Newsquawk Daily European Equity Opening News - 31st January 2024

31st January 2024

ASIA

APAC stocks were mostly subdued amid a deluge of earnings releases and key data releases at month-end. ASX 200 shrugged off early weakness and printed record highs as yields fell after softer-than-expected inflation.Nikkei 225 initially retreated following disappointing Industrial Production and Retail Sales data, while hawkish-leaning comments from the BoJ Summary of Opinions also provided a headwind for stocks. However, the index then gradually recovered all of its losses. KOSPI was subdued after results from Samsung Electronics which topped estimates but its profits declined.Hang Seng and Shanghai Comp underperformed following the latest Chinese PMI data in which Manufacturing PMI matched estimates and remained in contraction territory for a 4th consecutive month.

Samsung Electronics (005930 KS) - Q4 (KRW) oper. profit 2.8tln (prelim. 2.8tln), net 6.3tln (exp. 2.9tln), rev. 68tln (prelim. 67tln), Co. expects an overall recovery in the memory chip market in 2024. Expect the DRAM inventory level to return to normal around Q1 and the NAND inventory level to return to normal within H1, while it continues selective production adjustment of memory chips in H1. (Newswires)

EUROPEAN CLOSES

CLOSES: DAX: +0.18% at 16,972.34, FTSE 100: +0.44% at 7,666.31, CAC 40: +0.48% at 7,677.47, Euro Stoxx 50: +0.53% at 4,663.95, IBEX 35: +1.51% at 10,039.30, FTSE MIB: +1.29% at 30,623.27, SMI: +0.07% at 11,438.10.

SECTORS: Financials 0.81%, Consumer Disc 0.65%, Industrials 0.47%, Energy 0.28%, Utilities 0.18%, IT -0.04%, Consumer Stpl -0.12%, Healthcare -0.13%, Telecoms -0.25%, Materials -0.57%

FTSE 100

IHG (IHG LN) - Re-enters the Swedish market with the signing of voco Stockholm Kista. (IHG)

UK Business - UK Lloyds Business Barometer (Jan) 44 (Prev. 35). (Lloyds)

WPP (WPP LN) – Co. is to cut costs to free up more money to invest more into AI. The Co. expects to save up to GBP 125mln a year, by removing duplication of roles and processes, via Bloomberg. (Bloomberg)

OTHER UK COMPANIES

BROKER MOVES

Harbour Energy (HBR LN) downgraded to Sell from Buy at Goldman Sachs

Spirax-Sirco (SPX LN) upgraded to Hold from Underperform at Jefferies

DAX

OTHER GERMAN COMPANIES

Atoss Software (AOF GY) - FY (EUR): Revenue 151mln (exp. 148mln), EBITDA 55mln (exp. 52mln), EBIT 51mln (exp. 48mln), Net 35mln (exp. 32mln), EPS 4.5 (exp. 4.06). CEO’s position has been extended until 2026. Management expects growth to continue in FY24 and beyond. (Newswires)

Deutsche Lufthansa - Berlin Airport said there will be no departures for passengers on Thursday due to a strike. (Newswires) 

BROKER MOVES

Deutsche Bank (DBK GY) resumed with Neutral at Citi

Rational (RAA GY) downgraded to Underperform from Neutral at BNP Paribas

Tag Immobilien (TEG GY) upgraded to Buy from Hold at HSBC

Qiagen (QIA GY) upgraded to Overweight from Equal Weight at Morgan Stanley

CAC

Michelin (ML FP) - Confirms being part of EU antitrust investigation, according to Bloomberg. (Bloomberg)

OTHER FRENCH COMPANIES

Elis (ELIS FP) - Q4 (EUR): Revenue 1.08bln (exp. 1.1bln), Organic Revenue +8.1%. Co. delivered record revenue in 2024 of 4.3bln, +13% Y/Y. Outlook: 2023 targets are better than previously communicated targets, FCF expected above 300mln, +75mln Y/Y. (Newswires)

JC Decaux (DEC FP) - Wins the exclusive advertising concession of Shenzhen Bao'an International Airport in China. (Newswires)

Nexans (NEX FP) - Informs that the French Competition Authority is carrying out searches at three Nexans sites in France today. (Newswires)

Vivendi (VIV FP) - Notes update on the study of the "split project" to be presented to the supervisory board on March 7th. Steps need to be taken to meet regulatory approvals and in due time the consent of Co. shareholders. (Newswires)

BROKER MOVES

PAN EUROPE

Chip Names - Advanced Micro Devices Inc (AMD) - Q4 2023 (USD): Adj. EPS 0.77 (exp. 0.77), Revenue 6.17bln (exp. 6.12bln). Sees Q1 rev. USD of approximately USD 5.4bln +/- USD 300mln (exp. 5.77bln). (Newswires) Shares -6.7% after-hours following soft Q1 guidance.

Santander (SAN SM) - Q4 (EUR) Net 2.93bln (exp. 2.56bln), Net Interest Income 11.1bln (exp. 11bln). Plans to return EUR 5.5bln to shareholders from 2023 earnings. Guides initial FY24 Revenue "mid-single-digit growth", RoTE 16%, CET1 above 12%, efficiency ratio <43%. (Newswires)

Tech Stocks - Alphabet (GOOG) slumped 5.8% after advertising revenue missed, while Microsoft (MSFT) fell by 0.3% after Q3 More Personal Computing was guided below forecasts.

Universal Music Group (UMG NA) - Co. is to remove its songs from TikTok following a breakdown of payment negotiations, following negotiations across the past year with the firm according to the FT citing sources. (FT) Of note for Bollore (BOL FP) and Vivendi (VIV FP), given their sizeable stakes in UMG.

BROKER MOVES

Acciona Energias (ANE SM) downgraded to Hold from Buy at SocGen

BBVA (BBVA SM) downgraded to Hold from Buy at HSBC

Euronav (EURN BB) downgraded to Hold from Buy at Jefferies

Iberdrola (IBE SM) downgraded to Hold from Buy at SocGen

UCB (UCB BB) upgraded to Buy from Hold at Jefferies

SMI

Novartis (NOVN SW) - Q4 (USD): Revenue 11.4bln (exp. 11.7bln), Core EPS 1.53 (exp. 1.67), Core Net Income 3.12bln (exp. 3.34bln), Operating Income 3.8bln. FY23 dividend 3.30/shr, +3.1% (exp. 3.60). Net sales growth was driven primarily by strong performance for Entresto +31%, Kesimpta +99%, Kisqali +75%, Pluvicto +261% & Semblix +179%. Expect sales growth of 5% per annum until 2028, core operating margin at circa. 40% by 2027. (Newswires) Co. has around a 2% weighting in the Stoxx Europe 600 & and around a 16% weight in the SMI.

Nestle (NESN SW) – A division of the Co., Nestle Waters, has admitted to breaching French and EU regulation by using ultraviolet disinfection and activated carbon filtration to purify mineral water, via The Times. (The Times)

OTHER SWISS COMPANIES

Sandoz (SDZ SW) - Launched the first and only biosimilar for Multiple Sclerosis. Tyruko is available in Germany from February 1st. (Newswires)

BROKER MOVES

Barry Callebaut (BARN SW) downgraded to Neutral from Buy at Citi

SCANDINAVIA

DNB (DNB NO) – Q4 (NOK): Net 9.40bln (exp. 8.96bln), Total Income 20.0bln (exp. 20.7bln). (Newswires)

SSAB (SSABA SS) – Q4 (SEK): Adj. EBITDA 3.36bln (exp. 2.86bln), Revenue 26.5bln (exp. 26.5bln). Guides Q1 SSAB Special Steels shipments “significantly higher” Q/Q. (Newswires)

Novo Nordisk (NOVOB DC) - FY (DKK): Revenue 232.26bln (exp. 229.24bln), EPS 18.62 (exp. 18.32). New share buyback programme of up to DKK 20bln. The outlook reflects the gradual roll-out of Wegovy with capped volumes in international operations. Started increasing lower strength Wegovy within the US during January. Sees continued periodic supply constraints and related drug shortage notifications across a number of products and geographies. Q4: Wegovy Sales 9.62bln (prev. 2.45bln). Revenue 65.86bln (exp. 62.27bln). EBIT 26.7bln (exp. 24.9bln). FY24 Guidance: Sales: 18-26% (exp. 23.3%). Capex 45bln. adj. FCF 64-74bln. Co. has around a 2.8% weighting in the Stoxx Europe 600 (the largest in the index)

Wartsila (WRT1V FH) – Q4 (EUR): Adj. EBIT 177mln (prev. 93mln Y/Y), Revenue 1.64bln (prev. 1.77bln Y/Y). (Newswires)

BROKER MOVES

Ericsson (ERICB SS) downgraded to Sell from Neutral at UBS

Kesko (KESKOB FH) downgraded to Reduce from Accumulate at Inderes

US

CLOSES: SPX -0.06% at 4,925, NDX -0.68% at 17,477, DJI +0.35% at 38,467, RUT -0.76% at 1,996.

SECTORS: Financials +1.2%, Energy +1.01%, Consumer Staples +0.56%, Materials +0.45%, Health +0.25%, Industrials +0.05%, Utilities -0.04%, Consumer Discretionary -0.22%, Communication Services -0.71%, Technology -0.74%, Real Estate -0.91%.

Chevron (CVX) - Diverts Kazakhstan's CPC oil blend shipments to Asia from the Red Sea to a longer route around Africa, according to Reuters sources. (Reuters)

Alphabet Inc (GOOGL) - Q4 2023 (USD): EPS 1.64 (exp. 1.59), Revenue 86.31bln (exp. 85.33bln). Google advertising revenue USD 65.52bln (exp. 65.8bln). YouTube ads revenue USD 9.20bln (exp. 9.16bln). Google Services revenue USD 76.31bln (exp. 75.97bln). Google Cloud revenue USD 9.19bln (exp. 8.95bln). Other Bets revenue USD 657mln (exp. 298.6mln). Co. is taking action to optimise global office space. Executive says Co. saw ad strength in retail, while CFO says search remained the biggest contributor to revenue growth and operating cost increase primarily reflected by growing R&D expenses. (Newswires) Shares -5.7% after-hours

Advanced Micro Devices Inc (AMD) - Q4 2023 (USD): Adj. EPS 0.77 (exp. 0.77), Revenue 6.17bln (exp. 6.12bln). Data centre revenue USD 2.28bln (exp. 2.3bln).Gaming revenue USD 1.37bln (exp. 1.25bln). Client revenue USD 1.46bln (exp. 1.51bln). Embedded revenue USD 1.06bln (exp. 1.06bln). Sees Q1 rev. USD of approximately USD 5.4bln +/- USD 300mln (exp. 5.77bln). Sees Q1 adj. gross margin about 52% (exp. 51.8%). (Newswires) Shares -6.7% after-hours

Microsoft Corp (MSFT) - Q2 2024 (USD): EPS 2.93 (exp. 2.78), Revenue 62.02bln (exp. 61.1bln). Cloud revenue 33.7bln (exp. 32.31bln). Revenue breakdown (USD): Intelligent Cloud revenue 25.88bln (exp. 25.29bln).Productivity and Business Processes revenue 19.25bln (exp. 19.03bln). More Personal Computing revenue 16.89bln (exp. 16.8bln). Other metrics: (USD) Capital expenditure 9.74bln. Operating income 27.03bln. Says 6 points of Azure revenue growth is attributable to AI, up from 3 points growth in the prior quarter, via co. exec in an interview. Office Commercial paid seats rose to 400mln from 382mln in Q3 23. CEO says now 53,000 Azure AI customers and one-third were new to Azure in the past 12 months, adds over half of Fortune 500 companies use Azure's OpenAI AI services, seeing an increase in billion-dollar-plus Azure commitments. Q3 Guidance (via earnings call). Sees Q3 rev. USD 60bln-61bln (exp. 60.86bln) .Sees Productivity and Business Processes rev. 19.3bln-19.6bln (exp. 19.5bln).Sees Intelligent Cloud rev. 26.0bln-26.3bln (exp. 25.9bln). Sees More Personal Computing rev. 14.7bln-15.1bln (exp. 15.4bln). Sees Operating Expenses 15.8bln-15.9bln (exp. 16.5bln).Sees COGS 18.6bln-18.8bln (exp. 19.5bln)Shares -0.3% after-hours

PayPal (PYPL) - Is to cut 2,500 jobs (9%) as rivals snag market share, according to Bloomberg. (Bloomberg)

Starbucks Corp (SBUX) - Q1 2024 (USD): Adj. EPS 0.90 (exp. 0.93), Revenue 9.40bln (exp. 9.58bln). Starbucks Q1 comp. sales rose 5% (exp. +6.39%). CEO says saw a negative impact on business in the Middle East and events in the Middle East also had an impact in the US driven by misperceptions about our position Shares +3.7% after-hours

Tesla (TSLA) - CEO Musk's USD 55bln pay package voided by a judge. (Newswires) Shares -2.6% after-hours

Walmart (WMT) - Announces 3-1 stock split effective February 23rd. (Newswires)

31 Jan 2024 - 06:58- Exclusive- Source: Newsquawk