- European indices trade lower
- DE40 tests lower limit of market geometry
- Redcare Pharmacy jumps on 2024 guidance
European stock market indices are trading lower today. German DAX drops 0.2%, French CAC40 declines 0.1%, UK FTSE 100 dips 0.2%, while Dutch AEX slides 0.4%. Revisions of February's services PMI data from Europe showed slightly higher values than flash releases. However, this did not trigger any major market reaction on stocks. Traders should pay attention to the US services ISM index for February scheduled for 3:00 pm GMT today as weaker-than-expected manufacturing ISM reading on Friday was the trigger for a jump on equity markets.
Source: xStation5
German DAX futures (DE40) reached a fresh all-time high just slightly below 17,850 pts mark on Friday. However, market sentiment deteriorated this week with the index pulling back from the ATH area. Taking a look at DE40 chart at H1 interval, we can see that the index dropped around 1% off the record highs and tested the lower limit of market geometry in the 17,660 pts area. Sellers did not manage to push the price below this hurdle and an attempt to launch a recovery move can be seen at press time. Positive demand-side reaction to the lower limit of market geometry hints that the bullish trend is still in play.
Company News
Bayer (BAYN.DE) reported Q4 2023 earnings this morning, that turned out to be much better than expected. Q4 sales were reported at €11.86 billion (exp. €11.66 billion), Q4 adjusted EBITDA at €3.02 billion (exp. €2.25 billion) and Q4 EBIT at €2.19 billion (exp. €1.04 billion). Free cash flow at €4.26 billion was over twice as high as expected (€2.14 billion). Core Q4 EPS was reported at €1.85 (exp. €1.48). However, stock is trading lower today as 2024 forecasts disappointed. Bayer expects 2024 revenue of €47-49 billion (exp. €47.8 billion), adjusted EBITDA of €10.7-11.3 billion (exp. €10.6 billion) and core EPS of €5.10-5.50 (exp. €5.71). 2024 free cash flow is seen at €2-3 billion, while market expected €3.92 billion). Company said that it expects 2024 sales growth of -1% to 3% in its Crop Science division, flat sales in Pharmaceuticals division and 3-6% growth in Consumer Health division.
Deutsche Boerse (DB1.DE) informed that it has launched a regulated spot trading platform for crypto assets. Platform is targeted at institutional investors.
Airbus (AIR.DE) received an order for 85 A321neo aircraft from American Airlines. This is a part of 260 aircraft order American Airlines placed with Boeing, Airbus and Embraer. The order also includes an option for purchase of an additional 193 aircraft. It is known that 43 out of those 193 additional aircraft may come from Embraer, so Airbus and Boeing could provide the remaining 150 aircraft should the option be exercised. In other news, Reuters reported that Airbus deliver 49 aircraft in February, bring January-February deliveries to 79 - around 20% higher than in a year ago period. Airbus will release official monthly deliveries data for February this Thursday.
Redcare Pharmacy (RDC.DE) traded as much as 7% higher earlier today after announcing 2024 guidance. Company expects adjusted EBITDA margin in 2024 to reach 2-4%, compared to 3% in 2023. Sales are expected to reach €2.3-2.5 billion, up from €1.8 billion in 2023. This would imply adjusted EBITDA between €46-100 million, compared to €53.5 million reported for 2023. However, stock has erased majority of gains already.
Analysts' actions
- Deutsche Post (DHL.DE) downgraded to 'hold' at Societe Generale. Price target set at €46.00
- Siemens (SIE.DE) downgraded to 'reduce' at HSBC. Price target set at €150.00
- Nordex (NDX1.DE) upgraded to 'buy' at HSBC. Price target set at €15.00
Redcare Pharmacy (RDC.DE) opened slightly higher today and continued to gain during the first hours of cash session, following release of 2024 guidance. However, bulls failed to hold onto those gains and the stock has erased the majority of earlier advance. Should stock drop below recent local low, the lower limit of the Overbalance structure in the €123.50 area will a key support to watch. Source: xStation5
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