Newsquawk Daily European Equity Opening News - 16th October 2024

ASIA

APAC stocks were ultimately mixed with early declines seen as the risk-off mood rolled over into the region after Wall St pulled back from record levels with global sentiment sapped by disappointing earnings updates from ASML and LVMH. ASX 200 was restrained as weakness in tech and consumer stocks overshadowed the gains in financials and real estate, while miners were also lacklustre with Rio Tinto shares pressured following its quarterly update. Nikkei 225 underperformed after slipping beneath the 40k level and amid disappointing Machinery Orders. Hang Seng and Shanghai Comp clawed back opening losses following the PBoC's firm liquidity efforts and with China to hold a press briefing tomorrow on promoting the steady and healthy development of the property sector.

Woodside Energy (WDS AT) - Quarterly output 53.1mln BOE, rev. USD 3.68bln, narrows FY output guidance to 189mln-195mln BOE from 185mln-195mln BOE. Woodside Energy plans to delist from the London Stock Exchange due to low trading volumes, which represent only 1% of its issued share capital. The delisting, effective November 20th, aims to reduce administrative costs. Woodside’s listings on the ASX and NYSE remain unaffected. (Newswires)

EUROPEAN CLOSES

CLOSES: DAX: +0.06% at 19,521, FTSE 100: -0.52% at 8,249, CAC 40: -1.05% at 7,522, Euro Stoxx 50: -1.85% at 4,948, AEX: -2.52% at 899, IBEX 35: +0.67% at 11,930, FTSE MIB: -0.29% at 34,578, SMI: -0.17% at 12,238, PSI: -0.29% at 6,698.

SECTORS: Telecoms 1.12%, Utilities 0.99%, Financials 0.19%, Consumer Stpl 0.13%, Healthcare -0.40%, Industrials -0.48%, Consumer Disc -0.87%, Materials -1.27%, Energy -3.57%, IT -7.26%

FTSE 100

British American Tobacco (BATS LN) - On track for FY24 guidance. Expects 3-5% organic rev. growth and mid-single figure from operations growth on an organic and constant currency basis by 2026. (Newswires)

Rio Tinto (RIO LN) - Q3 Pilbara iron ore output 84.1mln tons (prev. 83.5mln tons Y/Y), iron ore shipments 84.5mln tons (prev. 83.5mln tons Y/Y), mined copper fell 1% Y/Y to 168k tons, aluminium output fell 2% Y/Y to 809k tons. Says: Guidance for 2024 IOC iron ore pellets and concentrate production has been reduced to 9.1 to 9.6mln tonnes. 2024 Pilbara iron ore unit cash costs are expected to be in the upper half of our USD 21.75 to USD 23.50 per tonne guidance. Expectations for Pilbara iron ore shipments in 2024 remain at 323 to 338mln tonnes. Industrial production is still on a gradual recovery. Guidance for 2024 copper C1 unit costs is unchanged at 140 to 160 US cents/lb. Ramp-up of copper production continues at Oyu Tolgoi underground mine. Geopolitical tensions and trade barriers remain near-term global economic risks. Decarbonisation of our business remains a priority and is progressing well. Construction of our Western Range mine is now 80% complete at Pilbara project. China’s economic recovery has been uneven, prompting more government support to sustain growth. The Simfer mine is on track to deliver first production in 2025. In 2024, all qualifying expenditure relating to Simandou is being capitalised. On track for first production from our Simandou high-grade iron ore project next year. On track for first lithium from Rincon starter plant by end of this year.

OTHER UK COMPANIES

Just Eat Takeaway (JET LN) - Q3 update (EUR): Gross Transaction Value 6.3bln (exp. 6.5bln), Total Orders 211.1mln (exp. 214mln). Reiterated guidance. (Newswires)

BROKER MOVES

DAX

Adidas (ADS GY) - Q3 2024 (EUR): Revenue 6.44bln (exp. 6.45bln) Gross margin 51.3%, operating profit 598mln. Q3 currency-neutral revenues increased 10% Y/Y. Q3 ex-Yeezy sales in both years, currency-neutral revenues increased 14% during the quarter. Operating profit increased to 598mln, including a contribution of around 50mln from the sale of parts of the remaining Yeezy inventory. Outlook 2024: Operating profit to reach around 1.2bln (prev. 1.0bln). Currency-neutral revenues to increase at a rate of around 10% in 2024 (prev. high-single-digit rate). Company assumes the sale of remaining Yeezy inventory during the remainder of the year to occur on average at cost. (Newswires) Co. holds a 2.9% weighting in the DAX 40

DHL (DHL GY) - Teamsters union says DHL-CVG ratified the first contract. (Newswires)

OTHER GERMAN COMPANIES

BROKER MOVES

CAC

Airbus (AIR FP) - Co. and Toshiba to partner on superconductivity research. (Newswires)

Air Liquide (AI FP) - To supply oxygen to LG Chem for their EV battery plant in the US; to invest USD 150mln to expand production. (Newswires)

Credit Agricole (ACA FP) - Credit Agricole Personal Finance & Mobility takes a stake in GAC Leasing to support the growth of GAC Group sales in China. (Credit Agricole)

Engie (ENGI FP) - Strengthens its presence in Biomethane in Europe with the acquisition of its first production unit in Belgium. (Newswires)

LVMH (MC FP) - Q3 2024 (EUR): Revenue 19.08bln (exp. 20.33bln). Organic revenue -3% (exp. +0.93%). Wines and spirits organic sales -7% (exp. -2.41%). Fashion and leather organic sales -5% (exp. 0.48%). 9mth revenue 60.8bln, organic growth 6%.. CFO says consumer confidence in mainland China back in line with the all-time low during covid. LVMH to adjust costs according to "what we forecast". LVMH will not stand still; to focus on product innovation. Louis Vuitton's performance was slightly higher than the rest of the division, Dior slightly lower. Impact of additional corporate taxes in France should range between EUR 700-880mln. It would be a mistake to introduce more affordable products. Will continue to renovate Tiffany retail space into the next year, and have only renovated 25% of the space. (Newswires) LVMH ADRs (LVMUY) fell from 136.00 to 125.05. *Weightings: Co. holds a 10.16% weighting in the CAC 40; 5.40% in the Euro Stoxx 50; 1.39% in the Stoxx 600.*

Vivendi (VIV FP) - To convene a shareholders' meeting on 9th December to vote on the split project; if approved, the first listing of shares of the 3 companies would take place on 16th December 2024. Assuming it is approved by 9th Dec, co. would proceed with early redemption of its bond debt. (Newswires)

Vinci (DG FP) - Sept Traffic: More than 90mln passengers used the airport, +6.4% Y/Y. Traffic acceleration in Japan, particularly thanks to the good performance of routes with China. (Newswires)

OTHER FRENCH COMPANIES

Ipsos (IPS FP) - Update on 2024 outlook: Organic growth in Q3 is below exp. and do not expect a significant rebound by end of the year; revises annual organic growth target to 1%. (Newswires)

BROKER MOVES

Covivo (COV FP) upgraded to Overweight from Neutral at JP Morgan

L'Oreal (OR FP) downgraded to Underweight from Neutral at JP Morgan

PAN EUROPE

ASML (ASML NA) - Sees FY net sales at EUR 28bln (exp. 27.7bln). Q3 bookings EUR 2.63bln (exp. 5.4bln). Q3 net sales EUR 7.47bln (exp. 7.2bln). Q3 gross margin 50.8% (exp. 50.7%). Q3 Net income EUR 2.08bln (exp. 1.89bln). Sees Q4 net sales between EUR 8.8-9.2bln, gross margin view between 49-50%. Sees 2025 net sales between EUR 30-35bln, gross margin seen between 51-53%. Commentary: Appears recovery is more gradual than previously expected. Strong developments and upside potential in AI, other market segments is taking longer to recover. 2025 gross margin outlook mainly related to the delayed timing of EUV demand. CFO expects percentage of China business as part of total business to show more normalized percentage in order book. At midpoint, expects low North America EUV tools to be below 50 tools for 2025. Expects China to come in at around 20% of total revenue for next year. ASML confirmed the shipment of its third High NA lithography system to a new customer and, despite a weak outlook for 2025, remains optimistic about long-term growth, acknowledging that some market segments are recovering more slowly, DigiTimes reports. (DigiTimes / Newswires) *Weightings: ASML holds a 12.1% weighting in the AEX; 9.2% in the Euro Stoxx 50; 2.6% in the Stoxx 600 **NOTE*: Co. mistakenly published its earnings a day earlier than scheduled; ASML fell 15.6% in the prior session; earnings were released at 15:31 BST

Italian stocks - Italy to raise EUR 3.5bln from banks and insurers, according to Reuters citing Deputy PM Salvini on X. (Reuters)

Stellantis (STLAM IM/STLAP FP) - Stellantis plans to produce Ram 1500 pickup trucks in Mexico, shifting production from Detroit, which may strain relations with the United Auto Workers union, WSJ reports. The expansion at the northern Mexico factory aims to boost production of Stellantis's bestselling truck in the US market. (WSJ)

BROKER MOVES

OCI (OCI NA) downgraded to Neutral from Overweight at JP Morgan

SMI

OTHER SWISS COMPANIES

BROKER MOVES

SCANDINAVIA

BROKER MOVES

US

CLOSES: SPX -0.76% at 5,815, NDX -1.37% at 20,160, DJIA -0.75% at 42,740, RUT +0.05% at 2,250

SECTORS: Energy -3.04%, Technology -1.79%, Health -1.24%, Industrials -0.74%, Materials -0.03%, Communication Services -0.02%, Consumer Discretionary +0.21%, Financials +0.26%, Utilities +0.45%, Consumer Staples +0.64%, Real Estate +1.23%.

Qualcomm (QCOM), Intel (INTC) - Qualcomm plans to delay any decision regarding a potential acquisition of Intel until after the US presidential election, Bloomberg reports. The company seeks clarity on the future administration's stance on antitrust issues and US-China relations, which could significantly impact the deal's feasibility, the report said.

United Airlines Holdings Inc (UAL) - Q3 2024 (USD): Adj. EPS 3.33 (exp. 3.18), Revenue 14.80bln (exp. 14.78bln)

16 Oct 2024 - 06:51- Research Sheet- Source: Newsquawk