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Stocks in Europe trade mixed
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DE30 tested 15,250 pts price zone
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MTU Aero and Wacker Chemie reported Q1 earnings
Majority of the European stock market indices trade mixed on Friday. German DAX is the best performing index from the Region while Russian RTS lag the most. Other indices from Europe trade near yesterday's closing prices.
German GDP report for Q1 was released at 9:00 am BST and it turned out to be a disappointment. Report confirmed that German economy has shrunk in the first 3 months of 2021, but decline was deeper than expected at -1.7% QoQ (exp. -1.5% QoQ). GDP growth for Q4 2020 was revised higher to 0.5% QoQ from 0.3% QoQ. Contraction can be blamed on a new set of coronavirus restrictions levied at the end of 2020 and at the beginning of 2021.
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Source: xStation5
Yesterday's plunge on DE30 has led to a test of lows from April 21 and the 38.2% retracement of the upward move started at the end of March (15,105 pts area). German index is recovering today and has tested the 15,250 pts price zone. This zone served as a lower limit of recent short-term consolidation and is additionally marked with the 50-hour moving average (green line). Failure to break above the aforementioned price zone could trigger a pullback towards the 15,180 pts support.
Company News
MTU Aero (MTX.DE) reported Q1 revenue at €989 million, down 22% YoY (exp. €999.8 million). Adjusted EBIT at €86 million was 53% YoY lower (exp. €94.9 million) while net income dropped 55% YoY to €58 million (exp. €67.6 million). Net debt at the end of March was 14% QoQ lower at €675 million while cash position increased 8.2% QoQ to €836 million. MTU Aero confirmed 2021 guidance, expecting full-year sales of €4.2-4.6 billion and adjusted EBIT margin of 9.5-10.5%.
Wacker Chemie (WCH.DE) reported Q1 revenue at €1.36 billion, up 14% YoY and higher than expected €1.3 billion. EBITDA increased 42% YoY to €246.2 million (exp. €220.2 million) while EBIT jumped from €69.8 million in Q1 2020 to €154.9 million in Q1 2021 (exp. €117.5 million). Net income jumped 55% YoY to €106.6 million. Wacker Chemie boosted its full-year EBITDA growth forecast from 10-20% to 15-25%.
According to the Handelsblatt report, Volkswagen (VOW1.DE) is planning to start designing and developing its own high-performance chips.
Analysts' actions
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E.ON (EOAN.DE) downgraded to "neutral" at UBS. Price target set at €10.50
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Aixtron (AIXA.DE) upgraded to "buy" at MM Warburg. Price target set at €19
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Nemetschek (NEM.DE) upgraded to "buy" at Bankhaus Metzler. Price target set at €72
Wacker Chemie (WCH.DE) launched today's trading with a bearish price gap. However, the initial downward move was halted near €122 and a strong upward move followed. Stock has already managed to recover almost all of today's losses and climbed back above the 200-hour moving average (purple line). Near-term resistance to watch, should the upward move continue, can be found at €130. Source: xStation5
