瑞信美股消费品行业家居产品与饮料行业摘要为保卫护城河而战20193842页

DISCLOSUREAPPENDIXATTHEBACKOFTHISREPORTCONTAINSIMPORTANTDISCLOSURES,ANALYSTCERTIFICATIONS,LEGALENTITYDISCLOSUREANDTHESTATUSOFNON-USANALYSTS.USDisclosure:CreditSuissedoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethattheFirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.8March2019Americas/UnitedStatesEquityResearchConsumerStaplesHouseholdProducts&BeveragesINDUSTR[e-mail]@[e-mail]:FightingtoDefendtheMoat■WesummarizeourlaunchoftheHouseholdProductsandBeverageindustry.Thesubsequentpagesincludethefrontpageandexecutivesummaryexcerptsfromourlargercompanynotes.■Fordecades,staplescompanieshavecreatedshareholdervalueonafoundationofdefensiblecompetitivemoats(brand-distribution-scale),opportunitiesforglobalexpansionandfavorablebusinesseconomics.Thesepillarsofvaluecreationareundermoreriskthanwecanrecall,evidencedbyslowinggrowthratesacrosstheindustry.■Meanwhile,marginsandvaluationareatornearpeak.Despiteslowingsalesgrowthandassetutilization,industrymarginsexpandedforadecade.Advertising,capitalexpendituresandevenR&Ddeclinedfor15years(atanacceleratingrate),whilecostsavingsincreased.Wecannotknowforabsolutecertainifslowerrevenuesareduetolackofinvestment.Ifthatisnotthecase,theindustryhasabiggerproblem:categorygrowthratesareslowingandcompetitivemoatsareshrinkingatamorerapidpace.■Long-termgrowthstorydown(butnotout).Populationgrowth,risingincomes,urbanization,distribution,frontiermarkets,demandforconvenience,innovation,etc.,supportapositiveequitystorylong-term.Ourviewisthelong-termopportunitywillbemaskedbynear-termheadwindsinthecomingyears.Duringthisperiod,weexpectmostcompaniestocontinue,expandorenteran“investmentphase”(read:build/rebuildcompetitivemoat)attheexpenseofmarginsandearningsdelivery.■WehighlightConstellation(STZ,Outperform38%upside)andColgate(CL,Underperform13%downside)asourtoprecommendations.Figure1:ConsumerStaplesSnapshot:SlowingSales(Left)andPeakingMargins(Right)0%1%2%3%4%5%6%20042006200820102012201420162018OrganicSalesGrowth5-YearAverage15%16%17%18%19%20%20042006200820102012201420162018OperatingMargin(Ex-Beverages)3-YearRollingSource:Companydata,CreditSuisseestimates.CompaniesincludeKO,PEP,CHD,CLX,CL,KMB,PG,CPB,GIS,HSY,K,KHC,MDLZ,MKC.KOandPEPareexcludedfrommargincalculationduetostructuralimpactofacquiringordivestingbottlingoperations.8March2019HouseholdProducts&Beverages2TableofcontentsFightingtoDefendtheMoat3Coverage..................................................................................................................3RelativeRankings....................................................................................................4EPSGrowthandValuationMatrix............................................................................5ValuationComparables............................................................................................6Church&DwightCo,Inc.(CHD)7ExecutiveSummary.................................................................................................9TheCloroxCompany(CLX)11ExecutiveSummary...............................................................................................13TheCoca-ColaCompany(KO)15ExecutiveSummary...............................................................................................17Colgate-PalmoliveCompany(CL)19ExecutiveSummary...............................................................................................21ConstellationBrands(STZ)23ExecutiveSummary...............................................................................................25MonsterBeverageCorporation(MNST)27ExecutiveSummary...............................................................................................29PepsiCo(PEP)31ExecutiveSummary...............................................................................................33Procter&Gamble(PG)35ExecutiveSummary...............................................................................................378March2019HouseholdProducts&Beverages3FightingtoDefendtheMoatCoverageFigure2:CSU.S.HouseholdProducts&BeverageCoverageUSBeveragesandHouseholdProducts&PersonalCareCoverageTickerCompanyNameCSRatingMarketPriceCSTargetUpside/Downside(ETR)NTMP/EonMarketPriceOneLinerSTZConstellationBrandsOutperform$168$23038%17.3xPredictablehigh-singledigitrevenuegrowthandFCFtospikeasbrewerycapexabates.Valuationwellbelowslowergrowthpeers(18xnowvs.21xavg).MNSTMonsterBeverageCorpOutperform$62$7827%29.6xFastestgrowingcompanyincoverage(low-doubledigitsrevandEPS)withrunwayforcontinuedgrowth.Cleanbalancesheetandcashgenerationshouldyieldgreaterthan$3.5bincomingyears,levelsnotseensincepartialsaletoKO.CLXCloroxCoOutperform$157$17212%23.8xUniqueportfoliopositionand8%five-yearEconomicProfitCAG