Newsquawk Daily European Equity Opening News - 27th July 2023

27th July 2023

ASIA

APAC stocks traded higher in the aftermath of the FOMC meeting and press conference where the Fed delivered a widely expected 25bp rate hike and Powell kept the door open for a further increase although didn’t commit to any decision and stressed a data-dependent approach. ASX 200 was led by strength in real estate and tech, while participants also digested production updates. Nikkei 225 was initially hesitant amid a firmer currency and as the BoJ kick-started its 2-day policy meeting but eventually conformed to the rally. KOSPI gained with the spotlight on earnings including Samsung Electronics which topped estimates. Hang Seng and Shanghai Comp were positive with outperformance in Hong Kong despite the HKMA’s lockstep rate, as sentiment benefitted from recent support efforts and with the tech and auto industries lifted after China issued guidelines on the standardisation of intelligent connected vehicles and with regulators holding talks with major ride-hailing firms. Furthermore, XPeng shares surged over 30% in early trade after Volkswagen took about a 5% stake in the Co. and plans to jointly develop two electric models for the mid-size segment.

LG Electronics (066570 KS) - Q2 2023 (KRW): Revenue 20tln (exp. 19.8tln). Net 162.1bln (exp. 357.8bln). Operating profit 742bln (-6% Y/Y). (Newswires)

Samsung Electronics (005380 KS) - Samsung Electronics (005930 KS) final Q2 (KRW) net 1.7tln (exp. 852bln), oper. profit 669bln (prelim. 600bln), rev. 60tln (prelim. 60tln). Co said demand for AI chips will grow rapidly for five years. Co. said it expects gradual increase in memory chip demand in H2, and expects smartphone market to grow in h2 vs last year but could contract if the global economic downturn risks persist. Co. said the memory market is expected to gradually move toward stability considering increasing production cuts in the industry. (Newswires)

EUROPEAN CLOSES

CLOSES: DAX -0.49% at 16,131, FTSE 100 -0.19% at 7,676, CAC 40 -1.35% at 7,315, Euro Stoxx 50 -1.04% at 4,346, IBEX 35 +0.85% at 9,600, FTSE MIB +0.05% at 28,980, SMI -0.48% at 11,177.

SECTORS: Utilities 0.45%, Telecoms 0.24%, Consumer Stpl 0.02%, Financials -0.11%, Industrials -0.47%, Energy -0.65%, Healthcare -1.12%, Materials -1.15%, Consumer Disc -1.42%, IT -1.48%

FTSE 100

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

OTHER UK COMPANIES

Hikma Pharmaceuticals (HIK LN) - Receives US FDA ANDA supplement 59 approval for Chloroquine Phosphate. (Newswires)

BROKER MOVES

DAX

BMW (BMW GY) - Comments on seven automakers uniting to create a leading High-powered charging Network Across North America. (Newswires)

Mercedes-Benz (MBG GY) - Q2 2023 (EUR): Revenue 38.2bln (exp. 38.95bln), EBIT 4.9bln (exp. 4.85bln), Net 3.64bln (exp. 3.4bln), EPS 3.34 (exp. 3.31). Expects significantly lower energy prices for remainder of year. Order intake stabilising, supply chain is noticeable improved. Expects growth of global economy to remain "rather subdued" in H2. Ongoing restrictive monetary policy is weighing on consumers & economic growth. Co. raised FY23 guidance on solid Q2 results; FY23 EBIT seen at same level as last year (prev. slightly below) and expects adj. return on sales between 13-15% (prev. 11-13%). EBIT increased to 5bln (prev. 4.7bln). (Newswires) Co. shares seen opening -1.1%. Co. holds a 4.9% weighting in the DAX 40.

Volkswagen (VOW3 GY) - Q2 2023 (EUR): Revenue 80.1bln (exp. 79.45bln). Adj. Operating Profit 5.6bln (exp. 6.09bln); Adj. Operating Margin 7% (exp. 8.48%). Co. cuts FY23 deliveries outlook but notes of Chinese recovery towards end of Q2. Sees FY Vehicle Deliveries 9.0M-9.5mln units (exp. 9.19mln; prev. saw deliveries of 9.5mln). Co. is to improve net cash flow in H2. Co. affirms FY revenue guidance. Co. holds a 2.5% weighting in the DAX 40.

OTHER GERMAN COMPANIES

Siltronic (WAF GY) – Q2 2023 (EUR): Revenue 403mln (exp. 401mln), EBIT 70mln (exp. 62mln). Sales prices stable despite significant decline in volumes in H1. (Newswires)

BROKER MOVES

Covestro (1COV GY) downgraded to Add from Buy at Baader Helvea

DWS (DWS GY) upgraded to Overweight from Neutral at JPMorgan Chase

RWE (RWE GY) reiterated with Overweight at JPMorgan Chase

Volkswagen (VOW3 GY) reiterated with Overweight at JPMorgan Chase

CAC

Airbus (AIR FP) - H1 2023 (EUR): Revenue +11% to 27.7bln (exp. 27.91bln); Adj. FCF 1.57bln (exp. 1.15bln), EBIT 1.85bln (exp. 1.75bln), Adj. EBIT 2.6bln (exp. 2.47bln), EPS 1.94. Ramp up on A220 is continuing towards a rate of 14/mth in middle of decade. Reaffirms A320 75 jets/month production rate by 2026, but removes mention of the previous guide of 65/m by 2024-end, instead saying it would make tactical adjustments in response to volatile supply chains. H1 consolidated FCF 1.474bln (prev. 1.646bln Y/Y). Co. said it is working with Pratt & Whitney (RTX) to support engine inspections; CEO said won't give interim A320 rate target any more, the final 75/month target is what matters. Co. is not withdrawing the interim production target due to any loss of confidence in the ability to reach it, there is no change to the plan. A321XLR will be "as close" as possible to range commitment. Co. said suppliers facing inflation and problems finding employees. (Newswires) Co. holds a 4.4% weighting in the CAC 40.

BNP Paribas (BNP FP) - Q2 2023 (EUR): Net income 2.81bln (exp. 2.52bln) Net Income: +16.4% Y/Y. Co. notes of exceptional impact of EUR -125mln of provisions for litigation. (Newswires) Co. holds a 4.4% weighting in the CAC 40.

Carrefour (CA FP) - H1 2023 (EUR): Sales inc. VAT 45.45bln (prev. 42bln Y/Y), EBITDA 1.85bln, +4%; reaffirms FY23 guidance. Recurring operating income 700mln, -2.2%, dragged down by costs tied to the integration of Group BIG in Brazil, cos. second-largest market. Co. expects a reduction in inflationary pressure in H2. (Newswires) Co. holds a 0.7% weighting in the CAC 40.

Renault (RNO FP) - H1 (EUR): Revenue 26.8bln (exp. 25.56bln), Operating Income 2.09bln (exp. 1.65bln), Net Income 2.1bln (exp. 1.2bln), Auto FCF 1.78bbln, Automotive operating cash flow 1.78bln (exp. 1.0bln). (Newswires) Co. holds a 0.5% weighting in the CAC 40.

L’Air Liquide (AI FP) – H1 2023 (EUR): Revenue 14.0bln (exp. 14.41bln). Net 1.72bln (exp. 1.585bln). Operating profit 2.48bln (prev. 2.29bln Y/Y). (Newswires) Co. holds a 4.8% weighting in the CAC 40.

Michelin (ML FP) - H1 2023 (EUR): Revenue 14.1bln (exp. 13.9bln), Net income 1.22bln (exp. 1.07bln), Operating Margin 12.1% (exp. 11.9%), Total segment operating income 1.70bln (exp. 1.67bln). GUIDANCE: FY adj. FCF seen above 2bln (prev. saw above 1.6bln). FY total segment operating income above 3.4bln. CEO said there is no intention to change pricing policy and will continue to value products at the right level. (Michelin IR) Co. holds a 1.3% weighting in the CAC 40.

Saint Gobain (SGO FP) - H1 2023 (EUR): Revenue 24.95bln (exp. 24.9bln, prev. 25.50bln Y/Y), EBITDA 3.74bln (prev. 3.68bln Y/Y); in H2 '23, targeting operating margin between 9-11%. Net debt stood at 8.9bln at end of June 2023. Targeting double-digit operating margin for 2023. (Newswires) Co. holds a 1.6% weighting in the CAC 40.

STMicroelectronics (STM FP) - Q2 (USD): Revenue 4.33bln (exp. 4.32bln), Net Income 1.01bln (exp. 1.01bln), EPS 1.06 (exp. 1.08), EBIT Margin 26.5%, Gross Margin 49%. Q3 Guidance, Gross Margin 47.5% (exp. 46.4%), Revenue 4.38bln (exp. 4.35bln). (Newswires) Co. holds a 1.8% weighting in the CAC 40.

OTHER FRENCH COMPANIES

Elis (ELIS FP) - H1 (EUR): EPS 0.78 (prev. 0.62 YY), EBITDA 698mln (exp. 676mln), Revenue 2.10bln (prev. 1.78bln YY). Narrows FY23 Organic Revenue +12% (prev. +11-13%), Adjusts FY23 EPS >1.65 (prev. >13% YY), Raises Net >410mln (prev. 405mln) (Newswires)

Ipsen (IPN FP) – H1 (EUR): Revenue 1.54bln (exp. 1.29bln), adj. EBIT 523mln (exp. 528mln), EPS 2.35, adj. EBIT Margin 34%. (Newswires)

Orpea (ORP FP) - Q2 (EUR): Revenue 1.31bln (prev. 1.18bln YY). Announces sale of Property Portfolios in the Netherlands and Austria for a total amount of EUR 83mln. (Newswires)

Teleperformance (TEP FP) - H1 (EUR): Net 271mln (prev. 274mln YY), EBITDA 807mln (prev. 792mln YY), Revenue 3.96bln (prev. 3.95bln YY). Cuts FY23 LFL growth +6-8% (prev. +8-10%). (Newswires)

BROKER MOVES

PAN EUROPE

AB InBev (ABI BB) - The brewer of Bud Light has laid off hundreds of workers in its US offices due to declining sales, WSJ reports. The restructuring affected less than 2% of its US workforce, focusing on corporate and marketing roles. (WSJ)

ArcelorMittal (MT NA) – Q2 (USD): Sales 18.6bln (exp. 18.8bln), Operating Income 1.93bln (exp. 1.85bln), EBITDA 2.6bln (exp. 2.47bln). CEO “Looking ahead, the company is in a good position and focused on delivering further strategic progress in the second half.” (Newswires)

ASML (ASML NA)/Chip Names - Samsung Electronics (005930 KS) said in H2 2023, the recovery of demand for major applications like mobile is likely to be delayed due to depressed consumer sentiment and lower-than-expected reopening efforts in China. Co. said the overall smartphone market is expected to return to year-on-year growth, especially in the premium market. Samsung noted of robust demand for AI applications led to higher-than-guided DRAM shipments and said demand for AI chips will grow rapidly for five years. (Samsung Electronics/Newswires)

Banco Sabadell (SAB SM) - Q2 (EUR): Net 359mln (prev. 179mln YY), NII 1.17bln (prev. 889mln). (Newswires)

Enel (ENEL IM) - H1 2023 (EUR): EBITDA 10.7bln (exp. 10.3bln), ordinary income 3.3bln (exp. 2.9bln). Confirms 2023 guidance, revenue 47.09bln (prev. 65.63bln Y/Y). Co. said it has addressed 60% of its planned asset disposal program worth EUR 21bln, group is not in a rush to sell assets and will only sell at the right price; maintains 2023 net debt reduction target. To present new strategic plan in November. Co. said rumours about a sale of the stake in Endesa are totally unfounded. (Newswires)

Jeronimo Martins (JMT PL) - Q2 (EUR): Net 221mln (prev. 178mln YY), EBITDA 559mln (exp. 514mln), Revenue 7.7bln (prev. 6.37bln YY). (Newswires)

Fincantieri (FCT IM) - H1 23 (EUR): Revenue 3.67bln (prev. 3.51bln Y/Y), EBITDA 185mln (prev. 90mln Y/Y), Net profit of 3mln (prev. loss of 94mln Y/Y). (Newswires)

Moncler (MONC IM) - H1 23 (EUR): Revenue 1.14bln (prev. 918mln Y/Y), EBIT 218mln (prev. 180mln), Net income 145.4mln (prev. 211mln). Moncler brand revenue 935mln (prev. 724mln Y/Y). Stone Island revenue 202mln (prev. 194mln). (Newswires)

Santander (SAN SM) - Co. is reportedly planning to hire a further 150 bankers in the next year in IB, mainly in the US, but also the UK, according to Reuters sources. (Newswires)

Telefonica (TEF SM) - Q2 2023 (EUR): Revenue 10.1bln (exp. 10.1bln), Net 462mln (exp. 301mln). OIBDA 3.14bln (exp. 3.15bln); Co. sees FY23 organic revenue at +4% Y/Y (vs prev. low single-digit %); Co. affirms Capex guidance

BROKER MOVES

UniCredit (UCG IM) reiterated with Overweight at JPMorgan Chase

SMI

Holcim (HOLN SW) - H1 2023 (CHF): Revenue 13.07bln (exp. 13.12bln), Recurring EBIT 2.04bln (exp. 1.92bln), EPS 2.19 (+15% Y/Y). (Newswires)

Roche (ROG SW) - Q1 2023 (CHF): Revenue 29.78bln (exp. 30.09bln), Core EPS 10.10 (exp. 10.15), Co. affirms FY23 outlook. (Newswires)

Nestle (NESN SW) - H1 (CHF): Revenue 46.3bln (exp. 45.58bln), adj. EPS 2.43, Organic Growth 8.7% (exp. 8.1%), Pricing Growth 9.5% (exp. 8.7%), FCF 3.4bln. FY Guidance. Organic Revenue +7% to +8% (prev. +6% to +8%), adj. EPS +6% to +10%, Adj. EBIT margin guidance maintained. (Newswires)

Vat Group (VACN SW) - H1 (CHF): Net 84.2mln (prev. 148mln YY), EBITDA 132mln (prev. 192mln YY), Revenue 454mln (prev. 549mln YY). Names Urs Gantner as new CEO, effective Jan 1st. (Newswires)

OTHER SWISS COMPANIES

BROKER MOVES

Sulzer (SUN SW) downgraded to Reduce from Add at Baader Helvea

SCANDINAVIA

Kesko (KESKOB FH) - Q2 (EUR): Sales 3.1bln (exp. 3.15bln), adj. EBIT 207mln (exp. 209mln), adj. PBT 189mln (exp. 191mln). FY Guidance: adj. EBIT 680-800mln (736mln). (Newswires)

BROKER MOVES

US

CLOSES: SPX -0.02% at 4,566, NDX -0.40% at 15,499, DJIA +0.23% at 35,520, RUT +0.72% at 1,980.

SECTORS: Communication Services +2.65%, Industrials +0.66%, Financials +0.65%, Real Estate +0.34%, Technology -1.3%, Consumer Discretionary -0.06%, Utilities -0.05%, Energy -0.09%, Materials -0.28%, Health -0.08%.

eBay Inc (EBAY) - Q2 2023 (USD): Adj. EPS 1.03 (exp. 0.99), Revenue 2.54bln (exp. 2.51bln); Gross merchandise volume 18.2bln (exp. 18.4bln), -1.9% Y/Y, Active buyers 132.0mln (exp. 132.9mln), -4.3% Y/Y. US gross merchandise volume 8.70bln (exp. 8.79bln), -3.1% Y/Y. International gross merchandise volume 9.51bln (exp. 9.27bln), -0.6% Y/Y. 30% of users tried AI feature in Q2. GUIDANCE: Q3 net revenue view 2.46-2.52bln (exp. 2.46bln). Q3 adj. EPS view 0.96-1.01 (exp. 0.92). (eBay IR)Shares fell 4.6% after-market

Meta Platforms Inc (META) - Q2 2023 (USD): EPS 2.98 (exp. 2.91), Revenue 32.00bln (exp. 31.12bln), Advertising Revenue 31.50bln (exp. 30.42bln), FB DAUs 2.06bln (exp. 2.03bln), FB MAUs 3.03bln (exp. 3.00bln). Q3 Revenue view 32.00-34.50bln (exp. 31.18bln). Co. cuts FY23 capex view to USD 27-30bln from 30-33bln "due to both cost savings, particularly on non-AI servers, as well as shifts in capital expenditures into 2024 from delays in projects and equipment deliveries rather than a reduction in overall investment plans." Co. raised FY23 expenses view to USD 88-91bln from 86-90bln "due to legal-related expenses recorded in [Q2]. This outlook includes approximately $4 billion of restructuring costs related to facilities consolidation charges and severance and other personnel costs. We expect Reality Labs operating losses to increase year-over-year in 2023." "Our guidance assumes a foreign currency tailwind of approximately 3% to year-over-year total revenue growth in the third quarter, based on current exchange rates." (Meta IR) Shares surged 6.9% after-market

Tesla (TSLA) - Co. is under investigation by California AG over Autopilot safety and marketing, according to CNBC. (CNBC)

27 Jul 2023 - 06:53- Research Sheet- Source: Newsquawk