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European markets trade mixed
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DE30 trades in 100-point range near 16,000 mark
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Henkel drops after guidance cut
European stock market trading mixed at the beginning of a new week. Situation looks similar as it did during today's trading in Asia, where major indices also struggled to find a common direction. Russian RTS (RUS50) is a leader, gaining around 0.9%, while Italian FTSE MIB (ITA40) lags the most, dropping 0.2%.
According to a Handelsblatt report, new government forecasts point to a higher tax revenue through 2025. Higher economic growth is expected to boost tax revenues by €29 billion this year compared to May estimate and by €33 billion next year. Around €160 billion more in taxes is expected through 2025. Handelsblatt did not name its source of the news. New set of German government forecasts will be officially announced on Thursday.
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Source: xStation5
DE30 continues to struggle in the 16,000 pts area, marked with a peak from August. Upward move on the index eased after price reached the upper limit of a steep upward channel and index began to trade in a tight 100-points range (15,980-16,080 pts). Break above recent highs could help revive the upward impulse. Note that there is a room for around 2% upward move until the next technical resistance is reached - exterior 127.2% Fibonacci retracement of a correction started in August (16,360 pts).
Company News
Covestro (1COV.DE) reported a 56% YoY jump in Q3 revenue, to €4.30 billion (exp. €4.02 billion). EBITDA increased 89% YoY to €862 million (exp. €871 million) while EBIT was almost 150% YoY higher at €654 million. Net income jumped from €179 million to €472 million (exp. €462 million). Strong earnings encouraged Covestro to boost full-year guidance. The company now expects full-year EBITDA to reach €3.0-3.2 billion, up from previous guidance of €2.7-3.1 billion. Free operating cash flow is seen reaching €1.4-1.7 billion, down from €1.6-2.0 billion forecast.
Henkel (HEN3.DE) announced sales data for Q3 2021. The German chemical company generated €5.09 billion in revenue during the July-September quarter, up 1.9% YoY and in-line with market expectations. However, the stock is trading lower today as the company decided to lower the full-year adjusted EBIT margin forecast to 13.5%, down from 13.5-14.5%. Organic revenue growth is still expected at 6-8%.
Fitch upgraded the long-year default rating for Daimler (DAI.DE) from "BBB+" to "A-". Rating agency cites quickly recovering profitability and company's ability to reposition to new market trends (like EVs) as reasons behind the upgrade.
Analysts' actions
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Volkswagen (VOW1.DE) downgraded to "underperform" at Jefferies. Price target set at €170
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Lufthansa (LHA.DE) upgraded to "outperform" at Bernstein. Price target set at €8.55
Henkel (HEN3.DE) drops following a full-year adjusted EBIT margin forecast cut. Stock pulled back from the 50% retracement of the post-pandemic recovery move and tested the support zone at €76.50, marked with the 61.8% retracement. Bulls managed to push the price off the daily lows but stock continues to trade around 5% lower on the day. Source: xStation5
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