THE TREND
(Boursier.com) — Hesitant at the opening, the CAC40 finally took the upward path, rising by 0.6% around 7,050 points as midday approached. Despite a brief passage below 7,000 points at the start of the session, the Parisian index therefore remains above the symbolic level that it managed to cross yesterday at the end of the session and to maintain at the close.
Central banks’ monetary policies remain the main concern of investors who are trying to determine how quickly the major issuing institutions intend to reduce their measures to support the economy in order to slow the surge in inflation. European Central Bank President Christine Lagarde tried to allay market fears during a hearing in the European Parliament yesterday by saying there was no need for a significant tightening of monetary policy in the euro zone, inflation being set to decline and stabilize at around 2% in the medium term. Investors’ expectations, however, lean towards at least one rate hike by the ECB this year and the yield on 10-year OATs barely fell on Tuesday (0.66%).
RISING VALUES
* AXA gains more than 3% to 28.8 euros in the morning. The insurer is supported by a note from Morgan Stanley which raised to ‘overweight’ its opinion on the case by targeting 35 euros. JP Morgan has also started monitoring the value with a ‘neutral’ advice and 30.5 euros in the viewfinder. The market is largely positive on the title since, according to the ‘Bloomberg’ consensus, 21 analysts are ‘buying’, 5 are ‘neutral’ and only 1 is ‘short’. The average 12-month target is set at 30.4 euros.
* Orpea rose by almost 8% this Tuesday morning to 34.7 euros, while the investment fund Mirova, one of the group’s shareholders explained in an open letter that he intended to remain in the capital of Orpea, “while by asking for profound changes in the company”. The management company holds 3.90% of the round table and calls in particular for the transformation of the dependency group into a “mission company”. Mirova, which is a subsidiary of Ostrum Asset Management, proposes among several other avenues that Orpea establishes the notion of “good treatment”, as well as social objectives in terms of the management of the group’s human resources…
* Korian also resumed 6% to 18.3 euros after almost 20% drop in two sessions.
* Fourth consecutive session of progression for Orange which goes up 2% to 10.77 euros. The telecom operator is benefiting from the return of speculation linked to its Spanish activities. According to the ‘Expansión’ newspaper, Orange is considering merging its Iberian subsidiary with its local rival MasMovil. The project would consider granting 50% of the new company to Orange on the one hand and to the shareholders of MasMovil – the KKR, Cinven and Providence funds – on the other. Orange’s objective would be to anticipate other options, such as a hypothetical merger of MásMóvil with Vodafone, which would leave it in a weak position in Spain, its second largest market after France. The daily specifies that the shareholders of Masmovil could be open to an agreement if the CEO Meinrad Spenger keeps his job in the new company.
* Airbus gains 1.4% to 114.5 euros. Jefferies has initiated coverage of Europe’s aerospace and defense sector as it enters the first year of “material recovery from the worst crisis in its history”. The broker’s preferred choice in the industry is Airbus (‘buy’) given the recovery momentum, ‘solid’ cost cuts and a now more attractive valuation.
FALLING VALUES
* BNP Paribas drops 1.4% to 64.8 euros after the publication of its 2021 accounts and the presentation of its new strategic plan for 2025. If the bank unveiled net profit above market expectations in the fourth quarter, certain figures somewhat disappointed analysts, particularly on the revenue side of market activities. Over the period, BNP recorded a net profit of 2.31 billion euros (+45%), helped by a sharp reduction in the cost of risk in a context of normalization of the credit markets after the health crisis, for a net banking income, of 11.2 billion euros (+3.7%). The “common equity Tier 1” ratio reached 12.9% at the end of December, up 10 basis points over one year. As part of its new strategic plan, management is aiming for an average annual growth of more than 3.5% per year in revenue over the period 2022-2025. The more moderate increase in costs should result in growth of more than 7% per year in net income to bring the ROTE to more than 11% while maintaining a CET1 ratio target of 12% by 2025, integrating the full effect of the finalization of Basel 3 (CRR3). The Group’s financial strength at the start of the plan as well as the growth in ROTE should make it possible to support the profitable and balanced growth of the Group’s businesses while increasing the payout rate to 60%, with a minimum cash payout rate of 50 %.
* EDF fell 2.4% to 8.18 euros. The national electrician has further revised down its estimate of nuclear production in France in 2022 to a range between 295 and 315 TWh, against 300 to 330 TWh previously. The nuclear production estimate for 2023, currently 340 – 370 TWh, will be adjusted as soon as possible…
* hexaom (-5% to 38.8 euros) achieved a turnover of 996.6 ME in 2021, up +13% compared to 2020 (+9.7% at constant scope). The level of production in the fourth quarter remained strong (€289.2 million, up +6.5% and +1.5% at constant scope) but was strongly impacted by the extension of delivery times in the materials supply chain, suffered by all building stakeholders.