Newsquawk Daily European Equity Opening News - 14th August 2024

14th August 2024

ASIA

APAC stocks only partially sustained the momentum from Wall St where risk sentiment was underpinned by softer-than-expected PPI data, while the region digested the RBNZ rate cut and PM Kishida's decision to not join the LDP leadership race. ASX 200 advanced amid a slew of earnings including from index heavyweight and largest bank CBA. Nikkei 225 wiped out initial gains with trade driven by currency moves and after PM Kishida announced to step down. Hang Seng and Shanghai Comp. were subdued ahead of key earnings from Alibaba and Tencent, while participants also digested weaker-than-expected Chinese new loans and aggregate financing data.

CBA (CBA AT) - FY24 (AUD) adj. net fell 2% Y/Y to 9.8bln, rev. from ordinary activities fell 2% Y/Y to 26.9bln, declares final dividend of AUD 2.50/shr. (Newswires)

BHP (BHP AT) - Escondida mine said management is illegally replacing workers during the strike and said it is willing to hold talks with management to end the strike, while BHP said the union at the Escondida mine declined to restart talks after a new invitation. The union at BHP Escondida mine said management is illegally replacing workers during the strike, while the union says it is willing to hold talks with management to end the strike. (Newswires)

EUROPEAN CLOSES

CLOSES: DAX: +0.45% at 17,806, FTSE 100: +0.30% at 8,235, CAC 40: +0.35% at 7,276, Euro Stoxx 50: +0.49% at 4,695, AEX: +0.37% at 889, IBEX 35: +0.73% at 10,724, FTSE MIB: +0.24% at 32,006, SMI: +0.42% at 11,924, PSI: +0.50% at 6,589

SECTORS: Healthcare 1.12%, Utilities 0.95%, IT 0.76%, Industrials 0.74%, Financials 0.54%, Consumer Disc 0.39%, Consumer Stpl 0.22%, Telecoms 0.14%, Materials -0.01%, Energy -0.50%

FTSE 100

AstraZeneca (AZN LN) - Planned GBP 450mln investment in a UK vaccine-manufacturing site is under doubt after UK Government insiders cited by the FT say the Treasury is looking to cut the state aid offer to GBP 40mln from the GBP 65mln offered under the previous government. FT article that the facility could potentially be relocated to France. (FT)

Flutter Entertainment (FLTR LN) - Q2 adj. EPS USD 2.61 (vs 1.67 Y/Y), Q2 revenue USD 3.61bln (exp. 3.37bln), average monthly players growth of +17% to USD 738mln (exp. 650mln). Co. is raising revenue and adj. EBITDA guidance following material Q2 outperformance relative to expectations. Exec said the returns it is seeing has given confidence to continue driving customer acquisition in H2. CEO said his company does not plan to match DraftKings (DKNG), which has introduced a player surcharge in high-tax states such as Illinois. Said the Illinois Gaming Board's increase in gaming taxes is expected to be directly mitigated, with around 50% of the cost in 2025 likely to be mitigated through locally optimised promotional and marketing spend. Will set out its growth vision and capital allocation opportunities in more detail at its Investor Day in September. Sees FY group ex-US revenue of between USD 7.85-8.15bln (prev. saw 7.65-8.05bln), adj. EBITDA between USD 1.69-1.85bln (prev. 1.63-1.83bln); for the US, sees FY revenue between USD 6.05-6.35bln (prev. saw 5.8-6.2bln), and adj. EBITDA between 680-800mln (prev. saw 635-785mln). (Newswires) Furthermore, Flutter is said to be eyeing a USD 1bln bid for Brazil's fifth-largest gambling operator Betnacional (market share ~7.3%), in what is framed as a bet on the Brazilian market. (Times)

OTHER UK COMPANIES

BROKER MOVES

DAX

RWE (RWE GY) – H1 (EUR): Adj. EBITDA 2.89bln (prev. 4.14bln Y/Y), Adj. EBIT 1.92bln (prev. 3.18bln Y/Y), Adj. Net Income 1.36bln (prev. 2.37bln Y/Y). Outlook for 2024 and dividend target of EUR 1.1/shr for the current FY unchanged. (Newswires)

Rheinmetall (RHM GY) – Strategic acquisition in the US. To acquire all equity interest of LOC Performance. (Newswires)

OTHER GERMAN COMPANIES

Ceconomy (CEC GY) – Q3 (EUR): Revenue 4.9bln (exp. 4.6bln), Adj. EBIT -51mln (exp. -52mln). Outlook for FY24 confirmed. (Newswires)

Evotec (EVT GY) – H1 (EUR): Revenue 390.8mln, +2% Y/Y, Adj. EBITDA 0.5mln (prev. 33.9mln Y/Y). (Newswires)

E.ON (EOAN GY) – Q2 (EUR): Adj. EBIT 3.35bln (exp. 3.32bln). Sees Adj. EBITDA between EUR 8.8-9bln (exp. 8.9bln). Sees FY adj. net income between EUR 2-3bln (exp. EUR 2.87bln).

Hapag Lloyd (HLAG GY) – H1 (EUR): EBIT -0.9bln (prev. 0.8bln), Profit 0.8bln (prev. 0.7bln Y/Y). Demand and freight rates recovered in H1. (Newswires)

K+S (SDF GY) – Q2 (EUR): Revenue 974mln (exp. 841.5mln), EBITDA 128mln (exp. 128.6mln). FY outlook: EBITDA range narrowed to 530-620mln (prev. guided 500-650mln). (Newswires) Shares +2.3% in pre-market trade.

ThyssenKrupp (TKA GY) – Q3 (EUR): Adj. EBIT 149mln (exp. 205mln), Revenue 9bln (exp. 9.49bln). Adj. EBIT in steel unit almost halved due to lower demand and prices. Reduced momentum in automotive, machinery and construction weighed during Q3. Cuts net profit outlook. Now anticipated that net income will improve to a negative figure in the mid to high three-digit million euro range (prev. increase to a negative figure in the low three-digit million euro range). (ThyssenKrupp)

Talanx (TLX GY) – H1 (EUR): EBIT 2.52bln, +28%, Net Income 1.1bln, +32% Y/Y. Confirms FY24 guidance. (Newswires)

BROKER MOVES

CAC

Airbus (AIR FP) - Competitor Boeing (BA) discovered a new set of problems in its 737s and is further slowing deliveries, according to Fortune. (Fortune)

OTHER FRENCH COMPANIES

BROKER MOVES

L’Oreal (OR FP) upgraded to Hold from Underperform at Jefferies

PAN EUROPE

Novo Nordisk (NOVOB DC), ASML (ASML NA), Meta (META) – Norway’s Sovereign Wealth Fund has cut its stake in Novo Nordisk, ASML and Meta during H1’24. Meta has been cut to 1.18% (prev. 1.22% in 2023), Novo Nordisk cut to 1.75% (prev. 1.87% in 2023), ASML 2.54% (prev. 2.61% in 2023), according to Bloomberg. (Bloomberg)

Wienerberger (WIE AV) – H1 (EUR): Revenue 2.2bln (prev. 2.2bln Y/Y). Cost efficiency measures take in H1’24 will still contribute positively to results in 2025 with a full market recovery expected. (Newswires)

BROKER MOVES

SMI

UBS (UBSG SW) - Q2 (USD): Net Profit Attributable 1.14bln (Co. exp. 528mln). Revenue 11.90bln (Co. exp. 11.55bln), Underlying PBT 2.06bln (Co. exp. 1.61bln). CET1 Capital Ratio 14.9% (Co. exp. 14.8%). Q2 net new asset in global wealth management (GWM) of USD 27bln with positive inflows across all regions. Heading into Q3 sees moderate net interest income headwinds for ongoing mix shifts in GWM and effects of the second SNB rate cut. In Q3, Co. expects around USD 1.1bln in integration-related expenses, while the pace of gross cost savings will decline modestly sequentially. In H2, expects non-core and legacy to record underlying pre-tax loss of some USD 1bln. Co. continues to target up to USD 1bln of share repurchases in 2024. Co. said it is on track to reach profitability levels seen before the Credit Suisse merger (Newswires)

OTHER SWISS COMPANIES

Flughafen Zurich (FHZN SW) – July 2024: 3.1mln passengers flew through Zurich airport, +7% Y/Y. (Newswires)

Straumann (STMN SW) – H1 (CHF): EBIT 336.1mln (exp. 324.4mln), Revenue 1.3bln, +16.1% Y/Y. Updates FY24 outlook: Organic revenue growth in low double-digit percentage range and profitability in 27-28% range at constant 2023 currency rates. (Newswires)

BROKER MOVES

SCANDINAVIA

Carlsberg (CARLB DC) - H1 24 (DKK): EBIT 6.336bln (exp. 6.391bln), organic growth of 3.9%, adj. net income of 3.869bln (exp. 4.121bln), adj. EPS 28.6, Revenue 38.766bln (exp. 39.46bln). EBITDA 8.355bln (exp. 8.684bln). Sees FY24 organic growth in operating profit of 4-6%. (Newswires)

Kesko (KESKOB FH) – July (EUR): 975.7mln, +7.4% Y/Y. (Newswires)

Nokian Tyres (TYRES FH) – European commission has approved EUR 99.5mln Romanian state aid measure to support the Co’s new zero CO2 emission tire factory in Romania. (Newswires)

Vestas Wind Systems (VWS DC) – William Fehram steps down from the BoD of the Co. (Newswires)

BROKER MOVES

US

CLOSES: SPX +1.69% at 5,434, NDX +2.5% at 19,006, DJIA +1.04% at 39,766, RUT +1.61% at 2,095

SECTORS: Energy -1.0%, Consumer Staples +0.5%, Utilities +0.5%, Real Estate +0.7%, Financials +0.9%, Materials +1.0%, Industrials +1.1%, Health +1.2%, Communication Services +1.5%, Consumer Discretionary +2.4%, Technology +3.0%.

Boeing (BA) - Co. discovered a new set of problems in its 737s and further slowing deliveries, according to Fortune. Boeing confirmed in a statement to Fortune that the Co. identified a “non-conforming component” on three already delivered airplanes, leading to their grounding. “Per our standard process, we will perform any necessary rework on airplanes in our production system to ensure they meet all requirements prior to delivery,” noting that production hasn’t stopped at the Renton factory.

DraftKings (DKNG) - After Flutter Entertainment said it does not plan to match DraftKings' player surcharges in high-tax states, DKNG said it has opted against the move following customer feedback. (Newswires)

Google (GOOG) - DoJ mulls Google breakup after landmark antitrust win. A ban on exclusive contracts are also being considered by the DoJ. US antitrust enforcers are reviewing Google remedy options. Most likely units for divestments are the Android operating system and Google's web browser Chrome. (Bloomberg) Separately, Google (GOOGL) unveiled lineup of new Pixel smartphones with deeper AI integration Pixel 9 Pro fold starts at USD 1799; Pixel 9 Pro starts at USD 999 and Pixel 9 Pro XL starts at USD 1,099; Pixel 9 starts at USD 799. New pixel smartphones includes tensor G4 processor. Starting later this week, Gemini will be available on android tablets. (Newswires)

Kellanova (K) - Mars has agreed to acquire Kellanova for over USD 29bln, according to sources cited by the FT, with a deal likely to be announced on Wednesday. The deal would be one of the largest this year. Mars is said to have made an offer of USD 83.50/shr (vs Kellanova's Tuesday closing price of USD 74.50/shr), and USD 6bln in net debt. Despite the decline in consumer spending and health trends, Mars is paying a significant premium; Kellanova recently raised its FY outlook. (Newswires)

14 Aug 2024 - 06:53- Research Sheet- Source: Newsquawk