Newsquawk Daily European Equity Opening News - 2nd February 2024

2nd February 2024

ASIA

APAC stocks mostly took impetus from the gains on Wall St where stocks were underpinned amid a softer yield environment and with US equity futures boosted following the big tech earnings. ASX 200 printed fresh all-time highs with real estate and tech front running the gains amid softer yields. Nikkei 225 gained with headlines dominated by another busy day of earnings results, while Aozora Bank suffered another double-digit drop after it recently flagged losses linked to US commercial property loans. Hang Seng and Shanghai Comp were both initially boosted with outperformance in automakers after their January delivery updates, while tech names were supported after China's NPPA approved 32 imported online games. However, stocks then gradually reversed course after the PBoC continued to drain liquidity despite next week's Lunar New Year holiday.

EUROPEAN CLOSES

CLOSES: DAX: -0.26% at 16,859.04, FTSE 100: -0.11% at 7,622.16, CAC 40: -0.89% at 7,588.75, Euro Stoxx 50: -0.51% at 4,638.85, IBEX 35: -0.63% at 10,014.00, FTSE MIB: -0.18% at 30,689.11, SMI: -1.05% at 11,213.91.

SECTORS: Energy 1.20%, IT 0.50%, Industrials 0.16%, Consumer Disc 0.16%, Consumer Stpl -0.06%, Telecoms -0.32%, Materials -0.51%, Healthcare -0.66%, Utilities -0.86%, Financials -1.60%

FTSE 100

BP (BP/ LN) - Whiting Indiana refinery restart timing is unknown following a power loss, according to sources. (Newswires)

Endeavour (EDV LN) - Says work at the Burkina Faso gold mine has resumed after the strike ended, according to Bloomberg. (Bloomberg)

Hikma (HIK LN) - Announces agreement in principle for a US Opioid settlement, to pay up to USD 115mln. (Newswires)

OTHER UK COMPANIES

Superdry (SDRY LN) - Hedge fund First Seagull has acquired a 5.3% stake, according to The Times. (The Times)

BROKER MOVES

Associated British Foods (ABF LN) downgraded to Equal Weight from Overweight at Morgan Stanley

easyJet (EZJ LN) upgraded to Overweight from Equal Weight at Barclays

Kingfisher (KGF LN) downgraded to Underweight from Equal Weight at Morgan Stanley

Sainsbury's (SBRY LN) upgraded to Equal Weight from Underweight at Morgan Stanley

Wizz Air (WIZZ LN) upgraded to Equal Weight from Underweight at Barclays

Wise (WISE LN) upgraded to Buy from Hold at Jefferies

DAX

E.ON SE (EOAN GY) - Prelim. 2023 (EUR): Net 3.1bln (exp. 3.05bln), Adj. EBITDA 9.40bln (exp. 8.83bln). Raises FY23 EPS 1.18 (prev. guidance 1.03-1.11), Adj. EBITDA 9.4bln (prev. guidance 8.6-8.8bln). (Newswires)

Mercedes-Benz (MBG GY) - Prelim. and unaudited FY23 FCF of the industrial business group is above guidance and market expectations; FCF 11.3bln (exp. 9.9bln). (Newswires)

Volkswagen (VOW3 GY) - Is to announce on Friday an additional BRL 9.0bln in investments in Brazil in the 2022-2028 plan. (Newswires)

OTHER GERMAN COMPANIES

BROKER MOVES

Zalando (ZAL GY) upgraded to Overweight from Equal Weight at Morgan Stanley Shares +4.2% in pre-market trade.

CAC

Renault (RNO FP) - Says dropping the Ampere IPO will not delay investments of Nissan and Mitsubishi in Ampere. (Newswires)

Vinci (DG FP) - Wins the power connection contract for three berths at Haropa Port. (Newswires)

OTHER FRENCH COMPANIES

BROKER MOVES

Rexel (RXL FP) downgraded to Sell from Hold at SocGen

Legrand (LR FP) downgraded to Hold from Buy at SocGen

PAN EUROPE

Caixabank (CABK SM) - Q4 (EUR) Net 1.16bln (exp. 1.21bln), NII 2.75bln (exp. 2.76bln), CET1 Ratio 12.3% (prev. 12.5% Q/Q). Guides initial FY24 NII "in line with FY23, ROTE > 15%, NPL approx. 3%, Cost of Risk approx. 0.3%." Plans to launch a new share buyback in H1, more details will be provided later. (Newswires)

Mega-Cap Tech Earnings - US after-hours results from Apple (AAPL) -2.9%, Amazon (AMZN) +7.1% & Meta (META) +15.2%, see the US section below for details.

Postal Names / Post Holdings (POST) - Q1 (USD): EPS 1.69 (exp. 1.07), Revenue 2.0bln (exp. 1.92bln). Raises FY24 outlook: Expects adj. EBITDA 1.29-1.34bln (prev. guidance 1.22-1.28). (Newswires) POST shares rose 3.2% after-hours

Steel Names / United States Steel Corp (X) - Q4 2023 (USD): Adj. EPS 0.67 (exp. 0.26), Revenue 4.14bln (exp. 3.76bln). (Newswires)

TomTom (TOM2 NA) - Q4 (EUR): Revenue 143mln (exp. 142mln), Net -11.6mln (exp. -23mln), EBIT -10.4mln (exp. -29mln). FY24 Outlook: Revenue 570-610mln (exp. 600mln). (Newswires)

BROKER MOVES

Jeronimo Martins (JMT PL) upgraded to Overweight from Equal Weight at Morgan Stanley

IMCD (IMCD NA) downgraded to Hold from Buy at HSBC

SMI

OTHER SWISS COMPANIES

BROKER MOVES

SCANDINAVIA

Danske Bank (DANSKEB DC) - Q4 (DKK): Net 5.77bln (exp. 5.73bln), NII 9.13bln (exp. 9.3bln). FY: Revenue 52.4bln (exp. 52.7bln), Net Income 21.3bln (exp. 21.3bln), CET1 18.8% (prev. 19.4%). Proposes a H2 dividend of 7.5/shr, on top of the 7.0/shr paid in H1 (FY exp. 14.65/shr). FY24 Guidance: Net 20-22bln (exp. 20.68bln). (Newswires)

Husqvarna (HUSQB SS) – Q4 (SEK): Sales 8.6bln (exp. 8.59bln), EPS -1.77 (exp. -0.67), adj. EBIT -168mln (exp. -614mln). (Newswires)

Konecranes (KCR FH) - Q4 (EUR): Adj. EBITDA 133.8mln (exp.138.1mln), Revenue 1.15bln (exp. 1.12bln). Notes demand environment remained good in general in Q4. Guides initial FY24 Revenue "on same level or to increase Y/Y"(Newswires)

SBB (SBB SS) - Public Property Invest is preparing for a possible IPO. SEB owns 44.8% of PPI. (Newswires)

BROKER MOVES

H&M (HMB SS) downgraded to Underweight from Equal Weight at Morgan Stanley

H&M (HMB SS) upgraded to Accumulate from Reduce at Inderes

Maersk (MAERSKB DC) upgraded to Buy from Hold at HSBC

UPM-Kymmene (UPM FH) upgraded to Accumulate from Reduce at Inderes

US

CLOSES: SPX +1.25% at 4,906, NDX +1.21% at 17,344, DJIA +0.97% at 38,519, RUT +1.39% at 1,974.

SECTORS: Consumer Discretionary +1.98%, Consumer Staples +1.97%, Utilities +1.89%, Real Estate +1.75%, Industrials +1.7%, Materials +1.66%, Technology +1.38%, Health +1.27%, Communication Services +0.88%, Financials +0.09%, Energy -0.06%.

Apple Inc (AAPL) - Q1 2024 (USD): EPS 2.18 (exp. 2.10), Revenue 119.58bln (exp. 117.91bln). Greater China revenue 20.82bln (exp. 23.5bln). REVENUE BREAKDOWN: Products 96.46bln (exp. 95.14bln).iPhone 69.70bln (exp. 68.55bln). Mac 7.78bln (exp. 7.9bln). iPad 7.02bln (exp. 7.06bln). Wearables, home and accessories 11.95bln (exp. 12.02bln). Service 23.12bln (exp. 23.37bln). KEY METRICS: Total operating expenses 14.48bln (exp. 14.62bln). Gross margin 54.86bln (exp. 53.56bln). Cash and cash equivalents 40.76bln (exp. 38.81bln). Apple expects March quarter total revenue and iPhone revenue to be similar to the previous year after accounting for inventory replenishment. Expects gross margins between 46%-47% for fiscal Q2. Expects operating expenses of USD 14.3bln-14.5bln in fiscal Q2. Expects services business to show double-digit growth similar to the December quarter in fiscal Q2. CEO Cook said the Co. will make announcements this year on new AI features. CEO Cook added that FX was a headwind for China sales, and the decline in China sales was in part on a stronger USD. (Apple/Newswires) Shares fell 2.9% after-market. Index weightings: SPX (6.6%), NDX (8.7%), DJIA (3.2%).

Amazon.com Inc (AMZN) - Q4 2023 (USD): EPS 1.00 (exp. 0.80), Revenue 169.96bln (exp. 166.21bln).SALES BREAKDOWN:Online stores 70.54bln (exp. 68.91bln). Physical Stores 5.15bln (exp. 5.23bln). Third-Party Seller Services 43.56bln (exp. 41.96bln). AWS 24.20bln (exp. 24.22bln). GEOGRAPHICAL REGIONS: North America 105.51bln (exp. 102.88bln). International 40.24bln (exp. 38.96bln). KEY METRICS: Third-party seller services net sales excluding F/X +19% (exp. +15.9%). AWS net sales excluding F/X +13% (exp. +11.8%). Operating income 13.21bln (exp. 10.49bln). Operating margin 7.8% (exp. 6.17%). North America operating margin +6.1% (exp. +4.12%). International operating margin -1% (exp. -1.27%). Fulfillment expense 26.10bln (exp. 25.2bln). GUIDANCE: Q1 net sales view 138.0-143.5bln (exp. 142.01bln). Q1 operating income view 8-12bln (exp. 9.1bln). CFO said improved delivery speeds have led to increased purchase frequency by customers across major geographies, and there are no immediate plans for dividends. (Amazon/Newswires) Shares rose 7.1% after-market. Index weightings: SPX (3.5%), NDX (4.9%).

Intel (INTC) - Intel is postponing its USD 20bln chip-manufacturing project in Ohio due to slow chip demand and slow government grant disbursement, WSJ reports. Originally set to begin chip-making in 2023, construction will now likely conclude by late 2026. (Newswires)

Meta Platforms Inc (META) - Q4 2023 (USD): EPS 5.33 (exp. 4.96), Revenue 40.11bln (exp. 39.17bln); authorised 50bln increase to share buyback programme and declared cash quarterly dividend of 0.50/shr. KEY METRICS: Advertising revenue 38.71bln (exp. 38.12bln). Facebook DAUs 2.11bln (exp. 2.07bln). Facebook MAUs 3.07bbln (exp. 3.06bln). Ad impressions +21% (exp. +24.6%). Average Family service users per day 3.19bln (exp. 3.11bln). Average Family service users per month 3.98bln (exp. 3.93bln). GUIDANCE: Q1 revenue view 34.5-37bln (exp. 33.34bln). Meta (META) noted the FTC is seeking to substantially modify consent order on Meta and if contesting is unsuccessful, this could impose additional restrictions on its ability to operate and would adversely impact its business. CEO said the Co. is getting ready to roll out AI services more widely in coming months, adds Threads now has more people using it daily than initial launch and Metaverse focus this year is going to be growing mobile version of Horizon. CFO said Co. will discontinue reporting of Facebook monthly and daily active users, Co. expects to maintain an active share repurchase program. (Meta/Newswires) Shares rose 15.2% after-market. Index weightings: SPX (2.2%), NDX (4.2%).

Microchip Technology Inc (MCHP) - Q3 2024 (USD): Adj. EPS 1.08 (exp. 1.04), Revenue 1.77bln (exp. 1.77bln). GUIDANCE: Q4 adj. EPS view 0.46-0.68 (exp. 0.91). Q4 revenue view 1.225-1.425bln (exp. 1.66bln).COMMENTARY: Taking steps to limit discretionary spending and tightly manage inventory levels during downcycle. Cautious about demand in near term given weak macro environment and customers' ongoing actions to reduce inventory. (Newswires)

Post Holdings (POST) - Q1 (USD): EPS 1.69 (exp. 1.07), Revenue 2.0bln (exp. 1.92bln). Raises FY24 outlook: Expects adj. EBITDA 1.29-1.34bln (prev. guidance 1.22-1.28). (Newswires) POST shares rose 3.2% after-hours

Truist Financial's Truist Insurance (TFC) - Stone Point and Clayton Dubilier & Rice are nearing a deal to acquire Truist Financial's Truist Insurance (TFC) for USD 15bln and an announcement could be made in the coming days, according to Insurance Insider. (Insurance Insider)

United States Steel Corp (X) - Q4 2023 (USD): Adj. EPS 0.67 (exp. 0.26), Revenue 4.14bln (exp. 3.76bln). (Newswires)

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