By Swissquote Analysts
Airbus Warns It Will Miss Full-Year Delivery Target
Topic of the day
Airbus SE, the world’s biggest plane maker, said it would likely miss its key delivery target this year after the company’s chief executive warned that supply-chain woes were still at least six months away from normalizing. The European manufacturer said on Tuesday that due to a “complex operating environment,” Airbus’s previously forecast goal of achieving around 700 deliveries this year is now “out of reach.” Such a miss is rare in the commercial jet-making business, where annual deliveries offer bragging rights between Airbus and rival Boeing Co. but also go directly into cash flow: Much of a plane’s cost is only paid for after delivery. But the pandemic has played havoc on both Airbus’s and Boeing’s ability to gauge their once highly orchestrated supply lines. Meanwhile, Boeing’s woes with its 737 MAX jet have hit its deliveries hard. That has all made the usual sprint between the two to rack up more deliveries than the other less of a contest this year. Analysts estimate that Boeing, which hasn’t outlined its own full-year delivery target, will hand over 471 aircraft this year, according to a consensus compiled by FactSet. The U.S. plane maker is set to outline its order and delivery figures for the year through November early next week. Despite lower deliveries, Airbus said it still expects to meet its adjusted earnings goal of around 5.5 billion euros, or about $5.77 billion, and free cash flow of €4.5 billion in the full year.
Save for a few minutes at the start and a brief while a little later, the Switzerland stock market languished in negative territory on Tuesday amid concerns the Fed will continue to aggressively hike interest rates to rein in inflation. The benchmark SMI ended with a loss of 85.34 points or 0.76% at 11,109.33. The index, which advanced to 11,208.11 in early trades, dropped to a low of 11,085.28 in the final hour. Lonza Group ended 3.47% down. Credit Suisse, Partners Group, Givaudan and Alcon lost 2.25 to 2.6%. Sonova, Logiteh, UBS Group and Roche Holding ended lower by 1.4 to 2%. Geberit and ABB both shed about 1.05%. Swisscom climbed 1.3% and Richemont surged nearly 1%, while Nestle ended with a modest gain. In the Swiss Mid Price Index, Zur Rose plunged nearly 10% and AMS ended 8.75% down. Temenos Group, VAT Group, Tecan Group, Straumann Holding, Bachem Holding, Kuehne & Nagel, Belimo Holding and Schindler Ps ended lower by 2 to 3.5%.
European stocks closed lower on Tuesday amid concerns about interest rates after recent recent jobs data and services sector activity report from the U.S. raised the prospects for more aggressive policy moves by the Federal Reserve. European Central Bank chief economist Philip Lane said in an interview today that interest rates will need to rise several more times to rein in inflation. He however said, price increases in the euro zone are nearing a peak. The pan European Stoxx 600 drifted down 0.58%. The U.K.'s FTSE 100 ended 0.61% down, Germany's DAX shed 0.72% and France's CAC edged down 0.14%, while Switzerland's SMI lost 0.76%. Among other markets in Europe, Austria, Czech Republic, Denmark, Iceland, Ireland, Netherlands, Norway, Poland, Portugal, Russia, Spain and Sweden closed weak. Turkiye ended notably higher, while Belgium, Finland and Greece ended flat. In the UK market, Mondi ended 4.7% down following a rating downgrade by Credit Suisse. Scottish Mortgage, Endeavour Mining, Dechra Pharmaceuticals, Halma, ICP, GSK, Fresnillo and F&C Investment Trust lost 2 to 3.1%. Rolls-Royce Holdings rallied 3.2%. Phoenix Group Holdings gained 2.55% following announcement of incremental new business long-term cash generation target. Barclays, BAE Systems and Smith (DS) advanced 1.2 to 1.6%. In the German market, HelloFresh, Fresenius Medical Care, Sartorius, Siemens Healthineers, Adidas, Infineon Technologies and Continental lost 2 to 4%. SAP, Merck and Fresenius also closed sharply lower. RWE, Munich RE, Zalando and HeidelbergCement posted notable gains. In Paris, Eurofins Scientific shed about 3.2%. WorldLine, Dassault Systemes, Capgemini, Teleperformance, TotalEnergies, Societe Generale, Stellantis and Alstom lost 1.6 to 2.6%.
U.S. stock indexes extended declines Tuesday as investors weighed fears about the outlook for interest rates against optimism surrounding China's reopening. The S&P 500 dropped 57.58 points, or 1.4%, to 3941.26, while the Dow Jones Industrial Average fell 350.76 points, or 1.3%, to 33596.34, and the technology-heavy Nasdaq Composite slid 225.05 points, or 2%, to 11014.89. Microsoft Corp. pledged to give Nintendo Co. access to the popular “Call of Duty” games for a decade if its $75 billion deal to buy the game’s developer, Activision Blizzard Inc., gets approved, the software giant’s latest move to head off possible American regulatory action to block the acquisition. The offer follows a similar pledge that Microsoft made to Sony Group Corp. , maker of the PlayStation videogame console. Sony has been the loudest of the critics of the planned Activision deal, arguing that it could hurt competition if Microsoft restricts access to Activision games. Sony has also said Microsoft could hinder competition in the global videogame industry if it were to gain ownership of “Call of Duty.” Juul Labs Inc. reached a sweeping legal settlement Tuesday covering more than 5,000 lawsuits and about 10,000 individual plaintiffs, resolving much of the legal uncertainty that had pushed the e-cigarette company to the brink of bankruptcy. Juul said Tuesday that it had secured an equity investment to cover the cost of the settlement. Financial terms weren’t disclosed. Juul has been in talks with early investors including two of its longtime board members, Hyatt Hotels heir Nick Pritzker and California investor Riaz Valani, to fund a bailout that would cover legal liabilities, The Wall Street Journal previously reported.
The familiar combination of interest rate fears and recession worries is slowing down the Asian stock markets on Wednesday. In Tokyo, however, the Nikkei-225 loses 0.6 per cent to 27,722 points - weighed down by electronics and energy stocks. Traders point to weak US data and poor data from China. Meanwhile, the Kospi in Seoul, South Korea, held its ground. Shares of heavyweight LG Electronics plunged 6.7 per cent, posting their biggest daily losses in more than two years, weighed down by reports that Apple plans to shut down its autonomous driving project and postpone the launch until 2026.
In bond markets, the yield on the U.S. 10-year Treasury note fell to 3.512% from 3.598% on Monday. The benchmark note's yield has largely trended lower over the past month as the Fed has signaled its intention to ease the size of its interest-rate rises.
BoA lowers Generali to Underp. (Neutral) – Target EUR 17.80 (17.50)
JPM raises the Vinci target to EUR 116 (113) – Overweight
JPM raises the HSBC target to 570 (530) p – Neutral
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