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(Boursier.com) — THE TREND
The CAC40 doesn’t stop! The Parisian index rose again by 0.64% to 7,791 points at the close, still supported by announcements of measures to revive activity in China after a jump of more than 2% yesterday. The publication of a clear slowdown in inflation in France and Spain also reinforces bets on a further rate cut by the European Central Bank next month…
Indicators in the United States also supported the hypothesis of a soft landing for the American economy. Wall Street is thus at its highest this Friday, following reassuring American inflation figures.
The adjusted “core PCE” price index announced today for the month of August in the United States showed an increase of 0.1% compared to the previous month and of 2.7% over one year, while the consensus was +0.2% compared to July and +2.7% compared to last year. Personal household income for the month of August increased by 0.2% compared to the previous month, against +0.4% consensus. Personal consumption expenditure increased by 0.2% from one month to the next, compared to the market consensus of 0.3%.
This was an important test, as markets take victory against inflation for granted, which also justifies the Fed being able to make significant rate cuts to normalize its policy.
According to the CME FedWatch tool, the Fed is expected to further reduce its rates by a quarter of a point (probability of 47.9%) or a half of a point (52.1%) on November 7, following the end of of the future FOMC meeting. The dominant hypothesis for December 18 and the last monetary meeting of the year is that of a range going from 4 to 4.25% on the federal funds rate, with more than 50% probability. This represents a drop of three-quarters of a point compared to current levels.
The euro/dollar parity reached $1.1160. A barrel of Brent for November delivery is trading at $71.45 (-0.2%). An ounce of gold consolidates slightly at $2,648.
RISING VALUES
Trigano soars by 11%, sought after a solid annual publication. The growth in turnover, associated with the control of margins and costs, allows us to foresee a current operating margin rate for 2024 at least equal to that of the 2022-2023 financial year (12.2%). A final quarter above expectations, a 2024 MOP which will be at least equal to that of 2023 and reassuring words for 2025, summarizes Oddo BHF. The group’s comments for 2025 are rather optimistic and, even integrating a conservative scenario for turnover and margins, the valuation remains very low (VE/ROC 2025e: around 3.5x vs. a historical figure of around 8x). Implicitly, this level of multiple would imply a downward revision of the 2024/25e ROC of at least 45% which seems too pessimistic, notes the broker. The latter reiterates its ‘outperformance’ opinion with a target of 158 euros. Note that the process of acquiring Bénéteau’s Mobile Home business is still being studied by the Competition Authority in France with a decision expected during H2…
Forvia jumped 11% to almost 10 euros despite a downward revision of its annual objectives. The automotive supplier, whose stock was halved this year, now forecasts 2024 turnover of between 26.8 and 27.2 billion euros at updated average estimated 2024 exchange rates, including a outperformance of organic growth estimated at around 300 basis points. The operating margin is for its part anticipated between 5% and 5.3% compared to the July forecast “at the bottom of the range of 5.6% to 6.4% initially forecast in February”. The impact of the revised operating margin on EBITDA leads to revising the expected net cash flow (NCF) for the 2024 financial year greater than or equal to 550 ME (compared to greater than or equal to 2023 in value, i.e. greater than or equal to 649 ME, previously).
OPMobility : +8% with Claranova, Bonduelle, Memscap
Valeo : +6.7% followed by Wordline, STM, Kering (+6%) and Ose
Ubisoft rebounds 6% after yesterday’s purge, followed by SMCP
Remy Cointreau : +5% with SEB (+4.5%) with Stedim, Dior, Stellantis
Renault : +3.5% followed by LVMH, Atos, Soitec, Vallourec, Equasens
ADP Group +3%. CIC Markets went ‘buy’ on the Paris airport manager, targeting 136 euros. The reorganization of Indian assets has not been well communicated to the market, but provides a better understanding of ADP’s exposure to a country where traffic is expected to see strong growth in the future, the analyst says. The signing of a new economic regulation agreement by 2027 “now seems possible” and would be appreciated by investors… Finally, international traffic outside Europe remains sustained and the gradual decline in domestic traffic in Paris and, in a lesser extent, in the Schengen area, seems to be “well understood by the market”, notes the broker.
Pernod Ricard : +2.5% with Essilor, Mersen, Rexel, Capgemini, Coty, Eramet, Interparfums, FNAC Darty.
FALLING VALUES
Waga Energy fell by 4.6%, while the group started a biomethane production unit at the Granges waste recovery center (Saône-et-Loire), operated by the company Valest, a subsidiary of Veolia. This is the 6th green gas injection project carried out with Veolia in 6 years. Thanks to Wagabox technology, developed by Waga Energy, the gas spontaneously emitted by waste stored on the site is recovered in the form of biomethane, a renewable substitute for fossil natural gas. Biomethane is injected directly into the natural gas distribution network to supply individuals and businesses.
Cegedim loses 3% followed by GTT (-2.8%) and Sword (-2%)
Casino : -2% with Elis, Lisi, Schneider (-1.7%) followed by Bastide and Getlink
Bouygues falls by 0.5%. Morgan Stanley reduced its target from 34 to 32 euros, the lowest level among analysts following the file. The bank, which is ‘underweight’ on the conglomerate, says it is not ‘discouraged’ in its cautious view of the company. It lowers its revenue expectations for 2024-26 by 1 to 2% and those for free cash flow by around 2 to 8%. It highlights risks to earnings in the short term, particularly due to price/costs in telecoms and weaker end markets in contracting.
Airbus yields 0.4%. The 2024 delivery target in danger? Several Reuters analysts and industry sources say the planemaker’s deliveries are showing a slower-than-expected pace compared to last year, raising more and more questions about the planemaker’s ability to reach its annual guidance. In July, Airbus lowered its full-year profit and delivery forecast to 770 planes, from 800 previously, due to shortages of parts and other items. The underlying production target was pushed back a year to 2027. Airbus would have delivered around 30 planes in September, bringing the total number of planes shipped since the start of the year to 477, according to data provided to ‘Reuters’ by consulting firm Cirium Ascend. If Airbus continues at this pace, it could end the month with 36 deliveries, or 483 since the start of the year, a level lower than the 488 deliveries made in the first nine months of 2023.
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