Many interesting numbers to think about...
First Danone which I bought a couple of times around the Euro50 level earlier this year as detailed here. The corporate numbers today from the company were not flawless BUT the main positive attribute I noted of good/positive price-mix ('value') continued apace:
(note too the negative FX impact, a theme we discussed yesterday here)
The other aspect that was noteworthy concerned input costs which - for once - were not offset by the company's pricing.
So why was this? Well the company highlighted strong/high milk prices and this combined with 'high bases for year-on-year comparisons linked to Fonterra's false safety alert' which impacted the baby nutrition division:
So what to do? Well comparisons are easing, H2 - as shown below - is anticipated to be strong and my core valuation work still suggests a target of Euro60+. Versus many other highly valued consumer names Danone still feels to me like a core hold.
Staying in Europe, Statoil shares - after a great run - are rolling over:
And the reasons? Well results especially in Norway were sequentially poor
After a great run in energy shares over recent months I am worried about roll-over of this sector. The Statoil numbers entrench that further.
Finally in Continental Europe there is LVMH where profits disappointed on destocking and 'prudent purchasing' by multi-branch retailers.
The Euro120s have been interesting buying points over the last couple of years and I don't expect this will change now.
As I noted back in January 'Valuation-wise, a 4.5% free cash flow yield and x11s EV/ebit ratio (using FY13 numbers) is exhibiting value. The backdrop is not easy...but for a branded luxury business with LVMH's history...' these are interesting levels.