Morgan Stanley underweight on TGBL with a price target of 150.
150? is it a typo error?
Is it possible to share the report please. 150 appears to be too low.
You can find in todays bloomberg quint report … open this url and scroll to the bottom of the page where you can see this morgan stanley on TGBL
NOTES FROM EDELWEISS CONFERENCE - 02-FEB-18
- For Q3FY18, excluding Russia, revenue from operations grew 3% YoY, attributable to improvement in India and UK with underperformance mainly in non-branded business.
- Everyday Black Tea category declined and retailer pressure continues in developed markets.
- As per Nielsen data, Tata Global Beverages (TGB) is gaining traction in volumes of tea business—45% of total tea consumed is unbranded and the company expects some shift.
- Within the domestic branded business, volumes have improved. Post GST, growth has been in high single digits or double digits in a few months.
- UK’s market share continues to expand, predominantly in non-black tea category.
- In the Starbucks JV, total number of stores stands at 106. From six cities moving to seventh city—Kolkata. Top line run rate of INR3,000-3,500mn p.a. Starbucks JV is now EBITDA positive.
- Nourish Co achieved break even during the year.
- Exit from China, restructuring of Russian operations and internal restructuring have been completed. Divestment of holding in its associate EMSPL, Sri Lanka in Q3FY18, was part of the company’s overall strategy.
Tetley squash drinks now available in premium super markets like Morrisons and Waitrose all over UK…
Tata May Merge Its Food Businesses Into Single Firm: Bloomberg Exclusive.
Yes, but I am not sure if that merger would actually happen. The results have been very subdued for past 3 quarters even though everyone was expecting good results. It’s still more of a commodity business than an FMCG one. It gets affected by crop produce, rains, etc. which does not make it a consumer business. The Starbucks story is going to take a lot of time to make a noticeable impact on bottomline or even on the topline. I am very critical about TGB, they have a very good company in front of them and they should make good efforts to grab the opportunity. Saying so, I am keen to get on this stock but I want a valuation cushion. The cash position is bad, 50% of which is in goodwill. I think I am positive on long term but it still is a risky bet. I might enter around 200-210 levels if it corrects that much otherwise I will simply pass. Let me know if there are any other views from people invested and interested.
A great franchisee being wasted for so long…any idea on future of starbucks partnership? Could it be a demerger or parting ways?