(BFM Bourse) – The vast majority of European automobile groups were sanctioned after their first quarter publication. Only Renault shares progressed during the session following its announcements.
American automobile manufacturers had passed the test of first quarter results rather well. General Motors gained 4.4% during the session following the publication of its accounts, Ford for its part gained 1%. Tesla had jumped 12%, not so much because of its (poor) results as its decision to bring forward the launches of new vehicles.
The same will not be said of their European counterparts. Almost all manufacturers who published accounts or revenues for the first quarter were punished by the market.
It is difficult to draw a general trend to explain these market reactions, each automobile group having its own positioning and specificities. Renault is, for example, absent from the Chinese market, where BMW, Mercedes-Benz, Porsche but also Ferrari showed a drop in their volumes over the first three months of 2024. BMW explained, in its opening comment, that the weakness of the real estate market had undermined the confidence of Chinese households.
Mercedes, for its part, highlighted macroeconomic conditions that are not necessarily obvious, with the American economy resisting while Europe is stagnating. “The weakening of customer demand has become increasingly noticeable after the high orders due to the pandemic have largely subsided,” developed the German group.
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Margins disappoint at Mercedes and BMW
Investors especially punished failures in publications, sometimes notable, sometimes slight. BMW disappointed investors on Wednesday by revealing an operating margin for its automotive division of 8.8% while analysts were expecting an average of 9.2%, according to Royal Bank of Canada. The group did not miss the boat by much but enough to lose almost 3% in Frankfurt on the day of publication.
The market had a heavier hand with Mercedes-Benz (-5.15%). The premium German manufacturer had both missed the consensus and its own expectations, with an automotive operating margin of 9%, compared to 10.2% expected on average by analysts. The company, meanwhile, was targeting the bottom of a range between 10% and 12%. Oddo BHF had deplored “weak results” with fundamentals which were “eroding”.
Volkswagen, which published its accounts on the same day as Mercedes, fared barely better, with its share price falling by 4.6%. First-quarter operating profit was 7% below consensus, while the corresponding margin came in at 6.1% versus 6.5% expected, according to UBS. The fault, in particular, is Audi’s low profitability (3.4%).
Stellantis suffered
We can debate the European character of Stellantis, a group resulting from the merger of Fiat Chrysler and PSA, to the extent that North America constitutes its most important source of profits. But the company suffered in all cases during the session following the publication of its first quarter earnings, with its share price falling by 10.1%.
The turnover turned out to be lower than expected. But it was above all the comments of its financial director, Natalie Knight, during the afternoon analysts’ conference, which worried the market. The manager indicated that the group anticipated a current operating margin of between 10% and 11% in the first half of the year compared to more than 14% over the same period of 2023. Natalie Knight also made unencouraging comments on the European market, calling it of “difficult” with “pressure” on prices.
For HSBC, Stellantis still has “ground work to do” to bounce back on the stock market, particularly on its stocks. Royal Bank of Canada, for its part, believes that with the recent fall in the stock, the investor day next June could serve as a catalyst for action.
Even Ferrari was punished
Even Ferrari fell 4.7% on the stock market following its first quarter results. The prancing horse group revealed accounts very slightly higher than expectations. But some investors hoped the group would raise its annual targets, according to Royal Bank of Canada. It was not the case.
Another group more or less related to the luxury segment, the British Aston Martin lost 6.8% after publishing its accounts. The results were generally lower than consensus, according to Deutsche Bank, with volumes falling more sharply than expected, before the arrival of new models.
Porsche, for its part, suffered a drop of more than 9% the session following its publication (which occurred on Friday April 26 at 5:30 p.m.). Here again the figures were not good, with revenues and operating profit 3% and 7% lower than consensus respectively, according to UBS. Cash generation was also disappointing.
“Furthermore, management said during the conference call that investments would peak in 2026/27 in order to keep the range of combustion engine vehicles “fresh” – we believe market participants were hoping for an earlier date “, underlines Deutsche Bank.
In the end, it was Renault that came out the best. The diamond manufacturer published revenues for the first quarter very slightly above expectations (11.7 billion euros against a consensus of 11.5 billion euros) and which had been driven by financial services. No big surprise then, but the value still ended in the green following these announcements, with an increase of 0.4% on April 23.
Julien Marion – ©2024 BFM Bourse
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