Newsquawk Daily European Equity Opening News - 26th April 2023

26th April 2023

ASIA

APAC stocks were mostly lower after the losses on Wall St where banking sector fears resurfaced as First Republic Bank shares fell by 50% due to an exodus of deposits and with the lender considering up to USD 100bln in asset sales, although US equity futures found some reprieve overnight from the big tech earnings. ASX 200 was lacklustre but with downside stemmed as participants digested somewhat mixed inflation data in which the headline CPI readings for Q1 topped forecasts, but all other components were softer than expected and supported the view that the economy has passed peak inflation. Nikkei 225 declined amid pressure in the banking sector and disappointment in Japan after the failed lunar module landing which resulted in a glut of sell orders for ispace shares. Hang Seng and Shanghai Comp were mixed with early weakness in tech after US Republican senators urged for US government measures to address Chinese cloud companies including placing sanctions on Huawei Cloud and adding Alibaba Cloud to the export control list, although it was also reported that China's State Council pledged to expand the export and import scale of key products and will properly respond to unreasonable foreign trade restrictions.

Alibaba (9988 HK/BABA) - Alibaba Cloud cuts prices for core and storage products by up to 50% with the cuts aimed at expanding user base and market penetration, according to Securities Times. (Securities Times)

Honda (7267 JT) - Co. plans to introduce four new EV models by 2026 and will collaborate with TSMC (2330 TT/TSM) on chip sourcing. (Newswires)

Kia Motors (000270 KS) - Q1 (KRW) net 2.12tln (exp. 1.80tln), oper. profit 2.87tln (exp. 2.27tln), rev. 23.7tln (exp. 22.8tln). (Newswires)

SK Hynix (000660 KS) - Co. Q1 (KRW) net -2.6tln (exp. -2.9tln), oper. -3.4tln (exp. -3.4tln), rev. 5.1tln (exp. 5.1tln), expects an improvement in market conditions from H2, sees 2023 DRAM demand shipments to grow mid-high single digit percentage Y/Y and NAND demand shipments to grow mid-high teen percentage Y/Y. (Newswires)

EUROPEAN CLOSES

CLOSES: Euro Stoxx 50 -0.54% at 4,377, FTSE 100 -0.27% at 7,891, DAX 40 +0.05% at 15,872, CAC 40 -0.56% at 7,531, FTSE MIB -1.03% at 27,253, IBEX 35 -1.23% at 9,290, SMI +0.38% at 11,511.

SECTORS: Healthcare 0.76%, Consumer Stpl 0.47%, Utilities 0.23%, Telecoms 0.20%, Industrials -0.37%, IT -0.43%, Consumer Disc -0.59%, Energy -1.16%, Financials -1.22%, Materials -1.52%

FTSE 100

Drax (DRX LN) - Ofgem has commissioned a probe into the Co’s compliance with sustainability regulations in relation to the use of woody biomass for power generation. (FT)

Standard Chartered (STAN LN) - Q1 2023 (USD): Adj. Operating Income 4.40bln (exp. 4.43bln). Adj Pretax 1.71bln (exp. 1.5bln), CET1 Ratio 13.7% (exp. 13.8%). underlying profit before tax rose 25% Y/Y in constant currency to 1.7bln, NII 2.01bln (prev. 1.78bln Y/Y). Co. said business has been boosted by rising interest rates. Co. plans to return in excess of USD 5bln to shareholders by 2024. Co. guides FY23 underlying income growth to 10% (prev. 8-10%), and lowers NIM guidance to 170bps (prev. 175bln) and cuts ROTE forecast to 10% (prev. over 11%). (Newswires)

OTHER UK COMPANIES

BROKER MOVES

DAX

Volkswagen (VOW3 GY) - Co's Skoda unit to offer six electric vehicle models by 2026. (Newswires)

Vonovia (VNA GY) - Co. has sold its common equity participation in a portfolio for EUR 1bln to Appolo, according to reports. (Newswires)

OTHER GERMAN COMPANIES

BROKER MOVES

BMW (BMW GY) upgraded it Equal Weight from Underweight at Morgan Stanley

CAC

Carrefour (CA FP) - Q1 2023 (EUR): Sales 22.07bln (exp. 21.3bln), +12.3% LFL Y/Y; in France, 10.22bln, +7.1% LFL Y/Y. Reaffirms FY23 growth in Net FCF, Recurring Operating Income, and EBITDA. (Carrefour IR)

Danone (BN FP) - Q1 2023 (EUR): Revenue 6.96bln (exp. 6.67bln), LFL Sales +10.5% (exp. +6.9%). Updates FY LFL Sales outlook to +4% to +6% (prev. +3% to +5%). (Newswires)

Kering (KER FP) - Q1 2023 (EUR): Revenue 5.08bln (prev. 4.98bln), Gucci sales 2.62bln; has seen improvement in mainland China since mid-March and sales to Chinese cluster globally are up double-digit, Q1 sales in the US are broadly flat Y/Y, there has not been a marked improvement. Balenciaga sales are moderately positive, growing in Asia and Europe, but things are more difficult in the US. CFO said Gucci margin could be flat to slightly higher in 2023; Gucci has some selective price hikes at the end of Q1. Q1 23 APAC retail sales -10%, US retail sales -18%. (Kering IR)

Orange (ORA FP) - Q1 2023 (EUR): Revenue 10.62bln (exp. 10.65bln), EBITDAAL 2.59bln (exp. 2.59bln). Company confirms FY guidance. (Newswires)

Safran (SAF FP) - Q1 2023 (EUR): Adj. Revenue 5.27bln (prev. 4.07bln Y/Y). Organic revenue +24.7% Y/Y. Co. said narrowbody air traffic is back to 2019 levels. Co. affirms guidance. (Newswires)

Vinci (DG FP) - Q1 2023 (EUR): Revenue 15bln (+17% Y/Y). FY FCF view between 4.0-4.5bln. Co. affirms outlook and guides FY23 revenue and operating income to "further increase". (Vinci IR/ Newswires)

OTHER FRENCH COMPANIES

Eurofins Scientific (ERF FP) - Q1 2023 (EUR): Revenue 1.57bln (exp. 1.61bln). Core business organic revenue +7.1% Y/Y. Co. has affirmed its FY23 adj. EBITDA and revenue guidance. (Newswires)

Nexans (NEX FP) - Q1 2023 (EUR): Revenue 1.67bln (exp. 1.67bln). Co. has affirmed its FY23 EBITDA and FCF guidance. Organic revenue +2.2% Y/Y. (Newswires)

Valeo (FR FP) - Q1 2023 (EUR): Revenue 5.48bln (exp. 5.44bln). Adj. LFL sales +11% Y/Y. Co. affirms its FY23 guidance. (Newswires)

BROKER MOVES

PAN EUROPE

ASM International (ASM NA) - Q1 2023 (EUR): Revenue 710mln (exp. 689mln), adj. net income 183mln, net income 380.4mln, orders 647.4mln; Q2 adj. EPS seen between 650-690mln. Memory market demand weakened and expected to remain low for the rest of 2023. (Newswires)

UMG (UMG NA) - Two top 25 shareholders have said the CEO’s pay package is too generous, in addition ISS and Glass Lewis have warned the package should be rejected at May’s AGM, via FT citing sources. (FT)

BROKER MOVES

SMI

Roche's (ROG SW) - Q1 2023 (CHF): Sales 15.32bln (exp. 14.93bln), Pharma Sales 11.70bln (exp. 10.94bln). Roche confirms 2023 outlook and maintains growth expectations for the year. Genentech announces new Vabysmo data suggests greater retinal drying versus aflibercept in wet age-related macular degeneration and diabetic macular edema. (Newswires)

OTHER SWISS COMPANIES

BROKER MOVES

SCANDINAVIA

Axfood (AXFO SS) - Q1 2023 (SEK): Revenue 19.3bln (exp. 19.4bln). EBIT 695mln (exp. 717mln). Net 472mln (prev. 682mln Y/Y). (Newswires)

Handelsbanken (SHBA SS) - Q1 2022 (SEK): Operating income 8.5bln (exp. 8.6bln). Net 6.8bln (exp. 6.1bln). CET1 ratio 19.4% (exp. 19.8%). NII 11.5bln (prev. 10.6bln Q/Q) Revenue 15bln (prev. 14.2bln Y/Y). (Newswires)

SEB (SEB SS) - Q1 (SEK): Net Income 9.4bln (exp. 7.6bln), NII 11.3bln (exp. 10.2bln).

Telia (TELIA SS) - Q1 (SEK): Sales 23.07bln (exp. 22.4bln), Net Income 738mln (exp 1.23bln), adj. EBITDA 7.3bln (exp. 7.2bln). Confirms FY23 guidance. TV and media unit is in the midst of a restructuring. Elsewhere, Co. has entered into a binding term sheet agreeing to sell operations and network assets in Denmark to Norlys for USD 938mln. (Newswires)

BROKER MOVES

US

CLOSES: SPX -1.58% at 4,072, NDX -1.89% at 12,725, DJIA -1.02% at 33,531, RUT -2.4% at 1,746.

SECTORS: Materials -2.15%, Technology -2.09%, Cons Disc -2.05%, Energy -1.84%, Industrials -1.83%, Financials -1.76%, Communication -1.58%, Health Care -1.05%, Real Estate -0.92%, Consumer Staples -0.12%, Utilities -0.09%.

Alphabet (GOOGL) - Q1 2023 (USD): EPS 1.17 (exp. 1.07), Revenue 69.8bln (exp. 68.9bln), board authorised on April 19th to repurchase up to an additional USD 70bln of Class A and Class C shares. Google advertising revenue USD 54.55bln (exp. 53.79bln). YouTube ads revenue USD 6.69bln (exp. 6.65bln) Google other revenue USD 7.41bln (exp. 7.22bln). Google Services revenue USD 61.96bln (exp. 61.27bln). Google Cloud revenue USD 7.45bln (exp. 7.46bln). Co. stated that the outlook remains uncertain due to the challenging environment but noted that foreign exchange headwinds have moderated, and the company expects a smaller FX impact in Q2. Alphabet plans to significantly slow down the pace of hiring in 2023 and anticipates that total capital expenditure for the year will be modestly higher than in 2022. The company's capital expenditure this year will include a meaningful increase in technical infrastructure, while investment in office facilities is expected to decline. Alphabet also expects the pace of investment in data centers and servers to increase in Q2 and continue to grow throughout 2023. (Alphabet IR/Newswires) Shares rose 1.7% after-hours.

Microsoft (MSFT) - Q3 2023 (USD): EPS 2.45 (exp. 2.23), Revenue 52.9bln (exp. 51.02bln). Cloud revenue 28.5bln (exp. 28.19bln). Intelligent cloud revenue USD 22.1bln, +16%. Productivity and business processes11% to USD 17.5bln. More Personal Computing revenue USD 13.3bln, -9%. CFO said cloud demand is fuelled by deal renewals and Co. is seeing good signs on demand for AI products. During the conference call, Microsoft announced that it has over 2,500 Azure OpenAI service customers and that Teams usage has reached an all-time high, surpassing 300mln monthly active users this quarter. The company also noted that Bing has more than 100mln daily active users and has grown its market share in the US. Microsoft provided financial guidance for Q4, including expected productivity and business processes revenue of USD 17.9-18.2bln (exp. USD 17.8bln), cost of revenue (COGS) of USD 16.8-17.0bln (exp. 17bln), intelligent cloud revenue of USD 23.6-23.9bln (exp. 23.8bln), operating expenses of USD 15.1-15.2bln (exp. 15.3bln), and more personal computing revenue of USD 13.35-13.75bln. The company anticipates a decrease of about 2 points in total revenue growth in Q4 due to the foreign currency impact and expects Q4 Azure and other cloud revenue services growth of 26%-27% in constant currency in the intelligent cloud segment. (Microsoft IR/Newswires) Separately, Microsoft is reportedly preparing to close the Activision (ATVI) deal despite FTC move to block the deal on antitrust concerns, according to NY Post, adding MSFT is optimistic about securing UK CMA approval. (NY Post) Shares rose 8.5% after-hours

First Republic (FRC) - First Republic (FRC) is mulling up to USD 100bln in asset sales, according to Bloomberg sources. (Newswires) First Republic is reportedly struggling to come up with a viable solution, such as a sale of all or part of the bank, after announcing it is pursuing strategic operations, according to FT citing sources. FRC was reportedly in touch with the US government, while leading options are for some of the large US banks that recently deposited USD 30bln into it to rescue FRC. (FT) Bankers working with First Republic reportedly say they expect an eventual government receivership for the bank after it exhausts private sector solutions like asset sales, finding a buyer, or both, which is appearing difficult, according to FBN's Gasparino. (FBN)

Meta (META) - Co. will bring in a Microsoft (MSFT) chip executive to oversee its work developing custom chips for hardware devices; employees concerned more layoffs could occur in Reality Labs, according to The Information citing sources, but, Among the options the leaders are considering is handing over the chip work for the AR glasses to an outside company like Qualcomm or MediaTek (2454 TW). (The Information)

PacWest Bancorp (PACW) - Q1 2023 (USD): Adj. EPS 0.66 (exp. 0.98), Total deposits increased USD 1.1bln to 28.2bln at March 31, 2023 compared to Company’s most recent update of USD 27.1bln as of March 20, 2023. Deposit balances further increased approximately USD 700mln as of April 24, 2023. Total insured deposits represented 73% of total deposits (prev. 48% in December). Immediately-available liquidity of USD 12.4bln, which exceeded uninsured deposits of USD 8.1bln, with a coverage ratio of 153%. All risk-based capital ratios increased from December 31, 2022, with CET1 increasing from 8.70% to 9.22%. (Globe Newswire)Shares rose 13.8% after-hours

Texas Instruments Inc (TXN) - Q1 2023 (USD): EPS 1.95 (exp. 1.78), Revenue 4.38bln (exp. 4.38bln); Q2 EPS view 1.62-1.88 (exp. 1.83), revenue view 4.17-4.53bln (exp. 4.44bln). Analog revenue USD 3.29bln, -14% y/y (exp. USD 3.35bln). Embedded processing revenue USD 832mln, +6.4% y/y (exp. USD 801.2mln). Other revenue USD 258mln, -16% y/y (exp. USD 262.7mln). Capital expenditure USD 982mln (exp. USD 1bln, prev. USD 443mln y/y). Cash and cash equivalents USD 4.48bln, +28% y/y (exp. USD 2.99bln). (Texas Instruments IR) Shares rose 1.5% after-hours

Visa Inc (V) - Q1 2023 (USD): EPS 2.09 (exp. 1.99), Revenue 7.99bln (exp. 7.79bln). Payments volume at constant currency +10% (exp. +8.11%). Cross-border volumes at constant currency +24% (exp. +19.9%). Change in cross-border volume +19% (exp. +15%). Total Visa processed transactions 50.1bln, +12% y/y (exp. 49.78bln). Total operating expenses 2.65bln (exp. 2.6bln). (Visa IR) Shares rose 1.3% after-hours

26 Apr 2023 - 06:48- Research Sheet- Source: Newsquawk