Newsquawk Daily European Equity Opening News - 25th July 2024

25th July 2024

ASIA

APAC stocks were negative following the sell-off on Wall St where the S&P 500 and Nasdaq suffered their worst declines since late-2022 owing to disappointment following some mega-cap earnings and a surprise contraction in US Manufacturing PMI. ASX 200 was dragged lower by notable losses in tech, while miners also suffered after several quarterly production updates and lower underlying commodity prices. Nikkei 225 underperformed and briefly dipped beneath the 38,000 level after shedding over 1,000 points with pressure from currency strength and prospects of a BoJ rate hike at next week’s policy meeting. Hang Seng and Shanghai Comp. conformed to the broad selling in the region and fell towards the 17,000 level where support held, while the mainland index also retreated albeit to a lesser extent than regional peers after the PBoC’s surprise MLF operation and 20bps rate cut to the 1-year MLF rate with markets seemingly unimpressed by China’s piecemeal stimulus efforts.

LG Display (034220 KS) - Q2 (KRW) net -471bln (exp. -299bln), oper. -94bln (exp. -308bln), rev. 6.7tln (exp. 6.4tln). (Newswires)

POSCO (005490 KS) - Q2 (KRW) consolidated net 500bln (exp. 363bln), oper. profit 800bln (exp. 663bln), rev. 18.5tln (exp. 18.5tln). (Newswires)

Nissan Motors (7201 JT) - Q1 (JPY): Recurring profit 65.13bln (-60.9% Y/Y), Net profits 28.56bln (-72.9%); Cuts FY24/25 China sales forecast to 777k (prev. 800k), cuts US forecast to 1.41mln (prev. 1.43mln). (Newswires)

SK Hynix (000660 KS) - Q2 (KRW) net 4.1tln (exp. 3.6tln), oper. 5.5tln (exp. 5.4tln), rev. 16.4tln (exp. 16.4tln). Q2 DRAM average selling price up mid-teen % vs Q1. Q2 NAND average selling price up mid-high teen % vs Q1. Plans Q3 DRAM shipments low single-digit % rise vs Q2. Plans Q3 NAND shipments mid-single-digit % fall vs Q2. In H2, strong AI demand to continue, as well as gradual recovery in conventional applications with the launch of AI-enabled PC, and mobile devices. (Newswires)

EUROPEAN CLOSES

CLOSES: DAX: -0.95% at 18,381, FTSE 100: -0.17% at 8,154, CAC 40: -1.12% at 7,514, Euro Stoxx 50: -1.10% at 4,863, AEX: -1.26% at 903, IBEX 35: flat at 11,210, FTSE MIB: -0.48% at 34,472, SMI: -0.66% at 12,197, PSI: +0.65% at 6,899.

SECTORS: Utilities 0.65%, Energy 0.57%, Materials 0.30%, Healthcare -0.04%, Telecoms -0.10%, Consumer Stpl -0.31%, Financials -0.49%, Industrials -0.95%, Consumer Disc -1.62%, IT -2.62%

FTSE 100

GSK (GSK LN) - Receives full approval from Health Canada for Jemperli for treatment of patients with recurrent or advanced DMMR/MSI-H Endometrial cancer. (Newswires)

Ex-dividend - SSE (SSE LN) will trade without entitlement to its latest dividend payout. (Newswires)

Mining Names - Metal prices extend on losses amid the broad risk-off mood with silver breaching USD 28/oz to the downside and gold further extending beneath the psychological USD 2,400/oz level, while copper prices are also weighed despite China's surprise MLF rate cut.

Unilever (ULRV LN) – Sale of its stake in Qinyuan; financial terms of agreement with Yong Chao venture capital disclosed. (Newswires)

OTHER UK COMPANIES

BROKER MOVES

RS (RS1 LN) downgraded to Hold from Buy at HSBC

DAX

Bayer (BAYN GY) – Australian judge said it is not proven that ingredient in Bayer’s Roundup Weedkiller increases the risk for cancer. (Newswires)

OTHER GERMAN COMPANIES

Deutsche Boerse (DB1 GY) – Q2 (EUR): Net Revenue 1.44bln, +19% Y/Y, EBITDA 848mln, +16% Y/Y. Raised 2024 guidance: Sees net revenue of more than EUR 5.7bln and EBITDA of more than EUUR 3.3bln. Shares seen opening +2%

Fraport (FRA GY) - Frankfurt airport suspends traffic after intrusion by environmental activists: police. (AFP)

Nordex (NDX1 GY) – H1 (EUR): Sales 3.43bln (prev. 2.7bln Y/Y), Revenue 3.25bln (prev. 2.79bln Y/Y). EBITDA margin guidance for 2024 tightened to 3-4%. Expectations for sales remain between 7-7.7mln. (Newswires)

Siltronic (WAF GY) – Q2 (EUR): EBITDA 90.6mln (exp. 69.7mln), Revenue 351.4mln (exp. 329.3mln). Weak demand affects Co's earnings in H2’24, as expected; sales in Q2 slightly above prev. quarter. Now expects sales to decline by a high single-digit percentage compared to prior year. (Newswires)

BROKER MOVES

CAC

Carrefour (CA FP) H1 2024 (EUR): Net sales 40.62bln (exp. 40.97bln), France net sales 18.15bln (exp. 18.49bln), EBITDA 1.92bln, +3.4% Y/Y, Negative FCF 1.7bln; group enters H2 with confidence and confirms financial objectives for FY24. (Carrefour IR)

Dassault Systemes (DSY FP) – Q2 (EUR): Revenue 1.5bln (exp. 1.52bln), Adj. EBIT 448mln (exp. 478.8mln). FY24: Sees total revenue growth in range of 6-8%, revenue 6.26-6.33bln. Sees Q3: Total Revenue 1.466-1.506bln. (Newswires)

Michelin (ML FP) - H1 (EUR) sales 13.48bln (exp. 13.53bln). EBITDA of business segments 2.8bln, representing 20.4% of sales. (Newswires)

Kering (KER FP) - H1 2024 (EUR): Revenue 9.02bln (exp. 9.11bln), Recurring operating income 1.58bln (exp. 1.61bln) or 17.5% (exp. 17.6%). H1: Free cash flow from operations 1.9bln, excluding real estate acquisitions. Q2: Revenue 4.51bln, -11% (exp. -9%). Gucci generated sales 2.01bln, -19% (exp. -16%). COMMENTARY: Recurring operating income in H2 2024 could be down by about 30% Y/Y. CFO says Gucci dealing with lower store traffic, notably in Asia, and permanent collection suffering more. Uncertain luxury sector outlook and consumer Confidence are fragile in all regions. Rollout of new Gucci designs in line with plans. Deputy CEO Bellettini said Gucci is suffering from a drop in new clients. (Kering IR/Newswires)

Renault (RNO FP) - H1 2024 (EUR): Revenue 26.96bln (exp. 27.1bln), Operating margin 8.1% (exp. 7.92%). Confirms 2024 outlook: Group operating margin superior or equal to 7.5% and FCF superior or equal to 2.5bln. Continues to be ahead of plans on its operating margin improvement roadmap. Renault can adapt to the volatility in electrification with its two pillars, Power/Horse in Hybrids and Ampere in EVs. (Newswires)

STMicroelectronics (STM FP) - Q2 (EUR): Revenue 3.232bln (exp. 3.204bln), Q2 gross margin 40.1% (exp. 40%). Sees Q3 gross margin 38% (exp. 40.9%), sees Q3 net revenue 38% (exp. 40.9%). Cuts FY24 revenue guidance to between EUR 13.2-13.7bln (exp. 14.3bln), Co. says “During the quarter, contrary to our prior expectations, customer orders for Industrial did not improve and Automotive demand declined.”, “Q2 net revenues were above the midpoint of our business outlook range driven by higher revenues in Personal Electronics, partially offset by lower than expected revenues in Automotive. Gross margin was in line with expectations.” (STMicroelectronics IR)

OTHER FRENCH COMPANIES

Elis (ELIS FP) – H1 (EUR): Revenue 2.25bln, +6.9% Y/Y. Outlook: Adj. EBITDA margin now exp. between 35.2-35.5% (prev. guided 35%). (Newswires)

Eurazeo (RF FP) – H1 (EUR): AUM 32.41bln (prev. 32.5bln Y/Y), Realisations 1.6bln (prev. 0.5bln Y/Y), Net Loss 105mln (prev. -145mln Y/Y). (Newswires)

Eiffage (FGR FP) – Wins “Routes et Rues” calls for road innovation projects. (Newswires)

Engie (ENGI FP) – Elengy said maintenance at French monitor LNG terminal extended one week to Aug 12 for safety reasons. (Newswires)

Ipsos (IPS FP) – H1 (EUR): Revenue 1.14bln (prev. 1.09bln Y/Y). Outlook Adj. downwards organic growth target for 2024 and now anticipates an organic growth close to that of last year. (Newswires)

SEB (SK FP) – H1 (EUR): Sales 3.74bln, +3.6% Y/Y, Net Profit 100mln, +31.6% Y/Y. (Newswires)

Verallia (VRLA FP) – H1 (EUR): Revenue 1.76bln, -17.6% Y/Y, Adj. EBITDA 431mln (prev. 659mln Y/Y). 2024 outlook: Adj. EBITDA target revised down and now expect same level as 2022. (Newswires)

BROKER MOVES

PAN EUROPE

Arcadis (ARCAD NA) – Q2 (EUR): Net Revenue 991mln, +6% Y/Y, EBITA 114mln (exp. 201mln). (Newswires)

argenx (ARGX BB) – Q2 (USD): Net Income 29.06bln (exp. -61mlm). (Newswires)

Edison (EDNR IM)/(SRG IM) - Cos are expected to announce a deal on gas storage assets on Thursday with a base price of nearly EUR 600mln, according to Reuters citing sources. (Newswires)

Saipem (SPMI IM) – Q2 (EUR): Revenue 3.37bln (exp. 3.3bln), EBITDA 297mln (exp. 322mln). (Newswires)

Moncler (MONC IM) - H1 2024 (EUR): Revenue 1.2bln, EBIT 258.7mln, Net income 180.7mln, Net profit 180.7mln. Stone Island revenue 200mln. (Newswires)

UMG (UMG NA) - H1 2024 (EUR): Revenue 5.53bln (exp. 5.46bln), Adj. EBITDA 1.24bln (exp. 1.11bln). EBITDA margin 19.3%. Operating profit 756mln. EBITDA 1.07bln. (Newswires)

BROKER MOVES

SMI

Nestle (NESN SW) - H1 (CHF): Sales 45bln (exp. 45.58bln), Net 5.6bln (exp. 6.08bln), EPS 2.16, +1.8%. In H1, repurchased CHF 2.4bln shares as part of the three-year CHF 20bln buyback which began in 2022. FY Guidance: Organic revenue growth of at least +3% (prev. guided +4%). Underlying trading operating profit is unchanged, moderate increase expected. Expect pricing to come down faster than forecast. CEO said “Positive real internal growth is back. We delivered improved volume and mix growth across the Group in the second quarter", "Health Science is recovering as planned and is set for a strong second half." (Nestle IR) Index Weighting: SMI 17.8% (Largest), Stoxx 600 2.3% (Third largest)

Roche (ROG SW) - H1 (CHF): 29.8bln (exp. 29.911bln), Net Income 6.697bln (exp. 7.523bln); Outlook for 2024 earnings raised; Roche expects to further increase its dividend in CHF. Roche expects an increase in Group sales in the mid-single-digit range. Core earnings per share are targeted to grow in the high single-digit range, excluding the impact of the resolution of tax disputes in 2023. Roche expects to further increase its dividend in Swiss francs. (Roche IR) Index Weightings: SMI 13.1% (Third largest), Stoxx 600 1.5%

OTHER SWISS COMPANIES

Julius Baer (BAER SW) – H1 (CHF): Net Profit 45mln,- 15% Y/Y, AuM 474bln, +11% Y/Y. (Newswires)

Sandoz (SDZ SW) - Sandoz launches biosimilar Pyzchiva (ustekinumab) across Europe, to treat chronic inflammatory diseases. Launch across Europe, starting today, strengthens well-established Sandoz immunology portfolio in Europe, leveraging existing footprint. (Sandoz)

BROKER MOVES

SCANDINAVIA

BROKER MOVES

US

CLOSES: SPX -2.3% at 5,427, NDX -3.7% at 19,032, DJIA -1.3% at 39,854, RUT -2.1% at 2,195

SECTORS: Technology -4.14%, Consumer Discretionary -3.89%, Communication Services -3.76%, Industrials -2.17%, Real Estate -1.34%, Materials -1.26%, Financials -1.19%, Consumer Staples flat, Energy +0.22%, Health +0.81%, Utilities +1.16%.

Bank of America (BAC) - Authorises USD 25bln stock buyback; raises dividend by 8%. (Newswires)

Ford Motor Co (F) - Q2 2024 (USD): Adj. EPS 0.47 (exp. 0.68), Revenue 47.8bln (exp. 44.02bln). FY adj. EBIT view 10-12bln (exp. 11.23bln). FY CapEx view affirmed between USD 8.0-9.0bln. Affirms FY loss of USD 5.0-5.5bln for Model E. Raises FY24 adj. FCF view by USD 1bln, to between 7.5-8.5bln. Ford+ on track for 2024 profitability, raises cash flow outlook; “we still have lots of work ahead of US to raise quality and reduce costs and complexity". (SEC) Shares -11.5% after market.

International Business Machines Corp (IBM) - Q2 2024 (USD): Adj. EPS 2.43 (exp. 2.20), Revenue 15.77bln (exp. 15.62bln). Sees FY constant currency revenue growth consistent with mid-single digit model. Guides free cash flow above USD 12bln (prev. saw about 12bln, exp. 12.35bln). Sees software segment to grow high-single-digit percentage in 2024 vs prev. outlook of mid-single-digit percentage growth. (SEC) Shares +2.9% after hours.

25 Jul 2024 - 06:55- Research Sheet- Source: Newsquawk