DE40 slightly higher ahead of ECB decision

• Hugo Boss shares under pressure after presenting new forecasts
• Bernstein analysts downgrade rating on Bayer shares

Overall market situation:

European stock markets are experiencing moderate gains at the start of the second phase of Thursday's session. The German market, after a slight correction initiated in the zone of historical highs, is still holding in that area. Investors' attention is now turning towards the ECB decision and information coming from individual European companies.

Data on orders in German factories for January were published this morning at 7:00 am GMT. It was expected that the report would show a deep decline in orders of 6% compared to the previous month, January 2024. However, the decline was expected after a significant increase in December 2023. The actual report showed a huge decline of 11.3% compared to the previous month, further deepening the series of worrying reports from the German economy.

European companies listed during Friday's trading session are currently showing mixed levels. Source: xStation 5

The German benchmark DE40 is experiencing slight gains during today's session. The most important zone of potential support at the moment may be the local zone of lows connected with the 50-period exponential moving average (blue curve, H4 interval). The local resistance zone may currently be the zone of local highs in the consolidation zone near 17777 points. Source: xStation 5

News:

Deutsche Bank AG (DBK.DE) has reduced the bonus pool in its investment banking division by over 10% due to a decline in the number of transactions and a slowdown in trading last year.

Bayer (BAYN.DE) CEO Bill Anderson rules out a new capital increase after rumors of a possible new share issuance emerged in the market.u.

Hugo Boss (BOSS.DE) shares are down over 15% during today's session following the publication of financial results for Q4. The selling pressure from investors largely stems from slightly lower earnings forecasts for the new year.

FORECAST FOR THE NEW YEAR

• Sales of approximately 4.3 billion to 4.45 billion euros, estimated at 4.57 billion euros
• EBIT of 430 million to 475 million euros
• Net income growth of 5% to 15%

FOURTH QUARTER RESULTS

Selected financial positions of the company and analysts' forecasts. Source: Bloomberg Financial LP

COMMENTS:

• Dividend per share of 1.35 euros, estimated at 1.33 euros
• EBIT margin for 2024 expected to improve to a level between 10.0% and 10.7%
• Sales in the EMEA region for 2024 expected to grow in the low to mid-single-digit percentage range, while sales in the Americas are expected to increase in the mid- to high-single-digit range
• Capital expenditure is expected to increase to a level of 300 million to 350 million euros in 2024

ProSieben (PSM.DE) has announced its forecasts for the new year and financial results for 2023.

FORECAST FOR THE NEW YEAR

• Revenue forecast at 3.95 billion euros, estimated at 3.95 billion euros
• Still expects adjusted EBITDA of around 575 million euros, estimated at 564.2 million euros

RESULTS FOR 2023

• Dividend per share of 0.050 euros, estimated at 0.20 euros
• Sales of 3.85 billion euros, -7.5% YoY
• Adjusted net income of 225 million euros, -25% YoY
• Adjusted EBITDA of 578 million euros

COMMENTS:

• The group expects adjusted EBITDA to remain stable at around 575 million euros plus/minus 50 million euros.

Brenntag (BNR.DE) is down 2.5% after the company reported results below analysts' expectations. EBITA did not meet expectations for the fourth quarter, mainly due to weakness in the specialty chemicals industry.

RESULTS FOR 2023

• Operating EBITDA of 1.58 billion euros, estimated at 1.59 billion euros
• Gross profit from operating activities of 4.04 billion euros, -6.4% YoY, estimated at 4.07 billion euros
• Net income of 721.1 million euros, -20% YoY, estimated at 749 million euros
• Dividend per share of 2.10 euros vs. 2 euros YoY
• Sales of 16.82 billion euros, -13% YoY, estimated at 17.16 billion euros
• Essentials segment revenue of 9.31 billion euros, estimated at 9.55 billion euros
• Specialties segment revenue of 6.98 billion euros, estimated at 7.23 billion euros

Other news about individual companies in the DAX index. Source: Bloomberg Financial LP

Analyst recommendations:

Bankhaus Metzler initiated coverage of Siemens Energy (SIE.DE) with a "buy" rating and a target price of 23.70 euros. Analysts at the institution believe that after five years of struggles in terms of sales and profitability, the need for expansion and modernization of power grids will generate high demand.

Bernstein downgraded its rating on Bayer (BAYN.DE) shares to "market perform" (previously "outperform"). The target price is set at 27 euros.