SodaStream Inside Samsung Fridges Spurs Rally: Israel Overnight
SodaStream International Ltd. rose to the highest level in three weeks in New York on prospects a partnership with Samsung Electronics Co. will help the Israeli company beat analysts’ revenue estimates this year.
Shares of the maker of home soda machines climbed 3.3 percent to $51.49 yesterday, the highest level since Jan. 25. The Bloomberg Israel-US Equity Index of the largest U.S.-traded Israeli companies lost 0.1 percent to 88.26 in a second day of declines, as Mellanox Technologies Ltd. slipped. EZchip Semiconductor Ltd. pared the worst weekly drop in six months after Oppenheimer & Co. recommended buying the shares.
SodaStream said yesterday that sparkling water dispensers using its system will be available in refrigerators built by Samsung, the Korean company that controls more than 13 percent of the global market. The four-door appliance will be sold in the U.S. in April at $3,899, the companies said in a statement. Airport City, Israel-based SodaStream will next week report record sales of $425 million for 2012, according to the mean estimate of eight analysts surveyed by Bloomberg.
“The more convenient it is for a customer to make their own sparkling water, the more they’re going to use SodaStream,” Jim Chartier, an analyst at Monness, Crespi, Hardt & Co. who rates the stock buy, said by phone yesterday from New York. “It takes the carbonation system from that thing sitting on your countertop taking up space to walking up to your fridge and pushing a button.” The agreement with Samsung will have a “significant impact” on long-term sales, he said.
SodaStream’s product won’t require much additional investment to meet demand as its standard gas canisters can be used in Samsung’s refrigerators, according to David Kaplan, an analyst at Barclays Plc.
“Having a big kitchen appliance partner is a great start,” Kaplan, who has the equivalent of a buy rating on the stock, said by phone yesterday from Tel Aviv. “The sodamaker they did on their own, and here they’re going to be integrated with a big partner, and that’s important.”
SodaStream’s revenue has surpassed analyst estimates for the past six quarters, according to data compiled by Bloomberg. The company may reach sales growth of 35 percent for the year, Kaplan said, above the 18 percent increase projected by nine analysts surveyed by Bloomberg.
SodaStream, which has gained 15 percent this year, aired its first Super Bowl commercial on Feb. 3. The pro football championship game was seen by an average of 108.4 million viewers this year, according to data from Nielsen Holdings NV.
The company’s 2013 outlook should reflect a “continuation from the momentum” from last year, Scott Van Winkle, an analyst with Canaccord Genuity Inc. who has the equivalent of a neutral rating on the stock, wrote in a note to clients on Feb. 13.
Van Winkle raised his price target on the shares to $52 from $45, saying the company can mirror its European growth in the U.S. and Asia. SodaStream received more than half of its revenue from Western Europe in 2011.
Israel’s TA-25 index slipped 0.4 percent to 1,220.71 yesterday, paring a weekly gain of 0.8 percent.
EZchip climbed 5.6 percent to $26.98 after sinking 21 percent on Feb. 13. The shares in Tel Aviv plunged 18 percent to 97.2 shekels, or the equivalent of $26.38.
“EZchip still offers attractive investment potential,” Andrew Uerkwitz, an analyst at Oppenheimer in New York, wrote in a Feb. 13 note. “The sell-off is overdone and exaggerates the impact of management’s reduced long-term revenue target.”
Shares of the Yokneam, Israel-based company tumbled on concern more customers may develop the Israeli chipmaker’s technology in-house, reducing revenue growth.
Mellanox fell 1.6 percent to $53.28. Shares of the technology company traded in Tel Aviv jumped 4 percent to 198 shekels, or $53.73.
Teva Pharmaceutical Industries Ltd., the world’s largest maker of generic drugs, rose 0.5 percent to $38.92 after shares in Israel declined 0.9 percent to 141.9 shekels, or the equivalent of $38.53. The company’s generic version of Shire Plc’s Adderall XR drug was approved by the U.S. Food and Drug Administration on Feb. 12, according to the agency’s website.
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