Here is the analysis of the evolution of the Paris Stock Exchange on Friday May 10, by the experts from Meilleurtaux Placement.
The markets: New historic record?
The Parisian index took advantage of this bridge in May to reach a new historical record in terms of performance. It reached 8257 points in session this Friday, finally closing at 8219 points up 0.38%. The index closed the week on a positive note, after 6 consecutive sessions of increase, the CAC 40 gained 3.29% weekly, one of the best weekly performances since January 1, 2024. As for values, the majority increases are due to changes in the opinion of analysis offices. Teleperformance, which recorded the largest increase in the CAC 40, +3.8%, is supported by Berenberg. Legrand takes +2.84% while the Citi bank raised its opinion by two notches from sell to buy on the stock.
Values: Sanofi and Renault
Sanofi The pharmaceutical giant posted an increase of 1.23% to 94.33 after the announcement of a co-exclusive licensing agreement with Novavax (an American biotech). This is a co-marketing of the Covid 19 vaccine and the development of combined influenza and Covid 19 vaccines. This license allows Sanofi to acquire a minority stake of less than 5% in Novavax. This agreement consolidates Sanofi’s position in vaccines and offers diversification with new combination products, which reassures shareholders of the potential for future growth. Since the start of the year, the French group has gained more than 5%. Renault The French car manufacturer gained 0.04% this evening, 48.3 after the rating agency Moody’s went from stable to positive on the group’s credit rating. Which suggests a potential rise towards the category
investment grade
(see glossary) in the next 12 to 18 months. This improvement reflects Renault’s financial renaissance, with a solid stock market performance in 2024 (+31% since the start of the year). The success of new electric models (Renault Scenic, Renault 5, Dacia Spring, Alpine A290) and the improvement in the liquidity profile will be decisive in maintaining this dynamic. You should know that raising the rating generally increases the group’s ability to increase returns to shareholders.
The world after: luxury in vogue on the stock market!
In the luxury sector, one actor is really popular at the moment! This actor is the Herms house. It stands out for its impressive growth, with a 17% increase in sales in the first quarter. A dynamism which contrasts sharply with more moderate increases among its competitors such as LVMH and Kering. The French saddler, recognized for its significant margins and regular growth, is valued by the Jefferies analysis office at 2,650 euros per share. This represents a potential appreciation of around 15%. Herms’ strategies include a diversification of the product offering ranging from Oran sandals for 595 euros to Sellier sofas for 54,000 euros. This allows it to attract a varied clientele, including young people seeking more accessible luxury items. Despite global economic turbulence and macroeconomic challenges, the analysis office remains confident in Herms’ ability to continue this growth momentum, aided by product innovations and intelligent pricing positioning. In short, revenue growth, combined with skillful management of brand extension, should allow it to continue to excel in the markets.
The glossary: Investment grade
Investment grade debt is a type of bond or loan issued by a company, government or other entity, and which is judged to be of high quality by rating agencies. This means that the issuing entity has a low probability of defaulting on its repayment obligations. Investment grade bonds generally have the following characteristics:
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1. High rating:
They receive quality ratings from the main rating agencies (Standard & Poor’s, Moody’s and Fitch). For example, ratings range from AAA BBB for Standard & Poor’s and Fitch, and Aaa Baa for Moody’s.
2. Low Risk:
They are considered to have a relatively low default risk compared to high yield bonds, which are rated below BBB-/Baa3.
3. Interest rate:
They generally offer lower interest rates than high yield bonds due to the reduced level of risk. Investment grade bonds are therefore preferred by conservative investors, such as pension funds and insurance companies, due to their stability and predictability.