Newsquawk Daily European Equity Opening News - 26th July 2023

26th July 2023

ASIA

Asia-Pac stocks traded mixed with most bourses lacking firm direction heading into the looming major central bank policy decisions beginning with the FOMC later today and US equity futures were contained overnight as participants digested the latest big tech earnings and guidance. ASX 200 (+0.8%) outperformed with gains led by the mining industry and the top-weighted financials sector, while participants also reflected on the mostly softer-than-expected inflation data which showed headline CPI Q/Q was at its slowest pace of increase since 2021. Nikkei 225 (+0.1) swung between gains and losses with the mood indecisive as softer Services PPI data from Japan added to the second-guessing surrounding this week’s BoJ meeting. Hang Seng (-0.8%) and Shanghai Comp. (-0.4%) were weaker after the prior day’s stimulus boost lost steam but with downside limited owing to wide expectations for further support measures and after the PBoC upped its liquidity efforts, while China also replaced the head of its central bank amid the increasing challenges facing its economy.

Hyundai Motor (005380 KS) Q2 (KRW) - net 3.2tln (exp. 3.3tln), oper. 4.2tln (exp. 4.0tln), rev. 42tln (exp. 41tln). Expects 2023 operating profit margin to be 8%-9% and 2023 capex at KRW 10.5tln. (Newswires) 

SK Hynix (000660 KS) - Q2 (KRW) net -3.0tln (exp. -2.3tln), oper. -2.9tln (exp. -2.7tln), rev. 7.3tln (exp. 6.4tln). Q2 DRAM average selling price was up by a high single-digit % Q/Q and Q2 NAND selling price was down around 10% Q/Q. To expand NAND output cut due to high inventory and low profitability. SK Hynix is to cut NAND output by a further 5%-10%.(Newswires)

EUROPEAN CLOSES

CLOSES: DAX 40 +0.13% at 16,211, FTSE 100 +0.17% at 7,691, CAC 40 -0.16% at 7,415.45, Euro Stoxx 50 +0.21% at 4,391, IBEX 35 -0.25% at 9,519, FTSE MIB +0.20% at 28,966, and SMI +0.55% at 11,239.

SECTORS: Materials 2.16%, IT 1.34%, Consumer Stpl 1.07%, Financials 0.70%, Industrials 0.33%, Healthcare 0.16%, Consumer Disc -0.09%, Utilities -0.11%, Telecoms -0.23%, Energy -0.50%

FTSE 100

Just Eat Takeaway (JET LN) - H1 2023 (GBP): Adj. EBITDA 143mln (exp. 128mln). Revenue 2.59bln (exp. 2.65bln). Co. says “We are fast approaching our positive free cash flow target.“ CFO Brent Wissink is to resign effective 2024. (Just Eat Takeaway)

NatWest (NWG LN) - CEO is to step down with immediate effect due to the Nigel Farage account leak, according to Sky News. Co. is said to hold an emergency meeting on the future of CEO. (Sky News)

OTHER UK COMPANIES

BROKER MOVES

Compass Group (CPG LN) reiterated with Neutral at JPMorgan Chase

Glencore (GLEN LN) downgraded to Hold from Buy at HSBC

Pearson (PSON LN) reiterated with Overweight at JPMorgan Chase

DAX

Deutsche Bank (DBK GY) - Q2 2023 (EUR): Revenue 7.40bln (exp. 7.06bln); FIC Sales & Trading revenue 2.10bln (exp. 1.97bln), Pretax profit 1.4bln (exp. 1.19bln); Investment Bank revenue seen slightly lower in 2023 (Newswires)

Deutsche Boerse (DB1 GY) - Q2 2023 (EUR): Revenue 1.22bln (exp. 1.17bln), EPS 2.52 (prev. 1.98 Y/Y). Adj. EBITDA 733mln (prec. 585mln) Co. is expect to exceed its guidance for 2023. Co. raises FY23 revenue guidance to above EUR 4.7bln (prev. upper end of range). (Newswires/Deutsche Boerse)

RWE AG (RWE GY) - Raises FY23 Adj. Net Income view 3.3-3.8bln (exp. 2.81bln, prev. 2.2-2.7bln), Raises FY23 Adj. EBIT view 5-5.6bln (exp. 4.46bln, prev. 3.6-4.2bln). (RWE)

OTHER GERMAN COMPANIES

DWS (DWS GY) – H1 2023 (EUR): Revenue 668mln (prev. 610mln Y/Y). Net 145mln (prev. 138mln Y/Y). Co. affirms its FY revenue is essentially flat Y/Y (Newswires)

Telefonica Deutschland (O2D GY) - Q2 (EUR): 2.09bln (exp. 2.08bln), Operating Expenses 1.5bln. (Newswires)

Uniper (UN01 GY) – Adjusts earnings outlook for FY23 following extraordinarily strong results for H1, expects H1 adj. EBIT 3.7bln (prev. -0.75bln). (Newswires) +20% in Lang & Schwarz pre-market; reminder, the German state has a 99% stake in the Co.

BROKER MOVES

CAC

Airbus (AIR FP) - Canada awards Airbus with a CAD 3.6bln contract for four new A330 tanker aircraft with the contracts also covering the conversion of five used A330 tankers. (Newswires)

Danone (BN FP) – H1 2023 (EUR): Revenue 14.17bln (exp. 14.17bln). Net 1.13bln (exp. 1.07bln). Recurring operating profit 1.73bln (exp. 1.71bln). Q2 LFL sales +6.4% (exp. +5.7%). Co. adjusts its FY23 LFL revenue to the upper end of prior guidance. (Newswires)

Dassault Aviation (AM FP) – Reduction of capital by cancellation of treasury shares. (Newswires)

EssilorLuxottica (EL FP) - H1 2023 (EUR): Revenue 12.85bln (exp. 12.78bln), Adj. net profit 1.66bln, Adj. operating profit 2.35bln; Q2: Revenue 6.7bln (exp. 6.64bln). Confirms its target of mid-single-digit annual revenue growth from 2022 to 2026 at constant exchange rates. Expects to achieve an adj. operating profit as a percentage of revenue in the range of 19-20% by the end of that period. EMEA double-digit growth in Q2, with China rebounding strongly, and North America positive. Q2 North America revenue 3.03bln (exp. 3.06bln). In other news, the Co. looking to move into hearing aids after buying Israeli start-up, according to FT. (Newswires/FT)

LVMH (MC FP) - Q2 23 (EUR): Revenue 21.21bln (exp. 20.6bln); US sales fall 1%. Doesn't expect further price hikes in near term; Co. is very pleased with China. Q2 GEOGRAPHY SALES: US -1% (prev. +8% in Q1), Japan +29% (prev. +34%), Asia-ex Japan +34% (prev. +14%), Europe +19% (prev. +24% in Q1). Q2 SEGMENT SALES: Fashion & Leather +21% (exp. +20.8%), Wines & Sprits -8% (exp. -0.7%), Perfumes & Cosmetics +16%, Watches & Jewellery +14%, Selective Distribution +25%. LVMH said the group will hold fewer events in H2 after higher advertising and promotions spending dented margins in H1. (LVMH/Newswires). Co. holds a 12.08% weighting in the CAC 40, a 2.25% weighting in the Stoxx Europe 600, and a 15.2% weighting in the Stoxx Europe 600 optimised Consumer Products & Services index.

Orange (ORA FP) – Q2 Revenue 10.9bln (exp. 10.8bln). EBITDAaL 3.31bln (prev. 3.31bln Y/Y). Co. affirms its FY23 EBITDAaL and organic cash flow guidance. Co. is to propose a dividend of EUR 0.72. CEO said results were in line with expectations. (Newswires)

Renault (RNO FP) - Nissan (7201 JT) and Renault have reached a final agreement on alliance revamp, according to a statement; Nissan to invest up to EUR 600mln in Renault's EV unit Ampere. (Newswires)

OTHER FRENCH COMPANIES

Bureau Veritas (BVI FP) - H1 (EUR): FCF 131.9mln, +1.5% Y/Y. Forward guidance provided, expects mid-to-high single-digit organic revenue growth (prev. mid-single-digit). (Newswires)

Eurofins Scientific (ERF FP) – H1 2023 (EUR): Revenue 3.21bln (exp. 3.21bln). Net 261mln (prev. 396mln Y/Y). Co. cuts its FY23 adj. EBITDA guidance to EUR 1.32-1.37bln (prev. 1.35-1.40bln) and Revenue 6.45-55bln (prev. 6.6-6.7bln). (Newswires)

Lagardere (MMB FP) – H1 2023 (EUR): Revenue 3.70bln (prev. 3.03bln Y/Y). Adj. net EUR 24mln (prev. 25mln). Recurring EBIT 141mln (prev. 197mln). (Newswires)

Nexans (NEX FP) – To build third generation cable laying vessel to drive global energy transition. (Newswires)

Verallia (VRLA FP) – H1 (EUR): Net 311mln (prev. 174mln YY), Adj. EBITDA 659mln (prev. 425mln YY), Revenue 2.14bln (prev. 1.64bln YY). Guides initial FY23 Adj. EBITDA 1.10-1.25bln.

Verbund (VER AV) – Acquisition of operative wind power plants in Spain with a capacity of 257MW and potential for hybridisation and repowering for EUR 460mln. (Newswires)

Vivendi (VIV FP) – EU to open formal investigation of whether the Co. breached requirement in Lagardere transaction, according to Reuters citing sources. (Reuters)

BROKER MOVES

PAN EUROPE

ASM International (ASM NA) - Q2 2023 (EUR): Revenue 669mln (prev. 560mln Y/Y). Operating income 180mln (prev. 148mln). Co. affirms FY23 revenue guidance. Q2 orders dropped 48% to EUR 486mln, sees project revenue of EUR 580-620mln for Q3, maintains revenue guidance at constant currencies, sees FY OM of 26% or slightly lower. Decrease in order intake also reflected some further normalisation of the backlog compared to elevated level in 2022, following improved supply chains. (Newswires).

Auto makers - Prices of used all-EV in the US have gone down 28% since July 2022, according to InsideEVs citing a Recurrent report; used Tesla (TSLA) prices seeing a decrease of more than 30% Y/Y due to reducing new vehicle prices. (Newswires) Separately, a fire broke out on a cargo ship from Germany caused by unnamed electric vehicles; one person died and several were wounded. (AFP/Newswires)

Edison (EDNR IM) – H1 2023 (EUR): Revenue 10.0bln (prev. 13.3bln y/Y). Net 187mln (prev. 201mln). (Newswires)

Elia Group (ELI BB) – H1 (EUR): Adj. Net 200mln (exp. 185mln), EBITDA 606mln (prev. 544mln YY), Revenue 1.89bln. (Newswires)

Iberdrola (IBE SM) – Co. is to sell its minority stake in the Baltic Eagle offshore wind farm for EUR 375mln. (Newswires)

Santander (SAN SM) - Q2 2023 (EUR): Net 2.67bln (exp. 2.58bln); NII 10.5bln (exp. 10.4bln). Net loan-loss provision 2.90bln (exp. 3.03bln). CET1 ratio 12.2% (exp. 12.3%). Revenue 14.3bln (prev. 12.8bln Y/Y); on track to meet 2023 targetConfident to remunerate shareholders in line with 50% payout. (Newswires)

UniCredit (UCG IM) - Q2 (EUR): Revenue 5.97bln (exp. 5.62bln), Net Profit 2.31bln (exp. 1.86bln), Net Interest 3.50bln (exp. 3.35bln). CET1 16.6% (exp. 16.50%). Net Profit equal/above 7.25bln (exp. 6.64bln), Revenue > 21.5bln (exp. 22.02bln), Net Interest equal/above 13.2bln (exp. 12.58bln). (Newswires)

BROKER MOVES

Akzo Nobel (AKZA NA) reiterated with Underweight at JPMorgan Chase

SMI

OTHER SWISS COMPANIES

BROKER MOVES

Julius Baer (BAER SW) upgraded to Market Perform from Underperform at Keefe Bruyette

SCANDINAVIA

Equinor (EQNR NO) - Q2 2023 (USD): Adj. net 2.25bln (exp. 2.35bln), Net income 1.83bln (exp. 2.32bln), ordinary cash dividend of USD 0.30/shr with continued extraordinary dividend of USD 0.60/shr; Co. increased production capacity at Johan Sverdrup. (Newswires)

Ericsson (ERICB SS) - Intel (INTC) announces strategic collaboration agreement with Ericsson to utilise Intel's 18A process and manufacturing technology for Ericsson's future next-generation optimised 5G infrastructure. Intel will manufacture custom 5G SoCs (system-on-chip) for Ericsson to create highly differentiated leadership products for future 5G infrastructure. Additionally, companies will expand collaboration to optimise 4th Gen Intel Xeon Scalable processors with Intel vRAN Boost for Ericsson's Cloud RAN (radio access network) solutions to help communications service providers increase network capacity and energy efficiency. (Newswires)

BROKER MOVES

Assa Abloy (ASSAB SS) downgraded to Neutral from Buy at UBS

Alfa Laval (ALFA SS) upgraded to Equal Weight from Underweight at Morgan Stanley

DSV (DSV DC) downgraded to Hold from Buy at SEB

Nordic Semiconductor (NOD NO) downgraded to Hold from Buy at Deutsche Bank

US

CLOSES: SPX +0.28% at 4,567, NDX +0.73% at 15,561, DJIA +0.08% at 35,438, RUT +0.02% at 1,966.

SECTORS: Materials +1.76%, Technology +1.19%, Energy +0.57%, Communication Services +0.43%, Utilities +0.22%, Consumer Staples -0.05%, Health -0.06%, Industrials -0.13%, Consumer Discretionary -0.23%, Financials -0.73%, Real Estate -0.74%.

Alphabet (GOOG) - Alphabet Inc (GOOGL) Q2 2023 (USD): EPS 1.44 (exp. 1.34), Revenue 74.60bln (exp. 72.82bln). Revenue ex-TAC USD 62.07bln (exp. 60.27bln). Google advertising revenue USD 58.14bln (exp. 57.45bln). YouTube ads revenue USD 7.67bln (exp. 7.41bln). Google other revenue USD 8.14bln (exp. 7.17bln). Google Services revenue USD 66.29bln (exp. 64.67bln). Google Cloud revenue USD 8.03bln (exp. 7.83bln). Other Bets revenue USD 285mln (exp. 231.7mln). CFO Ruth Porat will assume newly created role of President and Chief Investment Officer of Alphabet but will continue to serve as CFO as the Co. searches for her successor. Co. noted USD 69mln of total charges related to the reduction of the workforce was recorded in the quarter. CFO said largest capex in Q2 was for servers and AI computers, while they expect elevated levels of investment in technical infrastructure increasing in H2 and continuing to grow in 2024. (Alphabet) Shares rose 5.7% after market.

Amazon (AMZN) - US FTC is finalising a long-awaited anti-trust lawsuit against Amazon (AMZN) which could ultimately break up parts of the company, according to Politico citing sources with knowledge of the matter. (Politico)

Intel (INTC) - Co. is reportedly planning price hikes across all “Core” CPUs as part of restructuring policy, according to wffctech citing sources. (wffctech)

Microsoft (MSFT) - Q4 2023 (USD): EPS 2.69 (exp. 2.55), Revenue 56.2bln (exp. 55.47bln). Server products and cloud services revenue increased 17%, driven by Azure and other cloud services revenue growth of 26% (prev. 27%, exp. +25%). REVENUE BREAKDOWN: Productivity and Business Processes 18.29bln (exp. 18.1bln). Intelligent Cloud 23.99bln (exp. 23.8bln). More Personal Computing 13.91bln (exp. 13.58bln). KEY METRICS: Operating income 24.25bln (exp. 23.28bn). CapEx 8.94bln (exp. 7.85bln). GUIDANCE: guides Q1 rev. USD 53.8bln-54.8bln (exp. 54.9bln), sees Q1 Intelligent Cloud Revenue at USD 23.3bln-23.6bln (exp. 23.6bln). Sees Q1 productivity and business processes revenue at USD 18.0bln-18.3bln (exp. 18.1bln), Sees Q1 More Personal Computing Revenue 12.5bln-12.9bln (exp. 13.1bln). Sees Q1 Cost of Goods Sold at USD 16.0bln-16.8bln (exp. 17.0bln). Sees Q1 Operating Expenses at USD 13.5bln-13.6bln (exp. 14.1bln). Sees FY24 operating margins to remain flat Y/Y. Sees FY24 operating expenses growth rates to remain low. Sees FY24 capital expenditures to increase sequentially each quarter through the year. Sees FY24 cost of revenue growth rates to be higher than in FY23. Sees FY24 foreign currency impact increase to total revenue growth of around 1 point. CFO said AI sales will expand gradually. CEO said they are seeing seeing great momentum for Azure OpenAI service with over 11k organisations using it. (Newswires) Shares fell 3.7% after market.

PacWest Bancorp (PACW) - Banc of California (BANC) is in advanced talks to buy PacWest Bancorp (PACW), in a deal that could be announced as early as Tuesday, according to WSJ. (WSJ)

Snap Inc (SNAP) - Q2 2023 (USD): Adj. EPS -0.02 (exp. -0.04), Revenue 1.07bln (exp. 1.05bln) KEY METRICS: DAUs 397mln (exp. 395.2mln), +14% Y/Y. Adj. EBITDA loss 38.5mln (exp. loss 61.7mln). GEOGRAPHICAL REVENUE BREAKDOWN: North America 686.8mln (exp. 689.5mln), -9.5% Y/Y. Europe 182.1mln (exp. 169.2mln), +7.1% Y/Y. Rest of the world revenue 198.7mln (exp. 195.5mln), +28% Y/Y. Q3 GUIDANCE: Adj. EBITDA loss 50-100mln (exp. loss 2mln). Revenue 1.07-1.13bln (exp. 1.13bln). DAUs 405-406mln (exp. 406.3mln). COMMENTARY: Revenue growth remained challenged in Q2 as some headwinds from ad platform changes continued into the quarter. (Snap) Shares fell 19.4% after market.

Texas Instruments Inc (TXN) - Q2 2023 (USD): EPS 1.87 (exp. 1.76), Revenue 4.53bln (exp. 4.36bln). REVENUE BREAKDOWN: Analog 3.28bln (exp. 3.32bln), -18% Y/Y. Embedded processing 894mln (exp. 821mln), +8.9% Y/Y. Other 359mln (exp. 286.7mln), -10% Y/Y. KEY METRICS: CapEx 1.45bln (exp. 1.02bln). Q3 GUIDANCE: Revenue view 4.36-4.74bln (exp. 4.59bln). EPS view 1.68-1.92 (exp. 1.90). COMMENTARY: Saw weakness in end markets, apart from automotive. Co. said it is not expecting to see any significant change in end markets in Q3 compared to this last quarter. (Texas Instruments IR) Shares fell 3.3% after market.

Visa Inc (V) - Q3 2023 (USD): EPS 2.16 (exp. 2.12), Revenue 8.1bln (exp. 8.06bln). Payments volume at constant currency +9% (exp. +7.91%). Cross-border volumes at constant currency +17% (exp. +17.9%). Change in cross-border volume nominal USD +18% (exp. +16.8%). Total Visa processed transactions rose 9.5% Y/Y to USD 54.0bln (exp. 53.46bln). Total Visa processed transactions +10%. (businesswire) Shares fell 0.4% after market.

Wells Fargo (WFC) - Co. raised quarterly stock dividend to USD 0.35/shr from USD 0.30/shr and announces a new USD 30bln share repurchase program. (Newswires)

26 Jul 2023 - 06:50- Research Sheet- Source: Newsquawk