DE40: DAX in consolidation zone, Rheinmetall with stronger annual outlook

• DE40 drops ahead of Wall Street open
• Rheinmetall optimistic about outlook for new year

Overall market situation:

Thursday's trading session on European markets brings mixed sentiment The German DAX is currently losing close to 0.1%, the French CAC40 is adding 0.6% and the Euro Stoxx 50 benchmark is down 0.23%. Investors in Europe are reacting today to incoming quarterly results from European companies and PPI data from the US, which surprised with a higher-than-expected reading. 

European companies traded mostly down during Monday's trading session today. Source: xStation 5

The German benchmark DE40 is recording declines of nearly 0.1% during today's session. Thus, the index is descending into the consolidation zone observed for nearly two days. The main support level worth observing still remains the 50-period exponential moving average (blue curve, H4 interval). Source: xStation 5

News:

MorphoSys (MOR.DE) reported fourth-quarter revenues that were below average analyst estimates. The company's shares are losing nearly 0.5% in today's session.

FOURTH QUARTER RESULTS

• Revenue €59.0 million, estimated €60.8 million
• Net sales of Monjuvi US products €24.1 million
• Operating loss €81.4m, estimated loss of €80.9m
• Net profit €48.3 million, -85% y/y
• Royalty income €34.0m, estimated €33.7m

COMMENTS

• It expects the group's R&D expenditure to be between €170 million and €185 million in 2024. Selling, administrative and general expenses are expected to be between €90 million and €105 million
• In 2024, the Group expects R&D expenditure of between €170 million and €185 million.

Rheinmentall's (RHM.DE) shares are gaining nearly 5% during today's session following the presentation of the earnings report. Investors were particularly pleased with the improved forecasts for the new year. 

ANNUAL FORECAST

• Company targets sales of around €10 billion, estimates €9.59 billion 
• Operating margin of 14% to 15%, estimate 14.4%.

2023 RESULTS

• Operating profit €918 million, estimate €924.5 million
• Dividend per share €5.70 vs. €4.30 y/y, estimated €5.10
• Sales €7.18bn, +12% y/y, estimated €7.47bn
• Sales of vehicle systems €2.61bn, +15% y/y, estimated €2.74bn
• Sales of arms and ammunition €1.85bn, estimated €2.01bn
• Sales of electronic solutions €1.23 billion, estimated €1.23 billion
• Sales of sensors and actuators €1.42 billion
• Operating margin 12.8%, estimated 12.4%
• Profit after tax €586 million

COMMENTS

• The Rheinmetall Group expects a significant increase in sales and expects a growing operating margin coupled with an improved operating result in fiscal 2024.
• This would be a big increase compared to fiscal 2023, in which Rheinmetall has already reported sales growth of 12% to more than €7 billion, driven by vehicle systems and weapons and ammunition units.

Chemicals companies also presented their results: Lanxess (LXS.DE) and K+S (SDF.DE)

Lanxess results: 

Q1 FORECAST

• Expects revised Ebitda to €100 million, estimated €124.4 million 

Q4 RESULTS

• Sales €1.44 billion, forecast €1.58 billion
• Adjusted Ebitda €97 million, estimate €94.9 million 
• Adjusted Ebitda margin 6.8%, forecast 6.15%
• Net loss €753m, estimated loss €192.8m

K+S results:

ANNUAL FORECAST

• Projected Ebitda €500m to €650m, estimate €624.8m

2023 RESULTS.

• Ebitda €712m, -71% y/y, forecast €691.6m
• Dividend per share €0.70, forecast €0.76
• Revenues €3.87 billion, -32% y/y
• Adjusted net profit 162 million euro, -89% y/y, estimate 178.1 million euro

Other news about individual companies included in the DAX index. Source: Bloomberg Financial LP

Analyst recommendations:

• RBC initiated analyst coverage for Carl Zeiss Meditiec (AFX.DE) with an "outperform" rating. The target price for the company's shares was estimated at €150. The analysts communicated that the company is predicting a 10.6% CAGR in revenue by 2027.