The response by governments worldwide to stop the spread of the novel coronavirus has created unprecedented uncertainty in the restaurant industry. Restrictions are coming into place around the world that require restaurants to close or switch to carryout only. France, Italy, and Spain announced closures over the weekend, and several states (California, Ohio, Illinois, and others) followed suit soon thereafter [...]

The coronavirus pandemic has sapped demand for gasoline and jet fuel as more people worldwide are told to stay home and avoid non-essential travel.  It's hard to say how long these restrictions will remain in place, but they have created a cloud of uncertainty over refineries, which primarily process crude oil into conventional and premium [...]

Ventas (VTR) has paid uninterrupted dividends for twenty years, including during the 2007-2009 financial crisis, a time which tested the financial strength of most businesses and forced one-third of dividend-paying S&P 500 companies to cut their payouts. However, Ventas is now facing an unprecedented and unforeseen risk: that the REIT's already weak-performing senior living portfolio, [...]

BP (BP) has the most delicate balance sheet of any of the oil majors, and its leverage finished 2019 above the high end of management's target range. Following last week's unexpected plunge in oil prices, which we believe has potential to keep oil near $35 per barrel or lower (below the firm's breakeven point) for the foreseeable [...]

On Monday, Occidental Petroleum (OXY) announced an 86% cut to its dividend and an approximately $2 billion reduction in capital spending. The catalyst was a 30% decline in the price of oil, the result of a price war initiated by Saudia Arabia. While we didn't foresee a crash in oil prices this severe and thus didn't [...]

Unum (UNM) is a leading provider of disability, group life, and related insurance products. These businesses serve primarily employers' health plans, resulting in long-term relationships that have delivered predictable results; Unum's premiums and earnings have grown at a mid-single digit clip most years, and the company has paid steady dividends since 2004. Source: Unum Investor [...]

EPR Properties (EPR) is one of the more exposed REITs to the coronavirus outbreak. Movie theaters drive 45% of EPR's revenue, and Eat & Play businesses such as TopGolf and Pinstripes account for another 23% of sales. Schools represent 11% of revenue as well. Source: EPR Investor Presentation With social distancing becoming the norm across [...]

Walt Disney's (DIS) business is in the crosshairs of the coronavirus outbreak, with access to theme parks (38% of sales) and movie theaters (studio films account for 16% of sales) appearing increasingly likely to be temporarily cut off.  This demand shock comes at a less than ideal time as only a year ago Disney closed [...]

On March 5, Exxon (XOM) reaffirmed its contrarian plans to boost its capital spending in the years ahead with hopes of doubling its earnings power between 2018 and 2025: "Capacity investments have overwhelmed the growth in demand, leading to the down cycle and waiting for demand to catch up. These are typical cycles. Unfortunately, they're hitting multiple [...]

LyondellBasell's (LYB) origins date back to the 1950s when breakthrough discoveries were made in synthesizing petrochemicals. Today, LyondellBasell is one of the world’s largest diversified chemical suppliers and refiners. The heart of LyondellBasell's business is converting fossil fuels into plastic resins and other petrochemicals that are sold to manufacturers and eventually turned into food packaging, [...]

The price of oil plummeted as much as 30% last weekend as Saudi Arabia and Russia engaged in a price war that threatens to take market share from higher-cost U.S. shale producers. We analyzed this event in a note here, but the bottom line is that we believe oil prices could now remain at historically weak [...]

Boeing's (BA) timeline for returning its best-selling 737 MAX plans to commercial service likely took another hit this week, as the Federal Aviation Administration is expected to order certain electrical wires relocated inside the jets, accordingto the Wall Street Journal. Meanwhile, the coronavirus is weighing on travel demand and the financial health of Boeing's airline customers. Not [...]

Oil prices plunged as much as 30% last weekend as Saudi Arabia and Russia engaged in a price war that threatens to take market share from higher-cost U.S. shale producers. We analyzed this event in a note here, but the bottom line is that we believe oil prices could now remain at historically weak levels (i.e. [...]

The International Air Transport Association (IATA) now expects the coronavirus to cause the global air transport's 2020 revenue to fall between $63 billion and $113 billion, or as much as 20%.  This is expected to pressure the cash flow of most airlines, which are very sensitive to changes in demand due to their high fixed costs.  While [...]

On February 25, we downgraded Carnival's (CCL) Dividend Safety Score to Borderline Safe. Our full note here is worth reading for more background on Carnival's situation, but in our conclusion, we wrote: Cruise demand will take a hit for some period of time, but barring a major setback, Carnival appears to have the financial strength necessary to ride [...]