Analyst Comments on Movement in Avon (AVP) CDS Spreads
Tweet
Share
E-mailGet Alerts AVP Hot Sheet
Price: $5.60 --0%
Rating Summary:
3 Buy, 12 Hold, 4 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 3 | Down: 6 | New: 25
Rating Summary:
3 Buy, 12 Hold, 4 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 3 | Down: 6 | New: 25
Join SI Premium – FREE
Deutsche Bank maintained a Buy rating on Avon Products (NYSE: AVP) with a price target of $25.00. Analyst Bill Schmitz Jr said action in CDS spreads indicates further pressure ahead for Avon.
"Avon's 5 year CDS spreads have widened considerably year to date, with spreads up almost 40% from December 3, 2013 level of 193.61 to 268.44 yesterday. We view this move as consistent with the recent emerging market pressures and considerable negative moves in these currencies, led by the Argentine Peso and Turkish Lira," said Schmitz.
"We recently forwarded observations from our economics team into what is driving the sell-off, with Avon seeing collateral damage given its EM-centric portfolio that reports in dollars. We have already largely reflected the currency moves in our model and our Buy thesis on Avon remains intact, driven by the company's reinvestment in countries like Brazil where it has a right to win as it rationalizes underperforming and profit constrained regions like the US, after exiting South Korea, Vietnam, Ireland and likely France . . . To be sure, quarters will be lumpy and recovery non-linear, but we believe risk/reward remains highly favorable and EPS potential considerable." he added.
For an analyst ratings summary and ratings history on Avon Products click here. For more ratings news on Avon Products click here.
Shares of Avon Products closed at $16.36 yesterday.
"Avon's 5 year CDS spreads have widened considerably year to date, with spreads up almost 40% from December 3, 2013 level of 193.61 to 268.44 yesterday. We view this move as consistent with the recent emerging market pressures and considerable negative moves in these currencies, led by the Argentine Peso and Turkish Lira," said Schmitz.
"We recently forwarded observations from our economics team into what is driving the sell-off, with Avon seeing collateral damage given its EM-centric portfolio that reports in dollars. We have already largely reflected the currency moves in our model and our Buy thesis on Avon remains intact, driven by the company's reinvestment in countries like Brazil where it has a right to win as it rationalizes underperforming and profit constrained regions like the US, after exiting South Korea, Vietnam, Ireland and likely France . . . To be sure, quarters will be lumpy and recovery non-linear, but we believe risk/reward remains highly favorable and EPS potential considerable." he added.
For an analyst ratings summary and ratings history on Avon Products click here. For more ratings news on Avon Products click here.
Shares of Avon Products closed at $16.36 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Barrington Research Starts CBIZ, Inc. (CBZ) at Outperform
- KB Home (KBH) PT Raised to $66 at UBS on Market Stabilisation and Execution
- JFrog (FROG) PT Raised to $92 at UBS on Q2 Cloud Usage Trends
Create E-mail Alert Related Categories
Analyst Comments, Analyst EPS View, Credit Ratings, Forex, Trader TalkRelated Entities
Deutsche BankSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
