Summary:
- Adidas (ADS.DE) surges on strong sales growth in China
- DE30 keeps struggling near the 12400 pts handle
- BASF (BAS.DE) expects full-year profit growth near the low-end of forecasted range
Beginning of the European trading session on Friday can be named as mixed. Blue chips indices from the Western Europe opened a notch higher and stocks from the eastern part of the continent started day in red. However, the majority of “losers” moved above yesterday’s closing price already. Personal goods companies and miners led gains in the first minutes of trade while travel companies lagged the most. Among DAX members, attention is drawn mostly to Adidas (ADS.DE) and BASF (BAS.DE) following releases of Q1 earnings reports.
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DE30 keeps struggling in the vicinity of 12400 pts handle. Bulls managed to break above yesterday but those gains were not maintained until the end of the session. Today we are observing a repeated attempt to do so. In case buyers manage to overcome the aforementioned hurdle an upward move could take the price as high as to 78.6% Fibo level of last year’s move lower (12570 pts area). Source: xStation5
Adidas (ADS.DE) is the best performing DAX stock on Friday morning. The apparel company released earnings results for the first quarter of 2019. Revenue came in at €5.883 billion, 1,5% higher than expected, and EPS turned out to be €3.17, 11.4% higher than the median estimate. The company explained that better-than-expected performance can be mainly ascribed to growth in China and in the e-commerce segment. Double-digit sales growth in China cause Asia-Pacific region to account for a third of total revenue. Online sales grew by 40% YoY. These pleasant developments helped to offset a decline in European sales and a slowdown in the US revenue growth. However, the company is sure that sales on the Old Continent will get back on the growth track by the end of the year.
Adidas (ADS.DE) moved almost 40% higher since late-2018 bottom and the Q1 earnings report did little to change the situation. German apparel company surged on Friday morning and is trading at fresh all-time-high. Investors trading Adidas stock should keep in mind that such an abrupt spikes are often followed by a pullback in the later days. Source: xStation5
BASF (BAS.DE) is another company from the DAX index that has published results for Q1 2019 today. World’s biggest chemical maker generate revenue of €16.177 billion (0.47% higher than the median estimate) and the EPS ratio of €1.650 against an expected €1.483. The company did not change its full-year forecast. Revenue growth is still expected to be around 5% this year while profit growth is forecasted in 1-10% range. However, the company’s executives warned that profit growth is likely to be in the low-end of the forecasted range as petrochemical segment continues to be weak.
DAX members breakdown at 9:00 am BST. Source: Bloomberg
