THE TREND
(Boursier.com) — The CAC40 is moving forward this Wednesday, up a little more than 1%. This allows the main index of the Paris stock exchange to return above 8,000 points, around 8,020 points at the end of the morning. The luxury sector makes a good contribution to this rebound after a reassuring quarterly publication from the group LVMH.
The Fed chairman said Tuesday that recent inflation data in the United States had not given central bank officials enough confidence to cut interest rates “any time soon.” Jerome Powell added that the Fed may have to maintain high interest rates for longer than expected, while markets were widely betting a few weeks ago on a first rate cut in June. The scenario of a first decline which would not occur before September is now fairly well integrated.
RISING VALUES
* LVMH climbed by more than 4% to 817 euros, investors finally being reassured by the publication of the world’s number one luxury goods company. In the first quarter, the group reported sales of €20.7 billion, organic growth of 3%, with an increase of 2% for the flagship ‘Fashion & Leather Goods’ division. Morgan Stanley (‘online weighting’) refers to a “fairly good” publication. The figures and management’s comments during the presentation conference should slightly reassure the market, according to the bank. Bryan Garnier (‘buy’) believes that the first quarter could be the low point for the fashion and leather goods division. LVMH’s performance in the first quarter was “fairly bad”, as expected, but at least in line with expectations, without any “dramatic” trend. RBC (‘outperform’) highlights that management confirmed that fashion and leather goods trends in March were similar to those in the quarter, “which should provide modest reassurance that demand trends are quite stable”.
Quoting…
* Hermes took advantage of this to gain around 2% to 2,330 euros.
* Unibail-Rodamco-Westfield rose 3.5% to 75.3 euros. Citi raised its recommendation on the real estate company to ‘purchase’ while increasing its target from 52.5 to 85.2 euros. Markets appear to have “entered a new phase of stimulation, albeit slowly.” The analyst believes that the rate cut should help further support economic stability and growth from 2025 and anticipates a soft landing of the economy as the new base case.
* Virbac rises 2.5% to 369 euros. In the 1st quarter of 2024, the group’s turnover stood at 345.7 million euros, up 9.8% at real rates compared to the same period of 2023. After restatement of the impact unfavorable resulting from the evolution of monetary parities, the growth in turnover over the period reached +10.8%.
* Medincell jumped 16% to 10.8 euros. The French biotech is logically in demand the day after the announcement of a major agreement with the American pharmaceutical giant AbbVie to co-develop and market up to six products in different therapeutic areas and indications. Under the terms of the co-development and licensing agreement which covers up to 6 programs, Medincell will receive an upfront payment of $35 million and could receive up to $1.9 billion in milestone payments and marketing ($315 million for each program). Medincell is also eligible to pay mid-single to low-double-digit royalties on net sales. Portzamparc emphasizes that the announcement is very important and secures cash flow beyond 2025, the horizon at which the group plans to become profitable. Enough to target a price of 19.40 euros while remaining a buyer on the file.
FALLING VALUES
* Derichebourg lost 4% to 4.2 euros, in the red for the fifth consecutive session. The group, which is very dependent on recycling services, is logically abandoned after a warning on its annual results, the result of a reassessment of the impact of the cyber attack which affected the group’s operations and the continued deterioration of its end markets, notably construction which affected the production of long steels. In this context, Derichebourg should generate a current EBITDA of between 140 ME and 145 ME in this first half, down by around 35 ME to 40 ME compared to last year. Given these events and the business context mentioned, it is currently unlikely that the EBITDA delay observed in the first half will be completely made up by the end of the financial year, and that the target of EBITDA of minimum 350 ME for 2024 communicated when publishing 2023 results, is achieved. A current EBITDA target of between 300 ME and 310 ME at the end of the year appears realistic in the current state of the economy. Restated for the financial impact of the cyberattack, it would be 315 ME to 330 ME, the company said.
* Only one significant drop among the CAC40 values: Teleperformance drops 2% to 87 euros. Having become by far the lowest capitalization in the index with 5.6 billion euros, the group could however leave the CAC40 during a future review by the scientific council.