>>> Up
* Akzo Nobel Raised to Buy at Jefferies; PT 79 euros
* AstraZeneca Raised to Buy at Intron Health
* Avance Gas Raised to Buy at Arctic Securities; PT 177 kroner (+)
* B&S Group Raised to Buy at ING; PT 7.25 euros
* Boliden Raised to Neutral at JPMorgan (+)
* BW LPG Raised to Buy at Arctic Securities; PT 199 kroner (+)
* CLS Holdings Raised to Add at Peel Hunt
* Dorian LPG Raised to Buy at Arctic Securities; PT $45.20 (+)
* Elkem Raised to Buy at SEB Equities; PT 24 kroner
* Enagas Raised to Hold at Bestinver; PT 15 euros
* Endesa Raised to Neutral at BNPP Exane; PT 17.70 euros (+)
* Ericsson Raised to Buy at SEB Equities; PT 64 kronor
* Evonik PT Raised to 25 euros from 23 euros at Bankhaus Metzler (+)
* Fresnillo Raised to Overweight at JPMorgan (+)
* Gjensidige Raised to Hold at SEB Equities; PT 175 kroner
* Kemira Raised to Buy at OP Corporate Bank; PT 21 euros
* Kemira Raised to Buy at OP Corporate Bank; PT 21 euros
* Naturgy Raised to Buy at Mirabaud Securities; PT 27.80 euros
* Peach Property Raised to Buy at M.M. Warburg (+)
* Pennon Raised to Outperform at RBC; PT 850 pence
* Picton Property Income Ltd Raised to Buy at Peel Hunt
* Unibail Raised to Buy at Citi; PT 85.20 euros
>>> Down
>>> Down
* Alfen Cut to Hold at Deutsche Bank (+)
* Ashmore Cut to Underperform at BofA; PT 170 pence (+)
* BayWa Cut to Hold at M.M. Warburg; PT 29.50 euros (+)
* Brooks Macdonald Cut to Add at Numis; PT 2,145 pence (+)
* Enel Cut to Neutral at BNPP Exane; PT 6.30 euros (+)
* Haypp Group Cut to Hold at SEB Equities; PT 80 kronor
* Haypp Group Cut to Hold at SEB Equities; PT 80 kronor
* SCA Cut to Underweight at JPMorgan; PT 142 kronor
* Tritax Big Box Cut to Hold at Peel Hunt
* VW Cut to Market Perform at Bernstein
>>> Initiation
>>> Initiation
* Bawag Rated New Outperform at Mediobanca SpA; PT 73 euros
* Next Rated New Neutral at Oddo BHF; PT 8,900 pence (+)
* NIBE Industrier Rated New Sell at Goldman; PT 43 kronor
* NIBE Industrier Rated New Sell at Goldman; PT 43 kronor
* Orange Resumed Overweight at JPMorgan (+)
* Schott Pharma Rated New Hold at Stifel; PT 40 euros
>>> Call
>>> Call
* Akzo Nobel Upgraded at Jefferies on Topline Progress in Paints
* AstraZeneca’s Catalyst Outlook Transformed, Intron Upgrades
* Ericsson’s Outlook is Improving, Upgraded to Buy at SEB Equities
* Goldman Strategists Say Robust Macro to Lift Italy, Spain Stocks (+)
* Morgan Stanley Strategists See Healthier US Profits Through 2024 (+)
* Pennon Raised at RBC, Expects Clarity on Environmental Review
* Unibail Raised to Buy at Citi as Markets Hit New Stimulus Phase
* Unibail Raised to Buy at Citi as Markets Hit New Stimulus Phase
* Volvo 1Q Results Show Margin Resilience, Says Jefferies (+)
- Adidas (ADS TH) +3.8%
- Adidas Raises Guidance Amid Hot Demand for Sambas and Yeezys
- LVMH (MOH TH) +1.6%
- Luxury Goods Gain Wings With €500 Billion Market on Horizon
- Akzo Nobel (AKU1 TH) +0.9%
- Akzo Nobel Upgraded at Jefferies on Topline Progress in Paints
- Puma (PUM TH) +0.7%
- BBC: Adidas on front foot after exiting Kanye West deal
- BAT (BMT TH) +0.5%
- Watch Imperial Brands and BATS After Landmark UK Tobacco Vote
- Eni (ENI TH) -1.2%
- Rolls-Royce (RRU TH) -1.3%
- Barclays (BCY TH) -1.4%
- Nokia (NOA3 TH) -1.7%
- STMicroelectronics (SGM TH) -1.8%
- Infineon (IFX TH) -2.5%
- Aixtron (AIXA TH) -2.7%
- Continental (CON TH) -4.5%
- Continental Profit Squeezed by Weak Auto Market in Europe
- ASMI (AVS TH) -5.1%
- ASML (ASME TH) -7.5%
- ASML Orders Miss as Demand for Most-Advanced Machines Slips
DAX:
- Adidas (ADS TH) +3.8%
- Adidas Raises Guidance Amid Hot Demand for Sambas and Yeezys
- Infineon (IFX TH) -2.5%
- ASML Orders Miss Estimates as Demand for Advanced Machines Slips
- Continental (CON TH) -4.5%
- Continental Profit Squeezed by Weak Auto Market in Europe
MDAX:
- Evotec SE (EVT TH) +1.2%
- Siltronic (WAF TH) -1.2%
- Aixtron (AIXA TH) -2.7%
SDAX:
- Borussia Dortmund (BVB TH) +7.6%
- Varta (VAR1 TH) -1.8%
- Suess MicroTec (SMHN TH) -2%
>>> Up
* Akzo Nobel Raised to Buy at Jefferies; PT 79 euros
* AstraZeneca Raised to Buy at Intron Health
* B&S Group Raised to Buy at ING; PT 7.25 euros
* CLS Holdings Raised to Add at Peel Hunt
* Elkem Raised to Buy at SEB Equities; PT 24 kroner
* Enagas Raised to Hold at Bestinver; PT 15 euros
* Ericsson Raised to Buy at SEB Equities; PT 64 kronor
* Gjensidige Raised to Hold at SEB Equities; PT 175 kroner
* Kemira Raised to Buy at OP Corporate Bank; PT 21 euros
* Kemira Raised to Buy at OP Corporate Bank; PT 21 euros
* Naturgy Raised to Buy at Mirabaud Securities; PT 27.80 euros
* Pennon Raised to Outperform at RBC; PT 850 pence
* Picton Property Income Ltd Raised to Buy at Peel Hunt
* Unibail Raised to Buy at Citi; PT 85.20 euros
>>> Down
* Haypp Group Cut to Hold at SEB Equities; PT 80 kronor
>>> Down
* Haypp Group Cut to Hold at SEB Equities; PT 80 kronor
* SCA Cut to Underweight at JPMorgan; PT 142 kronor
* Tritax Big Box Cut to Hold at Peel Hunt
* VW Cut to Market Perform at Bernstein
>>> Initiation
>>> Initiation
* Bawag Rated New Outperform at Mediobanca SpA; PT 73 euros
* NIBE Industrier Rated New Sell at Goldman; PT 43 kronor
* NIBE Industrier Rated New Sell at Goldman; PT 43 kronor
* Schott Pharma Rated New Hold at Stifel; PT 40 euros
>>> Call
>>> Call
* Akzo Nobel Upgraded at Jefferies on Topline Progress in Paints
* AstraZeneca’s Catalyst Outlook Transformed, Intron Upgrades
* Ericsson’s Outlook is Improving, Upgraded to Buy at SEB Equities
* Pennon Raised at RBC, Expects Clarity on Environmental Review
* Unibail Raised to Buy at Citi as Markets Hit New Stimulus Phase
* Unibail Raised to Buy at Citi as Markets Hit New Stimulus Phase
A selloff in Asian stocks cooled Wednesday while currencies remained in focus as traders braced for higher-for-longer interest rates in the US. The MSCI Asia Pacific Index steadied after an earlier drop. The dollar edged lower after seeing its best five-day gain since October 2022. The greenback’s resilience is exerting pressure on global emerging-market currencies and prompting authorities to ramp up defense against rapid depreciation. The won rebounded after breaching a key level in the previous session. South Korean officials said they discussed currency concerns with Japanese counterparts. The Philippine peso weakened past 57-per-dollar for the first time since late 2022, while Indonesia’s rupiah extended a selloff despite the central bank’s intervention Tuesday. After recent strong US data, the market is now pricing in 25-to-50 basis point reductions in the Federal Reserve rate this year starting July or September, said Kieran Calder, head of equity research for Asia at Union Bancaire Privée in Singapore. “The resulting stronger dollar is a headwind for most Asia markets and for Japan, pushing the yen towards the increasingly uncomfortable 155 per dollar level.” Stocks in Asia diverged, with losses in Japan and South Korea offset by gains in mainland China. Chinese shares rebounded as the securities regulator tried to allay concerns about new stock exchange rules following a rout in small-cap shares. US equity futures climbed in Asian trading after the S&P 500 fell for the third session. Treasury yields traded in a narrow range after climbing to fresh 2024 highs Tuesday when Federal Reserve chief Jerome Powell said it will likely take longer to have confidence that inflation is headed toward the central bank’s target. The remarks represented a shift in his message after a key measure of inflation exceeded forecasts for a third month. After starting the year by pricing in as many as six rate cuts in 2024, or 1.5 percentage points of easing, traders are now doubtful there will even be a half point of reductions. Market-implied expectations for Fed rate cuts — which have collapsed in the past two weeks — declined further after Powell’s comment on inflation. On Tuesday, Fed Vice Chair Philip Jefferson said he expects inflation will continue to moderate with interest rates at their current level but persistent price pressures would warrant holding borrowing costs high for longer. Richmond Fed President Thomas Barkin said some recent data, including the consumer price index, has not “been supportive” of a soft landing. Elsewhere, New Zealand home-grown price pressures persisted in the first quarter even as headline inflation slowed to its weakest in almost three years. The yield on the country’s two-year government bonds rose while the kiwi climbed after the report. Oil edged lower as traders wait to see how Israel would respond to Iran’s weekend attack. Gold held near a record-high. US After Hours UAL +5.8%, HWC +2.6% higher on earnings; ALVO +3.7% as FDA approves Selarsdi injection; JBHT -5.4% lower on earnings.
Nikkei -0.86% Hang Seng -0.53% CSI +0.56% Shanghai +1.14% Shenzen +2.62%
Eur$ 1.0625 CNH 7.2588 CNY 7.2399 JPY 154.61 GBP 1.2433 CHF 0.9121 RUB 94.1498 TRY 32.5388 WTI$ 84.78 -0.68% Gold 2,383 -- BTC 63,750 +1.12% ETH 3,093 +0.70%
S&P +0.08% Nasdaq -0.03% EuroStoxx -0.04% FTSE +0.28% Dax +0.10% SMI -0.11%
Macro :
- Buffett Utilities Say More Gas Plants Needed to Meet Demand
Keep an eye on :
- ADP FP : ADP March Passenger Traffic +10.1%
- ADS GY :Adidas Boosts FY Operating Profit Forecast
- ADS GY :Adidas Boosts FY Operating Profit Forecast
- ADS GY : Adidas ADRs Rise on Boosted Revenue, Profit Outlook: Street Wrap
- ASML NA : ASML 1Q Bookings Misses Estimates
- ASML NA : ASML Orders Miss Forecasts as Chip Makers Await Demand Recovery
- ATO FP : Atos CEO Says Debt Talks Will Save Fallen French Tech Star
- BKT SM : *BANKINTER EXPLORES SALE OF ATOM HOTELES FOR €1B: CONFIDENCIAL
- BAS GY : ISS clashes with German blue-chips over boardroom independence
- BMW GY : BMW’s Surprise Electric-Car Win Started With an Early Blunder
- BA US : Boeing Whistleblower Says 787 Plane Should Be Grounded: NBC
- BA US : Boeing Plane’s Mid-Air Blowout Not A Surprise, FAA Panelist Says
- BA US : Boeing’s Safety Record Under Scrutiny in Split-Screen Hearings
- CON GY : Continental Auto Ebit Miss Suggest More Fixes Needed: React
- IDIA SW : Idorsia Continues Talks With Bondholders, Publishes 1Q Numbers
- TKWY NA : Just Eat Takeaway 1Q Gross Transaction Value Meets Estimates
- MC FP : LVMH 1Q Fashion & Leather Goods Organic Sales Misses Estimates
- MC FP : LVMH ADRs Gain After Better-Than-Feared Results: Street Wrap
- MUV2 GY : ISS clashes with German blue-chips over boardroom independence
- NTGY SM ; Taqa Hires Rothschild, Lazard for Naturgy Deal: Expansion
- NEL NO : Nel 1Q Ebitda Loss NOK16M, Est. Loss NOK72M
- NDA FH : Nordea, Peers' NII Peak in Sight, Downward Drift May Start in 1Q
- NOVN SW : Novartis’ Kesimpta Shows Six-Year Benefits in Multiple Sclerosis
- NOVOB DC : Longer Obesity Treatment May Boost $80 Billion Market: BI Survey
- RL US : Ralph Lauren’s ‘cluster approach’ to growing its business in China, world’s biggest luxury market by 2030
- RIO LN : Rio Tinto’s Iron Ore Shipments Fall 5%, Missing Estimates (1)
- SPM IM : Puliti Confirmed as Saipem CEO Nominee by ENI, CDP
- SAN FP : Sanofi Says Frexalimab Showed Reduction of Disease in New Data
- GLE FP : SocGen’s Treezor Fined €1M by French Banking Regulator
- SON PL : Sonae’s Sparkfood Completes Acquisition of 89% Stake in Diorren
- TLGO SM :
- TKA GY : Telekom Austria FY Capital Expenditure Forecast Beats Estimates
- TOM2 NA : TomTom 1Q Ebit Loss Misses Estimates
- TRYG DC : Tryg 1Q Profit After Tax Beats Estimates
- ULTI NO : Ultimovacs to Reduce Workforce by About 40%
- UCG IM : UniCredit, Alpha Bank Chiefs Eye Romania Growth After Tie-Up
- UNO GY : Nordic Nuclear Output Stable at 73% With 9 Units Online (Table)
- VIRP FP : Virbac 1Q Revenue Beats Estimates
- VOLVB SS : Volvo 1Q Adjusted Operating Profit Beats Estimates
Mistral, an OpenAI Rival in Europe, in Talks to Raise Capital at a $5 Billion Valuation
Mistral, a Paris-based startup developing artificial intelligence that is open source, has been speaking to investors about raising several hundred million dollars at a valuation of $5 billion, according to a person with direct knowledge. The company, which has just recently begun to generate revenue, in December raised $415 million at a valuation of $2 billion.
The possible back-to-back financing reflects investors’ continued appetite for certain AI startups and the large amount of capital such startups need to compete with Google, OpenAI and other leaders in the field. It’s unclear which investors Mistral has spoken to about a new funding round. Its existing investors include Andreessen Horowitz, Lightspeed Venture Partners and Microsoft, which has also backed OpenAI but with far more capital.
The Takeaway
• Paris startup raised at $2 billion valuation in late 2023
• Startup has recently begun to generate revenue
• Mistral has admitted to using Meta’s open-source AI, Llama 2
A spokesperson couldn’t be immediately reached for comment.
A $5 billion valuation would stand out even among AI startups that have fetched steep prices on modest revenue. Cohere, which also develops LLMs, has been in talks to raise money at a $5 billion valuation despite generating revenue at an annualized pace of about $22 million.
Mistral charges customers that use an application programming interface to access its large language models. The models, most of which are also available for free, have surged in popularity among application developers.
Mistral is banking on its ability to convince AI customers in Europe to work with a locally based firm rather than with AI providers based in other parts of the world.
Named after a northern winter wind, Mistral was founded a year ago by former DeepMind researcher Arthur Mensch and former Meta AI scientists Timothée Lacroix and Guillaume Lample. Unlike OpenAI, Mistral is open-sourcing its models and has said that it’s developing its products in line with stricter European regulations on the safe development of such software.
Mistral experienced backlash from some researchers over its first open-source model, launched last year, for lacking the safety features to prevent users from asking for advice on how to commit suicide, for instance. Mistral has also admitted to using Meta’s open-source AI, Llama 2, to create its own AI, only disclosing that fact after the information leaked.
In February, Microsoft took a tiny minority stake in Mistral. Microsoft said it would offer Mistral’s AI models, including its most advanced one, Mistral Large, on its Azure cloud rental service. Mistral Large was designed to compete with OpenAI’s most advanced model, GPT-4.
As Q1 Revenue Falls, LVMH Plays the Waiting Game
Confident that aspirational customers will eventually return, the luxury conglomerate continued to raise prices for some high-end goods.
PARIS – Luxury spending is slowing as aspirational customers tighten their purse strings, but LVMH Moët Hennessy Louis Vuitton has no plans to trim its prices to woo back this once-booming cohort. Instead, it is playing the waiting game.
The French luxury conglomerate said group sales fell 2 percent at actual exchange rates in the first quarter, signaling an end to several years of post-pandemic euphoria, with consumers in the United States and Europe shrinking back from rising prices.
Revenues totaled 20.69 billion euros in the three months ended March 31 as the normalization of growth rates impacted LVMH’s sales of high-end goods including jewelry and Champagne.
This represented a rise of 3 percent on a like-for-like basis, down from the 10 percent recorded in the fourth quarter, but in line with market expectations.
Organic sales at LVMH’s key fashion and leather goods division were up 2 percent, following a 9 percent increase in the fourth quarter, also matching the consensus forecast from analysts.
The watches and jewelry unit reported a 2 percent decline in like-for-like sales, while the wines and spirits segment saw a 12 percent drop. Bucking the overall trend were perfumes and cosmetics, up 7 percent, and selective retailing, with a revenue rise of 11 percent.
Chief financial officer Jean-Jacques Guiony said the spiraling prices of luxury goods were not in question, indicating that LVMH continued to raise prices for certain products in the first quarter and is willing to sit out the slump.
Neither does its star brand Louis Vuitton intend to court less wealthy customers by upping its share of canvas over leather goods, he told analysts and reporters in a conference call on Tuesday.
“The breadth of the brand, as you know, is quite large and we try to satisfy the various segments of the customer base by offering product at different price segments and in different materials,” Guiony said.
“Frankly, I don’t think the situation of aspirational customers in the Western part of the world is connected in any way with the offer. The question is inflation, which is taking its toll with a particular intensity on this group of customers,” he argued.
“As long as inflation will be a factor for this group of customers, we will not do miracles and basically we expect only a gradual improvement with this population in the coming quarters,” he added.
As prices soar into the thousands, many aspirational shoppers can no longer afford handbags from top designer brands. A Louis Vuitton Speedy 25, for instance, now costs $1,550, versus $1,000 in 2019.
“We had repeated price hikes coming either from currencies, but more importantly from inflation that we had to reflect, and sometimes we anticipated a little bit, taking advantage of the strong demand to avoid doing too much too late,” Guiony explained.
“No doubt that the aspirational customer has to adjust to that new normal,” he continued. “Most of our competitors have been doing the same, so I’m not particularly worried as to the acceptance of the new level of prices from aspirational customers. It’s just that it is going to take time, as we can see on the market, so don’t worry but be patient.”
While the group does not break down performance by label, Guiony indicated that Vuitton performed a little better than the division average, while Dior was “slightly” below. He emphasized that LVMH remains confident in the growth potential of its major fashion brands, with Vuitton, Dior, Celine and Fendi leading the charge.
“The first rank will be Vuitton. It’s by far the largest of the group and it’s on Vuitton that we are counting moving forward to develop the business,” he said.
“This brand has always been able to reach new frontiers in the past and we hope to do exactly the same with Dior, with a different positioning, but the same extraordinary potential moving forward,” Guiony added.
Earlier this year, LVMH chairman and chief executive officer Bernard Arnault sought to put a positive spin on the sector slowdown, but he was clearly banking on less anemic growth rates than the latest figures suggest.
“We have reached a stage where we no longer need such strong growth and for me, between 8 and 10 percent is ideal,” he said at the time, noting that he prefers to focus on the desirability of his brands with exclusive products, rather than chasing higher sales.
LVMH shares have risen by more than 8 percent so far this year, but some analysts have downgraded the stock, noting that sluggish Chinese demand is likely to continue weighing on the luxury sector for the foreseeable future.
In a mixed bag of economic indicators, China reported on Tuesday that its economy grew 5.3 percent in the first quarter, faster than expected, but that March retail sales came in below expectations, suggesting the outlook for consumer spending remains cloudy.
While the situation in China is hogging the headlines, Guiony said inflation was not an issue there, noting that LVMH saw spending by Chinese customers rise 10 percent in the first quarter, though there was a shift to purchasing overseas.
Overall, there is less of a gulf between entry-level and elite clients in Asia, he said.
In fact, LVMH increased its jewelry prices by 4 percent to 6 percent in the first quarter, Guiony said, without providing details. It is understood that Bulgari raised prices in Asia, while Tiffany & Co. implemented a global price increase in early January.
Meanwhile, the fashion and leather goods division raised prices by 2 percent worldwide during the quarter, Guiony said.
By region, LVMH said organic sales were up 2 percent in the U.S. and Europe in the first quarter, while Asia, excluding Japan, registered a 6 percent drop, reflecting a tougher comparison base, and the fact that Chinese consumers are buying more when they travel.
“We are totally agnostic as to where the business with mainlanders takes place, whether it is in China, whether it is elsewhere in Asia, or whether it is outside Asia,” Guiony demurred.
One beneficiary of this trend is Japan, where revenues jumped 32 percent as tourists took advantage of the weak yen, despite a series of price increases designed to level out price differentials.
Signaling that there is pent-up demand among aspirational consumers, Sephora posted “excellent” sales growth in North America, Europe and the Middle East in the first quarter. Asked to share the beauty retailer’s “secret sauce,” Guiony highlighted its merchandising prowess.
“Sephora is not just the engaging into a transactional relationship with its customers. It is also a place where people discover, try and do other things than they would do in a traditional store,” he said, noting that it’s no accident that Artemis Patrick, the new CEO of Sephora North America, has a merchandising background.
It’s one of several key executive appointments at LVMH as Arnault, 75, sharpens his succession plan.
Toni Belloni, one of his most trusted lieutenants, will step down as group managing director and chairman of the executive committee following LVMH’s annual general meeting on Thursday. He will be succeeded by Stéphane Bianchi, a relative newcomer to the company who was previously in charges of its watches and jewelry division.
Meanwhile, group veteran Michael Burke has succeeded Sidney Toledano, 72, as head of LVMH Fashion Group. Toledano left the executive committee and became an adviser to Arnault in the handover, which took effect on Feb. 1.
At Thursday’s meeting, shareholders are also expected to approve the appointments of Arnault’s sons Alexandre and Frédéric to the board.
Alexandre Arnault, executive vice president of product and communications at U.S. jeweler Tiffany & Co., and Frédéric Arnault, CEO of LVMH Watches, will join their siblings Antoine Arnault, head of communication, image and environment at LVMH, and Delphine Arnault, chairman and CEO of Christian Dior Couture, on the board.
That leaves the youngest sibling, Jean Arnault, who is in his mid-20s and is marketing and product development director for watches at Louis Vuitton. “He’s got time, he’s young,” his father commented at a press conference in January where he announced the nominations.