Newsquawk Daily European Equity Opening News - 21st February 2024

21st February 2024

ASIA

APAC stocks traded mixed with headwinds following the tech-led declines stateside ahead of Nvidia earnings and FOMC Minutes. ASX 200 was dragged lower by consumer stocks and miners in another busy day of earnings. Nikkei 225 continued its gradual pullback from near-record levels but remained above the 38,000 level.Hang Seng and Shanghai Comp. shrugged off early weakness with outperformance in Hong Kong driven by strength in property and tech, while the mainland also recovered its initial losses and more following recent stability efforts by Chinese authorities.

EUROPEAN CLOSES

CLOSES: DAX: -0.14% at 17,068.43, FTSE 100: -0.12% at 7,719.21, CAC 40: +0.34% at 7,795.22, Euro Stoxx 50: -0.07% at 4,759.75, IBEX 35: +0.94% at 10,038.20, FTSE MIB: +0.08% at 31,701.48, SMI: +0.51% at 11,456.96.

SECTORS: Utilities 1.08%, Financials 0.63%, Consumer Stpl 0.49%, Materials 0.48%, Telecoms 0.25%, Industrials -0.01%, Consumer Disc -0.17%, Healthcare -0.64%, Energy -1.19%, IT -1.82%

FTSE 100

FTSE Reshuffle, Indicative Review – FTSE 100: easyJet (EZJ LN) added and Endeavour Mining (EDV LN) removed. FTSE 250: Endeavour Mining (EDV LN), Kier Group (KIE LN) & Wincanton (WIN LN) added while easyJet (EZJ LN), Octopus (ORIT LN) and Tritax (BBOX LN) have been removed. (LSEG) The actual review of the FTSE UK Index Series will be conducted using data as at market close on Tuesday 27th February 2024. Confirmed rebalance changes will be announced after market close on Wednesday 28th February 2024.

HSBC (5 HK / HSBA LN) - FY23 (USD): Revenue 66.06bln (exp. 66.69bln). Pretax profit 30.35bln (exp. 34.12bln). Announces up to USD 2bln in share buybacks and a fourth interim dividend of USD 0.31/shr. Co. says the outlook for loan growth remains cautious for H1. OTHER METRICS: CET1 ratio 14.8% (exp. 14.5%). NIM 1.66% (prev. 1.42% Y/Y). Cost efficiency ratio 48.5% (prev. 64.6% Y/Y). OUTLOOK: Sees ROTE in the mid-teens for 2024. Expect banking NII Of At Least USD 41bln For 2024. The dividend payout ratio target remains at 50% for 2024, excluding material notable items and related impacts. Targeting cost growth of approximately 5% for 2024 compared with 2023. Co. took a USD 3bln charge on its holding in Bank of Communications Co. and USD 2bln on its French sale. CEO warned the macro environment remains “challenging”. (Newswires/Bloomberg). Index Weightings: FTSE 100 (6.4%, third largest), Stoxx 600 (1.4%), Hang Seng (8.6%, largest) Shares fell 3.5% in Hong Kong trade.

Rio Tinto (RIO AT / RIO LN) - FY23 (USD): Adj. EPS 7.25 (exp. 7.27). Underlying Profit 11.8bln (exp. 11.7bln). Revenue 54.04bln (exp. 53.94bln). Net Income 10.6bln (exp. 11.15bln). Underlying EBITDA 23.90bln (exp. 23.85bln). Co. said cost pressures and weaker market demand lowered underlying EBITDA by USD 1.0bln. Output guidance is consistent with the Q4 operation review. Co. announced a 2023 ordinary dividend per share of USD 4.35. In 2024, 2025 and 2026 share of capital investment is expected to be up to USD 10.0bln per year. Co. continues to see strong demand for our portside product in China for Pilbara operations. The board expects total cash returns to shareholders over the longer term to be in a range of 40% to 60% of underlying earnings. The board expects Co. to be in a position to pay fully franked dividends for the foreseeable future. (Newswires) Index Weightings: FTSE 100 (3.3%), Stoxx 600 (0.7%), ASX 200 (2.2%)

OTHER UK COMPANIES

BROKER MOVES

Currys (CURY LN) upgraded to Buy from Hold at HSBC

Plus500 (PLUS LN) downgraded to Neutral from Outperform at Autonomous Research

DAX

Fresenius (FRE GY) - Q4 (EUR): Adj. Net 397mln (exp. 416mln, prev. 445mln Y/Y), EBIT 634mln (exp. 592mln, prev. 559mln Y/Y), Revenue 5.68bln (exp. 5.82bln, prev. 5.67bln Y/Y). Guides FY23 EBIT +4-8%, Organic Revenue growth +3-6%. (Newswires)

Symrise (SY1 GY) - IFF (IFF) Q4 (USD): Revenue 2.7bln (exp. 2.69bln), adj. EBITDA 461mln (exp. 452mln), EPS 0.72 (exp. 0.75). FY24 Guidance: Sales 10.8-11.1bln, adj. EBITDA 1.9-2.1bln. (Newswires) Symrise lower by 1.4% in pre-market trade, traders cited by Reuters reference IFF earnings.

OTHER GERMAN COMPANIES

Telefonica Deutschland (O2D GY) - FY23 (EUR): Revenue 8.61bln (exp. 8.53bln), OIBDA 2.617bln (exp. 2.59bln), Dividend 0.18/shr (exp. 0.178/shr). Co. “successful over-achieved FY23 outlook”. FY24 Guidance: Revenue slightly positive Y/Y, EBITDA low-to-mid single digit % growth. (Newswires)

BROKER MOVES

Bilfinger (GBF GY) upgraded to Buy from Hold at Kepler Cheuvreux

CAC

Airbus (AIR FP) - Says Breeze Airways discloses order for 10 additional A220 aircrafts. (Newswires)

Carrefour (CA FP) - FY23 (EUR): Adj. Net 1.3bln (prev. 1.2bln Y/Y), Sales 94.13bln (prev. 90.81bln Y/Y). Raises dividend by 55% to 0.87/shr and launches new 700mln share buyback programme. CFO says the retailer plans to keep cutting prices this year in France to be more competitive; the Red Sea crisis has caused delays of one-to-two weeks on products coming from Asia to Europe and increased transport costs. Plans to absorb increased transport costs rather than passing them on to consumers. Price negotiations with PepsiCo (PEP) are still not resolved. The retailer has not seen an impact on sales since pulling PepsiCo products on January 4th. CEO is confident the retailer will reach the target of private label delivering 40% of food sales by 2026. (Newswires)

Danone (BN FP) - Plans to sell Russian operations to a Chechnya-linked businessman, according to FT. (FT)

EssilorLuxottica (EL FP) - Extends Michael Kors licensing partnership for five years, terms not disclosed. (Newswires)

Orange (ORA FP) - And Masmovil JV has been approved by the European Commission. (Newswires)

OTHER FRENCH COMPANIES

Saint Gobain (SGO FP) - Co. is said to be considering purchasing rival CSR (CSR AT), according to Bloomberg sources. The two firms reportedly held talks and are said to be working towards a deal. A deal size was not mentioned in the article, whilst CSR shares hit a market value of USD 2.5bln overnight. (Bloomberg)

Technip Energies (TE FP) – Invests in United Airlines ventures sustainable flight fund, no terms disclosed. (Newswires)

BROKER MOVES

Nexans (NEX FP) upgraded to Outperform from Neutral at Oddo

Valeo (FR FP) initiated with Hold at DBS Vickers

PAN EUROPE

Aedifica (AED BB) - FY23 (EUR): EPS 5.02 (exp. 4.93), Rental Revenue 314mln (exp. 314mln). Guides initial FY24 ERPA EPS 4.70/shr. (Newswires)

JDE Peet's (JDEP NA) - FY23 (EUR): Adj. EPS 1.51 (exp. 1.91), Underlying Net 734mln (exp. 822mln), Adj. EBIT 1.13bln (exp. 1.14bln), Revenue 8.19bln (exp. 8.22bln). Guides initial FY24 Organic Sales "lower end of medium-term 3-5%", adj. EBIT "mid-single-digit organic growth", and dividend "stable". (Newswires)

Stellantis (STLAM IM/STALP FP) – CEO says no talks are underway with rivals regarding mergers or significant EV collaboration. Adds, consolidation within the sector is necessary to compete against China. (Newswires) Follows recent reports in BBG that Volkswagen (VOW3 GY), Renault (RNO FP) & Stellantis are considering tie-ups with competitors, among other points, to become more competitive. CEO said Co. is taking a more “segmented” approach in the US market with a variety of battery-powered pickup trucks, SUVs and muscle cars. (Bloomberg)

Universal Music Group (UMG NA) - Acquires a minority stake in Chord Music Partner, deal values Chord at USD 1.85bln. UMG will own 25.8% of the unit once the transaction concludes. (Newswires)

Wienerberger (WIE AV) - FY23 (EUR): Adj. EBITDA 811mln (exp. 812mln), Revenue 4.2bln (exp. 4.31bln). Guides initial FY24 adj. EBITDA 860-890mln. (Newswires)

BROKER MOVES

Acciona Energias (ANE SM) downgraded to Reduce from Hold at HSBC

Enagas (ENG SM) upgraded to Hold from Sell at Deutsche Bank

SMI

OTHER SWISS COMPANIES

Lindt & Sprüngli (LISN SW) - Hershey Co (HSY) on cocoa prices, said it remains committed to pricing to cover inflation (Cagny conference). Mondelez (MDLZ) Exec, on cocoa prices in Europe, says given the current situation, the price is likely to rise; going forward Co. will probably price less but will take costs out. (Newswires)

BROKER MOVES

SCANDINAVIA

FLSmidth (FLS DC) - Q4 (DKK): EBITA 549mln (exp. 735mln, prev. 205mln Y/Y), Revenue 5.97bln (exp. 5.84bln, prev. 6bln Y/Y), Exit from the non-core activities segment continuing at an accelerated pace. Affirms FY24 guidance. FY24 Revenue 20-21.5bln, adj. EBITA margin 9-10%. (Newswires)

Nokia (NOK FH) - To cut around 250 jobs in India, according to Economic Times. (Economic Times)

NKT (NKT DC) – Q4 (EUR): EBITDA 63.2mln (prev. 39.7mln Y/Y), Revenue 536mln (prev. 389mln Y/Y). Guides initial FY24 operational EBITDA 285-335mln, adj. Revenue 2.21-2.36bln. (Newswires)

Volvo AB (VOLVA SS) - Says Chairman Svanberg will not stand for re-election. (Newswires)

BROKER MOVES

Coloplast (COLOB DC) downgraded to Hold from Buy at Berenberg

Castellum (CAST SS) downgraded to Hold from Buy at Pareto Securities

Maersk (MARSKB DC) initiated with Underperform at Bernstein

Saab (SAABB SS) initiated with Buy at Pareto Securities

US

CLOSES: SPX -0.60% at 4,975, NDX -0.79% at 17,546, DJIA -0.17% at 38,563, RUT -1.41% at 2,004.

SECTORS: Technology -1.27%, Consumer Discretionary -1%, Energy -0.95%, Health -0.4%, Financials -0.37%, Industrials -0.35%, Materials -0.22%, Real Estate -0.18%, Utilities -0.13%, Communication Services -0.11%, Consumer Staples +1.13%.

Chesapeake Energy (CHK) - Cuts prior capital expenditure guidance approximately 20% to USD 1.25-1.35bln through rig count reductions and deferring completions and turn-in-lines. (Newswires)

Citigroup (C) - CFO Mason says expecting consumer spending growth to slow; demand improving for M&A and debt capital markets; client sentiment is "cautiously optimistic" - BofA conference. Well positioned to capture market share in investment banking as rebound happens. Sees good activity in equities and across FICC.Expecting continued loan growth, particularly in credit cards. Expense guidance includes USD 700mln-1bln in reorganisation and severance. Making good progress on Banamex separation; expects 20-25% in the first tranche of Banamex IPO. Credit card losses continue to normalise; expect losses to trend up. The retail banking business is a drag on the Co.'s returns. (Newswires)

Kroger (KR) - FTC and states are poised to sue over Kroger (KR) and Albertsons (ACI) deal next week, according to Bloomberg; FTC suit expected before Feb. 28th, when timing agreement expires. (Newswires)

Index movements - S&P Dow Jones Indices says Amazon (AMZN) is set to join the Dow Jones Industrial Average and Uber (UBER) will join the Dow Jones Transportation Average, while Walgreens Boots Alliance (WBA) will leave the DJIA. (Newswires)

Occidental Petroleum (OXY) - Is exploring a sale of Western Midstream Partners (WES), which it has a 49% stake in, at a market value of "more than" USD 18bln, according to Reuters sources. (Reuters)

21 Feb 2024 - 06:56- EnergyResearch Sheet- Source: Newsquawk