AVP - Embedded Expectations Analysis - 2018 10 10
Avon Products, Inc. (AVP:USA) currently trades near recent averages relative to UAFRS-based (Uniform) Earnings, with a 22.5x Uniform P/E. At these levels, the market is pricing in somewhat muted expectations for the firm, and management has concerns about restoring their growth, promotion management, and their ability to improve processesSpecifically, management may lack confidence in their ability to improve their promotion management, and to better leverage their manufacturing facilities in China. Moreover, they may be exaggerating their immunity to big retailers and Amazon, and may lack confidence in their ability to maintain improved revenue trends. Also, they may lack confidence in their ability to restore their growth and competitiveness to prior levels, and to strengthen their core innovation plan. Furthermore, they may lack confidence in their ability to simplify their systems and to improve their service delivery
Avon Products is a manufacturer and marketer of beauty and related products. The company's product categories are Beauty and Fashion and Home. Beauty consists of skincare, fragrance and color (cosmetics). Fashion and Home consists of fashion jewelry, watches, apparel, footwear, accessories, gift and decorative products, housewares, entertainment and leisure products, children's products and nutritional products. The company's business is conducted primarily in one channel, direct selling. The company's reportable segments are based on geographic operations in four regions: Europe, Middle East & Africa; South Latin America; North Latin America; and Asia Pacific.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.