NESTLÉ (Core Holdings) is in talks to acquire The Bountiful Company, which makes vitamins and food supplements (protein-rich snacks). With sales of over $2bn and a forecast 2021 margin of 20% (Nestlé’s 2020 margin was 17.7%), the reported $5bn price tag equates to a reasonable valuation (EV/sales of 2.4x and EV/EBITDA of 17x). This acquisition would round out Nestlé’s health and nutrition portfolio.
UNILEVER (Core Holdings) is due to report its Q1 2021 sales this Thursday. Given that lockdowns were extended into Q1, the consensus forecast is cautious, putting organic sales growth at 3.9%, with sales nevertheless buoyed by the upturn in the US and, above all, emerging markets (Asia).
VEOLIA has been added to our European Satellites with the b-Transition label. The group’s operations span the full length of the value chain in water, waste and energy services. With the Suez acquisition finalised, the new group will be world number one and ideally placed on key ecological transition issues.
MICROSOFT, ALPHABET, VISA, APPLE, FACEBOOK and AMAZON (US Core Holdings) are all due to report results this week. This will give investors an idea as to the continued performance of Big Tech as the world continues to open up again. Unsurprisingly, these figures are likely to be very positive; they will also provide an indication of the overall trend in cloud computing, e-commerce and online advertising.
After a stable week, markets are bracing themselves for five busy sessions, with US tech firms and 180 S&P 500 companies all set to report quarterly results. While there are no particular expectations for Wednesday’s FOMC meeting, Fed Chair Powell’s speech will come under close scrutiny as usual. US and European GDP numbers are also expected. We remain confident.
Concerns over Biden’s tax plans caused USD to fall to EUR/USD 1.2103 and USD/CHF 0.9135. Our expected ranges: EUR/USD 1.1980-1.2160 and USD/CHF 0.9054-0.9225. CHF and GBP are holding firm at EUR/CHF 1.1055 and GBP/USD 1.3905. Having failed to break through resistance at $1,800/oz, gold is currently consolidating at around $1,775.
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