Newsquawk Daily European Equity Opening News - 20th April 2023

20th April 2023

ASIA

APAC stocks traded rangebound with the region indecisive following the flat handover from the US where earnings were under the spotlight and early headwinds were seen after firmer-than-expected UK CPI data. ASX 200 was indecisive as participants digested output updates and with the mining sector subdued despite the fresh record Q1 iron ore shipments by Rio Tinto, while Australian Treasurer Chalmers announced recommendations from the independent RBA review which included establishing separate boards for governance and monetary policy with fewer meetings and press conferences to be conducted after policy decisions. Nikkei 225 gradually pared opening losses following mixed trade data including better-than-expected exports growth and after a recent report that the BoJ is said to be wary of tweaking yield control this month. Hang Seng and Shanghai Comp were mixed following the lack of surprises by the PBoC which maintained its benchmark lending rates for the 8th consecutive month and as frictions lingered after the US Commerce Department imposed a USD 300mln civil penalty on Seagate for supplying hard disk drives to Huawei in violation of export controls.

Foxconn (2317 TT) - Apple (AAPL) supplier Foxconn plans to set up a new facility in the southern Indian state of Karnataka to produce as many as 20mln iPhones a year and is expected to employ 50,000 people, according to WSJ citing Indian officials. (WSJ)

Chip IPO - Chinese chipmaker Changxin seeks IPO at over USD 14.5bln value, according to Bloomberg. (Newswires)

TSMC (2330 TT/TSM) - Q1 (TWD): Net Profit 206.9bln (exp. 192.8bln), Sales 508.6bln (exp. 517.9bln), Gross Profit 286.5bln (prev. 273.2bln). EPS 7.98 (exp. 7.41), Gross Margin 56.3% (exp. 54.5%). (TSMC)

EUROPEAN CLOSES

CLOSES: Euro Stoxx 50 -0.01% at 4,393, FTSE 100 -0.13% at 7,898, DAX 40 +0.08% at 15,895, CAC 40 +0.21% at 7,549, FTSE MIB +0.15% at 27,933, IBEX 35 +0.77% at 9,494, SMI +0.05% at 11,364.

SECTORS: Utilities 0.99%, Consumer Stpl 0.74%, Financials 0.66%, Consumer Disc 0.07%, Industrials -0.23%, Materials -0.24%, Telecoms -0.24%, Healthcare -0.51%, Energy -0.96%, IT -2.30%

FTSE 100

Rio Tinto (RIO LN) - Quarterly Pilbara iron ore output 79.3mln tons vs prev. 71.7mln tons Y/Y, shipments 82.5mln tons vs prev. 71.5mln tons Y/Y, mined copper 145k tons vs prev. 125k tons Y/Y, aluminium output 785k tons vs prev. 736k tons Y/Y. Commodity prices found further support during Q1. China consumption is expected to normalise and recover further with household incomes. (Newswires)

OTHER UK COMPANIES

BROKER MOVES

DAX

Volkswagen (VOW3 GY) - Confirmed a US-assembled MY23 ID.4 eligible for full tax credit. (Newswires)

OTHER GERMAN COMPANIES

BROKER MOVES

CAC

L'Oreal (OR FP) - Q1 2023 (EUR): Sales 1.38bln, +13% LFL (exp. +8.08%); North America sales +16.6% (exp. +7.73%). Co. said it saw Chinese consumer demand and store traffic resume from February. Professional products LFL sales +7.60% (exp. +4.33%). Consumer products LFL sales +14.7% (exp. +9.5%). North Asia comp. sales +1.9% (exp. +6.96%). South Asia Pacific, Middle East, North Africa, Sub-Saharan Africa comp. sales +26.7% (exp. +15.4%). CEO said they are very confident for the rest of the year in China. (Newswires) Co. holds a 2.9% weighting in the Euro Stoxx 50.

Renault (RNO FP) - Q1 2023 (EUR): Revenue 11.50bln (exp. 11.31bln). Automotive revenue 10.52bln (exp. 10.88bln). Strong Group's orderbook in Europe remains at record levels. Renault Group confirms its 2023 financial outlook. (Renault IR)

OTHER FRENCH COMPANIES

Edenred (EDEN FP) – Q1 2023 (EUR): Revenue 557mln (exp. 529mln). Co. has affirmed its FY23 an FY22-25. LFL revenue +25.7% Y/Y. (Newswires)

Rexel (RXL FP) - Q1 (EUR): Sales 4.93bln, +12.6% on a reported basis. FY23 guidance confirmed. (Newswires)

BROKER MOVES

PAN EUROPE

Auto Names - Tesla (TSLA) share fell 6.1% post-earnings amid margin woes, while CEO Musk said the current macroeconomic environment remains uncertain, and has taken a view that pushing for higher volumes and a larger fleet is the right choice here vs lower volume and higher margins.

Chip Names - Tesla (TSLA) CEO said the Co. continues to make significant purchases of Nvidia (NVDA) GPUs. (Newswires) Separately, Italy is eyeing Taiwan chip deals ahead of a decision on the China pact, according to Bloomberg. (Newswires) Finally, TSMC (2330 TT/TSM) reported their earnings in which net profit and gross margins beat forecasts but sales dipped Y/Y.

Ferrovial (FER SM) - UK's Unite union said security officers at Heathrow Airport are to strike on May 4th-10th and May 25th-27th. (Newswires)

Tech Names - IBM (IBM) shares rose 1.7% following mixed earnings, although the Co. beat expectations on EPS, Software Revenue, and Adj. Gross Margin.

Telefonica (TEF SM) - Virgin Media O2, owned by the Co. and Liberty Global, has begun the sale process for all/part of its share in Cornerstone, according to sources; Cornerstone is the UK’s largest mobile tower network and is part owned by Vantage Towers (VTWR GY). (FT)

Saipem (SPM IM) - Q1 2023 (EUR): Adj. EBITDA 191mln (exp. 171mln). Net profit 0.00 (exp. loss of 24mln), Revenue 2.58bln (exp. 2.52bln). (Newswires)

Stellantis (STLAM IM/STLAP FP) has appointed Natalie Knight as new CFO, effective July 10th 2023. (Newswires)

BROKER MOVES

SMI

Nestle (NESN SW) - ShareAction, an investor group, wants the Co. to reduce the amount of unhealthier food it sells. (BBC)

UBS (UBS SW)/ Credit Suisse (CSGN SW) - Only a very small number of Credit Suisse dealmakers will be retained by UBS post-merger, according to Reuters sources. (Newswires)

OTHER SWISS COMPANIES

BROKER MOVES

SCANDINAVIA

Husqvarna (HUSQB SS) - Q1 (SEK): Sales 17.2bln (exp. 15.9bln), adj. EBIT 2.4bln. (Newswires)

Nokia (NOKIA FH) - Q1 (EUR): Sales 5.859bln (exp. 5.72bln), adj. EPS 0.06 (exp. 0.07), EBIT 426mln (exp. 532mln). FY23 guidance unchanged in CC. Co. sees FY adj. net sales between 24.6-26.2bln (exp. 25.67bln). Co. expects H2 profitability will be stronger than H1. CEO said "Looking forward, we are starting to see some signs of the economic environment impacting customer spending. Given the ongoing need to invest in 5G and fiber, we see this primarily as a question of timing". (GlobeNewswire)

Volvo AB (VOLVB SS) - Q1 (SEK): Revenue 131.4bln (exp. 122bln), adj. EBIT 18.4bln (prelim. 18.4bln). Despite a deteriorating economic outlook, transport volumes and infrastructure activity remain solid in most markets, contributing to good demand. With the exception of China, activity within the construction industry has continued to be good for most markets; sees 2023 China construction equipment market at -15% to -5%. (Newswires)

BROKER MOVES

US

CLOSES: SPX -0.01% at 4,152, NDX -0.02% at 13,089, DJIA -0.23% at 33,897, RUT -0.23% at 33,897

SECTORS: Communication Services -0.72%, Materials -0.31%, Energy -0.25%, Technology -0.13%, Industrials -0.07%, Consumer Staples -0.05%, Consumer Discretionary +0.02%, Financials +0.26%, Health +0.28%, Real Estate +0.55%, Utilities +0.78%.

Alphabet (GOOGL) - Google is to deploy generative A.I. to create sophisticated ad campaigns, according to FT. (FT)

Apple (AAPL) - Indian Deputy IT Minister said after the meeting with Apple CEO that Apple-India partnership has lots of headroom for investments, growth, exports and jobs - doubling and tripling over the coming years. (Newswires)

International Business Machines Corp (IBM) - Q1 2023 (USD): EPS 1.36 (exp. 1.26), Revenue 14.25bln (exp. 14.35bln). Software revenue USD 5.92bln, +2.6% y/y (exp. USD 5.76bln). Consulting segment revenue USD 4.96bln, +2.8% y/y (exp. USD 5.01bln). Infrastructure revenue USD 3.10bln, -3.8% y/y (exp. USD 3.26bln). Financing revenue USD 196mln, +27% y/y (exp. USD 160.2mln). Adjusted gross margin 53.7% vs. 52.9% y/y (exp. 53%). Free cash flow USD 1.34bln, +8.1% y/y (exp. USD 2.18bln). Guidance: still sees free cash flow about USD 10.5bln (exp. 10.28bln), and sees FY constant currency revenue growth of 3%-5%; saw growth consistent with its mid-single digit model. (IBM IR) Shares rose 1.7% after market

Tesla (TSLA) - Q1 2023 (USD): Adj. EPS 0.85 (exp. 0.85), Revenue 23.33bln (exp. 23.29bln), FCF 441mln (exp. 3.24bln), Gross Margin 19.3% (exp. 21.2%), CapEx 2.07bln (exp. 1.76bln). Still sees FY production 1.80mln vehicles (exp. 1.84mln). Tesla did not release its automotive margins figures. Tesla said it continues to believe that its operating margin will remain among the highest in the industry. Co. expects to remain ahead of the long-term 50% CAGR on production. Quarter-end cash, cash equivalents and investments increased sequentially by USD 217mln to 22.4bln in Q1. Q1 profitability was positively impacted by growth in vehicle deliveries despite margin headwind from under-utilisation of new factories. Over time, Co. expects hardware-related profits to be accompanied with an acceleration of software-related profits. EARNINGS CALL: CEO Musk said current macroeconomic environment remains uncertain, and has taken a view that pushing for higher volumes and a larger fleet is the right choice here vs lower volume and higher margins. He anticipates to have a delivery event for Cybertruck probably in Q3, and expects stationary storage growth to significantly exceed vehicle growth. Tesla continues to make significant purchases of Nvidia (NVDA) GPUs. He is hoping to achieve mid-20% gross margins for energy storage business this year, and the Co. achieved a 25% reduction in cost of goods sold in Q1. Musk said Tesla is still at maximum of pain for commodities in its cost structure, but lithium prices have dropped a lot. Musk said orders are in excess of production, and thinks they can do full self-driving this year. (Tesla/Newswires) Shares fell 6.1% after market

20 Apr 2023 - 06:46- Research Sheet- Source: Newsquawk