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The aftermarket scene was enlivened on Wednesday. An influential analyst who had defended You're here (NASDAQ: TSLA) the stock seems to be degrading.
In order not to be left behind by an analyst, the Brazilian cosmetics conglomerate Natura and Avon Products (NYSE: AVP) finally confirmed that Natura was going to buy his American counterpart in the context of a spectacular cross – border transaction.
The night was not boring. Let's go directly to our destination.
A Tesla Y model. Image Source: Tesla.
Tesla: Losing a big fan?
An influential analyst, optimistic about Tesla's stock, appears to be moving into the bear cave. According to the media, after the market, Morgan Stanley Predictor Adam Jonas expressed doubts about the company's prospects during a private conversation with a number of institutional clients of the bank.
Business Insider and CNBC claim to have had access to a recording of the call and quoted Jonas directly from it.
The influential analyst contrasted Tesla's strong position in the fourth quarter of its 2018 fiscal year – in which the company enjoyed strong demand, solid cash flow and buzz over its future SUV Y – with its current situation.
"Today, the supply exceeds the demand, they spend money, everyone makes fun of Model Y, the company has raised very low funds, no strategic purchase," he said.
"Tesla is not really seen as a growth story," he added. These days "[i]This sounds like a story of credit and restructuring in distress. "
Jonas also expressed skepticism about Tesla's buying prospects by a large technology center such as Amazon.com or Apple.
Tesla is a very volatile stock, so its investors are very resilient. Shares are down, but only slightly, in aftermarket trading, according to media reports.
Avon has a new owner
The Avon stock is up nearly 17% in after-hours trading. She and Natura issued a joint statement confirming the buyout, a very hot rumor being spread throughout the day. Natura is to acquire Avon in a transaction involving only $ 2 billion worth of shares. Avon shares must be exchanged for Natura shares at a rate of 1: 0.3.
As a result, Natura's current shareholders will own approximately 76% of the resulting company.
In the statement, Natura said that Avon's ownership would save $ 150 to $ 250 million a year. Part of this amount must be "reinvested to further strengthen digital and social selling, research and development and branding capabilities, and to further develop the Group's geographical footprint".
Although the Avon brand is strong, Avon is in a way a dinosaur in an industry that better fits current marketing techniques, including social media. Avon's performance could improve if they were incorporated into a larger, more powerful peer.
The redemption is subject to the relevant regulatory approvals. Both companies expect it to close at the beginning of 2020.
L Brands beats on the turnover and the EPS of T1
The Brands (NYSE: LB), owner of the prestigious Victoria's Secret & Bath & Body Works chain stores, released its first quarter 2019 results. The final figure, in particular, attracts traders from the aftermarket market.
In the first quarter, the company achieved a net business turnover of $ 2.56 billion, down slightly from the $ 2.63 billion achieved in the first quarter of 2018. It earned a profit of little more than 40 million USD (0.14 USD per diluted share) against a profit of nearly 48 million USD for the fiscal year ago quarter. Same store sales were stable on an annual basis.
However, on average, analysts expected L Brands to just break even this quarter, so net profit was a very pleasant surprise. Net business turnover also exceeded expectations, which were set at about $ 2.56 billion. In addition, analysts expected a decline of 1.3% in the number of composite products.
The company has lifted the lower limit of its forecasts for the year 2019; he now expects to earn between $ 2.30 and $ 2.60 per share (the previous range was $ 2.20 to $ 2.60). It also forecasts earnings per share of $ 0.15 to $ 0.20 for the second quarter.
L Brands is very active in after-sales trading. Its stock is up by almost 13% so far.
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