TMT & Consumer Independent Equity Research Analyst, Obex Capital Research

Aaron Gabin

TMT & Consumer Independent Equity Research Analyst

TMT & Consumer Independent Equity Research

Obex Capital Research

“Obex” is Latin for Barriers to Entry. Obex Capital Management’s investment philosophy is driven by an intense focus on which business model’s Barriers to Entry are able to withstand the ever increasing competitive disruption in the TMT and Consumer Sectors.

Thematic (Sector/Industry)

<ul>
<li>New data from Deloitte shows US streaming subscription churn is 35% and over 50% for younger demographics. Whoa!</li>
<li>Competition for attention and competition for the wallet are causes, a combination of the volume of streaming services combined with social media, gaming, and UGC....many of which are free. </li>
<li>The LT takeaway is streaming services likely have to rely on free-ad supported tiers to retain customers. Higher customer acquisition costs and lower multiple ad revenues not good for streamers.</li>
</ul>


New data from Deloitte shows US streaming subscription churn is 35% and over 50% for younger demographics. Whoa!
Competition for attention and competition for the wallet are causes, a combination of the volume of streaming services combined with social media, gaming, and UGC....many of which are free. 
The LT takeaway is streaming services likely have to rely on free-ad supported tiers to retain customers. Higher customer acquisition costs and lower multiple ad revenues not good for streamers.


European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

<ul>
<li>Apollo approached educational conglomerate <a href="https://www.smartkarma.com/entities/pearson-plc" target="_blank" data-smartkarma-citation="entities:680:1" rel="noopener">Pearson Plc (PSON LN)</a> regarding a 854.2p prospective offer for 100%, rejected by the Board. Value creation should come from further divesting businesses. <strong>PUSU deadline</strong> is <strong>8 April</strong>. </li>
<li>Cevian, top shareholder, has a 10.24% stake, and bargaining power (it could prevent a delisting). Using DCF, base-case TP is 742p, best case is 834p. Comps-based valuation is 815p.</li>
<li>The market's gone beyond initial doubts, shares closed at 827.6p on 15 March (3.3% gross spread), betting Apollo will succeed (probably raising the offer). The CDS market already believed it.</li>
</ul>


Apollo approached educational conglomerate Pearson Plc (PSON LN) regarding a 854.2p prospective offer for 100%, rejected by the Board. Value creation should come from further divesting businesses. PUSU deadline is 8 April. 
Cevian, top shareholder, has a 10.24% stake, and bargaining power (it could prevent a delisting). Using DCF, base-case TP is 742p, best case is 834p. Comps-based valuation is 815p.
The market's gone beyond initial doubts, shares closed at 827.6p on 15 March (3.3% gross spread), betting Apollo will succeed (probably raising the offer). The CDS market already believed it.


Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Capital Markets

The Walt Disney Co / Equity Capital Markets

<ul><li>Disney's recent financial results demonstrated that the company continued progress towards more normalized operations across its businesses.</li><li>The company set new advertising revenue records for the segment, as advertiser demand for their live sports, streaming, and digital businesses remain strong.</li><li>In this report, we have carried out a fundamental analysis of the historical financial statements of the company.</li></ul>

Disney's recent financial results demonstrated that the company continued progress towards more normalized operations across its businesses.The company set new advertising revenue records for the segment, as advertiser demand for their live sports, streaming, and digital businesses remain strong.In this report, we have carried out a fundamental analysis of the historical financial statements of the company.

The Walt Disney Co - Financial & Price Forecasts

Credit

<ul><li>Disney's recent financial performance showed its continued progress towards more normalized operations particularly in terms of its studios, parks, and cruise businesses.</li><li>With the post Covid-19 recovery in progress, the company has reimagined its parks business, significantly increased its investment in content creation, and implemented a reorganization to facilitate its ongoing transformation.</li><li>Based on our credit analysis, the company merits a Credit Evaluation Score of BBβ with a stable outlook and as per our Financial Strength Indicator, its performance is 3.34/ 5.</li></ul>

Disney's recent financial performance showed its continued progress towards more normalized operations particularly in terms of its studios, parks, and cruise businesses.With the post Covid-19 recovery in progress, the company has reimagined its parks business, significantly increased its investment in content creation, and implemented a reorganization to facilitate its ongoing transformation.Based on our credit analysis, the company merits a Credit Evaluation Score of BBβ with a stable outlook and as per our Financial Strength Indicator, its performance is 3.34/ 5.

The Walt Disney Company: Detailed Credit Analysis & Financial Strength Evaluation Report

Equity Bottom-Up

<ul>
<li>Disney announced a new ad-based tier for Disney+ last week.</li>
<li>The decision to go this direction may imply market saturation, rising competitive intensity, or an inability to hit its subscriber targets organically.</li>
<li>Disney's streaming business is increasingly dominated by low value Hotstar+ subs</li>
</ul>


Disney announced a new ad-based tier for Disney+ last week.
The decision to go this direction may imply market saturation, rising competitive intensity, or an inability to hit its subscriber targets organically.
Disney's streaming business is increasingly dominated by low value Hotstar+ subs


Disney: Streaming Trapped Between a Rock and Hard Place

United States

The Walt Disney Company is an entertainment company that conducts operations in media networks, studio entertainment, theme parks and resorts, consumer products, and interactive media. The Company produces motion pictures, television programs, and musical recordings, as well as books and magazines.

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The Walt Disney Co (DIS US)

Streaming's New Hamster Wheel

New data shows US streaming subscription churn is 35% and over 50% for younger demographics. To compete, streamers will have to rely more on free...

Aaron Gabin

Apollo/Pearson: Prospective Offer

Apollo confirmed it is evaluating a cash offer for Pearson, which rejected a second 854p approach. PUSU deadline is 8 April. On a best-case...

Jesus Rodriguez Aguilar

The Walt Disney Co - Financial & Price Forecasts

Disney's recent financial results demonstrated that the company continued progress towards more normalized operations across its businesses. The...

Baptista Research

The Walt Disney Company: Detailed Credit Analysis & Financial Strength Evaluation Report

Disney's recent financial performance showed its continued progress towards more normalized operations particularly in terms of its studios,...

Baptista Research

Disney: Streaming Trapped Between a Rock and Hard Place

Disney's recent announcement of an ad-supported tier being launched for Disney+ strikes us as a questionable strategic choice that indicates market...

Aaron Gabin

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