THE TREND
(Boursier.com) — A record at the start of the session (8,229.25 points) then a clear loss of steam. The morning was not easy for the CAC40 which saw its 0.7% advance melt away like snow in the sun by mid-morning, cooled after flat flash PMIs for March in France. Domestic business activity declined for the tenth consecutive month, as demand for goods and services slowed and employment weakened. At noon, the flagship Parisian index fell 0.23% to 8,143 points. The day had started well the day after the new heights reached by Wall Street after the rather benevolent posture of the Fed.
After the status quo of the Federal Reserve, Jerome Powell stressed during his press conference that the latest inflation figures had not called into question the scenario of continued easing of prices in the United States. Nine FOMC officials who presented their forecasts on Wednesday estimate that the Fed will cut rates three times this year, confirming market expectations. The probability of a first rate cut in June has risen to around 72%, compared to around 60% yesterday morning, according to the CME’s ‘FedWatch’ tool.
Still on the side of the Central Banks, while awaiting the decision of the Bank of England at 1 p.m., the Swiss National Bank surprised by reducing its main interest rate by 25 basis points to bring it down to 1.50%. “The easing of monetary policy was possible because the fight against inflation over the last five half-years was effective,” said SNB Governor Thomas Jordan. For its part, the Norwegian Central Bank opted for the status quo and cooled the mood a little by saying that it did not intend to ease its monetary policy before the fall.
Quoting…
On the value side, Esso jumps after the announcement of a large dividend, Pernod Ricard and Remy Cointreau are supported by a note from Deutsche Bank, while Bastide Le Confort Medical and Reworld lose ground after their results.
On the oil market, a barrel of Brent fell 0.2% to $85.8 in London. Finally, on the currency front, the euro is stable against the dollar, at $1,092 while Bitcoin is up more than 5% around $66,800 on Coindesk.
RISING VALUES
* Esso soared 22.5% to 104.1 euros. The oil group will pay a dividend of 3 euros per share for the 2023 financial year as well as an exceptional dividend of 12 euros, thus bringing the total dividend distributed to 15 euros per share for payment on July 10.
* Claranova climbs 6.5% to 2.5 euros. The group closed its first half of 2023-2024 with a turnover of €301 million, up 1% at constant exchange rates (-4% at actual exchange rates). The higher margin revenues generated by the PlanetArt division combined with the strong growth of the Avanquest and myDevices divisions allow the normalized operating profit to stand at €27.5 million, up 67% at constant rates. This performance allows the Group’s operating margin to stand at 9.1% compared to 5.5% for the first half of 2022-2023, its highest ever. Benefiting from a robust base of diversified activities, Claranova intends to continue their deployment with an emphasis on continually improving its profitability.
* NRJ Group (+5.1% to 7.86 euros) recorded very good results in 2023 which validate the strategies implemented by management for its various divisions. Consolidated turnover was 391.9 million euros, up +3%. Expenses are under control since their increase is limited to +2.5% (+8.4 ME) despite the inflationary context and an increase in the cost of electricity of 8.8 ME (net of aid). The Group’s current operating margin rate increased again, to stand at 12.5% (12% in 2022, 9.8% in 2021 and 7.9% in 2019). It is driven by the dynamics of operational activities and the controlled growth of its expenses. After a financial result of 10.6 ME for 2023 (+9.6 ME compared to 2022), the Group’s share of net income increased by +30.3%. It stands at 45.2 ME (34.7 ME in 2022) thanks to the growth in operating profit excluding trade and financial result.
* Forvia rose 4% to 13.8 euros. According to our information, UBS has raised its recommendation on the automotive supplier to ‘buy’ with its objective maintained at 20 euros. The bank evokes conservative orientations for 2024, financial leverage under control and a pragmatic vision of the industry’s challenges.
* Remy Cointreau climbs 2.7% to 92.5 euros. The buying flow on the spirits group is linked to a note from Deutsche Bank which raised its recommendation on the value to ‘purchase’ with a target of 112 euros.
* Vetoquinol outperformed the market with a gain of 1.3% to 98.3 euros. Following the company’s annual publication, TP ICAP Midcap raised its recommendation on the animal health group to ‘buy’, targeting 120 euros. The group should benefit from the normalization of the market and the return of volumes (to be seen in Essentials) despite the continued rationalization of complementary products in progress, affirms the broker. The firm’s increased refocusing on species, areas and products should enable the company to gain critical mass on its specialties, replicate the defensive growth of its market and deliver an EBITDA margin of around 20%, well above – beyond what prevailed in 2019 (ref. 15.5%) even so, the group is increasing its R&D investments (7-8% of turnover) and investing in its sales force in the United States and in marketing in product support. Portzamparc (‘strengthen’) highlights the good cash generation which gives room for maneuver to carry out M&A operations this year. The tone is reasonably cautious at the start of the year due to a complicated base effect in the first quarter.
* Pernod Ricard rose 1% to 147.6 euros, supported by a note from Deutsche Bank. The German broker upgraded its view on the spirits group to ‘hold’, saying it is now “generally fairly valued” after a period of underperformance. Pernod remains facing several headwinds, including spirits standardization in the United States and macroeconomic and regulatory uncertainty in China. But, longer term, it provides a combination of exposure to aged spirits and key growth markets. For now, there appears to be a compromise between a possible further decline in consensus and a valuation that appears to largely capture this risk. The objective has been raised from 135 to 140 euros.
* Airbus advances 0.3% to 168.6 euros. Japan Airlines offers itself Airbus and some Boeing. The Japanese company announced this morning the acquisition of 21 A350-900s and 10 Boeing 787s in order to renew its fleet and increase its capacities. The carrier will also buy 11 A321neo aircraft, breaking Boeing’s exclusive hold as the group’s sole supplier of single-aisle aircraft. At list price, the total order exceeds $12 billion. Korean Air, for its part, unveiled an order for 27 A350-1000s and 6 A350-900s. The value of the contract is approximately $13.8 billion.
FALLING VALUES
* Reworld Media fall of 18.8% to 3.14 euros. The firm published a 2023 turnover of €549.3 million, up +8.6% but down -1% on a comparable basis. Reworld Media records a consolidated EBITDA of €59.3 million in 2023, down -12.1% compared to the previous year, i.e. an EBITDA margin of 10.8% vs. 13.3%. Operating profitability increased significantly during the financial year, with the EBITDA margin increasing from 8.4% in the 1st half to 13% in the 2nd half. In the 2nd half, EBITDA was up compared to the 2nd half of 2022. The group’s net profit amounted to €24.2 million, down -43.7%.
* Bastide Le Confort Medical fell by 4.4% to 17 euros and brought its losses since January 1 to more than 35%. At the end of its first fiscal half-year, management expressed confidence in the continuation of its growth trajectory and confirmed its objectives of an annual turnover of around 530 ME at constant scope and a margin current operational at least equal to that achieved for the 2022-2023 financial year, i.e. 8.4%. Portzamparc explains that improving the mix makes it possible to increase the gross margin and mitigate salary inflation on the Ebitda margin. The brokerage house maintains its scenario, knowing that the increase in volumes in the second part of the financial year should offset the increase in personnel costs recorded in the first half. The broker reiterates its ‘buy’ opinion but reduces its target from 37 to 30 euros after updating the market parameters.
* Aubay (-0.4% to 39.3 euros), after its results. Annual turnover stands at €534.1 million, a purely organic increase of 4%. In this context, the management efforts deployed by the group and the achievement of a productivity rate slightly better than expected allowed the operating margin to settle at the top of the revised range during October. It thus amounts to 8.9%, still among the highest on the market. Aubay thus demonstrates its good resilience in the face of exogenous impacts, always maintaining a good ratio between the evolution of its sales prices and its average salary in a more normalized environment. The group’s net profit stood at €33.4 million, a limited decline of -6.2% compared to the record net profit reached in 2022.