Research Market strategy
By Swissquote Analysts
Published on 02.07.2021
Morning news

H&M 2Q Profit Beat Views Amid Well-Received Collections, Easing Restrictions

Topic of the day

Sweden's Hennes & Mauritz AB posted a forecast-beating rise in second-quarter net profit after experiencing a strong recovery from the pandemic amid well-received collections and easing restrictions. "The third quarter have started well and we are almost back at the level we were at before the pandemic," said Chief Executive Helena Helmersson. The company posted a net profit of 2.77 billion Swedish kronor ($324 million) for the fiscal quarter ended May 31, compared with a loss of SEK4.99 billion a year earlier. Analysts polled by FactSet had expected a profit of SEK2.66 billion. Sales rose 62% to SEK46.51 billion, as previously announced, while net sales between June 1 and 28 increased by 25% in local currencies on the year. Compared with the same period in 2019, sales decreased by around 4%.

Swiss stocks

The Swiss stock market was somewhat firmer at the end of trading on Thursday. In the course of the day, the SMI overcame the 12,000 mark, but was unable to defend it. The SMI gained 0.3 per cent to 11,977 points. Among the 20 SMI stocks, there were 14 price gainers and five price losers, and one share closed unchanged. 26.03 (previously: 32.89) million shares were traded. Nevertheless, shares in the travel industry were among the leading price gainers across Europe. This is because with effect from Thursday, many holiday destinations have eased their Corona restrictions. The share of duty-free shop operator Dufry improved by 4.3 per cent. Zurich Airport was up 1.0 per cent. Shares in banks Credit Suisse and UBS were also sought after (+0.8 per cent each). Heavyweights Nestle, Novartis and Roche posted gains of between 0.1 and 0.5 per cent. There was also news on individual stocks. Richemont fell 0.1 per cent. The company is buying Delvaux, a Belgian manufacturer of high-priced leather goods. However, analysts were divided on the acquisition. While Bryan Garnier praised the foray into the leather goods segment, Bernstein criticised the acquisition as insufficient to give the soft luxury business critical mass. Swatch (+0.7%) benefited from positive analyst comments.

International markets


The main European stock markets closed higher on Thursday, with good indicators on both sides of the Atlantic outweighing concerns about the spread of the Delta variant of the coronavirus. The Stoxx Europe 600 index gained 0.6% to 455.6 points. In Paris, the CAC 40 and the SBF 120 gained 0.7% each. In Frankfurt, the DAX 30 gained 0.5%, while in London, the FTSE 100 gained 1.3%. France's Sodexo delivered mixed results for the third quarter, analysts at Jefferies say. Quarterly revenue of EUR4.48 billion was above Jefferies' estimate of EUR4.29 billion and Visible Alpha consensus of EUR4.40 billion, says the U.S. bank. The food-services and facilities company's organic revenue growth of 19% for the period was ahead of 15.5% consensus and Jefferies' 16.3% estimate, according to the bank. Sodexo raised its guidance for the second half of its fiscal year but the outlook is in line with expectations, says Jefferies, noting that the company also increased its exceptional cost guidance for the year by EUR40 million. Shares in Sodexo trade up 4.7% at EUR82.38. Worldline's agreement to buy 80% of BNP Paribas's Italian payments business Axepta Italy marks the French fintech company's first steps in the Italian merchant services market, Bryan Garnier says, noting its significant long-term potential. "The Italian merchant acquiring market harbors a lot of potential in the long-term as it is still significantly relying on cash payments," the European investment bank says. Cash accounted for about 78% of total payment volumes in 2020, Bryan Garnier says, adding that even before the pandemic, card transaction volumes were growing at one of the fastest rates in Europe. Worldline shares trade 2.1% higher at EUR80.56.

United States

U.S. stocks rose, with the S&P 500 logging its sixth consecutive session of gains. The broad index added 0.5%, closing at a new record high. The Dow Jones Industrial Average rose 0.4%, and the Nasdaq Composite added 0.1%. Stocks have been lifted to record highs from data showing the U.S. economy is growing at a rapid clip, and the prospect of a bumper set of second-quarter earnings at the largest companies. Meantime, investors have grown less concerned that the Federal Reserve will raise interest rates to ward off higher inflation. In one sign of the rebounding economy, the number of people filing for unemployment benefits fell to 364,000 last week from 415,000 a week earlier, marking a new pandemic low.Shares in Micro Focus International fell 15% after the software developer reported a pretax loss and lower revenue and adjusted earnings in the six months to the end of April. The company said it expects full-year revenues to decline in line with consensus and that revenue stabilization by the end of 2022-23 remains its most important business objective. "A return to revenue stability exiting FY23 remains the goal, but the road [is] difficult, with maintenance still weak," UBS analysts say.Financial data provider Refinitiv confirms CFO Brian West has left the company--after Boeing announced West will become the aerospace company's new CFO. Refinitiv, which was acquired by the London Stock Exchange Group earlier this year, says it's dropping the CFO role. LSEG CFO Anna Manz is the only one to hold that title, under a restructuring announced last November.


The stock markets in East Asia and Australia show a mixed trend on Friday. In Shanghai and Hong Kong, the downward trend is more pronounced. It is said that there is profit-taking here after the recent rises. Traders also speak of a wait-and-see attitude before the US labour market report in the afternoon (CEST), which often points the way ahead. The Shanghai Composite and the Hang Seng Index in Hong Kong are clearly in negative territory with minus 1.6 per cent each.


Treasury yields rose to start the new month, third quarter and second half of 2021. Long-dated debt is coming off a quarter that saw the sharpest yield declines since the first quarter of 2020. The 10-year Treasury note was yielding 1.479%, versus 1.443% on Wednesday.


JPM lowers the Vodafone target to 165 (197) p – Overweight
UBS lowers the Vonovia target to 65 (70) EUR – Buy
UBS rises the Glaxo target to 1.500 (1.370) p – Neutral

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