Newsquawk Daily European Equity Opening News - 25th January 2024

25th January 2024

ASIA

APAC stocks were mostly positive but with gains capped as markets digested a slew of earnings releases and with the recent upside in global yields partially offsetting the Chinese stimulus euphoria. ASX 200 notched mild gains as strength in the commodity-related sectors picked up the slack in the rate-sensitive industries. Nikkei 225 eventually turned positive but lagged behind regional peers and briefly dipped below the 36,000 level. Hang Seng and Shanghai Comp were boosted with outperformance in the latter as mainland participants took their first opportunity to react to the latest support measures by China including the 50bps RRR cut which will release CNY 1tln of funds.

CITIC Securities (6030 HK) - FY23 (AUD) net 19.bln (prev. 21.3bln Y/Y), rev. 60.0bln (prev. 65.1bln Y/Y). (Newswires)

China's smartphone - Market shipments in Q4 rose 1.2% to 73.63mln units, while China smartphone market shipments in 2023 fell 5% to 271mln units, according to IDC. (IDC)

Kia (000270 KS) Q4 (KRW) net 1.62tln (exp. 2.16tln), oper. profit fell 6% Y/Y to 2.5tln, rev. 24.3tln (exp. 25.3tln)

Hyundai Motor (005380 KS) - Q4 (KRW) net 2.2tln (exp. 2.9tln), oper. profit 3.4tln (exp. 3.8tln), rev. 41.7tln (exp. 41.6tln). (Newswires)

SK Hynix (000660 KS) - Q4 (KRW) net -1.4tln (exp. -377bln), oper. 346bln (exp. -192bln), rev. 11.3tln (exp. 10.4tln). Plans Q1 DRAM shipments decrease by mid-teens% Q/Q. Plans Q1 NAND shipments increase by mid-single% Q/Q.Says it plans to remain conservative in H1 production this year until inventory normalisation which is expected in H1 for DRAM and H2 for NAND. (Newswires)

EUROPEAN CLOSES

CLOSES: DAX: +1.58% at 16,889.92, FTSE 100 +0.56% at 7,527.67, CAC 40 +0.91% at 7,455.64, Euro Stoxx 50 +2.17% at 4,562.85, IBEX 35 +1.16% at 9,974.00, FTSE MIB +0.87% at 30,338.35, SMI +0.41% at 11,194.50.

SECTORS: IT 5.74%, Materials 1.50%, Consumer Disc 1.15%, Financials 1.11%, Industrials 1.09%, Energy 0.67%, Healthcare 0.40%, Telecoms 0.28%, Utilities 0.27%, Consumer Stpl 0.12%

FTSE 100

IAG (IAG LN) - EU antitrust regulators open in-depth investigation into IAG's bid to buy out Air Europa; Deal may reduce competition on domestic routes to Balearic and Canary Islands. IAG is ready to offer remedies. EU regulators are to decide on the deal by June 7th. The deal may also reduce competition on short-haul routes between Madrid and the main EU cities, Israel, Morocco, the UK, and Switzerland. (Newswires)

OTHER UK COMPANIES

Drax (DRX LN) – Co. is reportedly planning to expand its US presence with investments of tens of millions of pounds over the next two years in a bid to benefit from US President Biden’s green tax incentives. Co. is planning to base a HQ in Houston, Texas, for its bioenergy operations. (Times)

BROKER MOVES

DAX

Volkswagen (VOW3 GY) - The Mexican union at Audi unit began strike action on Wednesday after failing to come to an agreement for a new contract, according to Reuters. (Reuters)

OTHER GERMAN COMPANIES

BROKER MOVES

CAC

Airbus (AIR FP) - Launched its first global aircraft recycling project within China, a total investment of CNY 6bln. (Newswires)

Carrefour (CA FP) - Entered into exclusive talks with Groupe Intermache to acquire 31 stores, the value of the acquisition is immaterial. (Newswires)

Publicis (PUB FP) - Q4 (EUR): Revenue 3.54bln (exp. 3.25bln). FY: Revenue 13.10bln (exp. 13.49bln), Organic Growth +6.3% (vs guided. +5.5-6%). AI strategy: plans to invest 300mln over the next three years, investment of 100mln in 2024 to be fully funded by efficiencies. (Newswires)

STMicroelectronics (STM FP) - Q4 (USD): Revenue 4.28bln (exp. 4.31bln), Net 1.08bln (exp. 0.9bln), EPS 1.14 (exp. 0.95), Operating Income 1.02bln (exp. 1.04bln). OTHER METRICS: Intend to invest circa. 2.5bln in net CapEx during 2024. Q1 GUIDANCE: Revenue 3.6bln (exp. 4.06bln). Gross Margin 42.3%. COMMENTARY: “In Q4, our customer order bookings decreased compared to Q3. We continued to see stable end-demand in Automotive, no significant increase in Personal Electronics, and further deterioration in Industrial.” "In Q4, ST delivered revenues and gross margin slightly below the mid-point of the guidance, with higher revenues in Personal Electronics offset by a softer growth rate in Automotive.” (STMicroelectronics/Newswires)

OTHER FRENCH COMPANIES

Getlink (GETP FP) - FY (EUR): Revenue 1.83bln (exp. 1.83bln), +14% Y/Y. Eurotunnel Revenue 1.121bln, +8%; Eleclink Revenue 558mln. Q4: LeShuttle traffic remained stable. (Newswires)

BROKER MOVES

PAN EUROPE

Auto Names - Tesla (TSLA) shares fell 5.9% after missing on EPS and Revenue expectations, whilst suggesting 2024 vehicle volume growth may be notably lower than 2023.

Banking Names - Fed announced the Bank Term Funding Program will cease making new loans as scheduled on March 11th and it adjusted the interest rate on the emergency loan program to prevent arbitrage. (Newswires)

SNAM (SRG IM) - Issues 2027 plan: Guides CAGR for Adj. Net Income at 4%. (Newswires)

Supply chains - Europe is set to agree on supply chain emergency powers next week, according to a key EU lawmaker; agreement is likely on the requirement for companies to prioritise production of key products during a supply chain crisis. (Newswires)

Stellantis (STLAM IM/STALP FP) - To cut 600 interim jobs at the Mulhouse plant in eastern France, citing the geopolitical situation and EV price war. (Newswires)

Tod's (TOD IM) - FY23 (EUR): Sales 1.13bln (exp. 1.12bln). The strong performance of Tod's group in 2023, at constant rates: RV +19.4%, Leather goods and accessories +19.8% Y/Y, Tod's +12.8% Y/Y. "The retail channel, which represents approx. 75% of the Group's turnover, recorded solid double-digit growth." (Newswires)

BROKER MOVES

ASML (ASML NA) reiterated with Buy at Argus

ASML (ASML NA) reiterated with Overweight at Wells Fargo

Buzzi Unicem (BZU IMI) upgraded to Buy from Hold at Berenberg

Brembo (BRE IM) initiated with Buy at Berenberg

SMI

Givaudan (GIVN SW) - FY23 (CHF): Net 893mln +4% Y/Y, EBITDA 1.47bln (exp. 1.49bln), Revenue 6.92bln (exp. 6.91bln). (Newswires)

OTHER SWISS COMPANIES

BROKER MOVES

SCANDINAVIA

Essity (ESSITYB SS) - FY (SEK): Sales 147.1bln (exp. 162.25bln), Net 9.5bln (exp. 12.2bln), adj. EPS 17.56 (exp. 17.77). Proposes a dividend increase to 7.75/shr (exp. 7.65/shr). (Newswires)

Billerud (BILL SS) - Q4 (SEK): Net -330mln, +990mln Y/Y, Revenue 9.57bln (exp. 9.85bln). (Newswires)

Nokia (NOKIA FH) - Q4 (EUR): Revenue 5.71bln (exp. 6.10bln), EPS 0.10 (exp. 0.13), Adj. EBIT 846mln (exp. 767.5mln), initiates a 2-year EUR 600mln share repurchase program; raises dividend to EUR 0.13/shr (prev. 0.12/shr). COMMENTARY: "In Q4 the environment remained challenging however there are now signs of stabilization with improving order trends.". "Nokia expects Q1 net sales in its networks businesses (consisting of Network Infrastructure, Mobile Networks and Cloud and Network Services) to show an approximately normal seasonal decline sequentially." GUIDANCE: Sees FY comparable operating profit between EUR 2.3-2.9bln (exp. 2.449bln). "Company decided to lower its comparable operating margin target to be achieved by 2026 from the prior at least 14% to at least 13%." "Nokia still sees a path to achieving the at least 14% comparable operating margin target but considering the current market conditions in Mobile Networks, this was deemed a prudent change". (Nokia/Newswires)

Orsted (ORSTED DC) - To acquire full ownership of Sunrise Wind subject to award in New York, no terms disclosed. (Newswires)

SEB (SEBA SS) - Q4 (SEK): Net 8.37bln (exp. 8.87bln), Op. 11.3bln (exp. 11.2bln), NII 12.1bln (exp. 12.2bln). Special Dividend SEK 3/shr. Launches new SEK 1.75bln share buyback programme. (Newswires)

Tryg (TRYG DC) - Q4 (DKK): Pretax 1.39bln (exp. 1.45bln), Insurance Service Result 1.65bln (prev. 1.47bln Y/Y). Affirms 2024 targets. (Newswires)

BROKER MOVES

US

CLOSES: SPX +0.08% at 4,868, NDX +0.55% at 17,499, DJIA -0.26% at 37,806, RUT -0.73% at 1,961.

SECTORS: Energy +1.43%, Communication Services +1.17%, Technology +0.77%, Financials +0.46%, Consumer Discretionary -0.24%, Industrials -0.64%, Health -0.91%, Consumer Staples -1.23%, Real Estate -1.36%, Utilities -1.38%, Materials -1.4%.

Energy - The White House reportedly delaying a decision on the enormous natural gas export terminal, according to the New York Times; before deciding whether to approve it, DoE will analyze the climate impacts of CP2, one of 17 proposed LNG export terminals. Biden admin is pausing a decision on whether to approve what would be the largest natural gas export terminal in the US, a delay that could stretch past the November election and spell trouble for that project and 16 other proposed terminals, via NYT. (NYT)

International Business Machines Corp (IBM) - Q4 2023 (USD): oper. EPS 3.87 (exp. 3.78), Revenue 17.4bln (exp. 17.3bln). Sees FY free cash flow of about USD 12bln (exp. 10.9bln). Sees FY constant currency revenue growth consistent with the company’s mid-single digit model. (Newswires) Shares +8.3% after-hours

Tesla Inc (TSLA) - Q4 2023 (USD): Adj. EPS 0.71 (exp. 0.74), Revenue 25.17bln (exp. 25.59bln); 2024 vehicle volume growth may be notably lower than 2023. KEY METRICS: Free cash flow 2.06bln (exp. .1.45bln). Gross margin 17.6% (exp. 18.1%). CapEx 2.31bln (exp. 2.32bln). COMMENTARY: Cybertruck production and deliveries ramp throughout the year. One-time non-cash tax benefit of USD 5.9bln recorded. CEO Musk says very far along with next-generation product development Co. is to first produce next-generation vehicles in Texas followed by Mexico, while Co. expects capital spending to exceed USD 10bln in 2024. Says: Will start production of next-generation vehicle towards end-2025. Will ramp up battery cell orders from suppliers. The production ramp-up of next-generation vehicles will be challenging.Wants 25% control of the company to be an effective steward of very powerful technology. A dual class of stock would be ideal. Co. has a chance of shipping some Optimus units next year. Chinese car companies will demolish rivals without trade barriers. (Tesla) Shares -5.9% after-hours

25 Jan 2024 - 06:49- Exclusive- Source: Newsquawk