THE TREND
(Boursier.com) — Investors are taking advantage of yesterday’s sharp drop and above all a series of 4 clearly negative sessions to make some cheap buybacks on Tuesday, which allows the CAC40 to recover around 1%, around 6,145 points at the end of the morning. A rebound despite the fall of the Nasdaq yesterday (-4.29%) and the sharp decline in Tokyo this morning (-2.53%). Wall Street is still expected to rebound today even if the trend remains at least fragile against a backdrop of rising interest rates and slowing global growth. The health situation in China, which is disrupting supply chains and raising fears of a marked drop in demand, has also weighed on the trend for long sessions.
Investors remain focused on future increases in central bank interest rates, after bullish gestures last week from the US Federal Reserve, the Bank of England and the Australian Reserve Bank. Faced with high inflation, further accentuated by the war in Ukraine, the markets anticipate the continuation of a tightening of monetary policy, particularly in the United States, where futures markets expect another 50bp tightening in June, followed by at least another 50bp hike in July, or even September, according to CME Group’s FedWatch tool.
Inflation figures for April will be published on Wednesday in the United States, China, Germany and France. across the Atlantic, the consensus expects a slight slowdown in price increases to 8.1% in April over one year after 8.5% in March, the strongest rise since 1981. The pace of growth in the ‘core’ CPI, which excludes the most volatile elements, should also slow to 6% over one year after 6.5% in March.
RISING VALUES
* The days follow each other and are alike for Euroapi. The company specializing in the manufacture of chemical molecules for drugs aligns a third session of strong progress this morning, on a gain of 5.5% to 14.55 euros. The company split from Sanofi made its debut on the Paris market on Friday at a price of 12 euros. The title continues to benefit from the support of analysts who are beginning to follow the file. This morning, Deutsche Bank and Oddo BHF initiated the coverage ofEuroapi with a positive review. DB, ‘Buy’ with a target of 20 euros, explains that given its leading position in structural growth markets and its initiatives to become more efficient following the split from Sanofi, the company is well equipped to achieve its objective of strong and profitable growth in the future.
* Alstom confirms its current form, with a gain of 3.6% to 23.6 euros. The day after the excellent contract won by the railway group in Germany, Stifel began monitoring the value with a ‘hold’ opinion and a target of 23 euros. If Alstom continues to be a darling among analysts, the broker sees few positive points in the story, except that the title has already fallen significantly (-52% over one year). Sitting well below consensus, the broker believes synergies from the Bombardier deal will materialize later than expected, input cost pressure will hamper efforts to return to pre-pandemic margins for the core business of Alstom and that Bombardier will not achieve Alstom profitability any time soon. Finally, the broker does not believe in the objective of a conversion rate of adjusted net income into free cash flow above 80%.
* Renault gained 0.7% to 22.6 euros. Mobilize, the Renault brand that offers flexible services around mobility, today presents its strategy to project the group beyond the automobile, generate recurring revenue and achieve the objective of achieving 20% of turnover. Renault Group’s business by 2030. Through the use of data, Mobilize can offer mobility, energy, financing, insurance, payments, maintenance and reconditioning services, and reduce the user cost for its customers. “These services are even more efficient when they rely on vehicles specially designed for new forms of mobility by the Mobilize teams,” explains the Renault subsidiary. The entity, excluding Mobilize Financial Services, is aiming for double-digit profitability from each of its activities by 2027, with a target for operating margin at breakeven in 2025.
* Veolia (+2% to 25.77 euros) and Saur have just signed a unilateral promise to purchase under which Saur has undertaken to acquire Veolia’s activities in mobile water services in Europe, which are part of antitrust remedies required by the European Commission. The amount of the sale of the assets in question is at around 190 million euros.
* trigano (+7% to 123.4 euros) announces that it has been able to offset the evolution of its manufacturing costs by appropriate price increases in the first half of its 2021-2022 financial year, following a timetable allowing it to preserve its margins. Consolidated current operating income amounted to €179.3 million and represents 12% of revenue (11.1% in 2020/2021). Taking into account a financial result of 6.8 ME, a corporate tax charge of 46.6 ME and the positive contribution of companies accounted for using the equity method (2.2 ME), the consolidated net profit stands at 141.3 ME (114.4 ME in 2020/2021) and represents 7.34 euros per share.
FALLING VALUES
* The only significant drop among the CAC40 values, Thales drops 2.1% to 115.7 euros. This is the fifth session in the red of the defense electronics group but with an accumulation limited to 7%.