Newsquawk Daily European Equity Opening News - 3rd August 2023

3rd August 2023

ASIA

Asia-Pac equity markets mostly followed suit to the weakness seen in global peers including on Wall St where stocks and bonds were pressured by the US rating downgrade, AMD earnings and hot ADP data, albeit with some of the losses stemmed in Asia as participants digested the latest Chinese Caixin Services and Composite PMI figures. ASX 200 (-0.4%) was dragged lower by weakness in tech after the similar underperformance of their US counterparts, with sentiment not helped by softer monthly exports and a continued contraction in quarterly retail trade. Nikkei 225 (-1.3%) was pressured as Japanese yields edged higher and with newsflow dominated by earnings. Hang Seng (-0.1%) and Shanghai Comp. (-0.1%) were choppy and briefly clawed back opening losses in the aftermath of somewhat mixed Chinese Caixin Services and Composite PMI data in which Services topped forecast at 54.1 (exp. 52.5) but the Composite reading slowed to 51.9 (prev. 52.5).

EUROPEAN CLOSES

Bourses: DAX -1.36% at 16,020, FTSE 100 -1.36% at 7,562, CAC 40 -1.26% at 7,313, Euro Stoxx 50 -1.60% at 4,337, IBEX 35 -1.83% at 9,329, FTSE MIB -1.30% at 28,975, SMI -0.79% at 11,220.

Sectors: Consumer Stpl -0.33%, Industrials -0.69%, Healthcare -1.02%, Telecoms -1.54%, IT -1.69%, Materials -1.70%, Consumer Disc -1.75%, Energy -1.77%, Financials -1.92%, Utilities -2.03%

FTSE 100

Ex-Dividends - BT (BT/ LN), Unilever (ULVR LN), Lloyds (LLOY LN), Reckitt Benckiser (RKT LN), Relx (REL LN), Rentokil (RTO LN) will trade without entitlement to its latest dividend payout. (Newswires)

Vodafone (VOD LN) - Co's largest shareholder, Emirates Telecommunications Group, said there was a possibility they could increase their stake in the Co. to 20% (vs 14.61% in April filings). (Times)

OTHER UK COMPANIES

BROKER MOVES

Centrica (CNA LN) reiterated with Overweight at JPMorgan Chase

Hothschild (HOC LN) upgraded to Buy from Hold at Berenberg

DAX

Adidas (ADS GY) - Q2 2023 (EUR): Revenue 5.34bln (exp. 5.14bln). Net Income +95mln (exp. -100mln). EPS +0.48 (exp. -0.55). Greater China revenue +16% Y/Y, North America Revenue -16%; Inventories fell more than EUR 400mln; expects revenues to decline Y/Y. Currency-neutral revenues flat versus the prior-year level. Top-line development reflects improved sell-out trends and conservative sell-in strategy. Gross margin up 0.6pp to 50.9%; strong improvement compared to Q1 reflecting better sell-through and less discounting. Operating profit of EUR 176mln includes extraordinary expenses of around EUR 160mln related to one-off costs, donations and accruals for future donations. Inventory position improves substantially versus Q1 level to EUR 5.5bln; now up only 1% year-over-year. (adidas/Newswires) Co. holds a 2.4% weighting in the DAX 40.

BMW (BMW GY) - Q2 2023 (EUR): Revenue 37.22bln (exp. 36.73bln). EBIT 4.38bln (exp. 4.23bln). Automotive revenue 21.63bln (exp. 32.01bln); Raises outlook for vehicle deliveries on strong EV demand, EBIT margin in the Automotive Segment is now projected to be within the range of 9-10.5% (prev. 8-10%). Deliveries of fully-electric BMW vehicles up 133%, the BMW Group benefited in the first half of the year from the positive development in many automotive markets. The company delivered a total of 1,214,864 vehicles to customers (2022: 1,160,094 units; +4.7% Y/Y). The volume of electrified models sold during this period increased significantly to 245,468 units (2022: 184,468 units; +33.1% Y/Y), while deliveries of fully-electric vehicles doubled to 152,936 units (2022: 75,890 units; +101.5% Y/Y). BEVs therefore accounted for 12.6% of sales in the first half-year (2022: 6.5%; +93.8% Y/Y) and 14.1% in the second quarter. (BMW/Newswires)

Infineon (IFX GY) - Q3 (EUR): Revenue 4.09bln (exp. 4.05bln), adj. EPS 0.68 (exp. 0.63), Net Income 831mln (exp. 723mln), Gross Margin 46.2% (exp. 46.8%). Q4 guidance. Segment result margin 25% (exp. 25.8%), Revenue 4bln (exp. 4.13bln), FY23 guidance. Revenue 16.2bln (exp. 16.23bln), Outlook is presented without taking into account the planned acquisition of GaN Systems., CEO Hanebeck, "On the one hand, in electromobility, renewable energy and related application areas, demand has stayed high. On the other hand, demand for consumer applications, such as PCs and smartphones remains low. Infineon is performing well in this challenging market environment thanks to its persistent focus on structural growth drivers for the digital transformation and the transition to a green economy." In other news, Co. to construct the worlds largest 200mm SIC power fab within Kulim, Malaysia; lead to total revenue potential of circa. EUR 7bln by the end of the decade. Expansion is backed by customer commitments of EUR 5bln and around EUR 1bln of pre-payments. (Newswires) Co. holds a 4.1% weight in the DAX 40

Merck (MRK GY) – Q2 (EUR): Revenue 5.30bln (Co. exp. 5.24bln). EBITDA 1.45bln (Co. exp. 1.50bln). EPS 1.62 (exp. 2.16). Net sales organically decrease by −1.1%. EBITDA pre organically down by −7.0%. Healthcare business sector increases net sales and earnings. Co. noted of a weaker market environment in Life Science and Electronics. Co. highlighted a negative foreign exchange impact stronger than in Q1 2023 – “foreign exchange effects, especially from the US dollar and the Chinese renminbi, had an adverse impact of −3.7% on sales.” Co. cuts FY23 revenue guidance to between 20.5-21.9bln (prev. 21.1-22.7bln) and cuts adj. EBITDA guidance to 5.8-6.4bln (prev. 6.1-6.7bln). (Newswires/Merck IR).

Zalando (ZAL GY) - Q2 (EUR): 56.6mln (prev. 14mln YY), Adj. EBIT 144.8mln (prev. 77.4mln YY), Revenue 2.60bln (prev. 2.62bln YY). Narrows FY23 Adj. EBIT 300-350mln (prev. 280-350mln YY), Revenue "lower end of -1%-+4%" (prev. lower end of +1-7%). (Newswires)

OTHER GERMAN COMPANIES

Lufthansa (LHA GY) – Q2 (EUR): Revenue 9.4bln (exp. 9.5bln). Net Income 881mln (exp. 691mln). Adj. EBIT 1.1bln (exp. 1.02bln). Sees Q3 adj. EBIT exceeding pre-crisis level of EUR 1.3bln. Sees FY adj. EBIT above EUR 2.6bln on a "strong" H2 outlook (exp. EUR 2.59bln). Co. expects demand for flight tickets to remain high for the rest of the year. Co. expects high demand remaining particularly in the premium classes. (Newswires)

Rational (RAA GY) - H1 (EUR): EBIT 135mln (prev. 93.1mln YY), Revenue 561mln (prev. 458mln YY). (Newswires)

BROKER MOVES

Auto1 (AG1 GY) downgraded to Hold from Buy at HSBC

Fresenius Medical Care (FME GY) reiterated with Underweight at JPMorgan Chase

Leg Immobilien (LEG GY) downgraded to Add from Buy at Baader Helvea

Siemens Healthineers (SHL GY) reiterated with Overweight at JPMorgan Chase

Telefonica Deutschland (O2O GY) downgraded to Reduce from Hold at HSBC

CAC

AXA (CS FP) – H1 (EUR): Net Income 3.83bln (exp. 3.68bln). Gross Written Premiums and other revenues 55.70bln (exp. 55.86bln). End-June Solvency II ratio +20ppts vs end-Dec. Co. is on track to meet its underlying earnings target of above EUR 7.5bln. (Newswires)

SocGen (GLE FP) - Q2 2023 (EUR): Revenue 6.29bln (exp. 6.41bln), Net Income 900mln (exp. 778mln), Adj. Net 1.16bln (prev. 1.48bln YY), Adj. Op 2.07bln (prev. 2.45bln YY),  Affirms objectives. Co. announces launch of the 2022 share buyback program for around EUR 440mln. Net banking income decreased in Q2 23 by -8.9% (-10.3%) vs. Q2 22, largely due to the decline in the net interest margin in French Retail Banking, a less conducive market environment in Global Banking and Investor Solutions activities and the booking of one-off items under Corporate Centre. (Newswires)

Teleperformance (TEP FP) - Launches a share buyback program of up to EUR 500mln. (Newswires)

Veolia (VIE FP) - H1 (EUR): EBITDA 3.16bln (prev. 2.95bln YY), Revenue 22.8bln (prev. 20.2bln YY). (Newswires)

OTHER FRENCH COMPANIES

BROKER MOVES

PAN EUROPE

AB InBev (ABI BB) - Q2 (USD): Revenue 15.1bln (exp. 15.4bln). Net 339mln (exp. 601mln). Organic revenue +7.2% (exp. 7.1%). Organic Adj. EBITDA +5.5% (exp. +2.5%). Organic volume growth -1.4% (exp. -0.7%). Co. noted the US beer industry share has been stable since the last week of April. (Newswires)

Banco BPM (BAMI IM) - Raises FY23 NII guidance to EUR 3.25bln (prev. over 3bln). (Newswires)

Bper (BPE IM) - Q2 (EUR): Net 414mln (exp. 331mln), Revenue 1.33bln (exp. 1.38bln). NII 819mln (prev. 409mln YY), CET1 Ratio 14%. (Newswires)

ING (INGA NA) - Q2 2023 (EUR): Net Interest Income 4.06bln (exp. 4.41bln), Net Income 2.16bln (exp. 1.72bln). Profit before tax significantly increases to EUR 3.035bln in 2Q2023, CET1 ratio rises to 14.9% Good interest income after a long period of negative rates, Operating expenses excluding regulatory costs slightly lower quarter-on-quarter, Low risk costs, reflecting strong asset quality, Growth of 227,000 primary customers and an increase in net core deposits of EUR 17bln. Four-quarter rolling RoE increased to 11.7%, ING will pay an interim cash dividend of EUR 0.35 per ordinary share. The current interest rate environment drove income growth in both Retail and Wholesale Banking, with continued deposit inflows across our retail markets. Despite cooling economies, we had another quarter with lending growth and higher fee income. (Newswires)

Solvay (SOLB BB) - Q2 (EUR): Underlying Net 426mln (prev. 470mln YY), Adj. EBITDA 790mln (prev. 864mln YY), Revenue 3.09bln (exp. 3.18bln). (Newswires)

Telecom Italia (TIT IM) - H1 23 (EUR): Group services revenue 7.2bln, +2.3% Y/Y; Q2: Total revenue 4bln (exp. 3.94bln), adj. EBITDA 1.6bln, +5.6% Y/Y,EBITDA in line with 2023 targets. The network sale project is on track and the company is working to secure a final binding offer from KKR by Sept. 30. (Newswires)

BROKER MOVES

SMI

Roche (ROG SW) - Expands Global Business Partnership Agreement with Sysmex. (Newswires)

UBS (UBSG SW) - Lays off Credit Suisse investment banking staff, according to Reuters sources; UBS closes Credit Suisse office in Houston. (Newswires)

OTHER SWISS COMPANIES

Adecco Group (ADEN SW) - Q2 (EUR): Net 62mln (exp. 85mln), Adj. EBITA 184mln (prev. 192mln YY), Revenue 6bln (exp. 5.92bln). (Newswires)

Gam Holdings (GAM SW) - H1 (CHF): AUM 68bln, PBT -22.5mln (prev. -15.4mln), net -71.2mln (prev. -275.2mln). Reduction in investment management AUM was driven by net outflows of 2.2bln, offset by positive market movements and FX action of 0.9bln. (Newswires)

BROKER MOVES

SCANDINAVIA

Novo Nordisk (NOVOB DC) - Co. and Eli Lilly (LLY) are being accused of failing to warn patients of gastroparesis risk from their blockbuster diabetes/weight loss drugs, via FT. Law firm Morgan & Morgan has signed up 400 clients. (FT)

BROKER MOVES

US

CLOSES: SPX -1.38% at 4,513, NDX -2.21% at 15,370, DJIA -0.98% at 35,282, RUT -1.37% at 1,966.

SECTORS: Technology -2.59%, Communication Services -2.07%, Consumer Discretionary -1.84%, Energy -1.34%, Materials -1.23%, Industrials -1.08%, Financials -0.89%, Real Estate -0.44%, Utilities -0.01%, Health +0.06%, Consumer Staples +0.25%.

PayPal Holdings Inc (PYPL) - Q2 2023 (USD): Adj. EPS 1.16 (exp. 1.16), Revenue 7.30bln (exp. 7.27bln). Total payment volume USD 376.54bln (exp. 372.48bln), Transaction revenue USD 6.56bln (exp. 6.63bln), Other value added services revenue USD 731mln (exp. 665.2mln), US net revenue USD 4.21bln (exp. 4.18bln), International net revenue USD 3.08bln (exp. 3.07bln), ADJ operating margin 21% (exp. 21.7%), Active customer accounts 431.0m (exp. 433.6mln), Payment transactions 6.07B (exp. 6.09), Sees Q3 Adj. EPS USD 1.22-1.24 (exp. 1.22), Sees Q3 rev. 7.40bln (exp. 7.32bln). (Newswires) Co. shares seen down 7.2% after-market.

Qualcomm Inc (QCOM) - Q3 2023 (USD): Adj. EPS 1.87 (exp. 1.81), Revenue 8.44bln (exp. 8.50bln). Sees Q4 Adj. EPS USD 1.80-2.00 (exp. 1.94), Sees Q4 rev. USD 8.1bln-8.9bln (exp. 8.79bln), Will proactively implement additional cost action sin H1 fiscal 2024. Qualcomm (QCOM) expect additional restructuring actions to consist largely of workforce reductions, expects to incur most charges in Q4. (Newswires) Co. shares seen down 6.9% after-market.

03 Aug 2023 - 06:52- Research Sheet- Source: Newsquawk