Core Laboratories N.V.

CLB Details

Core Laboratories N.V. (NYSE: CLB) is a major provider of patented reservoir description and production improvement and reservoir management services to the oil and gas industry. These services help CLB's clients enhance reservoir performance and recover more oil and gas from their producing fields. It employs around 3,700 people worldwide and has over 70 offices in over 50 countries.

Latest News:

• Share Repurchases: CLB repurchased a total of 10,000 common shares on August 30, 2021, at an average price of USD 24.67 per share, from August 19, 2021 to August 30, 2021. Previously, between August 03, 2021 and August 12, 2021, the company repurchased a total of 65,000 of its common shares at an average price of USD 30.90 per share.

9MFY21 Results:

• Decline in Revenues: CLB witnessed a decrease of 7.60% in its total revenues to USD 345.11 million during 9MFY21 (ended September 30, 2021) compared to USD 373.52 million during 9MFY20, due to the negative impact on the industry caused by the COVID-19 pandemic.
• Increase in Net Income: The company recorded a net income of USD 17.43 million during 9MFY21 vs. a net loss of USD 111.02 million during 9MFY20 due to a decline in operating expenses.
• Leveraged Balance Sheet: As of September 30, 2021, the company had cash and cash equivalents of USD 19.05 million and total debt of USD 188.46 million.

Key Risks:

• Supplier Concentration Risk: A small number of third-party suppliers and vendors are available in the marketplace for the company's specific product lines. As a result of this concentration in parts of its supply chains, its operations might be harmed if the suppliers' prices, quality, availability, or timely delivery of their products suffer substantial interruptions.
• Global Trade Risk: CLB has operations in more than 50 countries. As a result, any disturbances in the nations it works in could negatively impact its production and sales activities.

Outlook:

• Q4FY21 Revenue Estimates: On October 27, 2021, CLB reported that it expects revenues to be in the range of USD 121.0 – 124.0 million in Q4FY21, with an operating income of USD 13.0 – 15.5 million, representing an operating margin of ~12%.
• EPS Estimate: It also expects its Q4FY21 EPS to range between USD 0.18 and USD 0.22. As client engagement grows, it anticipates its past incremental margin performance to recover.

Valuation Methodology: Price/Earnings Per Share Based Relative Valuation

 (Analysis by Kalkine Group)

• % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

CLB Daily Technical Chart (Source: REFINITIV)

Stock Recommendation:

CLB's stock price has fallen 25.35% in the past nine months and is currently leaning towards the lower band of its 52-week range of USD 14.44 to USD 49.87. The stock is currently trading below its 50 and 200 DMA levels, and its RSI Index is at 43.81. We have valued the stock using the Price/Earnings-based relative valuation methodology and arrived at a target price of USD 33.20.

Considering the correction in the stock price, market dominance, consistent dividend yield, current valuation, and associated risks, we recommend a "Speculative Buy" rating on the stock at the current price of USD 26.80, up 3.55% as of November 03, 2021, 12:31 PM ET.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.

*Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached.

Tupperware Brands Corporation

TUP Details

Tupperware Brands Corporation (NYSE: TUP) is a company that produces and distributes culinary, home storage, and cosmetic goods. Under the Tupperware brand, the company provides food preparation, storage, serving items, cookware and microfiber fabrics. TUP sells its products in approximately 70 countries, primarily through independent distributors all around the world. In addition, its goods are offered directly to consumers through an independent sales force outside of typical retail shop locations through the direct-to-consumer channel.

Latest News:

• Waste Reduction Initiatives: TUP and Loop, a zero-waste platform of TerraCycle, announced a partnership on November 01, 2021, to create zero-waste and durable packaging. Under this collaboration, one of Loop's brand partners, Tim Hortons, commissioned TUP to generate a one-of-a-kind reusable packaging container solution.
• Divestiture of Business Division: TUP signed a definitive agreement with an undisclosed buyer to sell its House of Fuller beauty business in Mexico on October 18, 2021. This deal forms part of its non-core asset divestiture strategy under its recovery plan. The transaction's terms, including the expected closing date, were not revealed.

9MFY21 Results:

• Increase in Revenues: TUP witnessed an increase of 8.82% in its net sales to USD 1.21 billion during 9MFY21 (ended September 25, 2021) compared to USD 1.11 billion during 9MFY20 (ended September 26, 2020).
• Incurred Net Losses: The company recorded a net loss of USD 5.2 million during 9MFY21 vs. a net income of USD 90.4 million during 9MFY20.
• Adequate Balance Sheet: As of September 25, 2021, the company had cash and cash equivalents of USD 123.8 million and total debt (including finance lease obligations) of USD 678.4 million.

Key Risks:

• Exchange Rate Fluctuation: TUP does business in various currencies other than USD, exposing it to currency fluctuation risks. Even if currency forward contracts have been used to offset price fluctuations, the risk still exists. As a result, any adverse exchange rate movement would harm the company's financials.

Valuation Methodology: Price/Earnings Per Share Based Relative Valuation

 (Analysis by Kalkine Group)

• % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

TUP Daily Technical Chart (Source: REFINITIV)

Stock Recommendation:

TUP's stock price has fallen 40.77% in the past nine months and is currently leaning towards the lower band of its 52-week range of USD 18.62 to USD 38.59. The stock is currently trading below its 50 and 200 DMA levels, and its RSI Index is at 35.20. We have valued the stock using the Price/Earnings-based relative valuation methodology and arrived at a target price of USD 24.56.

Considering the sharp correction in the stock price, strategic divestitures, current valuation, and associated risks, we recommend a "Speculative Buy" rating on the stock at the current price of USD 19.93, down 15.05% as of November 03, 2021, 9:43 AM ET.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.

*Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached.  

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