- Old Continent gains slightly at the end of the week
- US PCE data will be released at 1:30 pm BST
- Investors react to the results of Covestro, Sanofi and NatWest
General market situation:
The last session on European markets this week brings better investor sentiment. Stock indices are gaining, and investors are focusing today on macro data readings from the US, including PCE data for September. The best performing sector in Europe at the moment is oil companies, while pharmaceutical stocks are doing less well (downward pressure is being driven by shares of France's Sanofi, which are losing more than 17%).
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At the moment, most companies listed in Europe during Friday's trading session are trading up. Source: xStation 5
Futures based on the German DE30 are trading nearly 0.75% higher intraday, nevertheless the benchmark continues to hold in the zone of local minima from March this year. In short-term terms, it is this zone that can be treated as the most important support. On the other hand, the local resistance remains the 15,000-point zone. Source: xStation 5
News:
Covestro (1COV.DE) shares are gaining nearly 1% in today's session, despite the German chemical company lowering its earnings forecast for 2023 and releasing worse-than-expected forecasts for 2024. However, as analysts report, the company's guidance, despite the negative tone, could have been even worse, so in this case the worse guidance does not trigger a sell-off.
EBITDA for this year is forecast to be €1.1 billion (previously, a range between €1.1 billion and €1.6 billion was forecast).
EBITDA for 2024 is expected to be €1.4 billion (€300 million higher than the company previously forecast, but lower than JP Morgan's expected €1.6 billion).
Source: xStation
During today's session, shares of Sanofi (SAN.FR; -17.3%) and NatWest (NWG.UK; -11%) saw very large declines.
Sanofi
The French pharmaceutical group has announced lower profit forecasts and notified of a plan to spin off its consumer care unit. The company is no longer forecasting an operating margin of 32% by the end of 2025.
NatWest
Shares in the British bank are losing ground over the gloomy business outlook and a statement by the FCA's financial watchdog that it has identified possible regulatory violations in the Nigel Farage account closure scandal.
NatWest said it now expects its net interest margin to be just over 3% for the year, instead of its earlier forecast of 3.15%.
Analyst recommendations:
* Allianz SE (ALV.DE): Barclays raises target price to €230 from €225.
* Atos (ATO.FR): HSBC lowers target price for shares to €5 from €8.
* Banco Sabadell (SAB.ES): Barclays raises target price to €1.5 from €1.3
* Banco Sabadell (SAB.ES): Deutsche Bank raises target price to €1.75 from €1.55
* Banco Sabadell (SAB.ES): Morgan Stanley raises target price to €1.4 from €1.35
* Campari (CPR.IT): Bernstein cuts target price to €13 from €13.5
* Campari (CPR.IT): Citi cuts target price to €11.5 from €13.7
* Campari (CPR.IT): Jefferies cuts target price to €11.5 from €12.0
* Campari (CPR.IT): Deutsche Bank cuts target price to €12.6 from €13.8
