Newsquawk Daily European Equity Opening News - 17th April 2024

17th April 2024

ASIA

APAC stocks traded mixed as the region picked up the pieces from the prior day's heavy selling but with the recovery limited after the choppy performance stateside amid Fed commentary and geopolitical concerns. ASX 200 eked mild gains albeit with upside capped by a lacklustre mining sector after Rio Tinto's quarterly production update which showed a decline in iron output and shipments from a year ago. Nikkei 225 was choppy after somewhat mixed trade data and recent speculation of FX intervention. Hang Seng and Shanghai Comp. were varied with the mainland underpinned by supportive measures with China's Financial Regulator vowing to allocate more credit resources to support manufacturing industry development and will continuously increase the proportion of medium to long-term loans for the sector, while financial institutions in Shanghai are to provide CNY 2tln in funding to support innovative technology companies over the next three years under an initiative backed by the PBoC.

EUROPEAN CLOSES

CLOSES: DAX: +0.12% at 17,713.50, FTSE 100: -1.82% at 7,793.91, CAC 40: -1.40% at 7,899.36, Euro Stoxx 50: -1.41% at 4,899.05, IBEX 35: -1.50% at 10,499.20, FTSE MIB: -1.65% at 33,310.99, SMI: -1.71% at 11,171.20.

SECTORS: IT -0.32%, Consumer Stpl -0.67%, Utilities -1.05%, Healthcare -1.28%, Telecoms -1.35%, Industrials -1.54%, Consumer Disc -1.61%, Materials -1.84%, Energy -1.86%, Financials -2.29%

FTSE 100

Rio Tinto (RIO LN) - Quarterly Pilbara iron ore output 77.9mln tons vs prev. 79.3mln tons Y/Y, shipments 78.0mln tons vs prev. 82.5mln tons Y/Y, mined copper 156k tons vs prev. 145k tons Y/Y, aluminium output 826k tons vs prev. 785k tons Y/Y. Chinese copper demand growth has been robust despite a weakening property sector. (Newswires) Shares closed -0.2% in Australian trade.

UK Stocks - UK Chancellor Hunt raised the possibility of further tax cuts before the next general election as he counts on recent national insurance cuts and prospects of lower interest rates to improve the ruling Conservative party's fortunes, according to FT. (FT)

OTHER UK COMPANIES

Just Eat Takeaway (JET LN) – Reiterated guidance for 2024. FCF to continue to be positive in 2024 and thereafter. Decided to discontinue all operations in New Zealand in the coming months; financial impact immaterial. (Newswires)

BROKER MOVES

Fresnillo (FRES LN) upgraded to Overweight from Neutral at JP Morgan

Tritax Big Box REIT (BBOX LN) downgraded to Hold from Add at Peel Hunt

DAX

Adidas (ADS GY) - Q1 2024 (EUR): Revenue 5.458bln (exp. 5.3bln, prev. 5.274bln, +4% Y/Y). Raised FY24 operating profit guidance. Gross margin improved 6.4ppt to 51.2% (prev. 44.8% Y/Y). Operating profit 336mln (prev. 60mln Y/Y). GUIDANCE: Now expects revenue to increase at a mid-to-high single digit rate in 2024 (prev. mid-single-date rate). Raises FY24 operating profit to EUR 700mln (prev. EUR 500mln). YEEZY: Latest Yeezy drop generated revenues of ~ EUR 150mln and op. profit of EUR 50mln in Q1. Its guidance assumes the sale of remaining Yeezy inventory during the remainder of the year to occur on average at cost - which results in additional sales of around EUR 200mln and no further profit contribution during the remainder of the year. COMMENTARY: Continues to expect unfavourable currency effects to weigh significantly on profitability this year. (Adidas IR) Index Weightings: DAX 40: 2.5%, Euro Stoxx 50: 0.9%

Continental (CON GY) -Prelim Q1 2024 (EUR): Consolidated sales 9.8bln (exp. 10bln), Adj. EBIT 2.0% (exp. 3.7%), Adj. FCF -1.1bln (exp. -891mln); affirms FY24 guidance. (Newswires)

OTHER GERMAN COMPANIES

Deutsche Lufthansa (LHA GY) - The latest remedies on the ITA stake buy are not much different from the earlier offer, according to Reuters sources; EU antitrust regulators do not see Lufthansa competing with Ryanair (RYA ID). Lufthansa disagrees with EU regulators on the definition of long-haul flights. (Newswires)

Hapag-Lloyd (HLAG GY) – Co. and Seaspan enter agreement for Methanol Main Engine Retrofits of Charter Vessels. (Newswires)

BROKER MOVES

CAC

Alstom (ALO FP) - Co. is reportedly close to a deal with the UK gov’t regarding an order for 10 new Elizabeth Line trains, via FT citing sources. (FT)

LVMH (MC FP) - Q1 24 (EUR): Revenue 20.69bln, +3.0% (exp. +3.3%), Asia ex-Japan Revenue -6.0% (exp. +4.1%). SALES BREAKDOWN: Fashion & Leather Goods +2.0% (exp. +3.22%) at 10.49bln, Perfumes & Cosmetics +7%Y/Y at 2.18bln, Wines & Spirits -12% at 1.42bln, Watches & Jewellery -2% at 2.47bln. COMMENTARY: Europe and the US achieved growth on a constant currency and consolidation scope basis. Japan recorded double-digit revenue growth; the rest of Asia reflected strong growth in spending by Chinese customers in Europe and Japan. In an uncertain geopolitical and economic environment, Co. remains both vigilant and confident at the start of its year. Purchases of Louis Vuitton products by Chinese consumers globally grew by around 10% in Q1. LVMH executive said the Co. is hopeful about Sephora in China and bets on differentiation. The executive does not expect a "fabulous" year for watches. (LVMH IR) Index Weightings: CAC 40: 11.6% (largest), Euro Stoxx 50: 6.3% (second largest), Stoxx 600: 2.1% (fourth largest).

Sanofi (SAN FP) - New 48-week frexalimab phase 2 data support potential for high sustained efficacy in multiple sclerosis. (Sanofi)

Vinci (DG FP) – Q1 airport traffic +12.4% Y/Y. (Newswires)

OTHER FRENCH COMPANIES

Aeroports de Paris (ADP FP) – March traffic 8mln +7.7% Y/Y. (Newswires)

BROKER MOVES

PAN EUROPE

ASML (ASML NA) - Q1 (EUR): Revenue 5.29bln (exp. 5.39bln). Bookings 3.61bln (exp. 4.63bln). EPS 3.11 (exp. 2.68). 2024 outlook unchanged; Guides Q2 revenue between 5.7-6.2bln (exp. 6.62bln). OTHER METRICS: Gross margin 51.0% (exp. 48.8%; prev. 51.4% Q/Q). New lithography systems sold (units) 66 (prev. 113 Q/Q). Used lithography systems sold (units) 4 (prev. 11 Q/Q). End-quarter cash and cash equivalents and short-term investments 5.406bln (prev. 7.01bln Q/Q). OUTLOOK: H2 is expected to be stronger than H1, "in line with the industry's continued recovery from the downturn". Sees 2024 as a transition year with continued investments in both capacity ramp and technology, to be ready for the turn in the cycle. (ASML IR) Index Weightings: AEX: 16.3% (largest), Euro Stoxx 50: 10.3% (largest), Stoxx 600: 3.4% (second largest).

Acciona (ANA SM) – Plans to reduce workforce, to around “5 or 6 people” from 40, in Brazil renewables due to lower power prices and rising costs, via Reuters (Reuters)

TomTom (TOM2 NA) – Q1 (EUR): Revenue 139mln (exp. 150mln). Reiterated FY guidance for FCF and Revenue. Expects increasing revenues later this year and in 2025. (Newswires)

UCB (UCB BB) – Fintepla oral solution approved in Japan for adjunctive treatment of seizures associated with LGS. (Newswires)

BROKER MOVES

Akzo Nobel (AKZA NA) upgraded to Buy from Hold at Jefferies

SMI

Novartis (NOVN SW) - Novartis Kesimpta six-year efficacy data show substantial benefits in recently diagnosed treatment-naïve people with relapsing multiple sclerosis. However, rates of 3- and 6-month CDW events remained higher compared to patients receiving continuous Kesimpta, indicating that the efficacy benefit of first-line Kesimpta on delaying disability worsening was not fully achieved in the switch group. (Novartis)

Geberit (GEBN SW) – Proposed dividend of CHF 12.70/shr (currently 12.54/shr). (Newswires)

OTHER SWISS COMPANIES

BROKER MOVES

SCANDINAVIA

Nel (NEL NO) – Q1 (NOK): Net Income -22mln (exp. -86mln), Revenue 387mln (exp. 545.5mln), Q1 EBITDA -16mln (exp. -89mln). Co. says more needs to be done to increase profitability. (Newswires)

Tryg (TRYG DC) - Q1 (DKK): Pre-tax profit 1.01bln (exp. 986mln). Dividend 1.95. (Newswires)

Wihlborgs Fastigheter (WIHL SS) - Signed leases with two co's in Lund. (Newswires)

Volvo AB (VOLVB SS) – Q1 (SEK) EPS 6.92 (exp. 6.32, prev. 6.35 Y/Y), Revenue 131.2bln (exp. 128.28bln, prev. 131.3bln Y/Y). Co. said there may be supply chain disturbances going forward; may experience higher input costs from increased prices on freight, energy and labour costs. (Newswires)

BROKER MOVES

Boliden (BOL SS) upgraded to Neutral from Underweight at JP Morgan

Kesko (KESKOB FH) upgraded to Buy from Hold at Danske Bank

Nibe (NIBEB SS) initiated with Sell at Goldman Sachs

US

CLOSES: SPX -0.21% at 5,051, NDX +0.04% at 17,713, DJIA +0.17% at 37,798, RUT -0.42% at 1,967.

SECTORS: Real Estate -1.53%, Utilities -1.36%, Energy -0.87%, Materials -0.74%, Financials -0.62%, Consumer Discretionary -0.52%, Industrials -0.20%, Communication Services -0.12%, Health +0.02%, Consumer Staples +0.07%, Technology +0.23%.

Morgan Stanley (MS) - Co. is said to plan its biggest round of China job cuts in years, while sources said Morgan Stanley is to cut up to 50 Asia-Pac investment banking jobs this week. (Bloomberg)

United Airlines Holdings Inc (UAL) - Q1 2024 (USD): Adj. EPS -0.15 (exp. -0.57), Revenue 12.50bln (exp. 12.45bln). PRASM USD 15.79 (exp. 15.68)Revenue passenger miles 57.43bln (exp. 57.36bln). Available seat miles 71.67bln (exp. 71.19bln). Load factor 80.1% (exp. 80.7%). Co. said the demand environment remained strong. (PR Newswire) Shares rose 5.2% pre-market

17 Apr 2024 - 06:52- Research Sheet- Source: Newsquawk