Newsquawk Daily European Equity Opening News - 15th February 2024

15th February 2024

ASIA

APAC stocks mostly took impetus from the rebound on Wall St after the Fed downplayed the recent CPI report. ASX 200 was led higher by a rally in tech and real estate but with upside capped by disappointing jobs data. Nikkei 225 climbed back above the 38,000 level and printed a fresh 34-year high with the index largely unfazed by the surprise contraction in Q4 GDP which showed that Japan's economy entered into a technical recession. Hang Seng traded rangebound amid quiet newsflow and the continued absence of mainland participants.

EUROPEAN CLOSES

CLOSES: DAX: +0.38% at 16,945.48, FTSE 100: +0.75% at 7,568.40, CAC 40: +0.68% at 7,677.35, Euro Stoxx 50: +0.43% at 4,709.65, IBEX 35: -0.09% at 9,916.60, FTSE MIB: +0.63% at 31,329.38, SMI: +0.65% at 11,215.70.

SECTORS: Industrials 0.98%, IT 0.93%, Healthcare 0.82%, Materials 0.50%, Consumer Disc 0.50%, Financials 0.32%, Telecoms 0.24%, Utilities -0.11%, Consumer Stpl -0.26%, Energy -0.34%

FTSE 100

Ex-Dividends - Imperial Brands (IMB LN), Pershing Square Holdings (PSH LN), Shell (SHEL LN), BP (BP/ LN) will trade without entitlement to their latest dividend payout. (Newswires)

NatWest (NWG LN) - To appoint interim CEO Thwaite as its permanent CEO, according to Sky News. A final decision has yet to be taken by its board but could be announced alongside the bank’s annual results on Friday morning. (Sky News)

OTHER UK COMPANIES

BROKER MOVES

Kingfisher (KGF LN) upgraded to Buy from Neutral at Citi

Kingfisher (KGF LN) downgraded to Hold from Buy at Jefferies

DAX

Auto Names - Thousands of Porsche (PAH3 GY), Bentley and Audi cars have reportedly been impounded in US ports after a supplier to Volkswagen (VOW3 GY) found a Chinese subcomponent in the vehicles that breached anti-forced labour laws, according to FT. Carmaker has delayed delivery of vehicles as late as March as it replaces the component from "western China". (FT)

BMW (BMW GY) - A misconfigured cloud storage server belonging to BMW exposed sensitive company information, including private keys and internal data, according to TechCrunch. (TechCrunch)

Commerzbank (CBK GY) - Q4 (EUR): Revenue 2.41bln (exp. 2.45bln). Operating Profit 542mln (exp. 560mln). Net 395mln (exp. 330mln). NII 2.13bln (exp. 2.09bln). Sees 2024 Net profit above 2023 levels. OTHER METRICS: Sees 2024 NII around 7.9bln due to a higher deposit beta and the anticipated interest rate reductions. Plans dividend of around EUR 0.35/shr and capital distribution of EUR 1bln for FY23. Costs 6.4bln (prev. 6.5bln). Cost-income ratio 61% (prev. 69%). (Commerzbank)

German Economy - German government expects GDP to grow by 1% in 2025 (prev. forecast 1.5% in October), sees inflation at 2.8% in 2024 and 1.9% in 2025, according to Reuters via government sources. (Reuters)

OTHER GERMAN COMPANIES

Delivery Hero (DHER GY) - CEO says boss aims more than a billion Euros for Southeast business. (Newswires)

BROKER MOVES

Hochtief (HOT GY) initiated with Overweight at Barclays

CAC

Airbus (AIR FP) - Q4 (EUR): Adj. EBIT 2.21bln (exp. 2.26bln). Revenue 22.9bln (exp. 22.5bln), sees 2024 deliveries about 800 planes (exp. 826). Co. is to propose a special dividend of EUR 1/shr. Sees 2024 adj. EBIT between 6.5-7bln (exp. 7.15bln). On widebody aircraft, the Co. continues towards a monthly rate of 4 aircraft for the A330 in 2024 and rate 10 in 2026 for the A350. Co. assumes no additional disruptions to the world economy, air traffic, the supply chain, the Company’s internal operations, and its ability to deliver products and services. (Airbus) Index Weightings: CAC 40 (4.8%), Euro Stoxx 50 (2.6%), Stoxx 600 (0.8%)

EssilorLuxottica (EL FP) - FY23 (EUR): Revenue 25.4bln (exp. 26.7bln), +7.1% Y/Y, Adj. operating profit 4.18bln (exp. 4.31bln), +7.7%, EPS 5.08 (prev. 4.83 Y/Y), Adj. operating margin 16.5% (exp. 16.9%); proposes dividend at 3.95/shr, +22% vs. 2022. Q4 Revenue 6.25bln (exp. 6.25bln). CFO expects more material margins expansion this year vs. 2023. (Newswires)

Orange (ORA FP) - Q4 (EUR): Revenue 11.58bln (exp. 11.58bln). EBITDA-AL 3.54bln (exp. 3.51bln). EBITDA-AL of Telecom Activities 3.58bln (Co. exp. 3.53bln). FY Organic Cash Flow of Telecom Activities 3.66bln (Co. exp. 3.54bln). FY net financial debt 27bln (Co. exp. 27bln). Co. achieved all of its targets for 2023 and confirms its financial objectives for 2025. Shareholders’ meeting in May to decide on 2023 dividend of EUR 0.72/shr payable in 2024. (Newswires)

Pernod Ricard (RI FP) - H1 (EUR): Sales 6.59bln (exp. 6.58bln), Net 1.57bln (exp. 1.43bln), Operating Profit 2.14bln (prev. 2.42bln), FCF 301mln. FY24 Outlook: Broadly stable net sales in H2 vs H1. EUR 300mln buyback for the year, EUR 150mln completed in H1. (Newswires)

Renault (RNO FP) - FY23 (EUR): Net 2.32bln (exp. 3.52bln), Revenue 52.38bln (exp. 52.88bln). Proposes 1.85 dividend (exp. 1.37). FY24 Operating Margin view of "at least" 7.5%, FY24 FCF view "at least" 2.5bln. (Newswires)

Rexel (RXL FP) - FY23 (EUR): Net 775mln (exp. 774mln), Adj. EBITA 1.3bln (exp 1.3bln), Revenue 19.2bln (exp. 19.2bln). Guides initial FY24 Same day sales "stable to slightly positive growth", adj. EBITA margin 6.3-6.6%. (Newswires)

Schneider Electric (SU FP) - FY23 (EUR): adj. EBITA 6.41 (exp. 6.03bln, prev. 6.02bln Y/Y), Revenue 34.2bln (exp. 36.04bln, prev. 35.9bln Y/Y). Guides initial FY24 adj. EBITA organic +8-12%, organic sales +6-8%, Adj. EBITA margin +40-60%. CFO does not expect to implement big increases this year. (Newswires)

Safran (SAF FP) - FY23 (EUR): Adj. Revenue 23.2bln (exp. 23.3bln), Op. 3.17bln (prev. 2.41bln Y/Y), Op margin 13.6% (exp. 13.8%). Guides initial FY24 adj. recurring op. close to 4bln, adj. revenue 27.4bln (exp. 26.69bln), FCF 3bln. Expects M&A activity to accelerate. (Newswires)

OTHER FRENCH COMPANIES

Aeroports de Paris (ADP FP) - FY23 (EUR): Net 631mln, +22% Y/Y, EBITDA 1.96bln (exp. 1.93bln), Revenue 5.5bln (exp. 5.5bln), Declares dividend 3.82/shr. Passenger traffic assumptions: yearly growth rate of +3.5 to +5% in 2024. (Newswires)

Nexans (NEX FP) - FY (EUR): Revenue 7.79bln (exp. 6.58bln), Net 223mln (exp. 236mln), EBITDA 654mln (exp. 641mln), Dividend 2.30/shr (exp. 2.04/shr). FY24 Guidance: adj. EBITDA 670-730mln (exp. 635mln). (Newswires)

Valneva (VLA FP) - FY (EUR): Revenue 153mln (exp. 179mln), product sales surpassed pre-COVID by 12% & 2022 by 26%. (Newswires)

BROKER MOVES

Saint-Gobain (SGO FP) upgraded to Buy from Neutral at Goldman Sachs

Wendel (MF FP) initiated with Buy at Berenberg

PAN EUROPE

BNP Paribas (BNP FP)/HSBC (HSBA LN) – South Korean prosecutors have reportedly searched places tied to the Cos, according to unconfirmed reports. (Newswires)

Energy/Renewable Names - Longi Green Energy Tech., accounts for 20% of the solar panel market, said that Western nations would have to at least “slow down” the transition from fossil fuels if they restrict Chinese companies from the sector. (FT)

European Energy – Goldman Sachs cuts European Energy to Neutral. (Newswires)

European stocks - Goldman Sachs raises European Consumer stocks to Overweight. (Newswires)

dsm-firmenich (DSFIR NA) - Q4 (EUR): EBITDA 439mln (exp. 430.7mln), Revenue 3.11bln (exp. 3.05bln). Guides initial FY23 adj. EBITDA of at least 1.9bln. To separate out Animal nutrition and Health business from the group. (Newswires)

Strabag (STR AV) - FY (EUR): Output 19.1bln (exp. 17.9bln), Order Backlog maintained at 23.5bln. 2024 Outlook: expect output volume to increase slightly Y/Y, from the current record level. Net investment is not forecast to exceed 750mln during 2024. (Newswires)

Stellantis (STLAM IM/STLAP FP) - H2 (EUR): Net Revenue 91.176bln (exp. 91.1bln). Adj. Operating Income 10.217bln (exp. 9.54bln; -10% Y/Y). Adj. Operating Margin 11.2% (prev. 14.4% in H1). Co. plans a EUR 3bln open market share buyback program this year. OTHER METRICS: Dividend proposed of EUR 1.55 per common share, increase of approximately 16% compared to prior year, pending shareholder approval. Industrial free cash flows of EUR 12.9bln; +19% Y/Y. LEV sales up 27% in 2023, with PHEVs at 1 in U.S. and #2 for LEVs in US 21% increase in global BEV sales in 2023. OUTLOOK The Company is reiterating a minimum commitment of double-digit adjusted operating income (AOI) margin in 2024, as well as positive industrial free cash flow, despite macroeconomic uncertainties. Management notes a number of factors could create a supportive revenue backdrop in 2024, including reduced supply and logistical constraints, stabilizing and potentially reduced interest rates, and the benefits of the Company’s expected expansion of its product offering.

Telecom Italia (TIT IM) - Q4 (EUR): Revenue 4.34bln (exp. 4.3bln). EBITDA 1.33bln (exp. 1.77bln). FY EBITDA-AL 5.3bln (exp. 5.28bln). Co. is to present a new 2024-2026 industrial plan on March 7th. Revenue breakdown: Connectivity (-2% Y/Y). Cloud (+31% Y/Y). IoT (+24% Y/Y). Security (+11% Y/Y). Other IT (+13%). Performance in TIM Brazil enabled Co. to exceed its targets in 2023. (Telecom Italia).

BROKER MOVES

ACS (ACS SM) initiated with Overweight at Barclays

Heineken (HEIA NA) downgraded to Hold from Buy at HSBC

SMI

Softwareone (SWON SW) - FY (CHF): Revenue 1.01bln (exp. 1.02bln), adj. EBITDA 245mln (exp. 229mln), Dividend 0.36/shr (exp. 0.35/shr). (Newswires)

OTHER SWISS COMPANIES

BROKER MOVES

SCANDINAVIA

Genmab (GMAB DC) - Announces initiation of share buy back program of up to 190k shares, to be completed on March 15, 2024. (Newswires)

Hexagon (HEX NO) - FY23 (NOK): EBITDA 480mln (prev. 348mln Y/Y), Revenue 5.2bln (prev. 4.3bln Y/Y). (Newswires)

Kojamo (KOJAMO FH) – Q4 (EUR): FFO/shr 0.15 (prev. 0.16), Adj. EBITDA 63.3mln (prev. 60.6mln), Revenue 113.5mln (prev. 107.9mln Y/Y). (Newswires)

Salmar (SALM NO) - Q4 (NOK): EBIT 2.16bln (exp. 2.10bln), Revenu 8.02bln (exp. 8.51bln). Cuts FY24 harvest 259kt (prev. guidance 279kt). (Newswires)

TietoEvry (TIETO FH) – Continued to focus on recovery from ransomware attack. (Newswires)

Tomra Systems (TOM NO) - Q4 (NOK): EBITA 252mln (exp. 216mln), Revenue 4.12bln (prev. 3.48bln Y/Y). (Newswires)

BROKER MOVES

Handelsbanken (SHBA SS) initiated with Underweight at Morgan Stanley

Nordea Bank (NDA SS) initiated with Equal Weight at Morgan Stanley

Neste (NESTE FH) downgraded to Equal Weight from Overweight at Barclays

Swedbank (SWEDA SS) initiated with Underweight at Morgan Stanley

US

CLOSES: SPX +0.96% at 5,000, NDX +1.18% at 17,807, DJIA +0.40% at 38,424, RUT +2.44% at 2,012.

SECTORS: Industrials +1.67%, Communication Services +1.42%, Technology +1.1%, Consumer Discretionary +1.02%, Financials +0.96%, Health +0.81%, Real Estate +0.7%, Materials +0.66%, Utilities +0.54%, Consumer Staples -0.19%, Energy -0.17%.

Berkshire Hathaway (BRK) 13-F: Cuts stake in AAPL by 1% or 10.6mln shares. New stake: Increases stake: SIRI, CVX. Reduces stake: AAPL, HPQ, PARA. Exits: STNE, MKL, DHI, GL. (Newswires)

Cisco Systems Inc (CSCO) - Q2 2024 (USD): Adj. EPS 0.87 (exp. 0.84), Revenue 12.8bln (exp. 12.71bln); to cut about 5% of global workforce. KEY METRICS: Networking revenue 7.08bln (exp. 7.16bln). Security revenue 973mln (exp. 956.8mln). Collaboration revenue 989mln (exp. 966mln). Adj. gross margin 66.7% (exp. 65.7%). Adj. operating margin 33% (exp. 32.1%). FY24 GUIDANCE: Revenue 51.5-52.5bln (prev. 53.8-55.0bln, exp. 54.33bln). Adj. EPS 3.68-3.74 (prev. 3.87-3.93, exp. 3.87). Q3 GUIDANCE: Revenue 12.1-12.3bln (exp. 13.1bln). Adj. EPS 0.84-0.86 (exp. 0.92). Adj. gross margin 66-67% (exp. 65.8%). Adj. operating margin 33.5-34.5% (exp. 33.8%).

Defence Names - US President Biden's 2025 defence budget proposes an 18% cut in the number of F-35 jets (LMT) the Pentagon buys, according to Reuters sources; order would be a USD 1.6bln drop in spending on jets. (Newswires)

Tesla (TSLA) - Elon Musk files 13G on Tesla (TSLA) with 20.5% stake. (Newswires)

15 Feb 2024 - 06:56- Research Sheet- Source: Newsquawk