Newsquawk Daily European Equity Opening News - 2nd March 2023

2nd March 2023

ASIA

Asia-Pac stocks were choppy with price action kept mostly rangebound after the uninspiring handover from Wall Street where risk appetite was hampered by the latest ISM data and hawkish Fed rhetoric. ASX 200 (+0.1%) was indecisive amid weakness in the financial, tech and consumer sectors, while sentiment was also not helped by a large slump in building approvals although the downside was limited by resilience in the commodity-related industries. Nikkei 225 (Flat) failed to sustain early advances with the index stuck around the 27,500 level after data showed Japanese recurring profits declined Y/Y for the first time in eight quarters. Hang Seng (-0.8%) and Shanghai Comp. (Flat) were mixed with underperformance in Hong Kong as investors booked profits from yesterday’s tech-led rally and with the mainland also clouded by several weak earnings releases and ongoing frictions as the US is said to be lobbying allies on possible China sanctions if Beijing gives Russia military aid in Ukraine.

EUROPEAN CLOSES

CLOSES: EURO STOXX 50 -0.53% at 4,215, FTSE 100 +0.49% at 7,914, DAX 40 -0.39% at 15,305, CAC 40 -0.46% at 7,234, FTSE MIB -0.59% at 27,315, IBEX 35 -0.76% at 9,322, SMI -0.38% at 11,056.

SECTORS: Materials 0.66%, Industrials 0.22%, Consumer Disc 0.18%, Telecoms -0.42%, Energy -0.57%, IT -0.96%, Financials -1.06%, Healthcare -1.08%, Consumer Stpl -1.13%, Utilities -2.53%

FTSE 100

Arm IPO - SoftBank-backed (9984 JT) Arm has reportedly ruled out a UK listing for now to focus on its US IPO, according to sources. SoftBank is poised to appoint banks to lead the transaction as soon as this month, including Goldman Sachs (GS), JPMorgan Chase (JPM) and Barclays (BARC LN), according to sources. (Bloomberg/SCMP)

Defense Names - UK and Saudi Arabia signed a new agreement during the Defense Minster's visit with a statement of intent signed, initiating a feasibility study to explore their combat-air relationship. (Newswires)

Ex-Divs - Diageo (DGE LN), Hargreaves Lansdown (HL/ LN), HSBC Holdings (HSBA LN), and Berkeley Group Holdings (BKG LN) will trade without entitlement to their latest dividend payouts. (dividenddata)

GSK (GSK LN) - Co. won the support of US FDA advisors for its vaccine for the respiratory syncytial virus. The committee of 12 voted unanimously that the Co's Arexvy vaccine is effective. (Newswires)

M&G (MNG LN) - Macquarie is reportedly considering a GBP 5bln-plus takeover bid for M&G, according to Sky News sources. (Sky News)

OTHER UK COMPANIES

Purplebricks (PURP LN) - Founder Bruce is reportedly considering making an offer for the Co., via Sky News; follows Bruce standing down as CEO around four years ago. (Sky News)

BROKER MOVES

Babcock (BAB LN) downgraded to Neutral from Buy at Citi

DAX

BASF (BAS GY) - Co. is said to be halting the development of hybrid wheat seeds in North America. BASF will instead focus on developing the new type of wheat in European markets, aiming to launch the technology there "toward the end of the decade,". (Yahoo Finance)

Covestro (1COV GY) - FY 2022 (EUR): Revenue 18bln (prev. 15.9bln Y/Y). Adj. EBITDA 1.62bln (prev. 3.09bln). Net -272mln (prev. +1.62bln). Co. guides initial FY23 EBITDA "well below" the prior year and FOCF "significantly below" the prior year. (Newswires)

Deutsche Boerse (DB1 GY) - January cash market turnover EUR 113.3bln (prev. 173bln Y/Y). (Newswires)

Merck (MRK GY) – FY 2022 (EUR): Revenue 22.2bln (prev. 19.7bln). Adj. EBITDA 6.05bln (prev. 5.95bln). Organic revenue +6.4% Y/Y. CEO said the strong development of the Life Science core business more-than offset the decline in COVID-related demand. Negative FX impact of -1% to -4% expected in 2023. (Newswires) Shares are seen opening lower by 2.1%.

SAP (SAP GY) - Salesforce (CRM) shares rose higher by 15.8% after hours following a strong quarter, increased buyback and impressive guidance for Q1 and FY.

OTHER GERMAN COMPANIES

Aareal Bank (ARL GY) – Q4 2022 (EUR): Operating profit 82mln (prev. 32mln). NII 188mln (prev. 162mln Y/Y). Co. expects a further increase in income this year. (Newswires)

Evonik (EVK GY) - FY 2022 (EUR): Revenue 18.5bln (exp. 18.3bln). Adj. EBITDA 2.49bln (exp. 2.53bln). Net 540mln (prev. 746mln Y/Y). Co. expects EUR 250mln in cost savings in FY23. Co. guides FCF to increase Y/Y. (Newswires)

Hapag-Lloyd (HLAG GY) - FY 2022 (EUR): Revenue 7.83bln (prev. 7.28bln Y/Y). EBITDA 3.79bln (prev. 4.03bln). Net 3.27bln (prev. 3.52bln). Looking ahead, Hapag-Lloyd expects earnings to gradually normalise in the current 2023 financial year. EBITDA is expected to be in the range of EUR 4-6bln and EBIT to be in the range of EUR 2-4bln. (Newswires/Hapag-Lloyd IR)

Kion (KGX GY) - FY 2022 (EUR): Revenue 11.1bln (exp. 11bln). Adj. EBIT 292mln (exp. 294mln). Order intake +6.2% Y/Y. (Newswires)

United Internet (UTDI GY) - United Internet acquires 13.9mln treasury shares during its public share buyback offer. (United Internet)

BROKER MOVES

Knorr-Bremse (KBX GY) reiterated with Overweight at JPMorgan Chase

CAC

Renault (RNO FP) - Co. said Aramco signed a letter of intent with Renault and Geely (175 HK) for a new powertrain company to focus on lower emission technologies. (Newswires)

OTHER FRENCH COMPANIES

Technip Energies (TE FP) - FY 2022 (EUR): Revenue 6.42bln (exp. 6.39bln). Net 320mln (prev. 251mln Y/Y). Order intake 3.84bln (prev. 9.79bln Y/Y). Backlog 12.8bln (prev. 16.4bln). EBIT margin 7.0% (prev. 6.5%). (Newswires)

BROKER MOVES

PAN EUROPE

AB InBev (ABI BB) - Q4 2022 (USD): Revenue 14.7bln (exp. 15.2bln). EPS 0.98 (exp. 0.72) Organic adjusted EBITDA margin +7.6% (exp. +7.4%). Co. sees 2023 organic adj. EBITDA +4-8% (exp. 7.6%). Normalised EBITDA 4.95bln (prev. 4.88bln). (Newswires)

Auto Names - The EU is reportedly attempting to revive plans to effectively ban new combustion-engine cars by 2035, according to Bloomberg. (Newswires)

UnicCedit (UCG IM) - Board is reportedly proposing an increase to CEO Orcel's annual pay by 30%, according to Reuters sources. (Newswires)

Telecom Italia (TIT IM) - Co. spokesperson said it is nearing a carve-out of its enterprise unit. (Newswires)

BROKER MOVES

Saipem (SPM IM) reiterated with Overweight at JPMorgan Chase

SMI

OTHER SWISS COMPANIES

Julius Baer (BAER SW) - CEO said there are no immediate plans to go onshore in China. (Newswires)

Kuehne + Nagel International (KNIN SW) reiterated with Overweight at JPMorgan Chase

BROKER MOVES

SCANDINAVIA

Subsea 7 (SUBC NO) – Q4 2022 (USD): Revenue 1.29bln (prev. 1.37bln Y/Y). Adj. EBITDA 169mln (prev. 143mln). Backlog 9.01bln (prev. 7.21bln Y/Y). (Newswires)

BROKER MOVES

Boliden (BOL SS) initiated with Underperform at Credit Suisse

Norsk Hydro (NHY NO) initiated with Outperform at Credit Suisse

US

CLOSES: SPX -0.47% at 3,951, NDX -0.86% at 11,938, DJI +0.02% at 32,661, RUT +0.08% at 1,898.

SECTORS: Utilities -1.72%, Real Estate -1.49%, Consumer Discretionary -1.28%, Technology -0.81%, Consumer Staples -0.76%, Communication Services -0.61%, Financials -0.38%, Health -0.18%, Industrials +0.38%, Materials +0.68%, Energy +1.94%.

Salesforce Inc (CRM) - Q4 2023 (USD): Adj. EPS 1.68 (exp. 1.36), Revenue 8.38bln (exp. 7.99bln), increases share repurchase program to USD 20bln. Co. sees Q1 Adj. EPS USD 1.60-1.61 (exp. 1.32), sees Q1 rev. 8.16bln-8.18bln (exp. 8.05bln), sees FY Adj. EPS 7.12-7.14 (exp. 5.78), sees FY rev. 34.5bln-3.7bln (exp. 34.05bln). Q4 revenue breakdown: Subscription and support revenue USD 7.79bln (exp. 7.41bln). Sales USD 1.79bln(exp. 1.71bln). Service revenue USD 1.92bln (exp. 1.88bln). Platform & other revenue USD 1.56bln (exp. 1.52bln). Marketing & commerce revenue USD 1.18bln (exp. 1.14bln). Subscription and support data revenue USD 1.34bln (exp. 1.2bln). (businesswire) Shares rose 15.8% after-market

Tesla (TSLA) - Investor day: CFO said the Co. could spend up to USD 175bln to reach 20mln vehicle production and noted of possible share buyback as use of excess capital. CEO Musk confirmed the Co. will build a new Gigafactory in Mexico, while the factory will build next-gen vehicle and other plans will also produce next-gen vehicles. Musk said Co. could have ten models to reach 20mln annual sales but declined to comment when asked about future two vehicle models Co. indicated were planned. Chip shortage is mostly behind us, while global production head said the Co. hit 4mln production milestone and aims to build a vehicle every 45 seconds. Tesla said battery storage business has grown at 65% CAGR since 2016. Tesla said next drive unit will take 50% lesser factory footprint and next-gen drive unit cost will be cut by USD 1,000 each, while next-gen drivetrain will not use rare earths. (Newswires) Desks said the event was light on details about both new car models and outlook. Shares fell 5.6% after-market

02 Mar 2023 - 06:48- Research Sheet- Source: Newsquawk