Visa (V) has indicated a solid uptick in consumer spending from April to May, as it continues to actively monitor the Covid-19 impact globally.Most notably, in May, total U.S. payments volume declined 5% year-over-year, a 13 percentage point (ppt) improvement over April. Meanwhile debit grew 12% and credit declined 21% year-over-year in May, a 17 ppt and 9 ppt improvement over April, respectively.“The continued distribution of Economic Impact Payments and the relaxing of shelter-in-place restrictions in a number of states are driving these trends” Visa stated.However, recovery in international markets in which Visa processes the majority of transactions lagged the U.S. in May. Across most of Europe, as well as Australia, Canada and Japan, the trajectory so far is comparable to the U.S. India and Singapore are slowly reopening, said Visa, while a few markets, such as New Zealand, Denmark and Chile, have positive year-over-year constant dollar growth in May.Global processed transactions declined 12% in May, a 12 ppt improvement over April. Since April, the mix has shifted to larger ticket transactions.Cross-border volumes excluding intra-Europe transactions declined 45% in May, a 6 ppt improvement over April. Travel related cross-border volumes declined 78% in May while cross-border eCommerce (excluding travel) continued to grow strongly, up 18%. Cross-border volumes including intra-Europe transactions declined 35% in May, an 8 ppt improvement over April.“As we have indicated before, cross-border volumes excluding intra-Europe transactions drive our international transaction revenues” Visa said.Shares in Visa are currently trading up 3.5% year-to-date, and analysts have a bullish Strong Buy consensus on the stock. In the last three months, 18 analysts have published buy ratings vs 5 hold ratings. Meanwhile the average analyst price target stands at $200 (3% upside potential). (See V stock analysis on TipRanks).RBC Capital analyst Daniel Perlin recently bumped up his price target from $195 to $212 (9% upside potential). “Overall volume trends point to a path of stabilization, while the shape of the recovery likely to be more elongated. However, new secular opportunities in ecommerce & accelerated cash to electronic conversion points to solid long-term growth.” he explained.“Our higher valuation is based on our view that V will be able to expand its constituencies, improve its competitive position, and accelerate secular trends as we emerge into a more normalized phase of growth” the analyst added.Related News: Western Union Seeks To Buy MoneyGram; MGI Spikes 32% Amazon’s Jeff Bezos Invests In UK Freight Startup Beacon Zynga Snaps Up Peak For $1.8B In Its Largest Deal To Date; Shares Up 7% More recent articles from Smarter Analyst: * Free Version of WWE Network Now Available for Fans * Bristol Myers Reveals Positive Results For Ulcerative Colitis Pivotal Trial * Pfizer Embarks On $500 Million Investment Plan For Biotech Businesses * MongoDB Earnings Preview: Analysts Looking For Beat, Raise Quarter
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Shares in Coty (COTY) jumped 18% as it appointed its chairman Peter Harf as CEO to help spearhead a strategic turnaround plan of its business. As part of the plan, the indebted cosmetics maker struck a deal to sell a majority stake in its retail and hair business to buyout firm KKR & Co. (KKR).Investors welcomed the news as the stock surged 18% to $4.28 in midday U.S. trading after plunging almost 70% since the beginning of the year.In his new role, Harf will be part of a new three-person Executive Committee to make sure that Coty takes the right steps to become a more profitable company and drive improvements across the business.Under the agreement with KKR, the cosmetics maker will sell a 60% stake in brands including Wella, Clairol, and OPI, in a deal valued at $4.3 billion. In addition, KKR will invest $1 billion directly into Coty through the issuance of convertible preferred shares.Coty said that the sale of a majority interest in the professional and retail hair business will simplify its portfolio and allow it to focus on its core prestige and mass beauty businesses.Excluding the Wella business, Coty is targeting a net reduction in fixed costs of about $600 million in cash over the next 3 years, equating to 25% of its pro forma fixed cost base. The one-off costs associated with this program are estimated at $500 million.Wells Fargo analyst Joe Lachky maintained a Hold rating on the stock with a $5 price target saying he sees “few positive catalysts until channel disruption normalizes and visibility into stabilization of the top-line emerges”.“Positively, COTY was able to get a deal done with a strong financial partner at an attractive multiple on pre-COVID financials (12.3x FY19 EBITDA),” Lachky wrote in a note to investors. “That said, we still estimate the transaction will be dilutive, even inclusive of new cost savings.”Overall, Wall Street analysts are sitting on the fence when it comes to Coty stock. The Hold consensus consists of 7 Hold ratings, 1 Sell and 1 Buy rating. Following the sharp share plunge this year, the $5.89 average analyst price target implies 37% upside potential over the coming 12 months. (See Coty stock analysis on TipRanks).Related News: KKR Joins $3.3 Billion Bid To Acquire Spanish Telecom Carrier Masmovil Amazon’s Jeff Bezos Invests In UK Freight Startup Beacon KKR Invests $1.5 Billion in Reliance’s Jio Platforms In Biggest Deal In Asia More recent articles from Smarter Analyst: * Free Version of WWE Network Now Available for Fans * Bristol Myers Reveals Positive Results For Ulcerative Colitis Pivotal Trial * Pfizer Embarks On $500 Million Investment Plan For Biotech Businesses * MongoDB Earnings Preview: Analysts Looking For Beat, Raise Quarter
A technical snafu in a U.S. government system caused many small businesses to receive loans twice or more under a federal aid program to help businesses hurt by the COVID-19 pandemic, nearly a dozen people with knowledge of the matter said. The money mistakenly handed out could amount to hundreds of millions of dollars that the government and lenders – which made the loans – have been trying to identify and recover in recent weeks, one of the people briefed on the matter said. The technical issue and scale of the resulting duplicate deposits made under the Small Business Administration’s $660 billion Paycheck Protection Program (PPP) have not been previously reported.