>>> US Gapping up

Gapping up
In reaction to earnings/guidance:
  • NFLX +14.3%, TRV +7.9%, STX +6.6%, IBKR +4.6%, FULT +3.7%, UAL +3.7%, PG +2.9%, SMBK +1.6%, GEV +1.6%, TDY +1%
Other news:
  • ORCL +9% (President Trump at press conference alongside CEOs of OpenAI, Softbank (SFTBY), and Oracle confirm partnership to invest up to $500 billion in infrastructure connected to artificial intelligence)
  • SMTI +5.4% (signs license and distribution agreement with Biomimetic Innovations; also guides Q4 revs higher)
  • APTV +5.3% (announces intention to separate its electrical distribution systems business; reaffirms FY24 outlook)
  • GLSI +4.4% (provides update on commercial manufacturing)
  • ROKU +4.1% (in sympathy with strong NFLX earnings)
  • LNZA +3.3% (to form JV and launch spin-out of LanzaX Business; names interim CFO)
  • OGS +2.4% (increases dividend)
  • NTRA +2.4% (to Present New Data at the 2025 ASCO GI Symposium)
  • CSGS +1.8% (Board Chair to step down at end of term)
  • ORLA +1.5% (receives shareholder approval of Musselwhite Mine)
  • CHRS +1.5% (Presents Final Phase 2 Clinical Casdozokitug Combination Data in Patients with Metastatic Hepatocellular Carcinoma at ASCO-GI 2025)
  • GVA +1.3% (awarded contract from US Army Corps of Engineers)
  • DIS +1.3% (in sympathy with strong NFLX earnings)
  • PB +1.2% (authorizes new 4.8 mln share repurchase program)
  • BDN +1.1% (updates leasing momentum)
  • NOW +1% (enhances global partner program)

>>> US Gapping down

Gapping down
In reaction to earnings/guidance:
  • AGYS -20.9%, SFNC -3%, PRGS -2.8%, BKU -2.7%, TXT -2.5%, CMA -2.4%, ABT -1.6%, WTFC -1.2%, CASH -1.2%, FNB -0.8%
Other news:
  • USCB -9.2% (increases dividend)
  • TWI -2.8% (union votes to ratify new contracts)
  • LPRO -2.7% (co-founder retires from Board)
  • IRON -2.5% ($200 mln stock and warrant offering)
  • AVBP -2% (enters exclusive license agreement with Lepu Biopharma for MRG007)
  • WDS -1.8% (reports Q4 operations update)
  • INBX -1.3% (preliminary data from the phase 1 Trial of ozekibart)
  • RKLB -1.2% (schedules the next Electron launch for Kinéis)

FT : Trainline shares hit by UK plans for state-backed rival

Trainline shares hit by UK plans for state-backed rival
Government outlines proposal for online service that brings together train operators’ ticketing websites

Shares in Trainline fell after the UK government outlined plans to launch a state-backed rival, triggering investor concerns that the London-listed company could lose its dominance of the domestic rail-ticketing market.

The government said on Wednesday that it planned to launch a new online service that would bring together individual train operators’ ticket websites, as part of the wider reform and nationalisation of the UK railway.

Shares in Trainline fell nearly 7 per cent by afternoon trading in London on Wednesday, reaching their lowest levels since October.

The threat of government competition has hung over Trainline, which has built a £1.7bn business by offering passengers a simple way to book tickets on any part of the UK’s railways, which includes a bewildering 55mn different ticketing and fare combinations.

The company takes a commission on ticket sales but draws on the same open-access database as the booking apps of other railway companies.

In its announcement, the UK government said its new ticketing site would “work alongside a thriving private sector retail market, where all rail retailers can compete in an open and fair manner”.

“The private sector will continue to play a key role in driving growth through innovation and investment and encouraging more people to choose rail,” it added.


Jody Ford, chief executive of Trainline said he welcomed the government’s “unequivocal commitment to a competitive retail market, underpinned by a level playing field, and recognition of the value and innovation that brings to rail users”.

Still, investors have for years feared that long-running government efforts to modernise the railway’s complex ticketing system could erode Trainline’s market dominance.

The company’s shares fell 40 per cent in 2021 when the previous Conservative government unveiled plans to create a new ticketing hub.

But the share price gradually recovered as the Conservatives’ reform agenda stalled. It boosted further in December 2023 when the then-government said it would not launch a rival.

Mark Plowright, director of Trainline rival Virgin Trains Ticketing, said a competitive ticketing industry would “benefit rail passengers across the UK”.

“However, there’s still much more work to be done to simplify rail tickets and make train travel less confusing for passengers,” he said.

>> US Research Calls I

Research Calls I
  • Upgrades:
    • 3M (MMM) upgraded to Overweight from Equal Weight at Wells Fargo; tgt raised to $170
    • Cerence (CRNC) upgraded to Buy from Hold at Needham; tgt $16
    • Charles Schwab (SCHW) upgraded to Overweight from Equal Weight at Wells Fargo; tgt raised to $93
    • Crinetics Pharmaceuticals (CRNX) upgraded to Buy from Hold at Jefferies; tgt $55
    • Darden Restaurants (DRI) upgraded to Outperform from Mkt Perform at Bernstein; tgt raised to $215
    • Mercantile Bank (MBWM) upgraded to Outperform from Market Perform at Hovde Group; tgt $54
    • Millicom International Cellular (TIGO) upgraded to Buy from Hold at HSBC Securities; tgt $34
    • Netflix (NFLX) upgraded to Buy from Hold at Canaccord Genuity; tgt raised to $1150
    • Netflix (NFLX) upgraded to Equal Weight from Underweight at Barclays; tgt raised to $900
    • Netflix (NFLX) upgraded to Buy from Neutral at Rosenblatt; tgt $1494
    • Nordson (NDSN) upgraded to Buy from Hold at Loop Capital; tgt raised to $280
    • Olympic Steel (ZEUS) upgraded to Overweight from Sector Weight at KeyBanc Capital Markets; tgt $42
    • Seagate Tech (STX) upgraded to Buy from Hold at The Benchmark Company; tgt $120
    • Seagate Tech (STX) upgraded to Buy from Hold at Summit Insights
  • Downgrades:
    • CAE (CAE) downgraded to Sector Perform from Outperform at National Bank Financial
    • Celsius (CELH) downgraded to Hold from Buy at TD Cowen; tgt lowered to $29
    • Charles River (CRL) downgraded to Mkt Perform from Outperform at William Blair
    • Elevance Health (ELV) downgraded to Equal-Weight from Overweight at Stephens; tgt lowered to $440
    • Fluence (FLNC) downgraded to Hold from Buy at Jefferies; tgt lowered to $15
    • Ford Motor (F) downgraded to Equal Weight from Overweight at Barclays; tgt lowered to $11
    • Hepsiburada (HEPS) downgraded to Hold from Buy at HSBC Securities; tgt $3.50
    • New Oriental Education & Technology (EDU) downgraded to Neutral from Overweight at JP Morgan; tgt lowered to $50
    • New Oriental Education & Technology (EDU) downgraded to Underperform from Outperform at Macquarie; tgt $44
    • New Oriental Education & Technology (EDU) downgraded to Equal-Weight from Overweight at Morgan Stanley; tgt lowered to $52
    • Reddit (RDDT) downgraded to Neutral from Buy at ROTH MKM; tgt raised to $195
    • Rogers Comms (RCI) downgraded to Equal Weight from Overweight at Barclays
    • STMicroelectronics (STM) downgraded to Underweight from Equal Weight at Barclays
    • Yum! Brands (YUM) downgraded to Mkt Perform from Outperform at Bernstein; tgt lowered to $135
  • Others:
    • Absci Corporation (ABSI) initiated with a Buy at Needham; tgt $9
    • ACV Auctions (ACVA) initiated with an Equal-Weight at Stephens; tgt $20.50
    • APi Group (APG) initiated with a Buy at Truist; tgt $45
    • BBB Foods (TBBB) initiated with a Market Perform at Itau BBA; tgt $32
    • Cytokinetics (CYTK) initiated with a Buy at Stifel; tgt $80
    • Daktronics (DAKT) initiated with a Buy at Craig Hallum; tgt $26
    • Edgewise Therapeutics (EWTX) initiated with a Hold at Stifel; tgt $30
    • OPENLANE (KAR) initiated with an Equal-Weight at Stephens; tgt $20
    • Orthofix (OFIX) initiated with a Buy at Canaccord Genuity; tgt $24
    • Sun Country Airlines (SNCY) initiated with a Overweight at JP Morgan; tgt $23
    • Viking Holdings Ltd (VIK) initiated with a Neutral at Goldman; tgt $49
    • Walt Disney (DIS) resumed with a Buy at Citigroup; tgt $125

>>> Europe : Brokers Upgrades & Downgrades - 22nd of January 2025 V3(++)

>>> Up
* AAK Raised to Buy at ABG; PT 360 kronor
* Avanza Raised to Buy at Danske Bank Markets; PT 355 kronor (++)
* Aviva Raised to Overweight at JPMorgan; PT 615 pence
* Bachem Raised to Equal-Weight at Barclays; PT 65 Swiss francs
* Big Yellow Group Raised to Buy at Berenberg
* BMW Raised to Buy at Berenberg
* Cargotec Raised to Buy at SEB Equities; PT 57 euros
* Coloplast Raised to Buy at HSBC; PT 920 kroner
* Corticeira Amorim Raised to Buy at JB Capital Markets
* Elisa Raised to Buy at Kepler Cheuvreux (+)
* Halma Raised to Buy at Berenberg; PT 3,250 pence
* Hannover Re Raised to Buy at HSBC; PT 280 euros
* JM Raised to Hold at SEB Equities; PT 173 kronor
* LDA SM Raised to Neutral at JB Capital Markets; PT 1.10 euros
* Millicom GDRs Raised to Buy at HSBC; PT 380 kronor
* Millicom Raised to Buy at HSBC; PT $34 (+)
* Munich Re Raised to Buy at HSBC; PT 560 euros
* Netflix Raised to Hold at Benchmark (++)
* Netflix PT Raised to $1,150 from $800 at Needham (++)
* Netflix Raised to Buy at Canaccord; PT $1,150
* Netflix Raised to Equal-Weight at Barclays; PT $900
* Netflix PT Raised to $1,150 from $1,000 at TD Cowen (+)
* Netflix PT Raised to $1,150 from $1,040 at Oppenheimer (++)
* Suedzucker Raised to Hold at M.M. Warburg; PT 10.40 euros (+)
* Vestas Raised to Buy at Jefferies; PT 135 kroner
* Virbac Raised to Buy at IDMidcaps; PT 410 euros (+)

>>> Down
* Ambev ADRs Cut to Neutral at Grupo Santander; PT $3.56
* Amedeo Air Four Plus Cut to Hold at Jefferies
* America Movil ADRs Cut to Hold at HSBC; PT $15.50
* Apple Cut to Fully Valued at DBS Bank; PT $210 (+)
* Carrefour Cut to Underperform at BNPP Exane; PT 11 euros (+)
* DFDS Cut to Sell at Nordea; PT 108 kroner
* Flow Traders Cut to Neutral at Oddo BHF; PT 25 euros
* Hochschild Mining Cut to Sector Perform at RBC; PT 260 pence (+)
* JD Sports Cut to Neutral at Citi; PT 95 pence
* Mercedes Cut to Hold at Berenberg
* Porsche SE Cut to Hold at Berenberg
* Schaeffler Cut to Hold at Deutsche Bank; PT 4.50 euros
* STMicro Cut to Underweight at Barclays; PT 20 euros
* Swiss Re Cut to Hold at HSBC; PT 140 Swiss francs

>>> Initiation
* Alfa Financial Rated New Buy at Shore Capital; PT 270 pence
* Bilia Reinstated Buy at Pareto Securities; PT 150 kronor
* Dassault Systemes Rated New Outperform at Grupo Santander
* Geberit Rated New Underweight at JPMorgan; PT 450 Swiss francs
* Kaufman & Broad Rated New Buy at Kepler Cheuvreux (+)
* Lindab Rated New Hold at SEB Equities; PT 200 kronor
* Nexity Reinstated Hold at Kepler Cheuvreux; PT 12.90 euros (++)
* PolyPeptide Group Rated New Overweight at Barclays
* Sunrise Communications Rated New Buy at Redburn
* Transense Technologies Rated New Corporate at Cavendish (+)

>>> Call
* Alm Brand Jumps on Guidance Update; DNB Sees Strong End to 2024 (++)
* Aviva Raised to Overweight at JPMorgan on Direct Line Deal (+)
* Bachem Raised to Equal-Weight at Barclays on Valuation Pullback (+)
* Carrefour Slips as BNPP Exane Cuts on Market Conditions (++)
* Delivery Hero Slides as BofA Reinstates Rating as Underperform
* Deutsche Bank Gets Street-High Target at Kepler Cheuvreux (++)
* Geberit Rated Underweight at JPMorgan, Earnings Risk Not Priced
* Morgan Stanley Starts Operations of Futures Company in China (+)
* Porsche Falls as 2025 Volumes, Costs Disappoint: Street Wrap (++)
* Schaeffler Sinks as Deutsche Bank Downgrades on Profit Warning (++)
* STMicro Cut to Underweight at Barclays on Downside Risk, China (++)
* Wetherspoons Shares Swing Lower; Jefferies Notes Slight Slowdown (++)

>>> Europe : Brokers Upgrades & Downgrades - 22nd of January 2025 V2(+)

>>> Up
* AAK Raised to Buy at ABG; PT 360 kronor
* Aviva Raised to Overweight at JPMorgan; PT 615 pence
* Bachem Raised to Equal-Weight at Barclays; PT 65 Swiss francs
* Big Yellow Group Raised to Buy at Berenberg
* BMW Raised to Buy at Berenberg
* Cargotec Raised to Buy at SEB Equities; PT 57 euros
* Coloplast Raised to Buy at HSBC; PT 920 kroner
* Corticeira Amorim Raised to Buy at JB Capital Markets
* Elisa Raised to Buy at Kepler Cheuvreux (+)
* Halma Raised to Buy at Berenberg; PT 3,250 pence
* Hannover Re Raised to Buy at HSBC; PT 280 euros
* JM Raised to Hold at SEB Equities; PT 173 kronor
* LDA SM Raised to Neutral at JB Capital Markets; PT 1.10 euros
* Millicom GDRs Raised to Buy at HSBC; PT 380 kronor
* Millicom Raised to Buy at HSBC; PT $34 (+)
* Munich Re Raised to Buy at HSBC; PT 560 euros
* Netflix Raised to Buy at Canaccord; PT $1,150
* Netflix Raised to Equal-Weight at Barclays; PT $900
* Netflix PT Raised to $1,150 from $1,000 at TD Cowen (+)
* Suedzucker Raised to Hold at M.M. Warburg; PT 10.40 euros (+)
* Vestas Raised to Buy at Jefferies; PT 135 kroner
* Virbac Raised to Buy at IDMidcaps; PT 410 euros (+)

>>> Down
* Ambev ADRs Cut to Neutral at Grupo Santander; PT $3.56
* Amedeo Air Four Plus Cut to Hold at Jefferies
* America Movil ADRs Cut to Hold at HSBC; PT $15.50
* Apple Cut to Fully Valued at DBS Bank; PT $210 (+)
* Carrefour Cut to Underperform at BNPP Exane; PT 11 euros (+)
* DFDS Cut to Sell at Nordea; PT 108 kroner
* Flow Traders Cut to Neutral at Oddo BHF; PT 25 euros
* Hochschild Mining Cut to Sector Perform at RBC; PT 260 pence (+)
* JD Sports Cut to Neutral at Citi; PT 95 pence
* Mercedes Cut to Hold at Berenberg
* Porsche SE Cut to Hold at Berenberg
* Schaeffler Cut to Hold at Deutsche Bank; PT 4.50 euros
* STMicro Cut to Underweight at Barclays; PT 20 euros
* Swiss Re Cut to Hold at HSBC; PT 140 Swiss francs

>>> Initiation
* Alfa Financial Rated New Buy at Shore Capital; PT 270 pence
* Bilia Reinstated Buy at Pareto Securities; PT 150 kronor
* Dassault Systemes Rated New Outperform at Grupo Santander
* Geberit Rated New Underweight at JPMorgan; PT 450 Swiss francs
* Kaufman & Broad Rated New Buy at Kepler Cheuvreux (+)
* Lindab Rated New Hold at SEB Equities; PT 200 kronor
* PolyPeptide Group Rated New Overweight at Barclays
* Sunrise Communications Rated New Buy at Redburn
* Transense Technologies Rated New Corporate at Cavendish (+)

>>> Call
* Aviva Raised to Overweight at JPMorgan on Direct Line Deal (+)
* Bachem Raised to Equal-Weight at Barclays on Valuation Pullback (+)
* Delivery Hero Slides as BofA Reinstates Rating as Underperform
* Geberit Rated Underweight at JPMorgan, Earnings Risk Not Priced
* Morgan Stanley Starts Operations of Futures Company in China (+)

>>> Stoxx 600 Pre-Market Indications

  • Adidas (ADS TH) +4%
    • Adidas Rises on Sales Beat, Strong Brand Momentum: Street Wrap
  • Aviva (GU81 TH) +2.7%
    • Aviva Raised to Overweight at JPMorgan; PT 615 pence
  • BAE (BSP TH) +1.7%
  • Vestas (VWSB TH) +1.5%
  • ASML (ASME TH) +1.5%
  • Novo Nordisk (NOV TH) +1.4%
  • Orsted (D2G TH) +1.3%
  • Thales (CSF TH) +1.2%
  • Amundi (ANI TH) +1.1%
  • Hannover Re (HNR1 TH) +1.1%
  • Porsche SE (PAH3 TH) -0.9%
    • Porsche SE Cut to Hold at Berenberg
  • Carrefour (CAR TH) -1%
    • French Food Retail Doesn’t Get Volume Boost From Banner Changes
  • Porsche (P911 TH) -1%
  • Qiagen (QIA TH) -1.1%
  • Norsk Hydro (NOH1 TH) -1.5%
  • STMicro (SGM TH) -1.5%
    • STMicro Faces Key Customer Risks But AI Power Strong: 4Q Preview
    • STMicro Cut to Underweight at Barclays; PT 20 euros
  • Frontline Plc (HF6 TH) -2.1%

FT : No volatility in volatile times

Where’s the (implied) volatility?

There is a new American president with an economic agenda that is long on radical ideas and short on specifics. We have just endured the first major inflationary incident in decades — and it may not be over yet. Stocks are at extremely high valuations and long-term bonds yields are in flux. Federal Reserve monetary policy rests on a razor’s edge. Uncertainty, in sum, appears to be everywhere. Why, then, are indices of implied — that is expected — stock and bond volatility so low?


The Vix index, the options-implied movement of the S&P 500, moved down yesterday, and at 15 it is below the threshold usually taken as a sign of market fear. The Move, the equivalent index for Treasury yields, is trading in its usual band. The implied volatility of investment-grade credit spreads is near a multiyear low, too.

These indices are based on the prices investors are paying for portfolio insurance, in the form of put and call options. Shouldn’t insurance be expensive right now? One explanation is that there is too much policy uncertainty. As a result, there is not much speculation in the options market, which suppresses volatility indices. From Russell Rhoads, head of research at EQDerivatives:

Most professional traders seem to be in a wait-and-see mode. Wait-and-see implies they are not putting new hedges and not speculating too much, as they don’t know what is coming around the bend . . . For the Vix to be active, you need a lot of activity in the index options.

The same logic applies to the Move. Traders still don’t know how to price Donald Trump’s unique mix of populist and conservative policy promises. The market, perhaps, is like a deer in the headlights.

Another possibility: there was a mechanical flow-through from good recent earnings and economic results to lower implied volatility. Fourth-quarter earnings results have been strong so far, causing a rally for those who have reported, but not for those who haven’t. Last week’s inflation print was not as dire as many predicted. According to Garrett DeSimone at OptionMetrics, those both “translate to lower market volatility”: diverging equity performace lowers correlation, in turn lowering the Vix, and the fall in inflation expectations pulls down bond yields, “which would be supportive of both a lower Vix and a lower Move”. 

That does not mean that there is no volatility in markets. Trump’s tariff threats have appeared, logically enough, in currency markets. Rates svengali Ed Al-Hussainy at Columbia Threadneedle notes that: 

Markets have focused on foreign exchange as the key adjustment mechanism in response to tariffs (higher tariffs = stronger dollar). The rest of the policy mix — immigration/taxes/regulation/etc — is too amorphous to price. This leaves a lot of room for last year’s positive economic/earnings growth story to continue driving risk higher.

At some point, policy proposals will turn into policies, for good or ill. Until then, the usual “fear gauges” might not tell you much.

WWD : Will Luxury Bounce Back in 2025? It’s Hard to Call

Will Luxury Bounce Back in 2025? It’s Hard to Call
Richemont's surprise 10 percent uptick in third-quarter revenue sent a jolt of energy — and hope — through the markets, but analysts remain divided as to whether the luxury giant's success signals a wider recovery.

LONDON — Is luxury on the rebound? It’s difficult to say.

Analysts are divided about the future of demand after the unexpected uptick in revenue at Richemont during the Christmas trading quarter, which prompted a surge in share prices last week at the big luxury groups.

In a flurry of reports this week, equities analysts from banks and brokers including Bernstein, Barclays, and RBC Capital Markets have been parsing Richemont’s surprising third-quarter results.

Some argue that Richemont’s gains point to better times ahead for the sector, while others believe the surge was specific to hard luxury — and to the power of the Richemont brands.

As reported, Richemont revenue rose 10 percent to 6.2 billion euros with double-digit gains in all regions except for China, where demand continues to stagnate. Revenue beat consensus by 9 percent.

On Thursday, Richemont’s shares closed up more than 16 percent and lifted those of its luxury peers including LVMH Moët Hennessy Louis Vuitton, which rose more than 9 percent, and Kering, which was up more than 6 percent.

The Richemont effect has continued to buoy luxury stocks since then, while in his report Bernstein’s Luca Solca said Tuesday that the sector is now “back in vogue after spending a few months in the penalty box.”

Solca named a few of the reasons behind luxury’s rebound. He said the “cyclical demand environment” has improved sequentially nearly everywhere, and added that all nationalities are now spending more year-on-year than in the third fiscal quarter of 2024 “even if the Chinese stay on the back foot.”

He believes that the tide of changes “will lift all boats.”

Solca added that jewelry in particular is experiencing stronger sales momentum compared with soft luxury because “it’s a lot cheaper than handbags today, in relative terms, and doesn’t face the same value for money challenge. This has been apparent for a few quarters, and is unlikely to change in the short term.”

Solca also pointed to Richemont’s own strengths, and portfolio of brands.

He said the group “provides clean exposure to hard luxury, has been even-handed on price increases, and holds the hottest hard luxury brands on the market today.” He acknowledged that Richemont occupies a “sweet spot” in the market, which he believes was a big contributor to the bounce in third-quarter sales.

Both Barclays and RBC also believe it was Richemont’s special positioning that fueled growth in the quarter, and suggested that investors shouldn’t necessarily get their hopes up regarding other luxury groups’ performance in the Christmas period.

In its report, “Shining Bright,” Barclays’ luxury goods team wrote that “Richemont is a positive read across the rest of the sector. However, we believe that the extent of growth acceleration at Richemont is also due to brand-specific factors [such as] the strong momentum of jewelry, newness at key brands Cartier and Van Cleef & Arpels, better availabilities of inventories, and space expansion.”

Barclays maintained its overweight rating on the stock and increased its price target to 175 Swiss francs from 150 Swiss francs following the publication of the Richemont results last week.

RBC Capital Markets also raised its price target on the Richemont stock to 170 Swiss francs from 145 Swiss francs.

The bank said Richemont’s revenue acceleration was down to “company-specific drivers including jewelry trends, perceived store of wealth and value for money, and brand momentum at Cartier and Van Cleef & Arpels” as well as the inherent strength of its brands.

The author of the report, Piral Dadhania, said “the extent to which we can read across Richemont results to the wider soft luxury space is not likely to be broad-based, but brand specific, with the winners likely to continue, and the laggards likely to remain so in the near term, in our view.”

Dadhania is expecting negative, near-term share price risk for the wider sector through the 2024 full-year reporting season, unless companies report better-than-expected results, or announce earnings upgrades, in what is still a “mixed” environment for luxury companies.

Cautious optimism might be the best approach for brands and investors alike. At least that’s what Richemont founder and chairman Johann Rupert would advise.

Rupert, who always takes the long view on business and market trends, said last year that “uncertainty has become the norm” in the luxury business, and the weakness in Chinese demand will take longer to recover.