Morning News

Pernod Ricard’s Shares Rise on Backed Mid‑Term Guidance

By Mathieu VILLARD
Published on Thu, 02/15/2024 ‑ 23:00

Topic of the day

Shares in Pernod Ricard jumped after the company confirmed its mid‑term outlook and posted first‑half sales that met expectations. The French distiller booked sales of 6.59 billion euros ($7.07 billion) for the six months to Dec. 31, an organic decline of 3% compared with the year‑ago period, but in line with Visible Alpha consensus. Net profit slipped to EUR1.57 billion from EUR1.79 billion previously, ahead of analysts’ projections of EUR1.45 billion, according to a Visible Alpha poll of estimates. First‑half results were solid and in line with expectations, despite investor fears to the contrary, Citi analysts wrote in a research note. The company backed its mid‑term financial targets, including reaching the upper end of between 4% and 7% of net sales growth and organic operating leverage of 50 to 60 basis points. The encouraging outlook, coupled with a robust first‑half performance, should drive a re‑rating of the stock, the analysts said.

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Swiss stocks

The Swiss market ended higher on Thursday, in line with markets across Europe, as some encouraging earnings updates from the region, and hopes about interest rate cuts sometime in the second quarter, helped underpin sentiment. The benchmark SMI ended higher by 70.54 points or 0.63% at 11,284.18, after moving in a tight range between 11,231.66 and 11,292.07. Richemont climbed 1.64%. Nestle, Swiss Life Holding, ABB, Swiss Re, Swisscom and Logitech International gained 1 to 1.32%. Sika and Zurich Insurance Group both ended nearly 1% up. Partners Group, UBS Group and Alcon posted moderate gains. Lonza Group ended down 0.91%. Givaudan eased 0.35%, while Kuehne & Nagel and Roche Holding edged down marginally. In the Mid Price Index, Julius Baer and ams OSRAM AG gained 4.12% and 3.75%, respectively. Straumann Holding climbed nearly 2.5% and Georg Fischer advanced 2.3%. Swatch Group, PSP Swiss Property, Schindler Holding, Tecan Group and Flughafen Zurich ended higher by 1 to 1.75%.

International markets

Europe
European stocks closed higher on Thursday with traders indulging in some strong buying, cheering corporate earnings updates, and betting on hopes the Federal Reserve and the Bank of England will cut interest rates in the second quarter. The pan European Stoxx 600 gained 0.68%. The U.K.'s FTSE 100 ended 0.38% up, while Germany's DAX and France's CAC 40 climbed 0.6% and 0.86%, respectively. Switzerland's SMI advanced 0.63%. Among other markets in Europe, Austria, Belgium, Denmark, Finland, Iceland, Netherlands, Norway, Portugal, Russia, Spain, Sweden and Turkiye closed higher. Greece ended weak, while Poland settled flat. In the UK market, Croda International climbed 4%. Kingfisher, Natwest Group, Fresnillo, Coca‑Cola, Pearson, Centrica, Prudential, Severn Trent, ICP, Rolls‑Royce Holdings, United Utilities, St. James's Place, Segro, Vodafone and Ocado Group gained 2 to 3%. Imperial Brands drifted down 3%. BP ended 1.7% down, while Royal Dutch Shell and Marks & Spencer ended lower by about 1.4% and 1.2%, respectively. In the German market, Commerzbank rallied more than 5% after the lender posted Q4 net profit that beat estimates. After reporting a 55% surge in its fiscal 2023 net profit, the bank said it plans to return a total of around 1 billion euros of capital to shareholders. Vonovia gained about 3%, while Mercedes‑Benz, Zalando, Daimler Truck Holding, BMW, Infineon, Puma, Siemens Healthineers, BASF, Volkswagen and Siemens gained 1 to 3%. Siemens Energy ended down 1.8%. Fresenius Medical Care, Porsche, Adidas and SAP also closed weak. In Paris, Renault climbed more than 6.5% after it bounced back into profit in 2023 and posted margin and revenue gains. Stellantis surged 5.3% on share buyback news.

United States
Stocks showed a lack of direction early in the session on Thursday but moved mostly higher over the course of the trading day. The major averages extended the significant rebound seen during Wednesday's session, with the S&P 500 reaching a new record closing high. The major averages finished the day just off their highs of the session. The Dow jumped 348.85 points or 0.9 percent to 38,773.12, the Nasdaq rose 47.03 points or 0.3 percent to 15,906.17 and the S&P 500 climbed 29.11 points or 0.6 percent to 5,029.73. The higher close on Wall Street came as a Commerce Department report showing a much bigger than expected decrease in U.S. retail sales in the month of January led to renewed optimism about the outlook for interest rates. Meanwhile, the Labor Department released a report showing an unexpected decline in first‑time claims for unemployment benefits in the week ended February 10th. The report said initial jobless claims fell to 212,000, a decrease of 8,000 from the previous week's revised level of 220,000. Economists had expected initial jobless claims to inch up to 220,000 from the 218,000 originally reported for the previous week. Applied Materials Inc. (AMAT) revealed earnings for its first quarter that increased from last year and beat the Street estimates. The company's earnings totaled $2.02 billion, or $2.41 per share. This compares with $1.72 billion, or $2.02 per share, in last year's first quarter. Excluding items, Applied Materials Inc. reported adjusted earnings of $1.78 billion or $2.13 per share for the period.

Asia
Stock markets in East Asia closed the week with strong gains. Participants cited the positive US data as the main reason for this. The Nikkei‑225 in Tokyo gained 1.0 per cent to 38,551 points, putting the index back near a record high.

Bonds
In the U.S. bond market, treasuries pulled back off their early highs but remained in positive territory. As a result, the yield on the benchmark ten‑year note, which moves opposite of its price, fell by 2.7 basis points to 4.240 percent after hitting a low of 4.191 percent.

Analysis
UBS raises Schindler to CHF 270 (250) – Buy

UBS raises Vinci to EUR 131 (127) – Buy

UBS raises ABN Amro to EUR 18.70 (18) – Buy


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