On Friday, Evercore ISI adjusted its price target on shares of Mettler-Toledo (NYSE:) International Inc. (NYSE:MTD) to $1,200 from the previous $1,175, while maintaining an In Line rating. The adjustment follows Mettler-Toledo’s preannouncement of a 13% organic revenue decline in the fourth quarter due to logistical issues in Europe. Despite the revenue shortfall, Mettler-Toledo has updated its fiscal year 2024 guidance, incorporating the delayed fourth-quarter revenue into the first quarter of 2024.
Mettler-Toledo reported a 22% decrease in fourth-quarter earnings per share (EPS) and a margin contraction of 375 basis points. The company attributed approximately 170 basis points of this margin decline to a revenue slip of about $55 million from the fourth quarter, caused by the logistical issues in Europe. The company’s revised guidance suggests a modest improvement, raising its midpoint (MP) guidance by approximately 100 basis points, from a prior forecast of roughly flat to an increase of 1-2%.
For the first quarter of 2024, Mettler-Toledo expects organic revenue declines between 6% and 4%, with an EPS decline in the teens at the midpoint. The company’s management also noted a potential foreign exchange headwind of about 400 basis points to EPS in the first quarter. Despite these challenges, the guidance for the full fiscal year 2024 assumes a high single-digit decline in China, an improvement over the 10% decline experienced in fiscal year 2023.
Evercore ISI noted that Mettler-Toledo’s management seemed more cautious regarding the European market. Nevertheless, the firm has slightly increased its own estimates to account for the expected catch-up in revenue due to the logistics issues. The new price target of $1,200 reflects roughly 30 times the projected calendar year 2024 earnings per share. The firm suggests that any potential upside for Mettler-Toledo and its life science tools (LST) peers will depend on the recovery of end markets, as the valuation multiples for the sector are seen to be at normalized levels.
As Mettler-Toledo International Inc . (NYSE:MTD) navigates through its recent logistical challenges, the company’s financial metrics and market performance remain crucial for investors. According to InvestingPro data, Mettler-Toledo currently has a market capitalization of $25.75 billion and is trading at a P/E ratio of 33.01, which is a premium to the market, indicating high expectations from investors. Despite a modest revenue growth of 0.3% over the last twelve months as of Q1 2023, the company has managed a solid gross profit margin of 59.37%, underscoring its ability to maintain profitability amidst revenue fluctuations.
The InvestingPro Tips highlight that Mettler-Toledo’s management has been proactive in share buybacks, which can be a sign of confidence in the company’s future prospects. Additionally, the company’s stock is noted for its low price volatility, which might appeal to investors looking for stable equity performance. However, it’s worth noting that four analysts have revised their earnings expectations downwards for the upcoming period, which could be a signal for investors to watch for potential shifts in the company’s earnings trajectory.
For those considering an investment in Mettler-Toledo, exploring the additional tips available on InvestingPro could provide deeper insights. There are more tips listed on InvestingPro’s Mettler-Toledo page that could help in making a well-informed decision. To access these insights, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
Wendy’s, blasted over CEO’s pricing comment, vows no price hikes at busy times
© Reuters. FILE PHOTO: A Wendy?s restaurant displays a “Now Hiring” sign in Tampa, Florida, U.S., June 1, 2021. REUTERS/Octavio Jones/File Photo
By Waylon Cunningham and Deborah Mary Sophia
DALLAS (Reuters) -Wendy’s said on Wednesday it has no plans to raise menu prices at times of peak demand, after the burger chain weathered heavy criticism on social media since its CEO said earlier this month it would start testing “dynamic pricing”.
CEO Kirk Tanner told investors on a call this month that starting as early as 2025, Wendy’s (NASDAQ:) would begin testing features including “dynamic pricing and daypart offerings”. Dynamic pricing refers to surge pricing based on demand, especially during peak hours of the day.
This practice often raises prices at busy times, similar to how Uber (NYSE:) adjusts ride fares.
Tanner’s comment this week sparked an online backlash. U.S. Senator Elizabeth Warren in a post on the social media platform X on Wednesday called it “price gouging plain and simple.”
Wendy’s, in a statement to Reuters, said on Wednesday it “would not raise prices when our customers are visiting us most.”
Its initiative to add digital menuboards to certain stores would instead allow Wendy’s to offer discounts to customers more easily, “particularly in the slower times of day,” it added.
“We said these menuboards would give us more flexibility to change the display of featured items. This was misconstrued in some media reports as an intent to raise prices when demand is highest … We have no plans to do that,” the company said.
Warren’s post on X, previously Twitter, said Wendy’s plan “means you could pay more for your lunch, even if the cost to Wendy’s stays exactly the same. It’s price gouging plain and simple, and American families have had enough.”
“I guess I won’t be eating at Wendy’s anymore,” one Reddit user said in a post, while others on X called for boycotts.
Analysts and consultants were skeptical of the idea of surge pricing at restaurants.
Wendy’s “dynamic pricing” was a hot topic at a restaurant conference in the Dallas area, with several executives saying customers – already skittish after recent price increases – would likely be scared off by unpredictable prices.
“I don’t see it taking off any time soon,” said Victor Fernandez, a senior analyst at restaurant analytics firm Black Box Intelligence.
Michael Lukianoff, CEO of SignalFlare.ai, who has consulted with restaurants about pricing for years, said that “dynamic pricing” is a great success in other industries such as airlines, but would not work in restaurants.
“Customers will shop elsewhere,” he said.
Wendy’s sales have already slowed. Placer.ai data showed visits to Wendy’s outlets declined in all three months of the fourth quarter of 2023.
Wendy’s shares, which dropped about 14% in 2023, were up 1% on Wednesday. The company also recently issued a profit forecast for this year below Wall Street estimates, hurt by higher commodity and labor costs.
Apple shareholders reject AI disclosure proposal
© Reuters. Apple logo is seen in this illustration taken, August 22, 2022. REUTERS/Dado Ruvic/Illustration
By Stephen Nellis
(Reuters) -Apple plans to disclose more about its plans to put generative artificial intelligence to use later this year, Chief Executive Officer Tim Cook said during the company’s annual shareholder meeting on Wednesday.
Cook said that the iPhone maker sees “incredible breakthrough potential for generative AI, which is why we’re currently investing significantly in this area. We believe that will unlock transformative opportunities for users when it comes to productivity, problem solving and more.”
Apple (NASDAQ:) has been slower in rolling out generative AI, which can generate human-like responses to written prompts, than rivals such as Microsoft (NASDAQ:) and Alphabet (NASDAQ:)’s Google, which are weaving them into products.
On Wednesday, Cook argued that AI is already at work behind the scenes in Apple’s products but said there would be more news on explicit AI features later this year. Bloomberg previously reported Apple plans to use AI to improve the ability to search through data stored on Apple devices.
“Every Mac that is powered by Apple silicon is an extraordinarily capable AI machine. In fact, there’s no better computer for AI on the market today,” Cook said.
Apple shareholders on Wednesday rejected a measure asking the company to disclose more information about how it uses artificial intelligence in its business and its ethical guidelines for the technology.
The proposal, which was defeated at the company’s annual shareholder meeting, was put forth by the pension trust of the AFL-CIO, the largest American labor union federation, which has also proposed AI measures at other technology companies.
A similar proposal will be heard at Walt Disney (NYSE:)’s annual meeting in April.
At Apple, the AFL-CIO asked for a report on the company’s use of AI “in its business operations and disclose any ethical guidelines that the company has adopted regarding the company’s use of AI technology.”
In its supporting statement in Apple’s proxy materials, the AFL-CIO wrote that “AI systems should not be trained on copyrighted works, or the voices, likenesses and performances of professional performers, without transparency, consent and compensation to creators and rights holders.”
Apple opposed the measure, saying that disclosures could tip its hand on strategy as it competes against rivals in the fast-moving AI field.
UMG to generate 250 million euros in savings by 2026, flags job cuts
© Reuters. FILE PHOTO: Universal Music Group logo is seen displayed in this illustration taken, May 3, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
(Reuters) – Universal Music Group (AS:) will cut jobs and streamline its operations with the aim of generating 250 million euros ($271.03 million) in run-rate savings by 2026.
In the first phase of the plan, which will be introduced immediately, the group plans to save 125 million euros in 2025, including 75 million euros in 2024, the company said.
“Our organizational redesign achieves efficiencies in targeted cost areas while providing our labels with unprecedented capabilities to deepen artist and fan connections via new experiential, commerce, and content offerings,” the group said in a statement.
UMG also posted a 9.2% year-on-year increase in adjusted core profit (EBITDA), to 677 million euros in the fourth quarter, as its revenue rose to 3.21 billion euros, up 9.0% from previous year.
It proposed a year-end dividend of 0.27 euros per share, bringing total dividend payout in 2023 to 0.51 per share.
($1 = 0.9224 euros)
(This story has been refiled to add ‘euros’ in the headline)
(Reportin by Dagmarah Mackos, editing by Tassilo Hummel)
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