The generics specialist Sandoz grew in 2023 and is forecasting further sales growth and higher margins for 2024. This is the former Novartis subsidiary's first annual financial statement as an independent company. Last year, Sandoz generated sales of USD 9.65 billion, an increase of 6 per cent compared to 2022. At constant exchange rates, the increase would have been 7 per cent, as the company announced on Wednesday. Of the two divisions, the generics business contributed USD 7.43 billion (+4%), while the significantly more lucrative biosimilars business generated USD 2.22 billion (+15%). Core EBITDA, which is adjusted for various factors, came in at 1.74 billion, a decline of 10 per cent. Sandoz puts the corresponding margin at 18.1 per cent (previous year: 21.3%). The bottom line was a core net profit of USD 953 million, which is 22 per cent below the previous year's figure. Shareholders are to participate with a dividend of CHF 0.45 per share. Thus, the company is distributing 24 per cent of the profit in line with the promised payout range of 20 to 30 per cent of the core net profit. For the current year, the Basel-based company is targeting net sales growth in the mid-single-digit percentage range at constant exchange rates. The core EBITDA margin is expected to be around 20 per cent.

The Swiss stock market remained in record mood on Tuesday. The SMI reached another high this year at 11,776 points. UBS shares were among the biggest gainers among the SMI with an increase of 2.2 per cent. The shares of insurers Swiss Life, Zurich Insurance and Swiss Re also increased significantly, climbing by up to 1.1 per cent. The SMI improved by 0.7 per cent to 11,762 points. Among the 20 SMI stocks, there were 18 gainers and 2 losers. A total of 22.28 (previously: 21.4) million shares were traded. Among the individual stocks, Roche shares advanced by 1.1 per cent. The company decided to increase its dividend to 9.60 francs per share. At the other end of the price scale, however, Novartis fell by 1.4 per cent. The Federal Cartel Office has cleared the planned billion-euro takeover of Morphosys by Novartis. Novartis had submitted a voluntary public takeover offer of EUR 68 per share in cash to Morphosys shareholders at the beginning of February. Based on the number of Morphosys shares totalling 37.655 million, the offer values Morphosys at around EUR 2.56 billion. Galenica shares fell by 2.7 per cent following the results for 2023. In contrast, shares in Polypeptide shot up by 17.1 per cent following the 2023 figures.

Europe
The European stock markets closed sharply higher on Tuesday, as the inflation figures published in the United States were deemed reassuring overall. The Stoxx Europe 600 index gained 1% to 506.5 points. In Paris, the CAC 40 and the SBF 120 each climbed 0.8%. The DAX 40 in Frankfurt added 1.2% and the FTSE 100 in London advanced 1%. Hotel group Accor (+1.9%) is to buy back a block of 7 million of its own shares, representing 2.77% of its capital, from Chinese group Jinjiang International for €275 million. Automotive supplier Plastic Omnium (+2.9%) announced on Tuesday the appointment of Christian Kopp as deputy CEO and CEO of its Intelligent Exterior Systems division, which includes body panel manufacturing activities. Porsche (+11.5% in Frankfurt) warned on Tuesday that its profitability was likely to fall this year, due to the renewal of its product range, the global economic situation and planned investments. However, the German sports car manufacturer raised its dividend for the 2023 financial year after an increase of its annual operating profit.

United States
The latest reading of U.S. inflation was hotter than economists expected but cooler than many investors feared. That lifted stocks Tuesday. Companies from chip makers and software providers to big-box retailers and pharmaceutical giants helped pull all three major indexes higher. The Dow Jones Industrial Average climbed 0.6%, or about 236 points, while the tech-heavy Nasdaq Composite rose by 1.5%. The S&P 500 added 1.1%, marking its 17th record high of 2024. The gains came despite a Labor Department report showing consumer prices rose 3.2% in February from a year earlier, another installment in a string of recent data suggesting inflation remains stubbornly high. In the stock market, six members of the so-called Magnificent Seven logged gains, with Nvidia’s 7.2% advance leading the pack of tech stalwarts. Demand for artificial intelligence helped Oracle’s earnings trump expectations, leading to a share-price pop of 12%. Shares in Archer Daniels Midland rose 3.9% after the grain merchant said an internal accounting investigation didn’t affect its overall earnings. The manufacturing conglomerate 3M rose 5% after it appointed William Brown, former leader of L3Harris Technologies, as its next chief executive. Southwest Airlines said it was re-evaluating its financial guidance, citing in part delayed aircraft deliveries from Boeing. Southwest’s stock slid 15%, the steepest decline in the S&P 500, while American and United airlines also fell. Boeing shares faded by 4.3%. Spirit AeroSystems, maker of the fuselage involved in the Alaska Airlines blowout, also slipped. Bitcoin traded around $71,395 as of 4 p.m. Tuesday, down slightly after notching an all-time high.

Asia
Asian stocks were mixed on Wednesday. The stock exchanges in Hong Kong and Seoul in particular are benefiting from gains in the technology sector. The Hang Seng Index increased by 0.2 per cent and the Kospi advanced by 0.4 per cent. In Hong Kong, shares in technology stocks Baidu, BYD and Semiconductor Manufacturing International were among the winners, rising by up to 2.7 per cent. In Seoul, the shares of index heavyweight Samsung Electronics climbed 1.0 per cent. By contrast, the Nikkei-225 in Tokyo gave up initial gains and dropped 0.1 per cent. The Shanghai Composite also declined slightly, falling by 0.2 per cent. Losses in the property and insurance sectors were the main burden here.

Bonds
U.S. government debt yields rose, erasing last week’s declines, after the government’s latest issuance of debt inspired lackluster interest from investors. The benchmark 10-year Treasury note yield, which rises when prices fall, edged 5 basis points higher to 4.156%. The 2-year Treasury note yield increased by 4 basis points to 4.599%.

Analysis
Target price Coltene: Research Partners upgrades to CHF 62.50 (61) - Hold
Target price Holcim: UBS lifts to CHF 80 (66) - Neutral
Dormakaba: UBS raises target price to CHF 450 (420) - Neutral
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