Consumer Sector Update for 05/07/2018: IFF,SBUX,MDLZ,GCI

Top Consumer Stocks

WMT -2.57%

MCD -0.03%

DIS +1.11%

CVS -1.98%

KO -0.60%

Consumer stocks were mixed today, with shares of consumer staples companies in the S&P 500 sinking over 0.7% this afternoon while shares of consumer discretionary firms in the S&P 500 were climbing almost 0.3%.

Among consumer stocks moving on news:

(-) International Flavors & Fragrances ( IFF ) fell to a 14-month low on Monday, dropping over 11% to its worst share price since March 2017 at $126.08 apiece after saying it was paying $7.1 billion to acquire Israel-based flavors and ingredients company Frutarom. Under terms of the proposed transaction, Frutarom's investors will receive $71.19 in cash and 0.249 of an International Flavors share for each Frutarom stock unit. Based on its closing price Friday, International Flavors said the deal values the target company at around $106.25 per unit. It also is expecting the deal will unlock "significant" value-creation opportunities, with double-digit cash earnings boosting net income at the combined companies by the second year after closing, which is expected in about six months.

In other sector news:

(+) Gannett ( GCI ) was almost 10% higher in Monday mid-day trading after reporting adjusted Q1 net income and revenue exceeding Wall Street expectations. Excluding one-time items, the newspaper publisher earned $0.13 per share, slipping a penny from last year's per-share non-GAAP profit and easily dispatching analyst projections for just $0.01 per share in net income. Total operating revenues fell to $723.0 million from $773.5 million during the same quarter last year but still beating the $721.6 million Street consensus. Gannet also reiterated its in-line revenue outlook for FY18 expecting between $2.93 billion to $3.03 billion compared with the analyst mean looking for $2.97 billion in revenue this year.

(-) Mondelez ( MDLZ ) opened more than 1% higher on Monday but has drifted lower since that early peak and turning negative in more recent trading after announcing a $500 million acquisition of the Tate's Bake Shop cookie brand. The transaction is expected to close later this summer, subject to customary closing conditions.

(-) Starbucks ( SBUX ) was edging lower Monday afternoon, giving back a nearly 1% gain soon after the opening bell that followed the coffee chain announcing a $7.15 billion deal selling its international marketing rights for Starbucks products to Swiss food giant Nestle SA for $7.15 billion. The deal expands Nestle's "at-home and away-from-home coffee" categories globally whill Starbucks retains a "significant stake" as a licensor of the global coffee alliance. Starbucks also is expecting the transaction will add to its per-share earnings no later than 2021, with no change expected to its existingfinancial targets.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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