Analysts Offer Insights on Consumer Goods Companies: Coca-Cola Enterprises (NYSE: CCE), Ralph Lauren Corp (NYSE: RL) and Select Comfort Corp. (NASDAQ: SCSS)

By Jason Carr

Companies in the Consumer Goods sector have received a lot of coverage today as analysts weigh in on Coca-Cola Enterprises (NYSE: CCE), Ralph Lauren Corp (NYSE: RL) and Select Comfort Corp. (NASDAQ: SCSS).

Coca-Cola Enterprises (NYSE: CCE)

In a report released today, Stephen Powers from UBS reiterated a Hold rating on Coca-Cola Enterprises (NYSE: CCE), with a price target of $38. The company’s shares opened today at $34.94.

Powers wrote:

“CCE delivered Q3 EPS of €0.66 (vs. UBSe/cons. of €0.63/€0.65) alongside flat revenues (vs. UBSe/cons. of -3.9%/-2.5%); however, organic growth was up +3.5% (vs. UBSe/cons. of +1.5%/+1.3%) driven entirely by volume growth (+3.5% vs. UBSe of +1.0%). The strongest regions included Iberia (+6.5%), N. Europe (+5.5%), and France (+1.0%) while Germany (-1.0%) underperformed and Great Britain was plagued by FX issues (-13.0%, but +3.0% organic). On the bottom line, EBIT margins slightly underperformed (+31 bps vs. UBSe of +50 bps). In addition to reiterating FY16 guidance of flat revenue and EPS of €1.86-€1.90, CCEP announced Damian Gammell will succeed John Brock as CEO just before calendar year end (12/28). Volume growth/Oct. trends strong; however, overshadowed by CEO change Across the board, CCEP was able to grow its portfolio as Sparkling brands grew +3.0% (with Coca-Cola trademark up +2.0%), sparking flavours and energy grew +6.5%, and stills grew +4.0%. Furthermore, momentum seems to be continuing into Q4 as the company indicated that October trends are strong. However, despite encouraging growth, the market will focus on the sooner than expected management change and the potential consequences (although we and likely the market weren’t surprised at the choice, the change likely happened about 6 months before the market was expecting).”

According to TipRanks.com, Powers is a 2-star analyst with an average return of -0.3% and a 56.1% success rate. Powers covers the Consumer Goods sector, focusing on stocks such as Multi Packaging Solutions, Constellation Brands Inc, and Estee Lauder Companies.

Currently, the analyst consensus on Coca-Cola Enterprises is Hold and the average price target is $41.33, representing a 18.3% upside.

In a report issued on November 7, Susquehanna also reiterated a Hold rating on the stock with a $41 price target.
Ralph Lauren Corp (NYSE: RL)

In a report released yesterday, Michael Binetti from UBS reiterated a Buy rating on Ralph Lauren Corp (NYSE: RL), with a price target of $117. The company’s shares opened today at $106.84.

According to TipRanks.com, Binetti is a 4-star analyst with an average return of 6.3% and a 52.3% success rate. Binetti covers the Services sector, focusing on stocks such as Abercrombie Fitch, Urban Outfitters, and The Finish Line.

Ralph Lauren Corp has an analyst consensus of Moderate Buy, with a price target consensus of $120.67.

Select Comfort Corp. (NASDAQ: SCSS)

In a report released today, Michael Lasser from UBS reiterated a Sell rating on Select Comfort Corp. (NASDAQ: SCSS), with a price target of $16. The company’s shares opened today at $21.58.

Lasser noted:

“SCSS reiterated it expects to achieve EPS of $2.75 in ’19 through HSD sales growth, 200 bps of margin expansion, & share buybacks. To support the outlook, it showcased all the advances it has made & those in front of it. It certainly has more room to benefit from its product innovation, ERP implementation, & supply chain improvements. But, we aren’t sure these initiatives will help it grow faster than the sector or just enable it to keep up. Since it aims to rise above, it will likely have to reinvest a significant amount of any margin savings to sustain its traffic. Customer acquisition costs are increasing at an elevated pace across the sector given the emergence of direct competitors. They now comprise 5-6% of the industry & are absorbing more attention. This will probably continue to put pressure on SCSS since its model remains very sensitive to traffic given its high in-store conversion & high ARU. Thus, we see risk ahead.”

According to TipRanks.com, Lasser is a 4-star analyst with an average return of 4.4% and a 49.2% success rate. Lasser covers the Services sector, focusing on stocks such as Dick’s Sporting Goods, Advance Auto Parts, and Bed Bath & Beyond.

Select Comfort Corp. has an analyst consensus of Moderate Buy, with a price target consensus of $16.