Newsquawk Daily European Equity Opening News - 25th July 2023

25th July 2023

ASIA

APAC stocks traded mostly higher amid a rally in Chinese stocks after the Politburo’s support pledges, although gains for the rest of the region were capped after soft global PMIs and with some cautiousness heading into risk events. ASX 200 was positive with the index led by gains in the mining and energy sectors amid recent strength in underlying commodity prices owing to the Chinese stimulus hopes. Nikkei 225 lagged as speculation remained rife regarding this week’s BoJ meeting with source reports noting the central bank is to consider a large increase in its 2023 inflation outlook and could raise its forecast to around 2.5%. Hang Seng and Shanghai Comp were boosted with gains led by a surge in property and tech stocks after the Politburo’s support pledges which lifted the Hang Seng Tech Index by around 5%, while the Hang Seng Mainland Properties Index rose by a double-digit percentage from early on as the Politburo’s statement omitted the language that homes are not for speculation.

TSMC (2330 TT) - Co. plans to invest nearly TWD 90bln to build advanced chip testing and packaging facility in Taiwan's Miaoli. (Newswires)

EUROPEAN CLOSES

CLOSES: DAX 40 +0.08% at 16,191, FTSE 100 +0.19% at 7,679, CAC 40 -0.07% at 7,427, Euro Stoxx 50 -0.20% at 4,383, IBEX 35 -0.29% at 9,544, FTSE MIB +0.18% at 28,908, SMI -0.27% at 11,177.

SECTORS: Energy 1.54%, Telecoms 0.82%, Financials 0.50%, Materials 0.29%, Industrials 0.18%, Consumer Disc -0.13%, Consumer Stpl -0.22%, Utilities -0.29%, Healthcare -0.42%, IT -0.99%

FTSE 100

Airline Names - Gatwick Airport set to avoid strikes in peak summer travel season, announced by Unite union on Monday, according to the FT. (FT)

Shell (SHEL LN) - To sell its participating interest in Indonesia's Masela Block for up to USD 650mln. (Newswires)

TUI (TUI LN) - TUI has cancelled all flights to Rhodes up to Friday as wildfires continue on the Greek island. (Sky News)

OTHER UK COMPANIES

Unite Group (UTG LN) - H1 (GBP): Pretax Net 116.9mln (prev. 334.1mln YY), Rental Income 197mln (prev. 177.4mln YY). (Newswires)

BROKER MOVES

Auto Trader (AUTO LN) downgraded to Underweight from Neutral at JPMorgan Chase

DAX

Adidas (ADS GY) - Prelim Q2 2023 (EUR): Revenue 5.34bln (exp. 5.05bln), -5% Y/Y, Gross margin 50.9% (prev. 50.3% Y/Y), Operating profit 176mln (exp. loss 130.6mln, prev. 392mln Y/Y), Operating margin 3.3% (prev. 7.0% Y/Y). In Q2, currency-neutral revenues were flat Y/Y. COMMENTARY/GUIDANCE: Top and bottom line development was positively impacted by the first sale of some of its Yeezy inventory as announced at the end of May. Underlying Adidas business also developed slightly better than expected. Consequently, updated FY guidance and now expects currency-neutral revenues to decline at a mid-single-digit rate in 2023 (prev. decline at a high-single-digit rate). Underlying operating profit, excluding any one-offs related to Yeezy and the ongoing strategic review, is still anticipated to be around the break-even level. FY operating loss view 450mln (exp. loss 313.7mln, prev. loss 700m). (Newswires) Co. holds a 1.9% weighting in the DAX 40.

Bayer (BAYN GY) - Co. lowered its FY outlook; FY EPS view EUR 6.20-6.40 (exp. 6.95), sales view 48.5-49.5bln (prev. 51-52bln, exp. 49.74bln), EBITDA before special items 11.3-11.8bln (prev. 12.5-13bln, exp. 12.2bln). Q2 EBITDA ex-items seen about 2.5bln. Prelim Q2 sales about EUR 11bln (exp. 12.2bln). Commentary: The Bayer Group adjusted its full-year outlook for 2023 downward on Monday, mainly due to a significant further decline in sales of glyphosate-based products. (Bayer) Co. holds a 3.6% weighting in the DAX 40. NB1: this follows guidance reduction from several chemical names such as Evonik (EVK GY), Lanxess (LXS GY), and BASF (BAS GY). NB2: Dow Inc (DOW) are due to report today. Bayer shares seen opening -3.3%.

OTHER GERMAN COMPANIES

BROKER MOVES

Adidas (ADS GY) upgraded to Outperform from Neutral at BNP Paribas

Bayer (BAYN GY) reiterated with Neutral at JPMorgan Chase

CAC

Dassault Systems (DSY FP) - Q2 (EUR): EPS 0.28 (exp. 0.28), Revenue 1.45bln (exp. 1.44bln). Guides Q3 EPS 0.26-0.27, Revenue 1.40-1.42bln. Affirms FY23 EPS 1.18-1.20. (Newswires)

Thales (HO FP) - Is to purchase Imperva for USD 3.6bln enterprise value; Thales total cybersecurity business will generate more than EUR 2.4bln revenues. (Thales)

OTHER FRENCH COMPANIES

Edenred (EDEN FP) - H1 (EUR): Net 202mln (prev.170mln YY), EBITDA 484mln (prev. 922mln YY). Guides FY23 EBITDA 1.02-1.09bln (prev. 1.02bln) (Newswires)

BROKER MOVES

PAN EUROPE

Akzo Nobel (AKZA NA) - Q2 (EUR): adj. EBITDA 397mln (exp. 402.5mln), Revenue 2.74bln (exp. 2.85bln). Raises FY23 outlook, FY23 adj. EBITDA 1.40-1.55bln (prev. 1.2-1.5bln). Saw the first effects of raw material deflation. (Newswires)

Chip names - NXP Semiconductors (NXPI) shares rose 2.2% post-earnings as its adj. EPS, revenue, and guidance topped forecasts.

ArcelorMittal (MT NA)/Thyssenkrupp (TKA GY)/ Salzgitter (SZG GY)/ Voestalpine (VOW AV)/ SSAB (SSABA SS) - US steel producer Nucor (NUE) beat EPS and missed revenue expectations, whilst expecting earnings in Q3 of '23 to decrease vs Q2. Nucor expects earnings for steel mills segment to decline in Q3 Q/Q, earnings of steel products segment are expected to moderate in Q3 Q/Q, and earnings for raw materials segment are expected to decrease in Q3 Q/Q.

Enel (ENEL IM)/ ENI (ENI IM) - Cos are due to benefit from the partial transfer of European Union funds to the REPowerEU scheme, according to a study by DBRS. (Newswires)

Poste Italiane (PST IM) - Q2 (EUR): Net 601mln (prev. 469mln YY), EBIT 799mln (exp. 659mln), Revenue 3.0bln (exp. 2.9bln). (Newswires)

Randstad (RAND NA) - Q2 (EUR): EBITDA 271mln (prev. 308mln) , Revenue 6.47bln (exp. 6.51bln). Guides Q3 gross margin slightly lower QQ. (Newswires)

BROKER MOVES

KBC (KBC BB) upgraded to Buy from Hold at Deutsche Bank

Inditex (ITX SM) downgraded to Neutral from Outperform at BNP Paribas

Prysmian (PRY IM) reiterated with Overweight at JP Morgan Chase

SMI

Credit Suisse (CSGN SW)/UBS (UBSG SW) – Credit Suisse has been fined USD 388mln by the BoE for risk management failures related to the Archegos collapse, according to Bloomberg. (Newswires)

Lindt & Sprüngli (LISN SW) - H1 (CHF): Net 205mln (prev. 138mln YY), EBIT 255mln (prev. 185mln YY), Revenue 2.09bln (prev. 1.99bln YY). Raises FY23 Organic Sales +7-9% (prev. +6-8%), Op profit margin +30-50bps (prev. +20-40bps). (Newswires)

Logitech (LOGN SW) - Q1 (USD): EPS 0.65 (exp. 0.47), Revenue 974.5mln (exp. 926.4mln). Raises H1 outlook; Revenue 1.875-1.945bln (prev. 1.8-1.9bln), Op 180-220mln (prev. 160-190mln). Guides FY24 Op 400-500mln, Revenue 3.8-4bln. (Newswires)

Novartis (NOVN SW) - Boss warns US drug pricing reform may be a risk to public health. Under President Biden's Inflation Reduction Act will have a shorter exclusivity period of nine years, compared for 13 years for drugs deliveries as infusions and extending the period of pills to 13 years was the top priority for the industry, according to the FT. (FT)

OTHER SWISS COMPANIES

SIG Combibloc (SIGN SW) - H1 (EUR): adj. Net 144mln (prev. 115mln YY), adj. EBITDA 384mln (exp. 384mln YY), Revenue 1.54bln (exp. 1.57bln). Affirms FY23 guidance. (Newswires)

BROKER MOVES

SCANDINAVIA

H&M (HMB SS) - Co. is suing Chinese rival Shein for copyright infringement in Hong Kong. The next hearing is slated to take place on July 31, according to Bloomberg. (Newswires)

BROKER MOVES

Boliden (BOL SS) upgraded to Neutral from Underperform at Credit Suisse

Fortum (FORTUM FH) upgraded to Buy from Hold at Berenberg

US

CLOSES: SPX +0.40% at 4,554, NDX +0.14% at 15,448, DJIA +0.52% at 35,411, RUT +0.28% at 1,965.

SECTORS: Energy +1.66%, Real Estate +0.99%, Financials +1.01%, Consumer Discretionary +0.52%, Communication Services +0.46%, Materials +0.31%, Consumer Staples +0.38%, Technology +0.26%, Industrials +0.24%, Health -0.23%, Utilities -0.28%.

Apple (AAPL) - Co. faces USD 1bln UK lawsuit by apps developers over App Store fees. (Newswires)

Nucor Corp (NUE) - Q2 2023 (USD): EPS 5.81 (exp. 5.53), Revenue 9.52bln (exp. 9.62bln); expects earnings in Q3 of '23 to decrease vs Q2. (Newswires)

NXP Semiconductors NV (NXPI) Q2 2023 (USD): Adj. EPS 3.43 (exp. 3.27), Revenue 3.30bln (exp. 3.21bln). Sees Q3 EPS USD 2.68-3.10 (exp. 2.64). Sees Q3 Adj. EPS 3.39-3.82 (exp. 3.43). Sees Q3 revenue USD 3.30bln-3.50bln (exp. 3.31bln). (Globenewswire) Shares rose 2.2% after hours.

25 Jul 2023 - 06:51- Research Sheet- Source: Newsquawk