Mid-session Paris: the rebound was short-lived
(Boursier.com) — THE TREND
The CAC40 continued its rebound above 6,500 points at the very start of the session, but the Parisian index quickly gave up its gains. At the end of the morning, a drop of 0.5% is needed at 6,460 points. The surge in raw materials, oil in the lead, is confirmed this Thursday with a barrel of Brent which is now trading at more than $116. The WTI points to more than $114. Prices are also supported by the decision of OPEC+, of which Russia is a member, not to modify its policy of gradually increasing its oil production, despite the Russian invasion of Ukraine.
The New York Stock Exchange nevertheless offered a technical rebound on Wednesday evening. Investors found a little respite in Jerome Powell’s speech deemed cautious before the House of Representatives Financial Services Committee. The Fed Chairman said he expects expecting the Fed to raise key rates this month to combat high inflation in a tight labor market, but he has acknowledged that Russia’s invasion of Ukraine had somewhat clouded the outlook.
* Thales climbed 5.5% to 108.6 euros and erased its losses from Wednesday. The electronics group specializing in aerospace, defense, security and land transport has unveiled solid annual accounts and will offer its shareholders a dividend of 2.56 euros per share. Thalès notably saw its adjusted operating profit and operating cash flow reach historic levels in 2021, while new orders increased by 18% to 19.9 billion euros. The company is targeting this year a turnover in the range of 16.6 billion to 17.2 billion euros, an Ebit margin of between 10.8% and 11.1% as well as a book-to-book ratio. to-bill above 1, supporting the acceleration of growth in 2023.
* Technip Energies resumed 16% to 10.2 euros, investors welcoming the annual publication of the Engineering and Technologies company for the energy industry and the rather reassuring speech on exposure to Russia. While the title was badly shaken after the invasion of Ukraine by the Russian army, the group indicates that as of December 31, 2021, around 3.8 billion euros or 23% of the order book is linked to projects under way in Russia, and will be impacted by the current crisis. At the level of the 2022 forecasts, the management anticipates a recurring EBIT margin of at least 6.5% (excluding the contribution of the projects in progress in Russia estimated at less than 70 ME), for a turnover including between 5 and 5.5 MdsE (excluding the contribution of ongoing projects in Russia estimated at 1.4 billion euros).
* Vallourec (+3%) announced that it has won a contract with OneSubsea, the division of Schlumberger specialized in subsea production and processing technologies and systems, for the supply of 3,000 meters of seamless profiled riser tubes for the project Bacalhau off Brazil. The contract was awarded on behalf of Subsea Integration Alliance, a global strategic alliance between Subsea 7 and OneSubsea.
* BNP Paribas gained 1.7% to 50.8 euros. The rue d’Antin bank is supported by a note from Mediobanca which raised to ‘outperform’ its recommendation on the value by targeting 59.6 euros.
* Faurecia loses another 5.5% to 27.9 euros. The equipment manufacturer is one of the stocks most impacted on the stock market within the sector since the start of the conflict in Ukraine, explains Oddo BHF. However, the analyst finds that fears are now exaggerated, both on the environment but also on aspects specific to Faurecia (leverage, capital increase) and thus reiterates his ‘outperformance’ opinion. Indeed, the direct exposure of Faurecia/Hella to Russia is very limited (approximately 1% of the turnover of the new group) and the indirect consequences (production stoppages, inflation) do not seem, at this stage, to call into question the guidance communicated last week. Furthermore, the selling pressure linked to the capital increase seems all the more exaggerated since the latter is neither urgent (probable that it will now be postponed to the end of 2022/beginning of 2023) nor necessary (sales, other means of possible refinancing).
* Engie lost 3.4% to 11.66 euros. Regarding the gas pipeline project linking Russia to Germany Nord Stream 2, to the financing of which the group has contributed since April 2017 alongside 4 other European investors, Engie as a lender says it is exposed to a credit risk for a maximum amount of 987 million euros which could materialize in particular in the event of a bankruptcy filing.
* Danone drops 4.3% to 50.4 euros, the group’s exposure to Russia continuing to weigh.
* Renault also loses 3% under 25 euros.