DE40: Falling yields push European stock markets higher

• Deutsche Bank gains nearly 6% after releasing quarterly results and forecasts for 2024
• Adidas' weak forecasts for 2024 push down the company's shares

Thursday's session on European stock exchanges brings an improvement in investor sentiment. Increases in stock indexes are fueled by falling yields on U.S. debt securities, which broke through the psychological barrier of 3.9% for the 10-year today.

European companies listed during Thursday's trading session are currently trading at mixed levels. US ADRs are pointing to a slightly higher opening of the US cash session. Source: xStation 5

Germany's benchmark DE40 is gaining more than 0.4% during today's session. The benchmark negates some of the declines recorded during yesterday's session. Source: xStation 5

News:

Deutsche Bank (DBK.DE) shares are currently gaining 5.5%, after it announced plans to buy back €675 million worth of shares in the first half of 2024 and raised its medium-term revenue target. This offset fourth quarter results, which performed mixed. 

FOURTH QUARTER RESULTS

Sales and trading fixed income: €1.50 billion, estimates €1.65 billion 

Common equity tier 1 ratio: 13.7% vs. 13.4% y/y, estimate 13.8%

Net income: €6.66 billion, +5.3% y/y, forecast €6.79 billion

Asset management revenues: 580 million euros, -4.8% y/y, estimate 627 million euros

Investment banking revenue: €1.84 billion, +9.7% y/y, estimate €1.99 billion

Private Bank revenues: €2.40 billion, -4.4% y/y, estimated €2.34 billion

Corporate Bank revenues: €1.91 billion, +8.6% y/y, estimate €1.87 billion

Net income: €1.26 billion, -30% y/y

Profit before tax: €698 million, -9.9% y/y, estimate €863.9 million

Provision for credit losses: EUR 488 million, +39% y/y, estimate EUR 395 million

Non-interest expenses: EUR 5.47 billion, +5.5% y/y, estimate EUR 5.69 billion

Cost-to-income ratio: 82%, estimated 85.4%

Further share repurchase of €675 million approved. The bank aims to generate revenues of about €32 billion in 2025. 

Deutsche Bank AG plans to cut 3,500 jobs in the coming years. The reason is a desire to deliver on its promise to raise profitability and return more profits to shareholders.

Source: xStation 

Adidas (ADS.DE) shares are losing 4%, after the company projected 2024 operating profit of about €500 million, well below the consensus estimate of €1.27 billion. Adidas also reported a currency loss of €1 billion due to the devaluation of the Argentine peso in 2023. FX movements will continue to weigh on the company's finances this year.

PRELIMINARY RESULTS FOR 2023

• Preliminary revenues €21.43 billion, estimates €21.54 billion
• Preliminary gross margin 47.5%, estimate 47.6%
• Preliminary operating profit €268 million

Source: xStation