Logitech increased both turnover and profit in the second quarter of the 2024/25 financial year. The computer accessories manufacturer is also further raising its outlook, which was only increased in the first quarter of the year. Turnover rose by 6 per cent to 1.12 billion US dollars in the months from July to September, as the company announced on Tuesday. The growth was broad-based across all regions and almost all categories, CEO Hanneke Faber was quoted as describing. In addition, operating profit (EBIT, non-GAAP) adjusted for acquisition and restructuring costs climbed 5 per cent to USD 192.8 million. EBIT (GAAP) improved by 3 per cent to 160.9 million. Logitech achieved a significant increase in gross margin, which grew by 210 basis points to 43.6 per cent (GAAP) and 44.1 per cent (non-GAAP). On the bottom line, Logitech generated an unadjusted net profit (GAAP) of 145.5 million dollars. This represents an increase of 6 per cent. Logitech thus exceeded analysts' expectations, particularly in terms of the adjusted non-GAAP figures and the margin, while falling slightly short otherwise. The company is again lifting its outlook for the full year 2024/25. Logitech is now targeting revenue of USD 4.39 to 4.47 billion, which would correspond to growth of 2 to 4 per cent. Non-GAAP operating profit is expected to be between 720 and 750 million - an increase of 3 to 7 per cent. The company had previously forecast sales of USD 4.34 to 4.43 billion and a non-GAAP operating profit of USD 700 to 730 million.

Following the rise of recent trading days, share prices on the Swiss stock exchange fell slightly on Monday - in line with the trend on most European stock markets. The firmer franc against the euro had a slight dampening effect. The SMI was supported by the confirmation of Switzerland's top "AAA" credit rating from the rating agency Fitch, with a stable outlook. The SMI lost 0.5 per cent to 12,262 points. Among the 20 SMI stocks, 18 losers were offset by only two gainers: Nestle (+0.4%) and Logitech (+0.9%). A total of 14.4 million shares were traded (Friday: 19.71 million). Roche fared better than the broader market with only a small drop of 0.1 per cent. Swatch rose by 1.2 per cent, while the shares of luxury goods manufacturer Richemont, which is also heavily dependent on China, fell by 0.6 per cent. UBS shares fell more sharply by 1.5 per cent. The bank announced the sale of its 50 per cent stake in the Swisscard joint venture to its former partner American Express - without disclosing a sale price. Swisscard was founded jointly by Credit Suisse and American Express in 1998. The exit is a further step towards streamlining the Credit Suisse portfolio acquired by UBS. Swiss Re, Lonza and Kuehne + Nagel brought up the rear in the SMI with losses of up to 1.8 per cent. Sandoz rose by 4.6 per cent, fuelled by an increased price target from analysts at JP Morgan.

Europe
The European stock markets posted a weak performance on Monday. The Stoxx Europe 600 index fell by 0.7% to 521.5 points. In Paris, the CAC 40 and SBF 120 lost 1% each, as did the DAX 40 in Frankfurt. The FTSE 100 dropped 0.5% in London. Automotive supplier Forvia (+5.3%) confirmed its recently revised targets for 2024, while its sales fell slightly less than analysts had feared in the third quarter. Kering shed 2.4% to 232.45 euros. Citi lowered its recommendation on the luxury group's shares from ‘buy’ to ‘neutral’ and set a target price of 264 euros. Icade (-1.9%) announced that it expects net current cash flow (NCFC) per share from strategic activities for 2024 to be at the ‘upper end’ of its forecast, despite the slight fall in its revenues in the first nine months of the year in a still uncertain environment. Sanofi (-1%) has entered into exclusive negotiations with the US investment fund Clayton, Dubilier & Rice (CD&R) for the sale of 50% of its consumer healthcare subsidiary Opella, which markets Doliprane. The public investment bank Bpifrance is expected to take a minority stake of around 2% in Opella, Sanofi indicated. The valuation of Opella as part of the negotiations is based on an enterprise value of around 16 billion euros, or 14 times its estimated gross operating profit (Ebitda) for 2024.

United States
On Monday, the S&P 500 fell 0.2%, and the Dow dropped 0.8%. The Nasdaq Composite edged up in afternoon trading and eked out a slim gain of 0.3% Nvidia closed with a market value of more than $3.5 trillion for the first time. Boeing shares rallied after it reached a tentative deal to end a debilitating strike; Tylenol maker Kenvue jumped on the news that an activist investor had taken a sizable stake. All eyes are on earnings this week. More than 110 S&P 500 companies, including seven members of the Dow Jones Industrial Average, are scheduled to report quarterly results, according to FactSet. Tesla, Coca-Cola and IBM will be among the highlights. So far, roughly 80% of S&P 500 companies that have reported have topped expectations, and earnings are expected to rise for the fifth consecutive quarter. Stocks kicked off the week with declines after a banner stretch that sent the S&P 500 up for six consecutive weeks, the longest winning streak of the year. Traders have been glued to election polling, with some placing their bets on who will win the White House and how the results will ripple through sectors such as banks or clean energy stocks. Health insurer Cigna fell by 4.7% on speculation that it might take over its rival Humana (-2.5%). The courier group UPS slumped by 3.4% to $131.33 on the eve of the release of its quarterly results, penalised by a downgraded recommendation from Barclays. Berkshire Hathaway (unchanged) again increased its stake in US satellite radio operator Sirius (-1.6%), taking its stake to almost 32% of the capital. Kenvue (+5.5%): Activist investor Starboard Value has snapped up a large stake in the US consumer healthcare group looking to make changes to boost the share price, the Wall Street Journal reported. Kenvue was spun off from Johnson & Johnson last year.

Asia
Asian indexes diverged for the Tuesday trading session. Japan's leading index, the Nikkei-225, fell by 1.4 per cent. In Shanghai, meanwhile, the Composite Index gained 0.5 per cent. In Hong Kong, the Hang Seng Index also rose by 0.5 per cent. Among the individual stocks, Geely Automobile climbed 7.7 per cent in Hong Kong. The car manufacturer announced the takeover of Ningbo Passenger Vehicle. The Kospi in Seoul lost 1 per cent.

Bonds
Monday’s selloff in U.S. government debt pushed long-dated yields toward their highest levels in almost three months amid growing concern about the potential for deficit spending to rise after the Nov. 5 presidential election. The 10-year Treasury note yield jumped by 11 basis points to 4.192%. The 2-year Treasury note yield also rose, by 7 basis points to 4.025%.

Analysis
Target price Kuehne+Nagel: Kepler Cheuvreux downgrades to CHF 230 (280) - Hold
Target price Sandoz: JP Morgan raises to CHF 43 (36.50) - Overweight
RBC cuts SGS to Underperform (Sectorperform) - Target CHF 83 (85)

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