These 7 global companies have the best chance to survive the retail apocalypse, Credit Suisse says


snowy deserted empty mall

  • As diversified and cash-rich retailers like Amazon take the world by storm, investors have been left scrambling to identify companies that will be able to withstand the disruption over the long term.
  • Credit Suisse has singled out seven companies it says will continue growing a key measure of financial strength, even amid mounting headwinds.

It’s Amazon‘s world, and the rest of the retail industry is just living in it. Or at least that’s how it seems these days.

But Credit Suisse isn’t ready to give up hope. The firm recently ran an analysis to assess which companies around the world are the most well-equipped to withstand the so-called retail apocalypse

It started by calculating the share price implied cash flow return on investment (CFROI) for each company in the global retail industry. By comparing this figure with the five-year historical median and its forecast for the next year, Credit Suisse was then able to see which companies are already priced for falling returns amid heavy disruption.

By the same token, the firm was able to pinpoint the elite handful of stocks expected to grow returns even as industry headwinds mount. And the findings show that not all hope is lost for (1) companies with a large and growing e-commerce business and (2) discount and value retailers.

“In most cases these companies have a more significant online presence which is benefitting from being asset light (especially relative to brick and mortar retail) and are experiencing stronger top line growth allowing for quicker operational efficiencies,” a group of Credit Suisse analysts led by Eugene Kierk wrote in a client note.

Without further ado, here are the seven companies that the firm says will generate positive CFROI going forward.

SEE ALSO: One of investing’s most influential pioneers just made a bold prediction about where tech stocks will be in 10 years — and it’s not pretty for the likes of Apple and Facebook


Ticker: ETR

Primary exchange: Deutsche Börse Xetra

Market cap: €12 billion ($ 14 billion)

Headquarters location: Berlin, Germany

Source: Credit Suisse

Ticker: JD

Primary exchange: Nasdaq

Market cap: $ 63 billion

Headquarters location: Beijing, China

Source: Credit Suisse

Magazine Luiza

Ticker: MGLU3

Primary exchange: B3

Market cap: 22 billion real ($ 6 billion)

Headquarters location: Franca, Brazil

Source: Credit Suisse

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