of the total haul, will pay for increased lending, investments in technology systems, and small acquisitions. Follow @liamwardproud on TwitterloadingCONTEXT NEWSBNP Paribas on Feb. 7 said it generated 50.4 billion euros of revenue in 2022, up 9% from the previous year. The French bank generated a 10.2% return on tangible equity in the year, slightly above the previous year’s 10%. BNP in 2021 agreed to sell BancWest to Canada’s BMO Financial for $16.3 billion in cash (15.2 billion euros).

☆ Renault’s Nissan upshot is mostly good news
▼ + stars: | 2023-02-06 | by ( ) www.reuters.com time to read: +2 min

HONG KONG, Feb 6 (Reuters Breakingviews) - The French automaker and its partner, Nissan (7201.T), confirmed on Monday that the Japanese giant will be buying up to 15% of Renault’s (RENA.PA) electric-car spinoff, Ampere. It however suggests that they will be waiting a long time to benefit from Renault’s planned sale of the 28.4% Nissan stake it will park in a non-voting trust. The sale was necessary to reduce Renault’s voting rights in its partner to 15%, on a par with the Japanese company’s interest in its own equity. Given that the deal also stipulates there will be no fixed timeline for the transaction, it could be a while coming. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Sanofi’s ailments are more than skin deep
▼ + stars: | 2023-02-03 | by ( ) www.reuters.com time to read: +2 min

LONDON, Feb 3 (Reuters Breakingviews) - Sanofi (SASY.PA) is battling multiple ailments. The $115 billion French pharma group on Friday forecast “low single digit” growth in earnings per share for 2023, disappointing analysts. Hence it’s more reliant on the star asthma and eczema drug Dupixent, which contributed nearly a fifth of Sanofi’s 43 billion euros of sales in 2022. Last August, $36 billion was wiped off Sanofi, GSK (GSK.L) and spinoff Haleon (HLN.L) shares on U.S. litigation fears. It currently trades on 10 times its forecast 2023 earnings, while Novartis (NOVN.S) trades on 13 times.

☆ Deutsche Bank turnaround victory is really a loss
▼ + stars: | 2023-02-02 | by ( Liam Proud | ) www.reuters.com time to read: +3 min

LONDON, Feb 2 (Reuters Breakingviews) - In many ways, Christian Sewing has successfully rejuvenated Deutsche Bank (DBKGn.DE). Counterparties no longer fret about the German lender’s solvency, and he’s axed 3 billion euros of costs since starting as chief executive in 2018. The centrepiece of Sewing’s turnaround, however, was an 8% return on tangible equity (ROTE) target for 2022, which he’s effectively missed. The main question now is whether Sewing’s 2022 miss makes his 2025 ambitions even more farfetched. Sewing wants to cut another 2 billion euros in the coming years by closing retail branches, merging IT systems and decommissioning old ones.

☆ Chelsea shrugs off cost-of-living crisis
▼ + stars: | 2023-02-01 | by ( ) www.reuters.com time to read: +2 min

LONDON, Feb 1 (Reuters Breakingviews) - The cost-of-living crisis has yet to reach soccer players. Chelsea Football Club, owned by a consortium led by American businessman Todd Boehly, spent a record 330 million euros in the January player transfer window, according to Transfermarkt. It brings total spending on footballers since the Los Angeles Dodgers owner acquired the club last May to over 600 million euros. It also brings total spending by Premier League clubs this season to a record 2.8 billion pounds, beating the 1.86 billion pounds spent in the 2017/18 season. The Boehly-led consortium bought Chelsea from Roman Abramovich for 2.5 billion pounds, equivalent to a toppy 5.7 times trailing sales.

☆ New Spotify release gives bull-market vibes
▼ + stars: | 2023-01-31 | by ( ) www.reuters.com time to read: +2 min

LONDON, Jan 31 (Reuters Breakingviews) - Just when it seemed like technology investors were done with “growth at all costs”, Spotify Technology (SPOT.N) has sent investors into a retro spin. The Swedish music-streaming company led by Daniel Ek on Tuesday said it ended 2022 with 205 million paid subscribers, a 14% year-on-year increase. The shares leapt almost 10%, boosting Spotify’s market capitalisation to roughly $21 billion. That means Spotify’s bull-market vibes are only relative. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.

☆ Unilever’s new boss whets appetite for split
▼ + stars: | 2023-01-30 | by ( ) www.reuters.com time to read: +2 min

LONDON, Jan 30 (Reuters Breakingviews) - Unilever’s new chief executive is arguably a bit low fat. The appointment of board member Hein Schumacher, CEO of Dutch dairy cooperative FrieslandCampina, will instead have investors wondering whether Unilever needs to split its food and non-food arms. Unilever’s current share price is barely 40 euros per share. (By Aimee Donnellan)Follow @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.

LONDON/HONG KONG, Jan 30 (Reuters Breakingviews) - Renault (RENA.PA) and Nissan (7201.T) have helped their 24-year alliance move forward after four years of stalemate. The deal marks the end of the French group’s domination of its Japanese partner, and addresses festering governance issues. The voting rights of the Nissan shares transferred to the trust will be "neutralised" for most decisions, the statement said. Renault shares fell 2.7% to 37.16 euros, as of 0837 GMT. Nissan shares were largely unchanged at 453.9 yen.

☆ Sainsbury’s latest bid chatter looks overblown
▼ + stars: | 2023-01-27 | by ( ) www.reuters.com time to read: +2 min

LONDON, Jan 27 (Reuters Breakingviews) - Sainsbury’s (SBRY.L) is in the crosshairs of discount shoppers. Although the news drove Sainsbury’s shares up 5%, a bid looks unlikely. Its 530 million pounds of EBITDA in 2022 was less than a quarter of Sainsbury’s, implying any deal would be a stretch. And Bestway would have to win over the Qataris and Czech billionaire Daniel Kretinsky who together own nearly a quarter of Sainsbury’s. Before Friday’s share bump, Sainsbury’s traded at around 5.5 times its forward EBITDA compared to larger rival Tesco (TSCO.L) which trades on 6.5 times.

☆ Rolls-Royce alarm is justified, if oddly expressed
▼ + stars: | 2023-01-27 | by ( ) www.reuters.com time to read: +2 min

LONDON, Jan 27 (Reuters Breakingviews) - Rolls-Royce's (RR.L) new boss Tufan Erginbilgic has the right sentiments, but arguably the wrong words. Cue a 4% drop in Rolls’ share price. In fairness, the Turkish-British national’s alarm is justified. Rolls is a bit like that: its share price has dropped 70% since 2014. JPMorgan reckons the sum of its parts implies an equity value of only 70 pence a share, 30% below the current share price.

☆ Artificial intelligence out-buzzes the blockchain
▼ + stars: | 2023-01-27 | by ( ) www.reuters.com time to read: +2 min

NEW YORK, Jan 27 (Reuters Breakingviews) - The blockchain is so last year. The newest craze to excite investors is artificial intelligence. It’s a welcome boost for the $300 million company, whose stock price has been in the dumps since it merged with a blank-check firm in 2021. In 2017 shares in beverage company Long Island Iced Tea almost quadrupled in value after it rebranded as Long Blockchain. In the internet craze of the late 1990s, companies enjoyed a stock price boost by adding “dot-com” to their nameplate.

☆ Breakingviews: Toyota without Toyoda takes a small step forward
▼ + stars: | 2023-01-26 | by ( ) www.reuters.com time to read: +2 min

HONG KONG, Jan 26 (Reuters Breakingviews) - Akio Toyoda, grandson of the founder of the world’s largest automaker, is handing over his title as Toyota (7203.T) president, which effectively means chief executive, to Koji Sato. The new boss is currently chief branding officer and president of the Lexus luxury unit. Sato’s role at Lexus might be more pleasing to climate activists who have lambasted Toyota for not transitioning to pure electric vehicles quickly enough. (By Pete Sweeney)Follow @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.

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