Company Reports
Find Companies
Recent Updates
Weak Execution Has Overshadowed the Value of Ubisoft's Core Franchises
Ubisoft owns some of the best-known video game franchises, including Assassin’s Creed and the Tom Clancy series. We expect these core titles will provide opportunities to create new content that generates consistent revenue. However, increased investment in new game development over the past few years has delivered poor results, and execution around core titles has faltered. We still see room for financial results to improve, but we suspect the next year will be bumpy.
All Reports
Company Report
Weak Execution Has Overshadowed the Value of Ubisoft's Core Franchises
Ubisoft owns some of the best-known video game franchises, including Assassin’s Creed and the Tom Clancy series. We expect these core titles will provide opportunities to create new content that generates consistent revenue. However, increased investment in new game development over the past few years has delivered poor results, and execution around core titles has faltered. We still see room for financial results to improve, but we suspect the next year will be bumpy.
Company Report
Kone Primes Itself for Service and Modernization Growth to Offset Weak China New Equipment Orders
Kone is a global top-four elevator and escalator original equipment manufacturer. Its operations are integrated across manufacturing and installation activities, while also spanning E&E servicing for existing installations. Kone also performs elevator modernization services for elevator systems that have come to the end of their useful lives, which is typically 15-20 years. Active in all major geographies, Kone has an approximate 15% share of the estimated $80 billion global E&E market.
Company Report
Japan Exchange's Underlying Results Continue to Be Strong Due to Yen Depreciation
Japan Exchange Group’s strategy has long focused on various attempts to help revitalize the Japanese economy and financial markets. Over the past decade, this strategy took shape through various mergers and acquisitions, such as the merger between predecessor companies Tokyo Stock Exchange and Osaka Securities Exchange in 2013 and the acquisition of Tokyo Commodity Exchange in 2019. Through these mergers and acquisitions, the Japan Exchange Group has become a vertically integrated securities exchange business, with offerings across the full breadth and depth of exchanges and a dominant market share in listing, trading and clearing in Japan. JPX’s current strategy continues in a similar vein, with its medium-term management plan aiming to reinvigorate the Japanese economy and financial markets, primarily by focusing on supporting fundraising and asset formation.
Company Report
New World Development's Margin Squeezed by Weak Property Prices Before Home Market Bottoms
New World Development is a leading property developer in Hong Kong and mainland China under the Cheng family, with property development and investment as core businesses. As NWD aims to raise the revenue mix of investment properties, we think execution efficiency remains crucial for the group to maintain robust top-line growth. We believe NWD is poised to leverage the success of its well-received K11 commercial project in Victoria Dockside to deliver the new 11 Skies project in Hong Kong. We also expect the group to complete a rich portfolio of K11 malls over the next five years in mainland China. With continuing floor area expansion and upward rental reversion, we estimate that recurring earnings from investment properties should represent over 30% of NWD’s operating profit in fiscal 2029.
Company Report
No-Moat BlackBerry’s Automotive Software Is Strong but Cybersecurity Business Is Underperforming
We think BlackBerry has positioned itself in rapidly growing markets that benefit from secular trends toward security and connectivity, but we think it has a long way to go to earn a durable competitive advantage. We like the firm’s automotive software portfolio, but see the larger enterprise security business as an underperformer that weighs on results. BlackBerry sells software into enterprise cybersecurity applications and embedded applications like cars. Its products in enterprise security focus on endpoint security. In the automotive market, BlackBerry’s QNX software underpins automotive chips, safety systems, and cabin features.
Company Report
BASF Plans to Divest Multiple Businesses Over the Next Several Years to Focus on Core
BASF is the world’s largest chemical company, producing commodity and specialty chemicals in nearly every major category. The firm maintains a top-three market position in over two thirds of its businesses. Its products are sold to a wide variety of end markets ranging from industrials to transportation to pharmaceuticals to agriculture. The catalysts business generated around 17% of companywide revenue in 2023, while agriculture generated roughly 15%. The remaining 11 business lines accounted for roughly 10% or less. BASF is fairly vertically integrated, manufacturing many chemicals that serve as inputs to its other segments.
Company Report
Accenture Is a Wide-Moat Powerhouse in IT Services
Accenture is one of the largest IT-services companies in the world, providing both consulting and outsourcing capabilities. We think that Accenture’s growth will remain at a healthy and gradual pace, thanks to the persistence of digital transformation trends. With the company's prominent reputation, which we believe to be crucial to the consulting business, and its proven ability to bring expertise to a gamut of enterprise issues, we are confident Accenture will maintain its wide economic moat.
Company Report
Brickwork's Fiscal 2024 Earnings Exposed to Cyclicality
Brickworks is a conglomerate consisting of building product manufacturing operations, property management, and a cross-shareholding in ASX-listed investment firm, Washington H. Soul Pattinson & Company, or Soul Patts.
Company Report
Cyclical Shareholdings Weigh on Soul Patt's Fiscal 2024 Earnings
Washington H. Soul Pattinson, or Soul Patts, is a value style-oriented investment house with approximately AUD 12 billion in net equity value. Its approach to growing shareholder value is somewhat distinct from many fund managers and capital allocators, benefitting from advantages in its corporate structure, investment-style, and from a relatively unconstrained investment mandate.
Company Report
Southwest Airlines Is Adapting to Postpandemic Passenger Preferences
Southwest is the largest domestic carrier in the US by passenger volume. Southwest has stuck to its strategy of streamlining airline operations to maintain lower unit costs than its full service rivals, which it passes on to customers in the form of cheaper tickets and a low-frills experience.
Company Report
We Expect Star to Raise Equity in Fiscal 2025
We expect Star Entertainment to deliver strong earnings growth over the next decade, buoyed by the recovery from pandemic-induced lows, the ramp-up of the Queen's Wharf and Gold Coast growth projects, and solid performance from its Sydney property, despite increased competition. The Star casino in Sydney is the company's core asset and historically generated approximately most of group earnings as the city's only casino. However, Star's exclusivity in Sydney has come to an end with a second Sydney casino license issued to Crown Resorts, opening in August 2022. This is a major blow to Star, ending its long-standing monopoly in Sydney.
Company Report
Wide-Moat Campbell Prudently Focused on Opportunities to Heat Up Sales and Profits Longer Term
Wide-moat Campbell has orchestrated significant changes since CEO Mark Clouse took the helm in January 2019. For one, the portfolio mix has shifted quite dramatically, such that its core soup lineup now accounts for only around one quarter of total sales (down from more than 40% in fiscal 2017) while snacks make up around 50% (up from less than 30%). In addition, the firm has worked to drive efficiencies across its supply chain and manufacturing network to fuel spending behind its brands and capabilities to solidify its competitive edge. These efforts have manifested in 3% average annual organic sales growth over the past five years against mid- to high-teens adjusted operating margins.
Company Report
Initiating Coverage of TeamViewer With a No-Moat Rating and EUR 12 Fair Value Estimate
TeamViewer offers secure remote connectivity software solutions to individuals, small and medium sized businesses and large enterprises globally. TeamViewer’s remote access and support software covers information technology devices such as computers, mobile phones, and tablets, as well as nonstandardized operation technology devices such as industrial equipment, robots, and medical devices, among others.
Company Report
Flutter's Investor Day Highlights Its Lasting Technology and Product Advantages
Flutter Entertainment has leveraged its leading technology and product offering into an advantaged global brand, the source of its narrow moat, which spreads across the US, the UK, Australia, and other international markets like Italy.
Company Report
Truckload Backdrop Remains Soft for Knight-Swift, but Signs of Improvement Are Emerging
Before its 2017 merger with Swift Transportation, Knight Transportation was the 12th-largest full-truckload carrier in the United States, with a long history of exceptional execution, including average returns on invested capital in the low teens—an unusual accomplishment in trucking. Knight's long-standing focus on network efficiency has served it well; its legacy operating ratio (expenses/revenue, excluding fuel) averaged in the mid-80s before the Swift deal versus an industry average that traditionally exceeds 90%.
Company Report
BorgWarner Stands to Benefit From Automotive Industry Trends
BorgWarner is well positioned to capitalize on auto sector industry trends arising from global clean air regulations, consumers' demand for fuel economy, and the popularity of sport utility and crossover vehicles around the world. The company benefits from its ability to continuously innovate, a global manufacturing footprint, highly integrated long-term customer ties, high customer switching costs, and moderate pricing power from new technologies. Acquisitions of vehicle electrification companies such as Remy, Delphi Technologies, Akasol, and Santroll as well as the completed spinoff of the fuel systems and aftermarket business lines as Phinia support our thesis.
Company Report
Allianz Is Probably the Best Executing European Multiline Insurer
Allianz is one of the best-performing multiline insurers in our European insurance coverage. The company combines a unique set of assets to generate returns that are better than most others. In its property and casualty division, the company has continued to invest in technology and data to improve customer experience, as well as its policy and claims processing. By increasing the speed of its first notice of loss, the company gets ahead of inflation and can manage repairs and claims more effectively. While the division has not earned economic returns, from an underwriting perspective it is one of the better-performing segments. The business still has work to do in the consistency of its commercial insurance.
Company Report
Cintas' Organic Growth and Margin Performance Continue to Look Solid
Cintas is by far the dominant provider in the $20 billion US uniform rental/sales and related ancillary services industry. It enjoys an approximate 30% market share. It has a diversified customer base of more than 1 million large corporations and small and midsize businesses across North America, with no single customer making up more than 1% of total revenue. Despite its already impressive position, we expect Cintas to post healthy growth over the long run. The firm consistently launches new product lines, emphasizes cross-selling to existing customers, and invests in IT infrastructure to enhance customer retention and operational efficiency. With a market penetration rate of less than 20%, the remaining unvended market remains sizable.
Company Report
Darden Leans Into Value Positioning, Scale Advantages During Challenging Industry Period
Darden Restaurants' playbook strives to leverage its competitive advantages, with the restaurant operator leaning into its scale-driven cost edge, embracing datacentric decision-making, trying to attract and retain employees with compelling benefits and culture, and providing a differentiated dining experience, consistent with management's back-to-basics strategy. While we view this approach as strategically sound, we expect any success at Darden to come in spite of, rather than propelled by, aggregate industry results, with the full-service industry ceding market share as consumers increasingly favor off-premises options at the expense of dine-in meal occasions.
Company Report
Brookfield Renewable Is Well Positioned for Rising Power Demand
Brookfield Renewable holds a well-diversified global portfolio of clean energy technologies assets. It 12%-15% returns via a combination of organic growth and acquisitions. Brookfield takes a primarily contrarian approach to acquisitions.