DE40: Novartis to acquire MorphoSys for €2.7 billion

• Europe's stock indices face slight declines 
• Novartis to acquire MorphoSys for €2.7 billion with a price of €68 per share
• Stifel lowered its recommendation for RWE shares

European stock indices are marginally losing during Tuesday's trading session. Despite gains in China's indices after new rumors suggesting the implementation of broad solutions to support the economy, the better mood does not carry over to the Old Continent. Individual benchmarks cannot find a common direction. In Germany alone, attention is once again turning to MorphoSys, whose shares are gaining another 15% after the announcement of Novartis' €2.7 billion takeover bid for the company. 

Source: xStation5

DAX (DE40) futures are trading down moderately today and are currently trading in the zone of a key support barrier, marked by the local lows of the consolidation zone initiated in early January and the 50-day exponential moving average (blue curve). 

News

MorphoSys (MOR.DE) shares are continuing their strong gains after Novartis (NOVN.CH) agreed to buy MorphoSys AG for €2.7 billion. The Swiss drugmaker will pay 68 euros per share for the German cancer drug maker, which is 61% above the February 2 closing price.  The company's shares have gained nearly 56% since yesterday's session. 

Source: xStation

Aurubis (NDA.DE) shares are gaining nearly 1.11% in today's session, after reporting worse-than-expected quarterly results and better annual forecasts. Analysts comment, however, that the announced restructuring of the Board of Directors is a factor of uncertainty. 

FIRST QUARTER RESULTS

• Operating profit before tax €111 million, estimates €118.5 million 
• Operating return on invested capital +9.7%
• Operating income €3.90 billion
• Operating profit €111 million, forecast €120.3 million

ANNUAL FORECAST

• Still sees operating return on invested capital in the range of +10% to +14%

COMMENTARY AND CONTEXT

• Operating EBT is expected to be in the range of €380 million to €480 million in the current fiscal year 2023/24.
• The implementation of the growth strategy will continue uninterrupted in the current fiscal year, despite the restructuring of the Board of Directors.

Analyst action

• HSBC downgraded its recommendation for Metro AG (B4B.DE) shares to a "reduce" rating (previously it was "hold"). The target price was set at €5.5 per share. 
• Stifel downgraded its recommendation for shares of RWE (RWE.DE) to a "hold" rating from the previous "buy."  The broker sees 2024 as a challenging year due to energy prices in Europe and the flow of political news in the US.