Trefis Top 5 – June 3 Insights (PG, F, AEO, MMI, VALE)

In today's recap, we put to rest some rumors readers have sent our way regarding Procter & Gamble (NYSE:PG) potentially bidding for rival Unilever (NYSE:UL), which we think is highly unlikely at this point. American Eagle Outfitters ( AEO ) reports that it may shut down up to 100 under-performing stores pointing to continued difficulty for many retailers. Ford ( F ) is driving sales with its fuel efficient car line up, and we believe Motorola Mobility's (NYSE:MMI) Xoom will struggle against King iPad of the tablet market as well as new tablets that will weigh on Xoom's future sales. Finally, we break down Vale's (NYSE:VALE) key value drivers (hint: it's iron ore!) after launching coverage on the stock yesterday.

Why P&G Buying Unilever is Unlikely

Just the idea of the two leading consumer goods giants, Procter & Gamble (NYSE:PG) and Unilever (NYSE:UL), considering a merging would have seen preposterous a while ago, but news sources are abuzz over this prospect in recent days. Our price estimate for P&G is over $68 and Unilever is over $35.

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Ford Driving Car Sales with Fuel Efficient Line Up

Increased environmental awareness and $4 a gallon gas in much of the country has encouraged customers to look for smaller, more fuel efficient cars. In April and May we saw this trend continue as oil price continued to climb. Ford car sales were able to capitalize on this trend because of Ford's push into fuel efficient technologies has helped it build one of the most impressive line up of fuel efficient vehicles.

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American Eagle Outfitters ( AEO ) Could Shut 100 Stores by 2012

American Eagle Outfitters ( AEO ) is considering shutting close to 100 stores in the next two years in response to pressures to reduce overhead costs and given the difficulty the retailer is having. As AEO and competitors like Gap (NYSE:GPS), Abercrombie & Fitch ( ANF ) and Aeropostale ( ARO ) have reported Q1 results, we have witnessed varying degrees of success in revamping sales after the downturn.

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Motorola's Xoom Could Lose its Zoom in Tablet Market

Motorola Mobility's (NYSE:MMI) sales of Xoom tablets lags behind that of Apple's iPad. While Motorola shipped more than 250,000 Xoom tablets in the first quarter of 2011, Apple sold around 1 million iPads in the first weekend of its launch last year. We think Motorola will benefit from the tremendous growth expected in the tablet market in the next few years, but it faces competitive threats from Apple's iPad, Research in Motion's (NASDAQ:RIMM) PlayBook, and new products from companies like Samsung, Dell ( DELL ) and LG.

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Top 3 Sources of Value for Vale

Vale (NYSE:VALE) is one of the world's largest mining companies and is headquartered in Brazil. It is the world leader in iron ore and iron ore pellets production and also has access to the world's largest nickel reserves. Apart from iron ore and nickel, Vale also produces bauxite, alumina, aluminium, copper, precious gems and minerals and other base metals. Vale operates a large logistics network based in Brazil which includes railroad, maritime terminals and a port. Vale competes with metals and mining giants like Rio Tinto (NYSE:RIO), BHP Billiton (BHP) and Alcoa (AA).

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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.

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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