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Feb 11 2020, 06:30 GMT
Foods
China – Q1 headwinds under-appreciated
- Sectors : Foods
- Companies : Givaudan | Kerry Group | Symrise | DSM-Firmenich
Ratings
Ratings and price correct at time of issue
| Company | Rating | Date | Previous Rating | Date | Closing Price |
|---|---|---|---|---|---|
| DSM-Firmenich | OUTPERFORM | 11/02/15 | Neutral | 16/07/14 | 11500c |
| Givaudan | NEUTRAL | 21/06/12 | N/A | N/A | 326600chf |
| Kerry Group | OUTPERFORM | 30/06/09 | N/A | N/A | 11650c |
| Symrise | NEUTRAL | 15/01/19 | Outperform | 21/06/12 | 9660c |
DAVY VIEW
While the outbreak of coronavirus across China has been well-documented, its economic impact remains under-appreciated by the market. Inter-connected supply chains are likely to amplify the first-round effects, with the impact on upstream activities a potential blind spot for investors. For now, the market appears to be pricing in short-term revenue dislocation, while ignoring secondary effects (working capital, operating leverage, etc). We believe that the outbreak will impact sector-wide organic growth rates in Q1 at a minimum.
