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StreetAccount Summary - Europe Pre-Open: Futures: FTSE (0.30%), DAX +0.23%, CAC40 +0.39%

Jul 23 ,2024

  • Synopsis

    • European equity markets set for a mixed open amid Asian equities mixed Tuesday. Taiwan outperforming as semis rebound following recent sell-off. Shares in Korea and Australia logging milder gains while Japan flat. Mainland China equities lagging. S&P 500 futures weakening afterhours.

    • US politics continues to dominate press coverage as Democrats coalesce around VP Harris as likely nominee for president. AP reports Harris has secured enough delegates to clinch nomination. Trump is still favored to win, and his front-runner status leaves market's focus on his economic and trade policies. Trump momentum a key factor behind reflation trade, though also concerns about deficits and tariffs.

    • On today's agenda, Germany finance ministry monthly report. Constitutive meetings of the EP's standing committees and subcommittees will take place. UK's HoC debate on the King's Speech continues after questions on Health and Social Care. EU's Simson attends the fifth meeting of the Partnership for Transatlantic Energy and Climate Cooperation (through Wed).

    • In central banks, Turkey and Hungary Central Banks interest rate decisions, no changes expected in benchmark interest rates of 50.0% and 7.0%, respectively. ECB/IMF/IMFER hosting event Global Challenges and Channels for Fiscal and Monetary Policy (through Wed); speakers include ECB's Lane 9:00CET.

    • On the macro front, Finland Jun Unemployment Rate 8.3% vs consensus 8.8% and prior 10.2%, and Eurozone Jul consumer confidence due.

    • Plenty of earnings newsflow to digest. DACH names in focus. SAP (SAP.GR) reported stronger-than-expected Q2 earnings. Current cloud backlog (ie key leading indicator) was up 28%, both at nominal and constant currencies. This sustained the +28% cc seen at Q1 and was noted by analysts to exceed investor expectations of a minor slowdown. SAP updated its financial ambition 2025, reflecting the anticipated incremental benefits from the transformation program. By 2025, SAP now expects non-IFRS operating profit of ~€10.2B (previously: approximately €10B). SAP ADRs were up 4-5%. Also earnings eyed from Logitech International (LOGN.SW), Vitesco Technologies Group (VTSC.GR). Also in DACHs, Porsche (PAH3.GR) and Schaeffler (SHA.GR) lowered their guidance for the year 2024. In France, Edenred (EDEN.FP) and Thales (HO.FP) reported H1 earnings.

    • In Nordics, Kesko (KESKOB.FH), Norsk Hydro (NHY.NO), Alfa Laval (ALFA.SS) and Vår Energi (VAR.NO) issued Q2 earnings. In Benelux, Randstad (RAND.NA) and Akzo Nobel (AKZA.NA) updated investors with their latest numbers. In Spain, Banco de Sabadell (SAB.SM) reported Q2 earnings with a gross operating income of €1.62B vs FactSet €1.58B.

    • In M&A, Eni (ENI.IM) has signed a temporary exclusivity agreement with KKR aimed at progressing the due diligence phase and completing the drafting of the documents related to the sale of a 20% to 25% stake in Enilive, based on a valuation of the company between €11.5B and €12.5B

  • Politics/Macro/World News

    • Europe Hopes for Harris as Potential Trump Presidency Looms - Bloomberg

    • Hungary Set to Extend Easing on Slower Inflation - Bloomberg

    • Britons' tolerance of fraud could cost benefits system £2bn a year - The Times

    • Federal tax revenues increased in the first half of the year - Handelsblatt

  • Top company news

    • Earnings/updates

      • DACHs

        • SAP.GR (SAP) -- reports Q2 EPS €1.10 ex-items vs FactSet €1.06

        • LOGN.SW (Logitech International) -- reports Q1 non-GAAP EPS $1.13 vs FactSet $0.83

        • GIVN.SW (Givaudan) -- reports H1 net income CHF588M vs consensus CHF533M

        • KNIN.SW (Kuehne & Nagel) -- reports Q2 EPS CHF2.43 vs FactSet CHF2.50

        • PAH3.GR (Porsche Automobil Holding SE) -- guides FY revenue €39-40B vs prior guidance €40-42B

        • P911.GR (Porsche) -- adjusts forecast for FY24 due to significant supply shortage impacting various suppliers with regard to special aluminium alloys

        • SHA.GR (Schaeffler) -- guides FY24 EBIT margin 5-8% vs prior guidance 6-9%

        • VTSC.GR (Vitesco Technologies Group) -- reports preliminary Q2 revenue €2.03B vs FactSet €2.16B

        • DAE.SW (Dätwyler Holding) -- reports H1 net income CHF38.6M vs FactSet CHF38.6M

        • ECX.GR (Epigenomics) -- reports prelim H1 net loss (€0.8M) vs year-ago (€5.7M)

        • LISN.SW (Chocoladefabriken Lindt & Spruengli) -- reports H1 EBIT CHF292.3M vs consensus CHF260.7M; CHF500 buyback and FY24 outlook confirmed

        • HLE.GR (HELLA GmbH & Co. KGaA) -- reports H1 EBIT €248M vs year-ago €245M; guides FY to be in the lower half of prior forecast ranges

      • Nordics

        • NHY.NO (Norsk Hydro) -- reports Q2 EPS NOK0.97 vs consensus NOK1.22

        • EMBLA.DC (Embla Medical hf) -- reports Q2 net income $20M vs FactSet $19.7M

        • SEDANA.SS (Sedana Medical) -- reports Q2 EPS (SEK0.18) vs FactSet (SEK0.13)

        • VAR.NO (Vår Energi) -- reports Q2 EPS $0.08 vs FactSet $0.10

        • KESKOB.FH (Kesko) -- reports Q2 comparable EPS €0.30 vs FactSet €0.31

        • ALFA.SS (Alfa Laval) -- reports Q2 EPS SEK4.08 vs FactSet SEK4.65

        • NCAB.SS (NCAB Group) -- reports Q2 EPS SEK0.39 vs FactSet SEK0.54

        • HANZA.SS (HANZA AB) -- reports Q2 EPS SEK0.16 vs year-ago SEK1.49

        • DVYSR.SS (Devyser Diagnostics) -- reports Q2 EPS (SEK1.41) vs FactSet (SEK0.40)

      • France

        • FGR.FP (Eiffage) -- Eiffage's APRR reports H1 revenue ex construction €1.50B vs year-ago €1.45B

        • ITP.FP (Interparfums) -- reports preliminary Q2 revenue €209.9M vs FactSet €203.7M

        • IDL.FP (ID Logistics Group) -- reports prelim Q2 revenue €728.3M vs year-ago €653.5M

        • BEN.FP (Beneteau) -- reports prelim Q2 revenue €417.7M vs FactSet €434M; adjusts FY24 boat operating margin downwards

        • EDEN.FP (Edenred) -- reports H1 EBITDA €597M vs consensus €588M; FY24 EBITDA expected to total between €1.23B and €1.30B vs FactSet €1.26B

        • HO.FP (Thales) -- reports H1 EPS €4.21 ex-items vs consensus €4.00

        • OPM.FP (OPmobility) -- reports H1 operating profit €234M vs FactSet €198.0M [4 est, €143-222M]; FY24 outlook confirmed

        • SIGHT.FP (GenSight Biologics) -- reports cash position as of 30-Jun -24 and provides business update

        • ALVU.FP (Vente-Unique.com) -- reports 9M revenue €132.6M, +12% vs year-ago €118.9M

      • Benelux

        • WHA.NA (Wereldhave) -- reports H1 DRPS €0.84 vs year-ago €0.89

        • AKZA.NA (Akzo Nobel) -- reports Q2 EPS from total operations €1.04 vs consensus €1.12

        • RAND.NA (Randstad) -- reports Q2 adjusted net income €118M vs FactSet €133.0M

        • CMCOM.NA (CM.com) -- reports H1 net income (€7.3M) vs year-ago (€18.1M)

        • ACOMO.NA (ACOMO NV) -- reports H1 net income €17.8M vs year-ago €22.0M

      • Southern Europe

        • SAB.SM (Banco de Sabadell) -- reports Q2 net attributable income €483M vs FactSet €422.9M

        • ENG.SM (Enagas) -- reports H1 Net Income €148M ex-items vs consensus €141.4M

    • M&A

      • CRH.LN (CRH plc) -- acquires Colorado-based Ary Corporation; terms not disclosed

      • GALE.SW (Galenica) -- increases shareholding in Redcare Pharmacy to 10%

      • SEDANA.SS (Sedana Medical) -- to acquire main supplier Innovatif Cekal for SEK 34M

      • CRI.FP (Chargeurs) -- PCC Fashion Technologies completes acquisition of strategic assets from Swiss company Cilander

      • HARVIA.FH (Harvia) -- to acquire ThermaSol Steam Bath for $30.4M (€27.9M)

      • ENI.IM (Eni) -- signs exclusivity agreement with KKR for potential sale of minority stake (20% to 25%) in Enilive; could lead to subsequent sale of a further stake of up to 10%

      • AXW.FP (Axway) -- launches ~€131M capital increase by way of a rights issue; completion of the Sopra Banking Softwar acquisition expected in early September 2024

    • Other

      • SIE.GR (Siemens AG) -- awarded $107.4M U.S. NAVY contract modiication

      • TIGO.SS (Millicom International Cellular) -- SEC filing: SC 13D/A (Filed by Atlas Investissement)

      • BAER.SW (Julius Baer Group) -- appoints Stefan Bollinger as CEO

      • VAR.NO (Vår Energi) -- declares dividend of NOK1.184/sh

      • BCP.PL (Banco Comercial Portugues) -- Banco Comercial Português notified by Banco de Portugal on MREL requirements

      • IDR.SM (Indra Sistemas) -- appoints Miguel Forteza as CFO, effective 1-Sep

      • HTO.GA (Hellenic Telecommunications Organization) -- cancels 5.3M own shares effective 24-Jul

      • FTK.GR (flatexDEGIRO) -- applies for approval of share buyback program

  • Key rating changes

    • Upgrades

      • BGN.IM (Banca Generali) -- to overweight from equal weight at Barclays

      • FRE.GR (Fresenius) -- to overweight from equal-weight at Morgan Stanley

    • Downgrades

      • SF.SS (Stillfront Group) -- to hold from buy at Kepler Cheuvreux

    • Initiations

      • JD.LN (JD Sports Fashion) -- outperform at Bernstein

      • OERL.SW (OC Oerlikon Corp.) -- neutral at Oddo

    • Other Actions

      • ELUX.B.SS (Electrolux) -- short-term recommendation transferred buy at Handelsbanken; prior rating was buy

      • GETI.B.SS (Getinge) -- assumed equal-weight at Morgan Stanley; prior rating was equal-weight

  • Data

    • Nikkei +0.03% to 39612.79

    • Hang Seng (0.46%) to 17554.64

    • Shanghai Composite (0.72%) to 2942.95

    • S&P futures (9.0) vs prior close of 5610.8

    • €-$ (0.0002) or (0.02%) to 1.0890

    • $-¥ (0.71) or (0.45%) to 156.32

    • €-¥ (0.81) or (0.47%) to 170.23

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