Newsquawk Daily European Equity Opening News - 27th February 2024

27th February 2024

ASIA

APAC stocks traded mixed after the lacklustre handover from the US as markets braced for looming risk events. ASX 200 was choppy as strength in the consumer sector was partially offset by weakness in miners. Nikkei 225 printed fresh record highs before reversing the advances as participants digested the latest CPI data. Hang Seng and Shanghai Comp. were mixed with the mainland mildly positive after the PBoC injected liquidity and China said to consider approving additional REITs to support consumption.

EUROPEAN CLOSES

CLOSES: DAX: +0.02% at 17,423.23, FTSE 100: -0.29% at 7,684.30, CAC 40: -0.46% at 7,929.82, Euro Stoxx 50: -0.17% at 4,864.15, IBEX 35: +0.08% at 10,138.40, FTSE MIB: -0.44% at 32,557.81, SMI: -0.37% at 11,454.50.

SECTORS: IT 0.80%, Industrials -0.08%, Financials -0.22%, Telecoms -0.23%, Healthcare -0.46%, Consumer Disc -0.54%, Consumer Stpl -0.72%, Energy -0.73%, Materials -0.77%, Utilities -1.25%

FTSE 100

B&M European Value Retail (BME LN) – Co. is said to be among potential buyers for Homebase, with insiders suggesting the brand’s intellectual property and 170 stores could be broken up and sold off. (Times)

Glencore (GLEN LN) - Co. reportedly paid USD 14.5mln to a middleman in a Chad loan deal which ultimately led to an IMF bailout, according to leaked documents cited by The Times. Glencore agreed to lend USD 1.5bln to Chad in 2014, to be repaid in oil. (Times)

Retail Names - UK BRC Shop Price Index YY (Jan) 2.5% (Prev. 2.9%); the slowest pace of increase since March 2022. (Newswires)

Standard Chartered (STAN LN) - Co. suspended new subscriptions by clients in China under the QDII outbound investment programme citing "commercial reasons". (Newswires)

Shein IPO - Co. is reportedly considering a London listing as its backup option in the scenario that a US IPO fails due to political opposition, via Bloomberg citing sources. (Newswires)

Tobacco Names - UK Chancellor Hunt could announce a duty on vapes, according to reporting by The Telegraph. Tobacco duty will be raised to ensure that vaping remains a cheaper alternative. The combined measures will raise GBP 500mln by 2028/29, according to Times’ Swinford. (Telegraph/Times)

Vodafone (VOD LN) - The Virgin Media O2 head has suggested the GBP 15bln merger between Vodafone and Three (1 HK) risks harming competition, adding that the merged entity's hold over the spectrum would lead to worse connections on rival networks and harm consumers. The report also suggests Virgin Media O2 is in direct talks with Vodafone and Three over a deal, and regulatory intervention may not be needed. (Telegraph)

UK Firms - FCA intends to name firms which are under investigation more often and earlier in the process, via director Chambers speaking to the FT; designed to enable firms to begin implementing resolutions earlier than currently possible. (FT)

OTHER UK COMPANIES

Hargreaves Lansdown (HL/ LN) - Short-seller bets against the Co. remain near record volumes, according to data cited by The Telegraph. BlackRock UK and Point72 are among the funds betting against the Co. (Telegraph)

BROKER MOVES

Flutter Entertainment (FLTR LN) upgraded to Overweight from Equal Weight at Barclays

Unilever (ULVR LN) downgraded to Underweight from Equal Weight at Morgan Stanley

DAX

Munich Re (MUV2 GY) - Q4 (EUR): Net 1bln (exp. 980mln). ROE 15.7% (prev. 20.2% Y/Y). 2024 Net seen at 5bln (vs 2023 target of 4.5bln). Co. plans a dividend of EUR 15/shr (Co. exp. 12.49/shr) for 2023 and resolves share buyback with a volume of up to EUR 1.5bln. "In a market environment poised to remain favourable, Munich Re will leverage its position of strength to grow once again and generate even more profits." (Newswires/Munich Re)

OTHER GERMAN COMPANIES

Duerr (DUE GY) - FY (EUR): Sales 4.63bln (exp. 4.62bln), EBITDA 322mln (exp. 383mln), Net 110mln (exp. 158mln), decrease in earnings due to expenses relating to job reductions at Homag. (Newswires)

Schaeffler (SHA GY) - Announced an investment of USD 230mnln to construct new EV manufacturing facility in Ohio. (Newswires)

BROKER MOVES

CAC

Accor (AC FP) - Co. is reportedly holding talks with Dubai Holding regarding the funding of a EUR 800mln cruise liner development, via FT citing sources. Talks have occurred with several parties, discussions with Dubai Holdings are reportedly at a more advanced stage. (FT)

Bouygues (EN FP) - FY (EUR): Sales 56bln (exp. 55.4bln), Net 1.04bln (exp. 1.09bln), Dividend 1.90/shr (exp. 1.79/shr). FY24 guidance: targets sales/operating profit slightly higher Y/Y. (Newswires)

OTHER FRENCH COMPANIES

Eurofins Scientific (ERF FP) - FY23 (EUR): Revenue 6.52bln (prev. 6.71bln). Adj. EBITDA 1.36bln (prev. 1.51bln). Adj. EBITDA margin -160bps Y/Y. Co. is to review options for some of its smaller underperforming units. (Newswires)

Group SEB (SK FP) - Peugeot Invest is to sell its remaining 4.02% stake in Group SEB. The book-building will start immediately, and the final terms of the placement will be announced after the closing of the accelerated book-building process. The settlement and delivery of the shares are expected to take place on 29 February 2024. (Peugeot Invest)

BROKER MOVES

L'Oreal (OR FP) upgraded to Buy from Hold at Berenberg

Schneider Electric (SU FP) downgraded to Market Perform from Outperform at Bernstein

PAN EUROPE

Banking Names - For the schedule of the UBS Financial Services Conference 2024, click here.

Prysmian (PRY IM) - Co. has signed a contract worth some EUR 1.9bln with Easter Green Link 2. (Newswires)

BROKER MOVES

Banca Monte dei Paschi (BMPS IM) initiated with Outperform at Exane BNP

Banco BPM (BAMI IM) initiated with Underperform at Exane BNP

Intesa Sanpaolo (ISP IM) initiated with Neutral at Exane BNP

UniCredit (UCG IM) initiated with Outperform at Exane BNP

SMI

Roche (ROG SW) - Co. is said to be mulling the disposal of its lung disease drug Esbriet, which has seen sales fall, according to Bloomberg sources. Talks are said to be in the early stages. Esbriet sales fell over 70% Y/Y in 2023 to CHF 202mln. A spokesperson said Roche is currently evaluating potential options for Esbriet "as part of the normal process to review our portfolio of established products" while adding that talks would take several months. (Bloomberg)

OTHER SWISS COMPANIES

Straumann (STMN SW) - FY23 (CHF): Core Net 441mln (prev. 482mln Y/Y). Revenue 2.41bln (prev. 2.32bln). Core EBITDA 727mln (prev. 712mln). (Newswires)

BROKER MOVES

Nestle (NESN SW) upgraded to Sector Perform from Underperform at RBC

SCANDINAVIA

Orsted (ORSTED DC) - The Board of Directors has appointed Trond Westlie as Ørsted’s next Group CFO and member of the Executive Board and the Group Executive Team effective as of 1 April 2024. On the same date, Patrick Harnett will join Ørsted’s Group Executive Team as COO. (Orsted)

Zealand Pharma (ZEAL DC) - FY (DKK): Revenue 342mln (exp. 332mln), Operating Result -572mln. Well positioned to attain significant milestones in 2024. (Newswires)

BROKER MOVES

US

CLOSES: SPX -0.38% at 5,070, NDX -0.02% at 17,933, DJI -0.16% at 39,069, RUT +0.61% at 2,029.

SECTORS: Energy +0.32%, Consumer Discretionary +0.23%, Technology +0.03%, Industrials -0.11%, Consumer Staples -0.29%, Financials -0.46%, Health -0.5%, Materials -0.59%, Real Estate -1.14%, Communication Services -2.09%, Utilities -2.1%.

Expedia Group (EXPE) - Expedia is cutting approximately 9% of its workforce (around 1,500 jobs), to focus on strategic growth areas. This move follows its recently published disappointing results for the holiday period--where it issued a weaker-than-expected outlook--and a leadership transition. The company, and its peers, are facing moderating travel growth as pent-up demand from the post-pandemic period last year appears to be running out of steam, Bloomberg noted. (Bloomberg)

Hess (HES), Chevron (CVX) - Chevron's USD 53bln acquisition of Hess faces potential disruption as rivals ExxonMobil (XOM) and CNOOC (883 HK) claim preemptive rights over Chevron's stake in a crucial Guyana oil project (the largest oil discovery in a decade). Discussions are ongoing, but failure to resolve this could jeopardise the Hess takeover, Chevron said. (Newswires)

JPMorgan (JPM) - CEO Dimon said confidence is up in markets; there are things ahead that are concerning; continue to remain cautious. (CNBC)

Workday Inc (WDAY) Q4 2023 (USD): EPS 1.57 (exp. 1.47), Revenue 1.90bln (exp. 1.92bln). Affirms FY25 subscription rev. view 7.73bln-7.78bln (exp. 7.77bln). (PR Newswire) Shares fell 8% after hours.

Zoom Video Communications Inc (ZM) - Q4 2024 (USD): Adj. EPS 1.42 (exp. 1.15), Revenue 1.15bln (exp. 1.13bln). FY25 adj. EPS view 4.85-4.88 (exp. 4.72), revenue view 4.6bln (exp. 4.66bln). (SEC) Shares rose 10.4% after hours.

27 Feb 2024 - 06:50- Research Sheet- Source: Newsquawk