THE TREND
(Boursier.com) — The correction is accelerating on the Paris stock exchange with a CAC40 down 1.7% on Wednesday around 7,250 points as midday approaches after having already lost 1.33% yesterday.
The luxury compartment weighs like yesterday on the trend, new concerns about China – a key market for luxury companies – having come on top of fears about a possible economic recession in the United States. China indeed expects to see Covid infections peak at around 65 million per week by the end of June, says ‘Bloomberg’.
Wall Street is expected in the red before trading on Wednesday, under pressure with the deadlock in negotiations on the US debt ceiling. Negotiations continued yesterday on Capitol Hill, but as a result no agreement emerged and the extent of progress is unclear, with House Speaker Kevin McCarthy saying there was not yet agree and some participants from the Republican Party lamenting a lack of progress.
RISING VALUES
* Only one value escaped noticeably from the drop on the CAC40: Orange gleans 0.2% to 11.63 euros.
* The Company of the Alps gains 1% to 14.8 euros. The turnover amounts to 678.5 ME for the 1st half of the 2022/23 financial year. It is up by 25.4%, at actual scope, and by 14.4% on a like-for-like basis compared to the 1st half of the 2021/22 financial year. Despite an inflationary context, the Gross Operating Surplus increased by 1% over the period to 232.7 ME against 230.4 ME for the same period 2021/22. Net income, Group share for the 1st half of 2022/23 amounted to 107.6 ME, a decrease of 4.5% compared to the 1st half of 2021/2022.
FALLING VALUES
* Renault lost 3.5% to 32.5 euros and Stellantis drops 4% to 14.6 euros. Fears of an electric price war after Tesla’s latest announcements continue to weigh on the trend.
* Vivendi lost another 2.5% to 8.87 euros while Barclays downgraded the value to ‘line weighting’. Bolloré sold shares suggesting that it will not exceed the threshold of 30% of Vivendi’s capital anytime soon (it would have done so in September given the cancellation of shares planned by Vivendi). This does not mean that an offer from Bolloré for Vivendi is no longer relevant, but the timetable is off. The sale of shares by Bolloré indeed gives it more flexibility and should lead to a potential voluntary rather than compulsory offer. Nevertheless, such an offer is unlikely in the short term, according to the broker, depriving Vivendi shares of their main catalysts. Indeed, the eventual sale of Telecom Italia’s fixed network and the green light for the Lagardère transaction are smaller potential catalysts with less impact on the price. The objective is reduced from 12 to 11.25 euros.
* In luxury, Hermes continues to fall by 1% to 1,873 euros, LVMH And Kering fell more sharply with drops close to 2%.
* Soitec yields 1% to 125.7 euros in the morning. Stifel lowered its target from 180 to 170 euros after further cutting its EPS forecast for the 2024 financial year (ending in March) by 14.8%. This reduction reflects the most recent data which suggests a further deterioration in smartphone demand and an extended period of inventory digestion in the supply chain from its last point (April 11).
* Valeo fell 3% to 18.5 euros. HSBC has adjusted the target from 21 to 20.5 euros (‘keep’). Renault and the equipment manufacturer Valeo have announced the conclusion of a partnership on the development of the electrical and electronic architecture of the next generations of the group’s vehicles. Valeo will supply electrical and electronic components, in particular the High-Performance Computer (HPC – high-performance calculator). Valeo engineers will also work near the Renault Group sites in Guyancourt, Toulouse and Sophia-Antipolis and will work closely with the Renault Software Factory teams on software development. Lastly, Valeo will supply on-board application software, such as parking assistance.