Mid-session Paris: the CAC40 is still gaining ground, Thalès heckled


THE TREND

(Boursier.com) — The trend is less euphoric than yesterday, but the Paris market confirms its good mood on November 11. At midday, the CAC40, on track to align a sixth consecutive week of increases, won 0.61% to 5,797 points. Stock markets remain buoyed by the announcement of a sharper-than-expected slowdown in inflation in the United States in October, which could lead the Fed to opt for lower rate hikes in future, as well as a relaxation of health measures in China intended to limit the spread of the coronavirus. Beijing has notably decided to shorten the duration of quarantine for contact cases and travelers from abroad while airlines having transported passengers contaminated with Covid-19 will no longer be sanctioned. Announcements that benefit the luxury sector as well as the basic resources compartment.

After recording its strongest rise in two and a half years, including a 7% surge in the Nasdaq, Wall Street is still expected to be in the green this weekend. The University of Michigan’s Preliminary US Consumer Sentiment Index for November (consensus 59.6) will be the day’s only indicator on the macro front as a few second-tier companies release their quarterly reports.

Teleperformance continues to spill a lot of ink after the “Colombian affair”, Thalès falls while data relating to the Defense group was published on the “dark web” by the group of Russian-speaking hackers LockBit 3.0, while Casino jumped on redemptions of short positions and reassuring information (in the short term at least) on its debt.

On the Nymex, a barrel of WTI crude (December maturity) rose more than 3% to $89.3. The ounce of gold advances by 0.5% to $1,764. The dollar index fell 1% against a basket of benchmark currencies and the euro gained another 0.6% against the greenback, to $1.027. Finally, Bitcoin gained 5% over 24 hours on Coindesk at $17,270.

RISING VALUES

* Casino soared 14% to 12.5 euros, boosted by reassuring elements on its debt. The distributor has redeemed on the market a nominal amount of 67,050,000 euros of the Quatrim 2024 covered bond. The redeemed bonds will be canceled in the coming days. As of November 10, the balance of the secure senior escrow account is zero.

* score gained 3.8% to 18.3 euros, supported by a note from Jefferies which raised its recommendation on the reinsurer to ‘buy’ while increasing its target from 17.5 to 22.5 euros. The analyst highlights the decisive steps taken in the third quarter to strengthen the company’s balance sheet and affirms that “the moment of the peak of risk is passing”. The measures will significantly reduce the risk to the group’s earnings estimates and credit rating. Even after the stock’s recent jump, Scor is still trading at only around 4x estimated 2023 earnings, compared to 7-11x for most peers, the broker adds.

* claranova advance of 3.2% to 2.6 euros the day after the announcement of a return to growth in the first quarter of its 2023 financial year. Revenue reached 96 million euros over the period, in 10% increase at real rates. An online publication for Oddo BHF, which leaves its 2022-2023 forecasts unchanged. Although the second quarter will be important, the analyst considers that it will still take time for the company to find a trajectory of profitable growth capable of seducing and restoring the confidence of the financial community (economic equation to be solved on PlanetArt, leverage to be confirm on Avanquest, fixed costs to be amortized on myDevices). This lack of momentum explains its ‘neutral’ opinion in the short term despite the upside and a valuation “on the mat” from a fundamental point of view. The objective is confirmed at 4 euros.

* Hermes, LVMH and Kering gain between 1 and 3%, without the wake of Richemont which soared by more than 20% in Zurich after its half-yearly publication. If the Swiss firm fell into the red over the first six months of its financial year due to a charge of 2.7 billion euros in connection with the sale of the majority of its stake in YOOX Net-A-Porter, its operating profit from continuing operations climbed 26% to 2.7 billion euros, against a market consensus of 2.3 billion euros. Revenue jumped 24% at real exchange rates (+16% at constant exchange rates), to E9.68 billion, with double-digit growth at real exchange rates across all business segments and distribution channels. The sector also benefited from the announcement of the relaxation of measures against Covid-19 in China.

* Engie (+1.2% to 14 euros) confirms its gains on Thursday after a solid quarterly publication. Oddo BHF reiterated its ‘outperform’ recommendation on the stock with an adjusted target of 17 to 17.5 euros. On current levels, and taking into account its dividend assumption, the group is trading on an implied yield level close to 10% for the current financial year and above 7% for the next two years. In relative terms, Engie trades at a discount of around 30% in its sector, i.e. close to its historical high, underlines the broker. For its part, Deutsche Bank (‘buy’) raised its target from 15 to 16 euros, evoking a new series of solid results, with a very good performance from trading activity. Finally, Goldman Sachs revalued the file from 19.5 to 21.7 euros while confirming its ‘buy’ opinion.

* Alstom (+0.8% to 24.2 euros) won a contract worth 98 million euros to design, manufacture, supply, test and commission 78 advanced metro cars for the Indian Chennai Metro Rail Limited (CMRL). These new metro cars will run on the 26km corridor forming part of Phase II which will link Poonamallee Bypass and Light House through 28 stations (18 elevated and 10 underground). The contract includes the manufacture of 26 metro trains (three-car configuration) capable of operating at a maximum speed of 80 km/h, as well as the training of personnel.

FALLING VALUES

* Thales stumbled 6.3% to 115.1 euros as the Russian-speaking group Lockbit 3.0 published hacked data on the dark web at the end of last month. According to ‘franceinfo’, the electronics, defense and security giant confirmed this information while specifying that “no authentic ransom demand” was made. “Thales security experts are currently analyzing the published data. For the moment, there is no impact on the group’s activities”, specifies the information site. On November 2, Thalès indicated that it had not identified any trace of compromise or impact on its information systems after the allegation of data theft by the group of hackers.

* Akwell (-4% to 16 euros) recorded consolidated revenue of 251.1 ME in the third quarter of 2022, up +18.7% as published compared to the previous financial year, and +22.3 % at constant scope and exchange rates. In a still difficult market context, the group confirms the gradual recovery of its activity but is still down -3.3% compared to the third quarter of 2019, before the health crisis.

* Teleperformance yields 3.7% to 169.5 euros after an increase of more than 10% at the opening. The world leader in call centers announced on Thursday that it had launched a share buyback program of 150 million euros following the decline deemed “excessive” in its stock price on Thursday (-33%), after the opening of an investigation in Colombia on suspicion of violation of labor rules. Edwin Palma Egea, Colombia’s Labor Relations Minister, wrote on Twitter: “We have decided to open an investigation against Teleperformance… We have notified the company and invite all workers and trade unions in the country to provide us evidence of alleged violations of labor standards”. The group told him that it had not received any official notification from the Colombian government on this investigation and that it was confident about the results it would give.

According to Teleperfomance, “the management team of the subsidiary in Colombia has always developed the company in compliance with the law”. The opening of this investigation follows information from the American magazine Time and the Bureau of Investigative Journalism, dating from October, on the working conditions in Colombia of employees in charge of moderation on the social network Tiktok, of which Teleperformance is a subcontracting. According to this press information, these employees, whose union rights were not respected, were subjected to traumatic working conditions for a salary of 10 dollars a day.



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