DE30: Wirecard surges after announcing ambitious goals

Summary:

• PM May’s party member hints on the scale of opposition in the Conservative Party

• DAX (DE30 on xStation5) struggles within the support zone

• Wirecard (WDI.DE) outperforms after announcement of 2025 goals

Most of the major stock market indices from Europe opened slightly higher on Tuesday. Italian and Polish equities were outperforming other peers from the region in the first minutes of trade. On the other hand, some weakness could be spotted among Austrian and Swiss shares. Miners and refiners led gains after oil and other commodity prices advanced. Telecoms met with the biggest downward pressure during the opening along with travel companies.

DE30 moved into the support zone ranging 11870-11970 pts yesterday. Sell-off has eased since then but the benchmark lacks direction. A break lower would set DE30 on a way to potential test of this year’s lows a notch above 11700 pts handle. However, it should be noted that the zone within which the index is trading right now served as a floor for the past year and we may expect bulls not to give up this bridgehead easily. Source: xStation5

While this may be nothing new that the UK Prime Minister Theresa May is facing opposition in her own party but this time we were offered some estimates on the scale of this opposition. One of the Conservative Party lawmakers, Steve Baker, told BBC radio that according to his estimates at least 40 Conservative Party members are ready to vote down Brexit deal proposal in case it will be “half in, half out” deal. In such situation Theresa May will find herself in the a very uncomfortable situation. Coalition of the Conservative Party and the Democratic Unionist Party holds 325 seats in the House of Commons, 320 is needed to secure a deal. In case 40 of the Conservative Party MPs decide to vote against PM May she will have to rely on the Labour Party support and Labour Party already announced that it will oppose any deal PM May proposes. Steve Baker served as junior Brexit minister in the PM May’s cabinet but resigned from the post to protest against her Brexit deal.

Major stock benchmarks after the first hour and a half of European trading session:

• DAX (DE30):  -0.12%

• FTSE 100 (UK100): +0.10%

• CAC 40 (FRA40): +0.12%

• IBEX (SPA35): +0.23%

• FTSE MIB (ITA40): +0.27%

• WIG20 (W20): +0.48%

Wirecard (WDI.DE) skyrockets as investors digest new set of 2025 goals. Source: Bloomberg

Company News

Wirecard (WDI.DE) is the best performing stock from the DAX and Euro Stoxx 600 indices today. The company announced its growth target for 2025. Wirecard expects its revenue to reach at least €10 billion in 2025 and EBITDA growing to more than €3.3 billion. To put that figures in context lets recall that in 2017 Wirecard had almost €1.5 billion of revenue and €0.4 billion in EBITDA. Additionally, the payment company forecasts that transaction volumes will exceed €710 billion (€91 billion in 2017). One can see that goals are ambitious but given that Wirecard managed to post double digit rates of growth in the aforementioned metrics in the past years they do not seem to be out of reach, just note that Wirecard revenue grew almost 45% YoY in 2017. Another factor that may contribute to stock’s stellar performance today is company devotion not to change dividend policy and invest in new products rather than raise dividend.