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StreetAccount Summary - Europe Pre-Open: FTSE (0.6%), DAX (0.8%), CAC (1.1%)

Jan 27 ,2025

  • Synopsis

    • European equity markets set to decline at the open, tracking losses across Asian markets. Steep losses among Japan semis in Monday trade with Nasdaq futures under pressure. China AI startup DeepSeek getting more attention after unveiling low cost, open-source LLM using older model NVDA chips that it claimed performed as well as OpenAI's o1. Press takeaways noted development called into question extent of US spending on AI system design (and implications for NVDA AI chip demand), as well as China's technological breakthrough against US restrictions.

    • Last week, Europe's leading equity markets posted further gains. The Stoxx Europe 600 rose +1.2%; saw gains for the fifth consecutive week, reaching fresh all-time highs. Performance was almost entirely contingent on Trump's return to the White House. On his first day, Trump abstained from imposing tariffs but analysts suggested major plans could be announced on 1-Apr, as federal agencies are expected to complete reviews of a range of trade issues.

    • The week ahead in Europe sees ECB and Riksbank interest rate decisions, Q4 preliminary GDPs and Jan preliminary CPIs from across the region, Germany Jan unemployment change, as well as earnings from heavyweights including ASML (ASML.NA), Atlas Copco (ATCO.A.SS), LVMH Moet Hennessy Louis Vuitton (MC.FP), Novartis (NOVN.SW), Roche (ROG.SW), SAP (SAP.GR), Sanofi (SAN.FP) and Shell (SHEL.LN). In the US, on Wed there's Fed interest rate decision after EU close. USA MAG 7 names in focus with MSFT, META, TSLA, and AAPL reporting this week.

    • European macro data releases out today include Germany Jan Ifo survey, Sweden Dec trade balance, Norway Dec unemployment rate, Denmark Dec retail sales

    • Also on today's agenda:, 10th Lamfalussy Lectures Conf with ECB's Lagarde speech at 9:00CET, Slovakia central bank's Kažimír panellist at 11:50, Croatia central bank's Vujčić, Austria central bank's Holzmann panellists at 15:00CET. Other central bank events include BOE's Benford speech at 9:40GMT at City & Financial's Global AI Regulation Summit and Bundesbank's Theurer speech at 14:30CET title 'Economic policy environment and current risk situation in the German banking sector' at event hosted by BaFin/Bundesbank. ECB's Lagarde remarks at 16:35CET at commemorative event on the occasion of International Holocaust Remembrance Day. Also today, Chancellor Scholz and Poland's PM Tusk hold a bilateral meeting; Scholz in Poland to participate in the commemoration of the 80th annv. of the liberation of the Auschwitz concentration camp. EU Agriculture and Fisheries Council as well as EU's Foreign Affairs Council meetings take place.

    • In corporate highlights, BASF (BAS.GR) announced preliminary results for FY2024; expects EBITDA before special items €7.9B vs FactSet €7.88B; EBIT expected to be €2.0B, which is below the analyst consensus for 2024 (Vara: €3.2B); main reasons for the deviation from the analyst consensus are non-cash-effective impairments, primarily on battery materials in the Surface Technologies segment, as well as restructuring costs in all segments. Ryanair (RYA.ID) reports Q3 net income attributable €148.6M vs StreetAccount €40.9M. Cautiously guiding FY25 net income in a range of €1.55-1.61B; FactSet net income consensus €1.51B. Lowers FY26 traffic target to +3% y/y, cites delay in new B737 deliveries. Analysts at Goodbody comment this is a strong update from Ryanair. Revenue trends continued to improve in Q3 while unit costs were slightly lower y/y. Firm says FY25 consensus should increase by mid-single digits. Furthermore, FY26 consensus also expected to be upgraded by mid-single digits. In M&A, Bureau Veritas (BVI.FP) and SGS (SGSN.SW) announce discussions regarding a potential business combination did not result in an agreement and have ended developments. Diversified Energy (DEC.LN) is in advanced talks to buy Maverick Natural Resources, according to a media report. Diageo (DGE.LN) not considering selling Guinness or stake in Moet Hennessy, reports Reuters citing a company statement. BHP (BHP.AU) cooling on idea of buying Anglo American (AAL.LN), reports the FT. WH Smith (SMWH.LN) is in talks to sell its high street operation, as per Sky News.

  • Politics/Macro/World News

    • UK Budget fallout adds to Bank of England dilemma on interest rates -- FT

    • Euro Zone's Lackluster Growth Set to Keep ECB on Rate-Cut Path -- Bloomberg

    • Greek PM's Pick for President Fails to Be Elected in First Round -- Bloomberg

  • Top company news

    • Earnings/updates

      • BAS.GR (BASF SE) -- announces preliminary results for FY2024; expects EBITDA before special items €7.9B vs FactSet €7.88B; sales for the full year 2024 are expected to be €65.3B vs FactSet €65.35B; EBIT expected to be €2.0B, which is below the analyst consensus for 2024 (Vara: €3.2B); he main reasons for the deviation from the analyst consensus are non-cash-effective impairments, primarily on battery materials in the Surface Technologies segment, as well as restructuring costs in all segments.

      • RYA.ID (Ryanair Holdings) -- reports Q3 EPS €0.1360 vs StreetAccount €0.05; lowers FY26 traffic target to +3% y/y, cites delay in new B737 deliveries; Cautiously guiding PAT in a range of €1.55-1.61B; FactSet net income consensus €1.51B

      • STM.GR (Stabilus) -- reports Q1 net income €14.3M vs FactSet €12.2M [1 est]

      • Also reporting today

        • Earnings: Note (NOTE.SS)

        • Trading Update: ID Logistics (IDL.FP), secunet Security Networks (YSN.GR), Lumibird (LBIRD.FP)

        • CMD/events: Airbus (AIR.FP) Helicopters, orders and deliveries 2024 press conf 10:00CET

    • M&A

      • BVI.FP (Bureau Veritas) -- and SGS announce discussions regarding a potential business combination did not result in an agreement and have ended

      • DEC.LN (Diversified Energy Co.) -- Diversified Energy in advanced talks to buy Maverick Natural Resources - media report

      • DGE.LN (Diageo) -- not considering selling Guinness or stake in Moet Hennessy - Reuters

      • AAL.LN (Anglo American) -- BHP cooling on idea of buying Anglo American - FT

      • VNA.GR (Vonovia) -- shareholders approve domination and profit and loss transfer agreement with Deutsche Wohnen

      • SMWH.LN (WH Smith) -- in talks to sell its high street operation - Sky News

      • MB.IM (Mediobanca) -- board to discuss MPS offer 28-Jan - Reuters, citing person close to the situation

      • Trump administration working on plan for Oracle, other investors to control TikTok - NPR

      • TAP privatization will require hub to remain in Lisbon - TSF

    • Healthcare

      • AMGN (Amgen) -- and Celltrion reach settlement agreement for denosumab biosimilar candidates; launch by 1-Jun-2025

      • SRPT (Sarepta Therapeutics) -- presents topline results from Part 2 of Phase 3 EMBARK study of ELEVIDYS; conference call at 08:30 ET

      • 4523.JP (Eisai) -- FDA approves Eisai's LEQEMBI IV maintenance dosing for treatment of early AD

      • IPH.FP (Innate Pharma) -- First patient dosed in Phase 1 study investigating the safety and tolerability of IPH4502

      • MDG1.GR (Medigene) -- exercises first tranche of standby equity purchase agreement

    • Other

      • BT.A.LN (BT Group) -- BT CEO Allison Kirkby helped arrange Sunil Bharti Mittal's purchase of Patrick Drahi's 24.5% stake - Mail on Sunday

      • KALMAR.FH (Kalmar) -- Index changes: Kalmar to be added to OMX Helsinki 25 Index; effective 3-Feb-25; Metsä Board will be removed

      • LDO.IM (Leonardo) -- signs MoU in the Kingdom of Saudi Arabia to expand collaboration in the aerospace and defence sector

      • BAER.SW (Julius Baer Group) -- Chairman of the board Romeo Lacher will not stand for re-election at the Annual General Meeting of 10-Apr-25

      • PSM.GR (ProSiebenSat.1 Media) -- announces chairman Andreas Wiele will not stand for re-election; board initiates search for successor

      • RECSI.NO (REC Silicon) -- announces close of a $40M Term Loan and termination of Granular Polysilicon Supply agreement

      • Estimated weekend box office revenues in US, Canada $65.9M, +20.9% y/y - Box Office Mojo

      • Universal Music Group and Spotify strike a new multi-year agreement

  • Key rating changes

    • Upgrades

      • PNDORA.DC (Pandora) -- to buy from hold at Jefferies

      • LGEN.LN (Legal & General) -- to buy from hold at HSBC

      • ELK.NO (Elkem) -- to buy from hold at DnB Markets

      • GIVN.SW (Givaudan) -- to overweight from neutral at JPMorgan

      • GLE.FP (Societe Generale) -- to overweight from equal weight at Barclays

      • MC.FP (LVMH Moet Hennessy Louis Vuitton) -- to overweight from equal-weight at Morgan Stanley

      • NEM.GR (Nemetschek) -- to buy from neutral at Goldman Sachs

      • SCATC.NO (Scatec) -- to buy from hold at DnB Markets

      • DnB Markets upgrades 2020.NO, SB

    • Downgrades

      • ERIC.B.SS (Telefonaktiebolaget LM Ericsson) -- to hold from buy at DnB Markets

      • LR.FP (Legrand) -- to underperform from hold at Jefferies

      • ETE.GA (National Bank of Greece) -- to hold from buy at HSBC

      • JD.LN (JD Sports Fashion) -- to neutral from outperform at BNP Paribas Exane

      • DLG.LN (Direct Line Insurance Group) -- to neutral from buy at UBS

      • BOSS.GR (Hugo Boss) -- to hold from buy at Jefferies

      • UQA.AV (UNIQA Insurance Group) -- to sell from neutral at UBS

    • Both

      • ALLEI.SS (Alleima) -- downgraded to hold from buy at Carnegie Securities; upgraded to buy from hold at SEB

    • Other

      • SWED.A.SS (Swedbank) -- Dagens Industri out with buy recommendation for Swedbank

  • Data

    • Nikkei (0.92%) to 39565.80

    • Hang Seng +0.75% to 20216.75

    • Shanghai Composite +0.06% to 3254.47

    • S&P futures (86.5) vs prior close of 6133.3

    • €-$ (0.0020) or (0.19%) to 1.0464

    • $-¥ +0.22 or +0.14% to 155.94

    • €-¥ (0.10) or (0.06%) to 163.12

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