One stock that surged up and one stock that was in red – Brambles and Crown Resorts

Brambles Ltd

BXB Details

First-quarter trading update: Brambles Ltd.’s (ASX: BXB) stock moved up by 0.75% on October 18, 2017 while the group released its first quarter of FY18 results entailing sales revenue from continuing operations of US$1,374.0 million, which is an 8% growth on the prior corresponding period at actual FX rates and 6% growth at constant currency. The group sales revenue in the first quarter is in line with the expectation for mid-single digit revenue growth through the cycle. Moreover, in CHEP Americas, there is 4% growth in the sales revenue in the US pallets business primarily due to the strong net new business growth associated with new customer contract wins in the last quarter of FY17 and the first quarter of FY18. Like-for-like volume of 1% was in line with the historic trends while the pricing has remained flat. In Latin America, the pallets business grew 12% at constant currency and continued to expand with both new and existing customers. In CHEP EMEA, the European pallets business has posted strong volume growth due to the net new business wins and strong existing customer demand in Western Europe. The pallets businesses in Africa, India and the Middle East and the European automotive segment has also made a strong contribution to growth in the first quarter. Additionally, the lower revenues in CHEP Asia-Pacific reflected the wind down of a large RPC contract and a number of automotive contracts in Australia. BXB also reported that IFCO continued to expand with existing retailers in Europe and delivered mix benefits in North America. Overall, the pallet and RPC businesses in Europe are growing strongly and the company continues to make good progress in emerging markets such as Latin America. However, BXB continues to operate in a challenging and a competitive environment, with cost pressures across the portfolio, particularly in the US pallets business. Meanwhile, BXB stock has fallen 3.34% in last three months as on October 17, 2017. We give an “Expensive” recommendation on the stock at the current price of $ 9.33

 

BXB’s sales revenue for Q1 FY 18 (Source: Company Reports)

Crown Resorts Ltd

CWN Details

Pressure owing to new accusation: Crown Resorts Ltd.’s (ASX: CWN) stock fell 4% on October 18, 2017, while the group has been accused of improper manipulation of poker machines and other illegal or improper conduct at Crown Casino in Melbourne, under parliamentary privilege by Mr Andrew Wilkie MP. However, CWN has denied the allegations related to the above accusation. CWN has called on the lawmaker to immediately provide information relating to the allegations to the authorities. As per federal lawmaker Andrew Wilkie, the activity at Crown’s Melbourne casino, is based on the allegations by three former Crown employees, with indications of “systemic breaches” relating to slot machines. Meanwhile, CWN stock has fallen 6.08% in last three months as on October 17, 2017. Given the challenges faced by the group in last one year, we put a “Hold” recommendation on the stock at the current price of $ 11.24

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