(BFM Bourse) – While the results season is now over, just like the first quarter, which groups shone and which companies disappointed? BFM Bourse takes stock.
Undeniably, the start of 2024 was good for the Parisian market, as for all equity markets. The CAC 40 rose 8.8% and the SBF 120, the second major index on the Paris Stock Exchange, advanced 8.2%.
This progression was fueled by the decline in inflation in the major economies combined with relative economic resilience, particularly in the United States. The annual results, which were recently completed (Atos published its results again on Tuesday) were generally good and supported the market.
However, this good trend hides significant divergences, depending on the values. Which groups did the best? Which ones, on the contrary, disappointed? BFM Bourse takes stock.
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Safran, Hermès, Stellantis, or operational excellence
On the upside, several large quality stocks take center stage.
Rubis has gained more than 45% since the start of the year. The specialist in energy distribution and storage positively surprised the market when it published annual accounts supported by optimal market conditions in the Caribbean zone. Above all, the stock accelerated this week following the notable entry into the capital of Vincent Bolloré who, via a company based in Luxembourg, took more than 5%. This prompted Oddo BHF to “outperform” on the stock on Tuesday, the businessman being known for its “history of creating value through minority stakes”, argues the research office.
Safran currently occupies second place in the SBF 120 (+31.9%), having already recorded an increase of more than 36% in 2023. The group is fully benefiting from the resumption of air traffic, which is boosting its services after-sales service for civil engines, a real driver of Safran’s profitability. To make matters worse, the company delivered 2023 results and 2024 prospects without any hitches. Over the period 2022-2025, the engine and aeronautical equipment manufacturer should achieve average annual growth of 24% in its earnings per share and cumulative cash of 10.8 billion euros according to forecasts from Oddo BHF.
Third, Renault (+26.8%), published excellent results for last year. Its cash generation has, more particularly, surprised investors in the second half of 2023. With numerous launches of new vehicles this year (such as the R5, the electric Scénic or the Rafale) and “a more efficient cost base”, the group has the right cards to “protect its margins” this year, judges Berenberg who raised his price target to 52 euros and confirmed his buying advice this week. The German bank also warns that the group, with its improved cash generation, should see its credit rating return to investment grade by the end of the year.
Returning in March to the CAC 40 to the detriment of Alstom, Accor took 25% and fourth place, supported by the resumption of tourism and record results.
Strongest increase in the SBF 120 last year (+59%), Stellantis continues its good trend (+24.5%) and occupies fifth place. The Franco-Italian-American automobile manufacturer has certainly reduced its stock market discount compared to other stocks in the sector. But the quality of its results – industrial cash generation of 12.86 billion euros and a current operating margin close to 13% – argues for the continuation of its rally. At a time when the market has abhorred electric vehicles and is focusing on fundamentals, “Stellantis could be (…) best placed to weather the storm”, judges Royal Bank of Canada.
Still well placed, Hermès (+23.31%) takes eighth place, driven by growth and results that never disappoint. The debate is more about valuation, which some analysts find demanding while others think it still leaves room for potential.
Among the other stocks in the top 10, we also note the presence of Bureau Veritas (+23.7%), which recently delighted the market with a successful investor day, or Spie (+23.04%), the multi-technical service provider, which reached its profitability objective two years in advance.
Well on its way to achieving zero debt by 2025 and seen as a target for its new major shareholder, ArcelorMittal, Vallourec (+22.64%) takes tenth place.
The harsh stock market torture of Atos
On the downside, we unsurprisingly find companies that have performed in a rather inglorious manner since the start of the year.
Atos (-73%) has by far the biggest fall in the SBF 120. A few years ago, the stock was worth more than 100 euros, compared to 1.7 euros currently. The sale to Daniel Kretinsky of its historical scope, i.e. outsourcing activities, did not go through, due to disagreements over the price. Airbus, for its part, preferred not to buy Atos’ cybersecurity, big data and supercomputer activities. The digital services company burned more than 1 billion euros of cash in 2023 and must refinance more than 3.6 billion euros of debt between 2024 and 2025. The group is heading towards a major financial restructuring. On Monday, Société Générale went short on the stock and slashed its price target to… 20 cents.
Euroapi plunges by more than 50%. The former Sanofi subsidiary has had one series of disappointments, with a 2024 outlook that is completely contrary to market expectations, precisely because of its dependence on its former parent company, but also production concerns on an Italian site, which have recalled a previous case at the end of 2022 in Hungary.
Hard hit by an unprecedented crisis in the real estate sector, Nexity (third with a fall of 43.8%) saw its margin plunge in 2023, suspended its dividend, announced a job protection plan and announced very vague prospects. for the current year.
The producer of materials for semiconductors Soitec (40.7%) comes in fourth place in the biggest declines in the SBF 120. The group issued a heavy warning on Wednesday evening on its sales for the first half of its financial year which will be closed in March 2025. This resulted in a significant sanction on the stock market, Thursday, of more than 20%.
The retirement home operator Orpea (-39.6%), which is preparing to change its name to Emeis (“we” in ancient Greek), shows the fifth biggest drop in the index.
Forvia (-31%) also appears in the ten biggest declines, but the automotive supplier’s situation on the operational level seems more enviable. The action especially suffered from questions about its cash generation and the impact of its restructuring in Europe on its margins and its debt reduction. UBS recently argued that market fears were exaggerated and that deleveraging was instead under control, moving to buy the stock.
Among these biggest declines are also Teleperformance (-31.8%), which continues to publish disappointing growth and suffer from market fears about the impact of generative artificial intelligence on its activity.
Julien Marion – ©2024 BFM Bourse