Newsquawk Daily European Equity Opening News - 24th January 2024

24th January 2024

ASIA

APAC stocks traded mixed following a similar lead from the US with participants digesting earnings, recent hawkish BoJ comments and Chinese support pledges ahead of this week's risk events.ASX 200 lacked direction as gains in the commodity-related sectors were offset by losses in financials, tech and defensives. Nikkei 225 was pressured amid the upside in Japanese yields and a more hawkish tone from BoJ Governor Ueda. Hang Seng and Shanghai Comp were somewhat mixed with outperformance in Hong Kong following the slew of recent support pledges by Chinese authorities, while the mainland was choppy and briefly wiped out its earlier gains after the PBoC continued to drain liquidity through OMOs, but then staged a mild comeback later in the session.

Chinese Stocks - PBoC leaders will hold a press conference on Wednesday at 07:00GMT/02:00EST to introduce the implementation of the CEWC decisions and financial support for the real economy. Timely support from state-backed funds is the most efficient way to stabilise China’s stock market and boost investor confidence in the short-term, according to a front-page report in Chinese press citing analysts. (Securities Daily)

EUROPEAN CLOSES

CLOSES: DAX -0.34% at 16,627.09, FTSE 100 -0.03% at 7,485.73, CAC 40 -0.34% at 7,388.04, Euro Stoxx 50 -0.31% at 4,466.35, IBEX 35 -1.09% at 9,859.20, FTSE MIB -0.35% at 30,077.46, SMI -1.16% at 11,144.40.

SECTORS: Energy 0.73%, Consumer Disc 0.36%, Materials 0.31%, Telecoms -0.02%, IT -0.17%, Consumer Stpl -0.31%, Financials -0.40%, Industrials -0.45%, Utilities -0.81%, Healthcare -0.94%

FTSE 100

Rio Tinto (RIO LN) - Co. said it was informed that a plane on the way to its Diavik mine crashed near Fort Smith, Northwest Territories, Canada resulting in fatalities. (Newswires)

OTHER UK COMPANIES

BROKER MOVES

British Land (BLND LN) downgraded to Hold from Buy at Panmure Gordon

Crest Nicholson (CRST LN) downgraded to Hold from Add at Peel Hunt

Greggs (GRG LN) initiated with Hold at Numis

DAX

Deutsche Bank (DBK GY)/ Commerzbank (CBK GY) - Commerzbank (CBK GY) CEO said a merger with Deutsche Bank (DBK GY) is not a topic for and focus is on its own strategy programme. (Newswires)

SAP (SAP GY) – FY23 (EUR): Revenue 31.207bln (exp. 31.225bln), Non-IFRS Basic EPS 5.01 (exp. 5.20). Non-IFRS Operating profit 8.721bln (exp. 8.523bln). Cloud revenue up +20% Y/Y. Cloud revenue backlog +25% Y/Y. FCF -4% Y/Y. Q4 Revenue 8.47bln (exp. 8.35bln). Q4 Operating profit 2.51bln (exp. 2.53bln). GUIDANCE: Co. does not provide Q1 revenue guidance. Co. said the 2024 outlook anticipates accelerating cloud revenue growth. Co. sees FY24 cloud revenue between EUR 17-17.3bln (exp. 17.207bln). Sees FY24 cloud and software revenue 29.0-29.5bln (exp. 29.477bln). SAP adjusted FY25 guidance and now sees FY 25 Free cash flow of approximately EUR 8.0bln (prev. EUR 7.5bln). Co. reaffirms FY25 cloud revenue and total revenue guidance. (SAP) Separately, Co. plans a restructuring that will affect some 8,000 jobs as the Co. focuses on AI. (Newswires) SAP index weightings: Euro Stoxx 50: ~4.3% weighting, Stoxx 600: ~1.4%, DAX 40: ~10.5% (largest).

Siemens Energy (ENR GY) - Co. announced that preliminary Q1 '24 results were better than market expectations, with the outlook for FY24 left unchanged; Revenue EUR 7.65bln (exp. 7.36bln), +12.6%, Order intake EUR 15.38bln, +23.9%. Q1 profit before special items EUR +208mln (exp. -106mln). Still forecasts FY comp sales +3-7%. (Newswires/Siemens Energy )

OTHER GERMAN COMPANIES

Deutsche Lufthansa (LHA GY) - Italy Treasury said the Government is to move forward with plans to sell a stake in ITA airways to Lufthansa following the EU decision to open an in-depth probe of the deal. (Newswires)

BROKER MOVES

Siltronic (WAF GY) downgraded to Sell from Neutral at UBS

CAC

Airbus (AIR FP) - French Interior Minister said they are to purchase 42 new H145 helicopters. Separately, across 2023 Co. logged 410 helicopter gross orders, delivered 346. (Newswires)

Alstom (ALO FP) - Q3 (EUR): Revenue 4.33bln (exp. 4.38bln), Executing the deleveraging plan to maintain Investment Grade Rating. (Newswires)

OTHER FRENCH COMPANIES

BROKER MOVES

Thales (HO FP) resumed with Equal Weight at Morgan Stanley

PAN EUROPE

ASML (ASML NA) - Q4 (EUR) Revenue 7.237bln (exp. 6.906bln). Bookings 9.19bln (exp. 3.57bln). Net Income 2.048bln (exp. 1.868bln); Sees Q1 net sales between 5-5.5bln (exp. 6.23bln); "there are some positive signs" on semiconductor market recovery. OTHER METRICS: Gross Margin 51.4% (exp. 50.8%). 2023 dividend +5.2% Y/Y to EUR 6.10/shr. "In the fourth quarter, we did not purchase any shares under the current 2022-2025 share buyback program." GUIDANCE: Sees 2024 net sales to be similar to 2023 "in spite of the positive signs".Sees Q1 net sales between 5-5.5bln (exp. 6.23bln). Sees Q1 gross margin between 48-49%. Sees R&D costs of around EUR 1.070bln and SG&A costs of around EUR 300mln. COMMENTARY: "Although our customers are still not certain about the shape of the semiconductor market recovery this year, there are some positive signs." "Industry end-market inventory levels continue to improve and litho tool utilization levels are beginning to show improvement." "Our strong order intake in the fourth quarter clearly supports future demand." (ASML) CFO says "as the impact of export regulations will have on the 2024 sales, we believe that will be somewhere between 10% to 15% of the #hina system sales in 2023." ASML index weightings: Euro Stoxx 50: ~8% weighting. (largest). Stoxx 600: ~2.5% (third largest). AEX: ~15.3% (largest)

AB InBev (ABI BB) - Co. said it laid off workers on the US sales team on January 12th. (Newswires) The number was unspecified, according to Bloomberg

Chip Names - Texas Instruments Inc (TXN) shares fell 4.5% after-hours following a revenue miss and weak Q1 guidance.

Telecom Italia (TIT IM) - Vivendi (VIV FP) is reportedly asking the EU regulator to look at the involvement of the Italian Treasury in the planned purchase of network assets, via Reuters citing sources. (Newswires)

BROKER MOVES

Stellantis (STLAM IM/ STLAP FP) downgraded to Hold from Buy at HSBC

SMI

Barry Callebaut (BARN SW) - Q1 (CHF): Revenue 2.2bln (exp. 2.17bln), driven by cost-plus pricing and mix. Sales volume 580.9k/T, Chocolate business +0.7%. Significantly strengthened balance sheet and optimised liquidity position via additional financing sources. Confirms FY23/24 guidance of flat volume and EBIT (exp 0.6bln) on a recurring basis. (Newswires)

UBS (UBSG SW) - Co. has made alterations to the executive board: Aleksander Ivanovic was appointed Asset Management president, and Harford retires. As of March 1st. (Newswires)

OTHER SWISS COMPANIES

BROKER MOVES

Kuehne + Nagel (KNIN SW) downgraded to Reduce from Hold at HSBC

Richemont (CFR SW) downgraded to Outperform from Buy at CLSA

SCANDINAVIA

Gjensidige (GJF NO) - Q4 (NOK): Net 1.11bln (prev. 1.32bln Y/Y), Insurance Rev 9.39bln (prev. 8.32bln Y/Y). (Newswires)

Nokia (NOKIA FH) - Announces collaboration with T-Mobile for 5G tech. (Newswires)

Swedbank (SWEDA SS) - Q4 (SEK): Net 8.32bln (exp. 7.95bln), NII 13.3bln (exp. 13bln), Raises dividend to 15.15/shr (prev. 9.75/shr). CEO said margin pressure on mortgages continues. (Newswires)

BROKER MOVES

Kindred (KIND SS) downgraded to Hold from Buy at Berenberg

US

CLOSES: SPX +0.29% at 4,864, NDX +0.43% at 17,404, DJIA -0.25% at 37,905, RUT -0.36% at 1,976.

SECTORS: Consumer Staples +1.08%, Communication Services +1%, Technology +0.45%, Energy +0.34%, Materials +0.32%, Utilities +0.23%, Financials +0.14%, Health -0.05%, Industrials -0.06%, Consumer Discretionary -0.14%, Real Estate -0.51%.

Apple (AAPL) - Co. reportedly now plans car for 2028 with less ambitious autonomy goals, according to Bloomberg. Looks to finally complete the car after a decade in the works. Apple car release date slips to 2028 from the previous 2026 target. Apple aiming to make cars with level 2+ automation, down from 4. (Bloomberg)

eBay (EBAY) - Co. is reportedly to cut around 1,000 jobs which is about 9% of its workforce. (Newswires)

Netflix Inc (NFLX) - Q4 2023 (USD): EPS 2.11 (exp. 2.22), Revenue 8.83bln (exp. 8.71bln), Streaming paid net change +13.12mln (exp. +8.91mln). Sees Q1 paid net additions to be down sequentially but to be up from Q1 23 net paid additions of 1.8mln. Sees Q1 EPS USD 4.49 (exp. 4.09). Sees Q1 revenue USD 9.24bln (exp. 9.28bln). FY24 forecasts. Sees 2024 double-digit revenue growth ex-FX. Sees free cash flow of about USD 6bln (exp. 6.03bln). Sees operating margin 24% (exp. 22.7%). "In FY24, we expect a high single-digit percentage year over year increase in content amortization". Continues to expect 2024 cash spend on content of up to USD 17bln. (Netflix IR) Shares rose 8.7% after-hours on strong net additions with soft EPS offset by strong Q1 EPS guidance.****Steel Dynamics Inc (STLD) - Q4 2023 (USD): Diluted EPS 2.61 (exp. 2.66), Revenue 4.23bln (exp. 4.14bln). Plan to commission flat rolled steel coating lines during Q1 '24. Still, plan to start commissioning of aluminium flat rolled mill mid-2025. Shares had initially rallied in after-hours trading following sales above expectations, however, they turned negative on an adjusted profit miss. Exec added that steel pricing has firmed, customer order entry activity continues to be solid, demand continues to be steady, and customer inventories remain historically low. The company plans to commission flat rolled steel coating lines during Q1 and still plans to start commissioning aluminium flat rolled mill in mid-2025. (Steel Dynamics) Shares fell 1% after-market

Tesla (TSLA) - Co. reportedly wants to launch production of a new small electric crossover vehicle in mid-2025, according to Reuters sources. (Newswires)

Texas Instruments Inc (TXN) Q4 2023 (USD): EPS 1.49 (exp. 1.46), Revenue 4.08bln (exp. 4.12bln). GUIDANCE: Q1 revenue view 3.45-3.75bln (exp. 4.09bln). Q1 EPS view 0.96-1.16 (exp. 1.42) COMMENTARY: Sequential decline in automotive and increasing weakness across industrial. (Texas Instruments) Shares fell 4.5% after hours following a revenue miss and weak Q1 guidance.

24 Jan 2024 - 06:51- Research Sheet- Source: Newsquawk