TOSBF - Panasonic: Outlook Remains Challenged By The Implications Of Trade War
Thesis
Panasonic Corporation (PCRFY) started FY 2020 with a rough Q1. The company's sales and earnings respectively saw a ~6% and ~13% y/y decline. The mediocre quarterly performance was attributable to certain strong headwinds. Out of these, I believe that weak demand in China is the most significant headwind that impacted multiple business segments. Unless we see improvement in the Chinese markets (which could come from an end to the US-China trade war), PCRFY is likely to deliver flat price performance. Nevertheless, there are two positive catalysts that would limit the downside to