Companies & Funds

Oil glut renders industry’s appeal purely relative

1 Nov 2024

A record 5 mln bpd of spare OPEC+ capacity helps explain lower profit at Exxon, Chevron and Conoco. The titan run by Darren Woods has positioned itself better to handle the surfeit. Nevertheless, the next decade of returns from US crude producers will be even worse than the last.

Vivendi activist’s critique falls on deaf ears

1 Nov 2024

Pushy fund CIAM reckons a planned carveup of the 10-bln-euro media empire favours the controlling Bolloré clan. That’s true. Yet the split at least eases a conglomerate discount. And since voting it down would be a leap into the unknown, investors will probably just stay in line.

Saudi’s Davos is no longer such a desert

1 Nov 2024

Around 8,000 CEOs and financiers flocked to the Future Investment Initiative in Riyadh, twice the number at its inception in 2017. Western bosses were keener to talk about artificial intelligence than investing in the kingdom. But Saudi’s progress suggests that may yet change.

Macquarie’s lumpy earnings are a luxury problem

1 Nov 2024

The $55 bln investment bank's stock fell 4% as results were hit in part by fewer private equity-like asset sales. But it's still sporting a high valuation despite low returns. CEO Shemara Wikramanayake's impressive track record means the lender can withstand a few blows.

Gold surge adds glitter to tarnished miners

31 Oct 2024

The yellow metal is up 35% this year as investors fret about inflation. Gold miners like Newmont and Barrick have repeatedly failed to capitalise on the ore’s rising value. But new-found financial discipline and modest valuations present investors with a rare opportunity.

AI venture shapes up to be glue for the Muskiverse

31 Oct 2024

Tesla boss Elon Musk is in talks to raise money for his year-old xAI at a whopping $45 bln valuation. From satellites to cars to social media, his holdings have access to gobs of differentiated data. Self-dealing concerns aside, the OpenAI rival might just turbocharge the empire.

Uber’s deal chest would be well spent on groceries

31 Oct 2024

The $150 bln ride-sharing firm’s rich stock price gives boss Dara Khosrowshahi good reason to go shopping, especially amid the threat of robotaxis. Slower growth this quarter adds to the anxiety. A mooted Expedia tie-up would send the wrong message. Instacart is a better fit.

Siemens AI deal is baby step to higher share price

31 Oct 2024

The German trains-to-robot maker is buying simulation group Altair for $10 bln. The rich transaction will take years to pay off. But Siemens’ fast-growing software unit gains scale. Shareholders may give Siemens a higher valuation if CEO Roland Busch opts for a bigger breakup.

French banks’ ups and downs obscure value problem

31 Oct 2024

Société Générale shares rose 7% after its results showed faster growth, while BNP Paribas fell 6% after sluggish earnings. The bigger issue is that both lenders now trade at a discount to euro zone peers. A tough Gallic market and volatile trading units make that hard to change.

Global banks are nearing peak regulation

31 Oct 2024

Sixteen years after the financial crisis that triggered bailouts and new rules, CEOs like JPMorgan’s Jamie Dimon are pushing back. Sympathetic politicians and competition from shadow banks help their case. The best hope for watchdogs is to stop the system from fragmenting.

Robust banks impair pleas for lighter regulation

31 Oct 2024

Lenders on both sides of the Atlantic are doing relatively well, despite concerns over the effect of shifting rates. In this Viewsroom podcast, Breakingviews columnists debate what is driving growth, and why CEOs are simultaneously bemoaning increased scrutiny from watchdogs.

Samsung’s diminishing tech edge is in full glare

31 Oct 2024

The South Korean giant has lost over $100 bln of market value this year as it falls behind rivals in making chips used for AI. The company may be paying the price for one giant distraction: Boss Jay Y. Lee's never-ending legal troubles. Shareholders are voting with their feet.

BYD’s outpacing of Tesla has only just begun

31 Oct 2024

The electric-car maker still lags Elon Musk's marque on profitability. But his Chinese rival's record $28 bln revenue last quarter handily bested Tesla's. With heftier R&D spending, new factories and models coming, BYD's sales will be hard to catch up with.

It’s safe to count chickens even before they hatch

30 Oct 2024

Bigger and faster-growing fowl keep pushing prices lower and consumption higher. The $50 bln US industry is cooking, evidenced by Pilgrim’s Pride’s profitability, Chick-fil-A’s entertainment app, and more. None of it, though, will end a cyclicality that runs like cluckwork.

Lilly’s weight loss let-down is all about timing

30 Oct 2024

The obesity drug maker shed $50 bln of market value after sales disappointed the assumption that rising supply would meet endless demand. It may be a blip due to slow marketing. But a valuation triple industry norms leaves Eli Lilly no room to fumble its window to extract value.

UBS can share more M&A savings with investors

30 Oct 2024

CEO Sergio Ermotti keeps upping the pace of cost cuts from buying Credit Suisse, with his 2024 target now $7.5 bln. Yet expenses elsewhere in the bank seem to be offsetting those gains. To please shareholders, UBS may have to let more of the bounty drop down to the bottom line.

Grim VW numbers give CEO a mandate for shake-up

30 Oct 2024

The 46 bln euro carmaker reported a 21% year-on-year operating profit slump in the first nine months of 2024. That may help boss Oliver Blume push through a restructuring of its ailing core brand. It’s a necessary but risky move, and other problems, like China, are getting worse.

China is reshaping, not choking, private business

30 Oct 2024

Tech giants and property developers have tumbled, while party support lifted electric carmaker BYD and solar powerhouse Longi. A blurred line between state-backed and private firms does not preclude innovation or competition in the $18 trln economy. Disdain for market forces can.

Big Tech’s AI spending isn’t crazy, in a vacuum

29 Oct 2024

Microsoft, Meta and Alphabet are all ramping investment by 40% or more this year. Each decision seems defensible, as an 8% revenue increase might justify the expense. Sitting out also could push businesses into extinction. But too many firms want pieces of the same pie.

Ford’s ride-the-brakes strategy is hard to steer

29 Oct 2024

The Detroit carmaker has trimmed electric vehicle plans that nonetheless lost $1.2 bln last quarter. Meanwhile, the airbag of gas-guzzler profit is deflating on quality and supply issues. Boss Jim Farley says it’s safer to forestall the future. He’s struggling to prove it.