Newsquawk Daily European Equity Opening News - 19th February 2025

ASIA

APAC stocks traded mixed following the somewhat choppy performance stateside as attention centred on US-Russia talks on Ukraine, while US President Trump reiterated threats of tariffs on autos, chips and pharmaceuticals. ASX 200 was dragged lower by underperformance in energy and the top-weighted financial sector after a double-digit percentage drop in Santos's underlying profit and Big 4 bank NAB also reported a decline in earnings. Nikkei 225 briefly tested the 39,000 level to the downside following disappointing machinery orders and export data. Hang Seng and Shanghai Comp were mixed with sentiment in Hong Kong subdued and the mainland kept afloat in a reversal of recent fortunes, while the US tariff threat lingered and Chinese House Prices continued to contract Y/Y albeit at a less severe pace.

EUROPEAN CLOSES

CLOSES: DAX: +0.29% at 22,863, FTSE 100: -0.01% at 8,767, CAC 40: +0.21% at 8,207, Euro Stoxx 50: +0.26% at 5,534, AEX: -0.16% at 947, IBEX 35: +0.99% at 13,146, FTSE MIB: +0.59% at 38,554, SMI: +0.12% at 12,893, PSI: +0.97% at 6,688.

SECTORS: Financials 1.14%, Industrials 0.74%, Healthcare 0.67%, Telecoms 0.45%, Energy 0.14%, Materials -0.14%, Consumer Disc -0.27%, Consumer Stpl -0.39%, Utilities -0.47%, IT -1.15%

FTSE 100

AstraZeneca (AZN LN) - Hit with US class action lawsuit over China regulatory probes, via FT. Lawsuit claims UK pharma giant understated the risk of government investigations. (FT)

BP (BP/ LN) - Co. is weighing the sale of its lubricants unit amid Elliott push, as the co. attempts to win back investor confidence, according to Bloomberg citing sources; the people added that the unit could be worth about USD 10bln, and was also identified by Elliott as among the assets which could be disposed. Discussions regarding the sale are ongoing, and could be announced during its capital markets day on Feb 26th, the sources added. Elsewhere, Devon Energy (DVN) and BPX Energy will dissolve their 15yr JV in the Eagle Ford Shale, originally formed by Petrohawk and GeoSouthern. The JV covered the Blackhawk Field, with BPX inheriting its share as BP Plc’s US shale division. Elsewhere, 48 institutional investors have called on the Co. to provide shareholders with a vote on any plan to pare back its climate goals, in the context of Elliot Management taking a c. 5% stake and calling for the divestment of some green energy investments. (Bloomberg / FT)

HSBC (HSBA LN / 5 HK) - FY (USD) Adj. Pretax Profit 34.1bln (exp. 32.6bln), Revenue 65.9bln (exp. 66.5bln), CET1 Ratio 14.9% (exp. 14.81%). Co. announces USD 2bln share buyback. Outlook 2025: Expect banking NII of around USD 42bln, CET1 ratio mid-range of 14-15% (exp. 15%). Now targeting a mid-teens return on ROTE in each of the three years from 2025-27. Sees USD 1.8bln cost over next two years. Aims to generate approx. USD 0.3bln of cost reductions in 2025, which is a commitment to an annualised reduction of USD 1.5bln in cost base exp. to by the end of 2026. Elsewhere, co. is to sell its Bahrain banking operations amid its restructuring. (Newswires)

Rio Tinto (RIO LN) - Mitsui & Co (8031 JT) joins Rhodes Ridge iron ore project with the acquisition of 40% stake in the project for USD 5.34bln, while Rio Tinto confirmed Mitsui is joining the project

OTHER UK COMPANIES

De La Rue (DLAR LN) / CMC Markets (CMCX LN) - CMC holds a 9.17% stake in De La Rue (prev. stake 5.09%). (Newswires)

BROKER MOVES

Antofagasta (ANTO LN) upgraded to Overweight from Underweight at JP Morgan

DAX

OTHER GERMAN COMPANIES

BROKER MOVES

Delivery Hero (DHER GY) downgraded to Sell from Neutral at Citi Shares -2.2% in pre-market trade

Heidelberg Materials (HEI GY) downgraded to Equal Weight from Overweight at Morgan Stanley

CAC

Sanofi (SAN FP) - Co. and CD&R sign an agreement for a 50% stake in Opella; transaction is exp. to close in Q2'25, and subject to regulatory approvals.

OTHER FRENCH COMPANIES

Nexans (NEX FP) - FY24 (EUR): Net Income 283mln (exp. 321mln, prev. 223mln Y/Y), Adj. EBITDA 804mln (exp. 750mln, prev. 665mln Y/Y), Revenue 7.08bln (exp. 7.94bln, prev. 6.51bln Y/Y). Affirms guidance. (Newswires)

BROKER MOVES

PAN EUROPE

Trump Tariffs - US President Trump says will be announcing large companies that are coming back to the US related to chips and cars; auto tariff rate will be around 25%Pharmaceutical probably 25% or higher. Will see announcements over next couple weeks. Contacted by companies because of tariffs. EU has been very unfair to US.

Phillips (PHIA NA) - Q4 (EUR): Adj. EBITA 679mln (exp. 687mln, prev. 653mln Y/Y), Revenue 5.04bln (exp. 5.07bln prev. 5.06bln Y/Y). Comparable Revenue +1% Y/Y; Order Intake +1% Y/Y. Adj. EBITA margin 13.5% (prev. 12.9% Y/Y). Proposed dividend maintained at EUR 0.85/shr. Outlook 2025: Sees FCF 400-600mln; 1-3% comparable sales growth; inc. mid- to high-single digit decline in China. Sees comparable sales growth to back-end-loaded in the year, with a mid-single digit decline in Q1 mainly due to lower demand in China, with a correspondingly lower adj. EBITA margin. CEO remains confident on long-term plan. David Pyott to retire from Supervisory Board after his third consecutive term. Post-earning commentary, via Bloomberg: CEO said China market is approx. 10% of total revenue. (Newswires / Bloomberg)

Post Italiane (PST IM) - Could invest further in Telecom Italia (TIT IM), increasing its current 9.8% stake; Italian government is against any break up of the co., and any M&A deal would involve entire company, according to Reuters citing sources. (Reuters)

Recordati (REC IM) - Share sale via vehicle Rossini. Placing of approx. 10.5mln shares through ABB procedure was priced at EUR 55.70/shr; Rossini holds approx. 46.82% of Recordati. (Newswires)

BROKER MOVES

SMI

OTHER SWISS COMPANIES

SoftwareOne (SWON SW) - FY24 (CHF): Adj. EBITDA 223.4mln (exp. 214mln, prev. 245.2mln Y/Y), Revenue 1.02bln (exp. 1.03bln, prev. 1.01bln Y/Y). (Newswires)

Strauman (STMN SW) - FY24 (CHF): Core EBITDA 774mln (prev. 571mln Y/Y), Revenue 2.50bln (prev. 2.41bln Y/Y). (Newswires)

Temenos (TEMN SW) - Q4 and FY24 results in line with pre-announcement and proposed dividend of CHF 1.30 for FY24; FY25 guidance announced with ARR growth of at least 12%. FY25 Guidance: EBIT growth at least 5%. EPS growth of 7-9% reported. FCF of at least 12% reported. (Newswires)

BROKER MOVES

Julius Baer (BAER SW) downgraded to Hold from Buy at Jefferies

Holcim (HOLN SW) downgraded to Equal Weight from Overweight at Morgan Stanley

SCANDINAVIA

Neste (NESTE FH) - CEO Malinen said they "believe there is a valid case for decarbonisation, and that it will happen, but the journey will be volatile and non-linear". (FT)

BROKER MOVES

US

CLOSES: SPX +0.24% at 6,129, NDX +0.23% at 22,164, DJI +0.02% at 44,556, RUT +0.50% at 2,291.

SECTORS: Energy +1.37%, Materials +1.23%, Utilities +0.94%, Industrials +0.77%, Financials +0.77%, Technology +0.55%, Real Estate +0.4%, Consumer Staples +0.12%, Health -0.26%, Consumer Discretionary -0.52%, Communication Services -1.26%.

Cadence Design (CDNS) - Shares fell 4.1% in extended trading despite a profit and revenue beat for the quarter, following forecasts for lower-than-expected annual revenue and profit, citing soft demand for its chip design software as clients reduce spending. Q4 adj. EPS 1.88 (exp. 1.82), Q4 revenue USD 1.36bln (exp. 1.35bln). Guides FY adj. EPS between 6.65-6.75 (exp. 6.82), and sees FY revenue between USD 5.14bln-5.22bln (exp. 5.24bln).

Devon Energy (DVN) - Q4 adj. EPS 1.16 (exp. 1.00), Q4 revenue USD 4.4bln (exp. 4.25bln); Q4 production 848k BOEPD, rising 28% Y/Y supported by its Williston Basin acquisition, while revenue increased despite lower prices. CEO Rick Muncrief will be succeeded by Clay Gaspar on March 1st. Sees Q1 production between 805-825k BOEPD, and sees Q1 capex between USD 980M-1.05bln. Sees FY25 production between 805-825k BOEPD, and sees FY25 capex between 3.8-4bln.

Howard Hughes (HHH), Pershing Square (PSH) - Pershing Square Capital plans to buy 10mln newly issued Howard Hughes shares for USD 900mln, raising its stake to 48%. Bill Ackman would become chairman and CEO, while current CEO David O’Reilly would lead its main subsidiary. Howard Hughes' special committee will review the revised proposal.

Occidental Petroleum (OXY) - Shares fell 1% in extended trading, despite topping profit estimates for the quarter, it missed revenue expectations. Reports also noted potential concerns over broader market conditions. It reported Q4 adj. EPS of 0.80 (exp. 0.70), Q4 revenue of USD 6.84bln (exp. 7.05bln). Boosts quarterly dividend +9% to 0.24/shr. Said it achieved its near-term debt repayment target of USD 4.5bln in Q4, and signed two agreements in Q1 to divest upstream assets for a combined USD 1.2bln. Sees Q1 production between 1.37-1.41mln BOEPD, and sees FY25 production between 1.385-1.445mln BOEPD.

Strategy (MSTR) - Strategy plans to offer USD 2.0bln in 0% convertible senior notes due 2030 via a private offering, and may also grant initial purchasers an option to buy an additional USD 300mln in notes, subject to market conditions. Traders speculate funds may be used for Bitcoin purchases.

Shift4 Payments (FOUR) - Shift4 reported Q4 EPS of 1.35 (exp. 1.13), revenue USD 887mln (exp. 406.9mln). Will acquire Global Blue (GB) for USD 7.50/shr in cash, valuing the deal at around USD 2.5bln; the acquisition expands Shift4’s global payments reach. FOUR's shares finished extended trading down 11%.

Intel (INTC) - Silver Lake reportedly near a deal for stake in Intel's Altera, according to Bloomberg

19 Feb 2025 - 06:58- Research Sheet- Source: Newsquawk