Newsquawk Daily European Equity Opening News - 23rd April 2024

23rd April 2024

ASIA

APAC stocks traded with a mild positive bias after the tech-led rebound stateside. ASX 200 was led by strength in real estate and tech, while the latest flash PMIs from Australia were varied. Nikkei 225 traded indecisively and on both sides of 37,500 after briefly wiping out all of its opening gains. Hang Seng and Shanghai Comp. were mixed with outperformance in Hong Kong due to tech strength, while the mainland lagged amid the PBoC's continued tepid liquidity operations and with the US drafting sanctions that threaten to cut some Chinese banks off from the global financial system for aiding the Russian war effort.

Chinese Banks - The US is reportedly drafting sanctions that threaten to cut some Chinese banks off from the global financial system in an effort to stop Beijing's commercial support of Russia's military production, according to WSJ. (WSJ)

TSMC (2330 TT) - Co. said Taiwan experienced several earthquakes but none reached the Co.'s threshold for evacuating outdoors. (Newswires)

Westpac (WBC AT) - Co. said it reported net profit after tax in H1 will be reduced by AUD 164mln due to notable items, while it noted changes to enhance operating segment financial reporting, assessment including funds transfer pricing refinements and others. (Newswires)

Xiaomi (1810 HK) locked-in orders of more than 70k SU7 cars as of April 20th and it targets deliveries of more than 100k SU7 cars in 2024. (Newswires)

EUROPEAN CLOSES

CLOSES: DAX: +0.64% at 17,738.04, FTSE 100: +1.62% at 7,895.85, CAC 40: +0.22% at 8,007.45, Euro Stoxx 50: +0.39% at 4,913.05, IBEX 35: +1.50% at 10,783.90, FTSE MIB: -0.58% at 33,423.38, SMI: +0.28% at 11,256.20.

SECTORS: Telecoms 1.72%, Healthcare 1.51%, Energy 1.25%, Financials 0.93%, Utilities 0.43%, Consumer Stpl 0.36%, Consumer Disc 0.19%, Industrials 0.15%, Materials -0.07%, IT -0.28%

FTSE 100

BP (BP/ LN) - An Iraqi man has started legal action against BP over the death of his son, claiming the flaring at a BP-run oil field in Iraq caused his son's leukaemia, according to a letter seen by the BBC. "A BBC investigation in 2022 found that the village which lies within the field, had high levels of cancer-causing pollutants known to come from flaring." (BBC)

Rio Tinto (RIO LN) – Rio Tinto is among 30 firms that have submitted proposals to develop lithium extraction technology for a Chilean salt flat, according to Reuters. (Reuters)

UK Defence Names - UK PM Sunak is to announce a GBP 500mln military aid package to Ukraine. Around 400 vehicles, 60 boats, 1,600 strike and air defence missiles, and 4mln rounds of ammunition are included in the package. (Sky News/FT)

Vodafone (VOD LN) - Vodafone’s Indian business has raised USD 2.2bln via an equity issue - easing fear that the JV unit Vodafone Idea (IDEA IS) would collapse amid substantial debt. (FT)

OTHER UK COMPANIES

Drax (DRX LN) – Fitch affirmed Co. at BB+; outlook stable. (Newswires)

BROKER MOVES

Reckitt Benckiser (RKT LN) upgraded to Hold from Underperform at Jefferies

Rentokil (RTO LN) resumed with Neutral at JP Morgan

DAX

Bayer (BAYN GY) - The CEO said crop science and consumer health divisions expect a slow start to the year but feel confident in FY targets and the direction of its business. Co. expects declines in earnings before special items of 3-9% in 2024. Despite lower profitability, will make progress in improving its 2024 cash flow. Expects 2024 FCF to come in between EUR 2-3bln (exp. 3.12bln). Elsewhere, received US FDA NDA supplement 23 approval for Lotrimin Ultra. (Newswires)

SAP (SAP GY) - Q1 24 (EUR): Adj. EPS 0.81 (exp. 0.89), adj. revenue 8.04bln (exp. 8.03bln). Adj. cloud and software revenue EUR 6.96bln (exp. 6.93bln). Adj. cloud revenue EUR 3.93bln (exp. 3.94bln). Adj. cloud revenue in constant currencies +25% (exp. +24.5%). Adj. operating profit EUR 1.53bln (exp. 1.7bln). GUIDANCE: Cloud revenue view between 17.0-17.3bln (prev. 13.66bln in 2023). Cloud and software revenue view at EUR 29.0-29.5bln (prev. 26.92bln in 2023) Adj. Operating profit view EUR 7.6-7.9bln (prev. 6.51bln in 2023). Raises 2023 dividend 7% to EUR 2.20/shr vs 2022 dividend. (Newswires) SAP ADR (SAP) rose 2.1% in the US after-hours. Index Weightings: DAX 40 (10.9% - largest), Euro Stoxx 50 (5% - third largest), Stoxx 600 (1.3%).

OTHER GERMAN COMPANIES

Aixtron (AIXA GY) - Vishay selected Co. multiwafer batch tech. (Newswires)

Hypoport (HYQ GY) – Q1 (EUR): EBIT 4.3mln (prev. 0.8mln Y/Y), Revenue 107mln (prev. 94mln Y/Y). (Newswires)

BROKER MOVES

Brenntag (BNR GY) downgraded to Add from Buy at Baader Helvea

CAC

Renault (RNO FP) – Q1 (EUR): Revenue 11.71bln (exp. 11.7bln). Sales +2.6% Y/Y. Strong order book in Europe, reflecting a very good start to the year. Co. is progressing well toward its target of cost reduction to lower EV costs by 40%. The EV market is a bit slower than had expected a few years ago. Talks with Geely and Aramco on the ICE powertrain JV are at an advanced stage. (Newswires)

Sanofi (SAN FP) - Rilzabrutinib LUNA 3 phase 3 study met the primary endpoint in immune thrombocytopenia. (Newswires)

Pernod Ricard (RI FP) - Saint Marguerite en Provence signed an agreement to acquire Terres DE Ravel. (Newswires)

OTHER FRENCH COMPANIES

Covivo (COV FP) - Signed strategic partnership in Germany residential with CDC immobiliser. (Newswires)

BROKER MOVES

Legrand (LR FP) upgraded to Buy from Neutral at Goldman Sachs

STMicroelectronics (STM FP) upgraded to Buy from Hold at Berenberg

PAN EUROPE

Akzo Nobel (AKZA NA) – Q1 (EUR): EBIT 261mln (exp. 251mln), Adj EBITDA 363ln (exp. 348mln). Targets to deliver adj. EBITDA 1.5-1.65bln. (Newswires)

ArcelorMittal (MT NA)/Thyssenkrupp (TKA GY)/ Outokumpu (OUT1V FH) - Nucor Corp (NUE) shares fell 6.2% after earnings missed on the top and bottom line. Nucor expects earnings to decrease in Q2 vs Q1 due to decreased earnings in the steel mills segment. (Newswires)

Enagas (ENG SM) - Q1 (EUR): Net 65.3mln (exp. 58.3mln), Revenue 221mln (exp. 212mln). (Newswires)

Randstad (RAND NA) – Q1 (EUR): Adj. EBITA 177mln (exp. 181mln), Gross margin 20.2% (exp. 20.4%). Notes April volumes are stable compared to March. (Newswires)

Saipem (SPM IM) – Q1 (EUR): Net Income 57mln (exp. 82mln), Revenue 3.04bln (exp. 3.02bln), Adj. EBITDA 268mln (exp. 296mln). (Newswires)

Telecom Italia (TIT IM) – Vivendi (VIV FP) is to abstain from voting on Telecom Italia's BoD; does not support the board slate put forward by the outgoing board. (Newswires)

BROKER MOVES

SMI

Kuehne & Nagel (KNIN SW) – Q1 (CHF): Revenue 5.5bln (exp. 6.65bln), EBIT 376mln (exp. 331mln), -39% Y/Y. (Newswires)

Novartis (NOVN SW) - Q1 (USD): Revenue 11.8bln (exp. 11.5bln). Core EPS 1.80 (exp. 1.73); Raises FY24 Net Sales and Core Operating Income guidance. Strong sales momentum in Entresto (+36% cc), Cosentyx (+25% cc), Kesimpta (+66% cc), Kisqali (+54% cc), Pluvicto (+47% cc) and Leqvio (+139% cc). Free cash flow 2.0bln (-24%) - declined due to a prior-year one-timer and timing of payments. Novartis proposes Dr. Giovanni Caforio as Chair of the Board of Directors at AGM 2025. Index Weightings: SMI (15.9% - second largest), Stoxx 600 (2%). Net Sales are expected to grow high-single to low double-digit digits. Core operating income is expected to grow low double-digit to mid-teens. (Novartis/Newswires)

OTHER SWISS COMPANIES

BROKER MOVES

SCANDINAVIA

DNB (DNB NO) - Q1 (NOK): Net 9.79bln (exp. 9.40bln), Revenue 20.4bln (exp. 20.7bln). (Newswires)

EQT (EQT SS) – Board approved SEK 1bln repurchase plan. (Newswires)

BROKER MOVES

Getinge (GETIB SS) upgraded to Buy from Hold at Handelsbanken

Telenor (TEL NO) upgraded to Buy from Hold at Deutsche Bank

US

CLOSES: SPX +0.87% at 5,010, NDX +1.02% at 17,211, DJI +0.67% at 38,240, RUT +1.02% at 1,967

SECTORS: Technology +1.28%, Financials +1.20%, Utilities +0.96%, Consumer Staples +0.94%, Real Estate +0.77%, Industrials +0.75%, Consumer Discretionary +0.66%, Energy +0.65%, Communication Services +0.42%, Health +0.39%, Materials +0.10%.

Boeing (BA) - Co. said it expects a slower increase in the rate of the 787 production and deliveries due to supplier shortages on "a few key parts"; Boeing (BA) said it still plans to steadily increase its rate to meet strong demand. (Newswires)

Nucor Corp (NUE) Q1 2024 (USD): EPS 3.46 (exp. 3.66), Revenue 8.14bln (exp. 8.26bln). Expects earnings to decrease in Q2 vs Q1 due to decreased earnings in the steel mills segment. Average scrap and scrap substitute cost per gross ton USD 421 (exp. 399.58). Sales tons to outside customers 6.22mln (exp. 6.41mln). Shares fell 6.2% after-market.(Newswires)

23 Apr 2024 - 06:51- Research Sheet- Source: Newsquawk