DENTSPLY SIRONA, Inc. (XRAY:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings, with a 28.1x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm...
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March 25, 2021
CDS 109bps, Base Case iCDS 7bps
Negative Case iCDS 18bps, 2026 2.196% Bond YTW of 2.370%
iYTW of 0.920%, Baa2 Rating from Moody’s, IG4 (equivalent to Baa2) Rating from Valens
Low Refinancing Need...
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March 24, 2021
The Kraft Heinz Company (KHC:USA) currently trades near corporate averages relative to UAFRS-based (Uniform) earnings, with a 20.7x Uniform P/E. Even at these levels, the market is pricing in bearish expectations for the firm...
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March 23, 2021
Automatic Data Processing, Inc. (ADP:USA) currently trades at a recent high relative to UAFRS-based (Uniform) earnings, with a 30.2x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm...
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March 23, 2021
Each week, the Valens Research team highlights our most interesting insights from across our tools and our analysis, including individual company, industry, and macro insights. Top Highlight: LPLA – LPL Financial Holdings Inc. Other Highlights: KMB, ROP, SBUX...
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March 22, 2021
No Traded CDS, Base Case iCDS 158bps
Negative Case iCDS 314bps, 2024 3.500% Bond YTW of 3.273%
iYTW of 1.953%, Ba1 Rating from Moody’s, IG4+ (equivalent to Baa1) Rating from Valens
Low Refinancing Need...
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March 22, 2021
Northrop Grumman Corporation (NOC:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) earnings, with a 16.3x Uniform P/E. At these levels, the market is pricing in bearish expectations for the firm...
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March 19, 2021
Align Technology, Inc. (ALGN:USA) currently trades near historical highs relative to UAFRS-based (Uniform) earnings, with a 57.7x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, but management may have concerns about Invisalign portfolio growth, their digital appointment capabilities, and dentist engagement...
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March 18, 2021
Starbucks Corporation (SBUX:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings, with a 44.1x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, but management may have concerns about maintaining revenue growth, operating margins, and new stores in China...
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March 18, 2021
CDS 409bps, Base Case iCDS 127bps
Negative Case iCDS 308bps, 2026 6.250% Bond YTW of 6.547%
iYTW of 2.117%, Caa2 Rating from Moody’s, HY1 (equivalent to Ba2) Rating from Valens
Moderate Refinancing Need...
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March 18, 2021
- Credit Spreads Levels Are As Important As Their Rate of Change… They Remain Low. There has been a great deal of discussion about rising rates recently. What is far more important than that they are rising is that even after the recent rise in the risk-free rate, the cost for U.S. corporates to borrow remains near historically low levels. Favorable bank, corporate, and consumer credit fundamentals coming out of this disruption still point to optimism for an ongoing recovery
- Through Q2 and Q3 2020, management sentiment pointed to a rapid re-acceleration of investment after the pandemic, thanks to optimism on growth. As highlighted last month, in Q4 and particularly in the January and February earnings season, management is showing more reservation, which may slow earnings growth which the market is already pricing in. Corporate fundamentals signal a strong recovery in profitability, but a pause in growth
- After having flashed warning signs the past 2 months, sentiment indicators are finally moderating after the recent sell-off. More neutral sentiment indicators mean less positive news doesn’t need to point to a sell-off in the near-term, it’s more likely to just mean a more sideways and volatile market, until growth can re-engage...