Newsquawk Daily European Equity Opening News - 29th January 2025

ASIA

APAC stocks traded higher following the positive handover from Wall St where tech clawed back some of the DeepSeek-related losses, although the conditions were quiet in Asia amid mass closures for the Chinese New Year. ASX 200 was led higher by outperformance in tech and utilities, while softer-than-expected Australian CPI data for Q4 also spurred increased rate cut bets for the RBA's meeting in February (cut now priced at around 76% vs. 64% pre-release). Nikkei 225 took impetus from US counterparts but with gains capped amid few fresh drivers and after outdated BoJ minutes.

Alibaba (BABA) - Alibaba Cloud's Qwen says new Qwen 2.5-Max AI model outcompetes DeepSeek V3 in benchmarks like Arena Hard, Live Bench, Live CodeBench; expects new version will be much better. (Newswires)

Gaming Names - Sony (6758 JT) is to appoint CFO Totoki as the next CEO, as of April 2025. (Newswires)

EUROPEAN CLOSES

CLOSES: DAX +0.74% at 21,439, FTSE 100 +0.35% at 8,534, CAC 40 -0.12% at 7,897, Euro Stoxx 50 +0.19% at 5,198, AEX +0.40% at 898, IBEX 35 +1.31% at 12,154, FTSE MIB -0.12% at 36,147, SMI +0.44% at 12,471.

SECTORS: Telecoms 1.83%, Utilities 1.20%, Consumer Stpl 0.88%, Consumer Disc 0.51%, Financials 0.48%, Energy 0.12%, Healthcare 0.06%, Materials -0.12%, IT -0.18%, Industrials -0.33%

FTSE 100

Chancellor Reeves Speech - In her 10:00GMT speech the Chancellor is expected to encourage, in principle, a planning application for a third runway at Heathrow; of note for Ferrovial (FER SM) which has a 5.25% stake. Additionally, to focus on the development of transport and housing in the scientific area between Cambridge and Oxford, to create a "Silicon Valley of Europe"; of note for housing names, i.e. Barratt Development (BDEV LN) and Taylor Wimpey (TW/ LN); reports have suggested a "zoning scheme" around train stations. More broadly, the speech will focus on growth. Note, in recent sessions there has been some speculation that the UK could attempt to join the Pan-Euro-Mediterranean Convention as a way of improving ties with the bloc. (BBC/Guardian/Treasury/Newswires)

Shell (SHEL LN) - Shell dominated the carbon credit market in 2024, removing 14.9mln credits from trading. Over double Eni (ENI IM), which was the next closest. (FT)

Santander UK (SAN SM) - Chair William Vereker resigns and the exit comes as the Co. reviews its country operations, according to FT. (FT)

OTHER UK COMPANIES

Playtech (PTEC LN) – Co. Chair to retire from the board this year, according to Sky News. (Sky News)

BROKER MOVES

Serco (SRP LN) initiated with Buy at Berenberg

DAX

Continental AG (CON GY) - Continental anticipates a challenging sales year for its automotive unit as it proceeds with plans to spin off the division by 2025, Bloomberg reports. Despite the downturn in the car industry, the company aims to offset costs through cost-cutting measures to maintain profitability levels. (Bloomberg)

Deutsche Telekom (DTE GY) - Apple (AAPL) is said to be working with SpaceX and T-Mobile (TMUS) to offer service on iPhones with the new iPhone update expected to support Starlink satellites. (Newswires)

OTHER GERMAN COMPANIES

BROKER MOVES

Carl Zeiss Meditec (AFX GY) upgraded to Neutral from Sell at Goldman Sachs Shares +2.1% in pre-market trade

CAC

Airbus (AIR FP)- Co. says it is progressing in technical assessment of one major satellite programme, and expects to give an update with 2024 results. Tells analysts it expects headcount to be roughly stable in Q4 2024, Q/Q. Progressing in technical assessment of one major satellite programme, expects to give an update with 2024 results. Expects financial benefits from its lead cost-cutting and improvement programme in Q4 24 to be similar to Q3 and mostly reflected in R&D expenses. Separately, Airbus confirmed that an Airbus A321 aircraft operated by Air Busan caught fire on the ground. (Newswires)

BNP Paribas (BNP FP) – Co’s Cetelem unit is to make products available via Apple (AAPL), via Les Echos. (Les Echos)

LVMH (MC FP) - FY 2024 (EUR): Revenue 84.68bln (exp. 84.32bln), Profit from recurring ops. 19.57bln, Net profit 12.55bln (exp. 13.65bln). Q4 organic sales -1% (exp. -2.82%). Q4 organic revenue +1% (exp. -1.04%). Q4 BREAKDOWN: Revenue +1% (exp. -1%, Q3 -3%). Fashion & Leather -1% (exp. -2.8%, Q3 -5%), Watches & Jewellery +3% (exp. -2.8%, Q3 -4%), Selective Retailing +7% (exp. +3.1%, Q3 +2%). Wines & Spirits -8% (exp. -7%, Q3 -7%), Perfumes & Cosmetics +2% (exp. +3.5%, Q3 +3%). US +3% (Q3 +0%), Japan +8% (Q3 +20%), Asia ex-Japan -10% (Q3 -16%), EMEA +4% (Q3 +2%). Will propose a dividend of EUR 13/shr. COMMENTARY: CFO said mainland China clientele stayed stable in 2024; mainland China shoppers for fashion and leather showed slightly more appetite towards end of year. CEO said he is confident on 2025, environment in 2024 was more delicate, and is confident to turn around the alcohol division within the next two years. CEO said Tiffany New York store had record sales in 2024, with Tiffany Q4 organic sales growth 9%. CEO said 2025 started rather well. Louis Vuitton and Tiffany had double-digit growth in early 2025, and is confident on Dior but would not say optimistic. When asked on Trump inauguration, said there is a wave of optimism in the US and the market is developing very dynamically, and predicts a booming US market. CFO added the Co. did a reasonable job in managing costs, co. did no or very little price rises last year, and rise in admin expenses was mostly one-off. CFO said Dior faced difficult environment, but did best among fashion couture brands. CEO asked on potential disposal of wine and spirits division, says 'it's not on the agenda at all.' Index Weightings: Euro Stoxx 50: 4.744%, CAC 40: 9.50%.

OTHER FRENCH COMPANIES

Air France (AF FP) – Co. has made a move to become a new shareholder of Air Europa by hiring the services of Societe Generale as an advisor to help submit a bid for the co, via Reuters citing sources. (Reuters)

Remy Cointreau (RCO FP) – 9M (EUR): Sales 787.9mln (exp. 777.5mln); in Q3 Revenue 254mln (exp. 245mln). Confirms 2024-2025 organic sales guidance at lower end of guidance range (current guidance close to -18%). Expects exchange rates to have a positive impact on sales between +5-10mln. (Newswires)

BROKER MOVES

EssilorLuxottica (EL FP) upgraded to Outperform from Sector Perform at RBC

PAN EUROPE

Arcadis (ARCAD NA) – Secures a share of a USD 150mln contract with US army. (Newswires)

Agricultural Names - European commission proposes tariffs on agricultural products and fertilizers from Belarus, according to Bloomberg. (Newswires)

Aluminium Names - EU reportedly proposes new Russian sanctions including an aluminium ban that would phase in over one year, while it also proposes new measures against Russian banks and dark fleet tankers. (Newswires)

Akzo Nobel (AKZA NA) - Q4 (EUR): adj. EBITDA 321mln (exp. 323mln), EBIT 127mln (exp. 199mln), Revenue 2.62bln (exp. 2.52bln). Do not expect a significant market rebound in 2025. FY24 Revenue 10.7bln (exp. 10.6bln). Final dividend of 1.54/shr proposed. FY25 Guidance sees adj. EBITDA >1.55bln (exp. 1.58bln). (Newswires)

ASML (ASML NA) - Q4 (EUR): Revenue 9.263bln (exp. 9.074bln), Booking 7.09bln (exp. 3.53bln), Gross Margin 51.7% (exp. 49.6%). Sees Q1 net sales between EUR 7.5-8.0bln (exp. 7.25bln), sees Q1 gross margin between 52-53% (exp. 51.2%). CEO COMMENTARY: Revenue "was primarily driven by additional upgrades. We also recognized revenue on two High NA EUV systems." "Consistent with our view from the last quarter, the growth in artificial intelligence is the key driver for growth in our industry". DIVIDEND AND BUYBACK: ASML intends to declare a total dividend for the year 2024 of €6.40 per ordinary share, which is a 4.9% increase compared to 2023. "In the fourth quarter, we did not purchase any shares under the current 2022-2025 share buyback program." (ASML) Note: CEO and CFO press conference at 10:00GMT/05:00EST, Earnings Call at 14:00GMT/09:00EST. Index Weightings: Euro Stoxx 50: 7.921%, AEX: 11.51%.

EU Capital Markets - The EU financial services chief Maria Luis Albuquerque suggested that the bloc may proceed with a "coalition of the willing" to advance the capital markets union, breaking a decade-long deadlock, Bloomberg reports. While consensus among all 27 member states is preferred, alternatives could be explored to address investment gaps.

Mining Stocks - Brazilian miner Vale Q4 iron ore output 85.3mln tons (exp. 85.9mln tons), iron ore sales 69.9mln tons (exp. 73.6mln tons). Separately, White House said the February 1st date for tariffs on Canada and Mexico still holds, and no specific date for tariffs on steel and copper. (Newswires)

BROKER MOVES

SMI

Lonza (LONN SW) – FY (CHF): Sales 6.6bln (exp. 6.61bln). Excluding Vacaville, which is expected to contribute around CHF 0.5bln in sales at a lower profitability, Lonza expects low-teen organic sales growth and margin improvements in its CDMO business. (Newswires)

Logitech (LOGN SW) - Q3 EPS 1.59 (exp. 1.36), Q3 revenue USD 1.34bln (exp. 1.25bln). Exec noted gaming sales neared pandemic highs, with strong performance in Pro Gaming and MX portfolios. Logitech for Business advanced, and effective marketing boosted geographic progress. Lifts FY25 revenue outlook to between USD 4.54-4.57bln (exp. 4.46bln; prev. saw 4.39-4.47bln), and raises its FY25 operating income view to between USD 755-770mln (prev. saw 720-750mln). Notes of notable progress in China with doubt digit increase in net sales Y/Y. Elsewhere, Co. enters into USD 750mln revolving credit facility. (Newswires)

OTHER SWISS COMPANIES

Julius Baer (BAER SW) - Reportedly set to cut hundreds of jobs and reduce its executive board, via Bloomberg. (Bloomberg) Report hit just before Tuesday's close

BROKER MOVES

SGS (SGSN SW) resumed with Buy at Citi

SCANDINAVIA

Novo Nordisk (NOVOB DC) - FDA approves Ozempic (NOVOB DC) as the only GLP-1 RA to reduce the risk of worsening Kidney Disease and Cardiovascular death in adults with Type 2 diabetes and Chronic Kidney disease. Approval is based on results of pivotal flow Phase 3B Kidney Outcomes trial. (Newswires)

SSAB (SSABA SS) – Q4 (SEK): EBIT 487mln (exp. 419.1mln), Revenue 23.61bln (Exp. 22.62bln). Q1 Outlook: Compares with Q4’24, special steels’ shipments to are assessed to be significantly higher, though prices exp. to be lower. Costs of raw materials to expected to be stable vs Q4. (Newswires)

SEB (SEBA SS) - Q4 (SEK): NII 10.8bln (exp. 10.5bln), Net 7.5bln (exp. 7.65bln). Proposed a dividend of 8.50/shr & special dividend of 3.00/shr. (Newswires)

Tele2 (TELE2B SS) – Q4 (SEK): Net Income 1.bln (exp. 0.99bln), PBT 1.2bln (exp. 1.26bln), EPS 1.40 (exp. 1.46). FY25 Guidance: low-single digit organic growth of end-user service. Plans to cut more than 600 jobs in 2025. (Newswires)

Volvo AB (VOLVB SS) – Q4 (SEK): Revenue 138.4bln (exp. 133.1bln), Adj. Op. 14bln (exp. 14.5bln), EPS 5.28 (prev. 5.93 Y/Y). Proposes extra dividend of SEK 10.50/shr. Truck Total Order Intake 61,200 (exp. 54,285). Cuts China truck market outlook, but notes that North America is gradually improving. Market Outlook 2025: China change of +0-10% (prev. guided -5 to +5%). (Newswires)

BROKER MOVES

US

CLOSES: SPX +0.92% at 6,067, NDX +1.59% at 21,463, DJIA +0.31% at 44,850, RUT +0.04% at 2,284.

SECTORS: Technology +3.60%, Communication Services +1.26%, Consumer Discretionary +0.34%, Financials -0.20%, Materials -0.35%, Industrials -0.64%, Health -0.66%, Energy -1.04%, Real Estate -1.24%, Utilities -1.39%, Consumer Staples -1.50%.

American Axle (AXL), Dowlais Group (DWL) - American Axle & Manufacturing Holdings is in advanced talks to merge with UK-based Dowlais Group in a deal valued over GBP 1bln, Bloomberg reports. The transaction could be announced soon, with both companies' shareholders set to own roughly half of the merged entity.

DeepSeek - The US Navy has reportedly banned the use of China’s DeepSeek AI over security and ethical concerns, CNBC reports. Separately, Microsoft (MSFT) and OpenAI are reportedly investigating whether China-linked DeepSeek improperly accessed OpenAI’s data; suspicious API activity was said to have been detected in late 2024, and the two claim that DeepSeek’s new AI model may have used OpenAI outputs for training, raising US security concerns.

Meta (META) - CEO Zuckerberg is reportedly looking into purchasing a property in Washington DC, via FT citing sources; article writes that move signals Zuckerberg's intention to work closely with US President Trump's administration

Qorvo (QRVO) - Apple-supplier Qorvo reported Q3 adj EPS of 1.61 (exp. 1.22), Q3 revenue USD 916.3mln (exp. 901mln). Sees Q4 adj. EPS between 0.90-110 (exp. 0.82), and sees Q4 revenue at USD 850mln (exp. 833mln). Shares initially rose after the publication of its results, however, gains were given back as the company warned of flat sales to its largest customer, likely Apple (AAPL), while also noting that the Android market faces challenges, particularly in China.

Norway SWF - Norway's USD 1.8tln wealth fund ended 2024 with a tech-heavy top ten, with nine out of ten largest holdings in technology stocks. The fund benefited from advances in AI and increased demand for semiconductor components, although concerns over a potential correction in the AI stock rally loom, Bloomberg reports.

Starbucks (SBUX) - Q1 EPS 0.69 (exp. 0.67), Q1 revenue USD 9.40bln (exp. 9.31bln). Q1 comp sales -4% (exp. -5.3%); North America comps -4% (exp. -5.0%), China comps -6% (exp. -9.3%), International comps -4% (exp. -6.1%). Exec said it plans to cut 30% of its menu after a shift towards coffee and espresso. Noted that rewards membership and spending grew. SBUX aims to double store count long-term, applying lessons from China. Said the “Back to Starbucks” strategy is driving early US business improvements. Exec said Q2 EPS was expected to be lowest in 2025 due to seasonality, restructuring, and elevated investments; EPS is expected to improve in H2.

29 Jan 2025 - 06:56- Research Sheet- Source: Newsquawk