Newsquawk Daily European Equity Opening News - 4th August 2023

4th August 2023

ASIA

Asia-Pac stocks traded mixed as most bourses in the region lacked firm direction following the subdued handover from Wall St where sentiment was clouded by the higher yield environment and mixed data, while participants also reflected on earnings releases from tech giants Apple and Amazon, as well the latest PBoC support pledges. ASX 200 (-0.2%) was rangebound with gains in the commodity-related sectors and financials offset by weakness in defensives, while the RBA’s quarterly Statement of Monetary Policy provided little to shift the dial and reiterated that some further tightening may be required. Nikkei 225 (-0.1%) swung between gains and losses as an early retreat beneath the 32,000 level was met with dip buying which then petered out. Hang Seng (+1.1%) and Shanghai Comp. (+0.5%) were positive with gains led by the property sector after the latest policy support pledges by the PBoC which announced to roll out guidelines to support private firms and will expand debt financing tools, as well as implement differentiated housing credit policies.

EUROPEAN CLOSES

Bourses: DAX -0.79% at 15,893, FTSE 100 -0.43% at 7,529, CAC 40 -0.72% at 7,261, Euro Stoxx 50 -0.75% at 4,304, IBEX 35 -0.23% at 9,307, FTSE MIB -0.94% at 28,703, SMI -1.08% at 11,091.

Sectors: Energy 1.01%, Financials 0.17%, Consumer Disc -0.32%, Materials -0.54%, Industrials -0.83%, Consumer Stpl -1.01%, Healthcare -1.19%, Telecoms -1.19%, Utilities -1.49%, IT -1.95%

FTSE 100

OTHER UK COMPANIES

BROKER MOVES

DAX

Volkswagen (VOW3 GY) - Commenting on Fremantle Highway fire, Co. said its cars were insured and will not result in financial damage, and added those vehicles can no longer be delivered to clients. (Newswires)

OTHER GERMAN COMPANIES

Commerzbank (CBK GY) - Q2 2023 (EUR): Net Income 565mln (exp. 567.7mln), NII 2.13bln (exp. 1.92bln), Co. raises FY23 NII outlook to at least EUR 7.8bln (prev. about EUR 7bln). Net profit for 2023 expected well above 2022. CET1 ratio increased to 14.4% (vs 14.2% in Q1) – Bank to apply to ECB and German Finance Agency for approval of further share buyback. Cost-income ratio in the first half of the year at 61% (H1 2022: 64%). (Commerzbank) Shares seen opening higher by 3.6%

Carl Zeiss Meditec (AFX GY) - 9M (EUR): EBIT 245mln (276mln YY), Revenue 1.51bln (prev. 1.33bln YY). Cuts FY23 EBIT margin "lower end of 17-20%" (prev. 17-20%). (Newswires)

Lanxess (LXS GY) - Q2 2023 (EUR): Revenue 1.78bln (exp. 1.74bln); "Demand was weak from the construction and chemical industries in particular"; "There is currently no sign of a recovery in demand anticipated for the second half of the year." Co. affirms FY23 EBITDA guidance, Adj. EBITDA 107mln (exp. 101mln); DEMAND COMMENTARY: "Business figures for the second quarter were again dominated by the weak global demand in many customer industries.", "Weak demand, especially from the construction and electronics industries, negatively affected the Specialty Additives segment’s sales and earnings.", "Low demand from nearly all industries." "Demand was weak from the construction and chemical industries in particular.", "China, the world’s largest chemical market, also failed to stimulate demand." "There is currently no sign of a recovery in demand anticipated for the second half of the year. We are therefore taking countermeasures." Co. said "This will initially save LANXESS around EUR 100mln in 2023 through one-time cost reductions and lower investments.", "In addition, the Group is positioning itself more efficiently and will permanently reduce its annual costs by around EUR 150mln from 2025 onward." Appoints Oliver Stratman as CFO, effective September 1. (Lanxess)

Vonovia (VNA GY) - Q2 (EUR): FFO 502.2mln (prev. 503.5mln YY), Rental Revenue 1.5bln (prev. 1.47bln YY). (Newswires)

BROKER MOVES

Covestro (1COV GY) downgraded to Hold from Buy at Kepler Cheuvreux

CAC

Airbus (AIR FP) - Delivered 65 airplanes in July (vs 72 in June), according to Reuters sources. (Newswires)

BNP Paribas (BNP FP) - Launches EUR 2.5bln second tranche of share buyback programme. (Newswires)

Credit Agricole (ACA FP) - Q2 2023 (EUR): Revenue 6.68bln (exp. 5.89bln), Net Income 2.04bln (exp. 1.43bln), CIB Revenue 1.91bln (exp. 1.82bln); Q2 Underlying Revenue in Capital Markets and Investment Banking -4.9% Y/Y, FICC revenue -1.1% Y/Y. Inflows remained at a good level in the Asset gathering and Large customers division. Retail banking, loan production was down compared with the second quarter of 2022 in a declining market, but the level of outstanding loans continued to rise across all business lines. Revenues driven by dynamic business, notably in Insurance across all business lines, with continued strong net inflows in unit-linked products. Corporate and Investment Banking posted good performance this quarter, especially in structured financing activities (up 20.4% compared with the second quarter of 2022) and good commercial activity in capital markets, particularly in financing solutions (repo, primary credit and securitization). (Credit Agricole)

OTHER FRENCH COMPANIES

BROKER MOVES

PAN EUROPE

AstraZeneca (AZN LN)/ Sanofi (SAN FP) - The US Centers for Disease Control and Prevention’s (CDC) Advisory Committee on Immunization Practices (ACIP) voted unanimously 10 to 0 to recommend routine use of Sanofi and AstraZeneca’s Beyfortus™ (nirsevimab-alip) for the prevention of respiratory syncytial virus (RSV) lower respiratory tract disease for newborns and infants below 8 months of age born during or entering their first RSV season. Beyfortus RSV list price proposed to be USD 495/shot for adults, USD 395/shot for children in US based on cost effective model. Price not final. (Sanofi)

bpost (BPOST BB) - Q2 (EUR): Net 43.2mln (exp. 68mln), Adj. EBIT 68.7mln (exp. 66.1mln), Revenue 1.03bln (exp. 1.04bln). Raises FY23 Op income +4-6% (prev. 3-5%). (Newswires)

Chip Names - Microchip Technology Inc (MCHP) Q1 2023 (USD): EPS 1.21 (exp. 1.64), Revenue 2.29bln (exp. 2.29bln). (Newswires) Shares seen -5% after-market

Italian Cos – PM Meloni is seeking to allow Cos to issue shares which provide key investors with as many as 10 voting rights each, a measure designed to stem relocations of HQs out of Italy. (Newswires)

Italian Banks – PM Meloni’s party proposed a levy on banking names to curb variable mortgage costs. (Newswires)

Saipem (SPM IM) - Awarded EUR 1.6bln OMV Petrom Neptun contract. (Newswires)

Salvatore Ferragamo (SFER IM) - H1 2023 (EUR): Net +22.5mln (exp. -39mln; prev. +61.6mln), Revenue 600mln (exp. 598mln; prev. 630mln). H1 geographic sales breakdown: APAC -12.9%, "penalized by the weak performance in Korea and in the Travel Retail channel, while the performance of retail in Greater China was positive", Japan -11.4%, EMEA +10.8%, North America -17.3%, "with the wholesale channel underperforming more than proportionally, mainly as a consequence of the network rationalization", Central & South America +0.4%. CEO have not seen sales in China slow down in the last few weeks. (Newswires)

BROKER MOVES

DSM (DSFIR NA) reiterated with Underweight at JP Morgan Chase

SMI

Sika (SIKA SW) - H1 (CHF): Net 411.9mln (prev. 598.8mln YY), EBIT 749.9mln (prev. 841.9mln YY), Revenue 5.35bln (prev. 5.25bln YY). Raises FY23 Revenue "above 15% YY" (prev. 6-8% YY). (Newswires)

Swiss Re (SREN SW) - H1 (USD): Net 1.4bln (prev. 157mln YY), Premiums and Fee Income 22.1bln (prev. 21.2bln YY). (Newswires)

OTHER SWISS COMPANIES

Gam Holding (GAM SW) - Liontrust extends offer period to 23rd Aug from 28th July. (Newswires)

Dufry (DUFN SW) - H1 (CHF): Net -27.6mln (prev. 43mln YY), Core EBITDA 492mln (prev. 358mln YY), Revenue 5.73bln (exp. 4.52bln). (Newswires)

BROKER MOVES

SCANDINAVIA

BROKER MOVES

Neste Oil (NESTE FH) reiterated with Overweight at JPMorgan Chase

Outokumpu (OUT1V FH) upgraded to Accumulate from Neutral at Inderes

US

CLOSES: SPX -0.26% at 4,502, NDX -0.11% at 13,353, DJIA -0.19% at 35,216, RUT -0.28% at 1,961.

SECTORS: Utilities -2.29%, Real Estate -1.35%, Industrials -0.61%, Materials -0.6%, Health -0.5%, Technology -0.32%, Consumer Staples -0.17%, Communication Services -0.17%, Financials +0.07%, Consumer Discretionary +0.34%, Energy +0.95%

Auto Names - UAW demands a 40% pay increase in labour talks with Detroit automakers, according to WSJ. (WSJ)

Amazon.com Inc (AMZN) - Q2 2023 (USD): EPS 0.65 (exp. 0.35), Revenue 134.4bln (exp. 131.5bln). AWS net sales 22.14bln, +12% y/y (exp. 21.71bln); Q3 revenue view 138-143bln (exp. 138.25bln). Q3 revenue view 138-143bln (exp. 138.25bln). AWS net sales 22.14bln, +12% y/y (exp. 21.71bln), Online stores net sales 52.97bln, +4.2% y/y (exp. 52.45bln), Physical Stores net sales 5.02bln, +6.4% y/y (exp. 4.96bln), Third-Party Seller Services net sales 32.33bln, +18% y/y (exp. 31.2bln). Subscription Services net sales 9.89bln, +14% y/y (exp. 9.79bln). Advertising services sales 10.683bln (prev. 8.757bln Y/Y) North America net sales 82.55bln, +11% y/y (exp. 79.68bln). International net sales 29.70bln, +9.7% y/y (exp. 29.25bln). AWS continued to add to meaningful leadership position in cloud with a slew of generative AI releases in the quarter. Sees strong demand for ad services as team keeps innovating for brands. AWS growth stabilized. Continued lowering costs to serve in fulfillment network, while providing prime customers with fastest delivery speeds AMZN has recorded. CEO says Whole Foods is growing at a healthy clip and meaningfully improved its profitability last year, while CFO said inflation headwinds continued to ease. CFO said expects capital investment for FY23 to be slightly more than USD 50bln compared to USD 59bln in 2022. CEO said Co. is working to grow business-to-business commerce to USD 100bln in yearly gross sales from current USD 35bln. Capex forecast includes a significant amount in cloud for generative AI and large language models. (Newswires) Shares seen +8.7% after-market 

Apple Inc (AAPL) - Q3 2023 (USD): EPS 1.26 (exp. 1.19), Revenue 81.80bln (exp. 81.69bln). Products revenue USD 60.58bln (exp. 60.67bln), iPhone revenue USD 39.67bln (exp. 39.8bln), Mac revenue USD 6.84bln (exp. 6.37bln), iPad revenue USD 5.79bln (exp. 6.33bln), Wearables, home and accessories USD 8.28bln exp. 8.38bln), Service revenue USD 21.21bln (exp. 20.77bln), Greater China rev. USD 15.76bln (exp. 14.59bln), CEO Cook said Co. has been researching generative AI for years and work on generative AI is among drivers of increased research and development spending. Apple is continuing to invest in technologies such as generative AI to improve its products. iPhone sales grew by double digits in China during fiscal Q3. Apple Services had over 1bln paid subscriptions. CFO says iPhone reached all-time revenue record in India, while Co. expects revenue performance for September quarter to be similar to the June quarter. Expects gross margin to be between 44% and 45% for the September quarter. iPad and Mac revenue is expected to decline double digits in Q4, while iPhone and services revenue is seen accelerating from Q3. Co. has slowed down hiring to lower costs. (Newswires) Shares seen -2% after-market

Booking Holdings Inc (BKNG) - Q2 2023 (USD): Adj. EPS 37.62 (exp. 28.80), Revenue 5.5bln (exp. 5.17bln). Marketing expense USD 1.80bln, +3.7% y/y (exp. 1.63bln). ADJ EBITDA USD 1.78bln, +64% y/y (exp. 1.47bln). ADJ EBITDA margin 32.6% (exp. 28.4%, prev. 25.3% y/y). Gross merchant bookings 21.12bln, +40% y/y (exp. 18.15bln). Room nights sold 268mln (exp. 266mln). Rental car days sold 20.0mln (exp. 19.3mln). Airline tickets sold 9.00mln (exp. 7.94mln). (Newswires) Shares seen +11% after-market

Coinbase Global Inc (COIN) - Q2 2023 (USD): EPS -0.42 (exp. -0.77), Revenue 0.663bln (exp. 0.63bln). Maintains goal to improve FY adj. EBITDA in absolute Dollar terms Y/Y. Q3 subscription and services Revenue view "at least" USD 300mln. CEO says in conference call that the Co. expects to win the lawsuit with the US SEC. (Newswires) Shares seen -1% after-market

Fortinet Inc (FTNT) - Q2 2023 (USD): Adj. EPS 0.38 (exp. 0.34), Revenue 1.29bln (exp. 1.3bln). FY23 EPS view 1.49-1.53 (exp. 1.46), FY revenue view cut to 5.35-5.45bln (exp. 5.47bln). (Newswires) Shares seen -15.9% after-market

Post Holdings (POST) - Q3 (USD): EPS 1.52 (exp. 0.89), Revenue 1.89bln (exp. 1.82bln). Raises FY23 EBITDA 1.18-1.20bln (prev. 1.09-1.13bln). (Newswires)

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