Starbucks' impact on Tata Global overstated: MStanley
Reuters Market Eye - Shares in Tata Global Beverages (TAGL.NS) fall 2.9 percent after Morgan Stanley downgrades the stock to "underweight" from "equal weight".
Tata Global shares have nearly doubled this year, partly on hopes about its outlook as the joint venture partner of Starbucks(SBUX.O), which has opened three coffee shops in India this year.
However, Morgan Stanley says the contribution from the Starbucks JV will be limited and recommends booking profits on Tata Global.
"The business suffers from poor earnings visibility, weak brand/market positioning, a lack of pricing power, sluggish revenue growth and mediocre return ratios," Morgan Stanley says about Tata Global in a note dated on Monday.
Morgan Stanley also adds: "Structurally this is one of the weakest businesses in our coverage universe."
- Tweet this
- Share this
- Digg this
Trending On Reuters
India has put security agencies on nationwide alert for a militant strike in the lead-up to a visit by U.S. President Barack Obama next month, citing an assault on a Pakistani school this week as a warning signal. Full Article
Supreme Court defers verdict on Sahara plea to raise more debt on hotels Full Article
ADB trims growth forecasts for developing Asia, says India to grow 5.5 pct in 2014 Full Article