Research Market strategy
By Swissquote Analysts
Published on 15.02.2023
Morning news

Coca-Cola Earnings Drop as Stronger Dollar Weighs

Topic of the day

Coca-Cola reported a stronger-than-expected 7% rise in quarterly revenue. Yet, the beverage maker’s shares fell $1.01, or 1.7%, to $59.59. Coca-Cola Co. admitted profit falling in the fourth quarter from a stronger dollar. For the current year, Coke expects sales growth to slow, with organic revenue, which strips out the effects of foreign-currency fluctuations, acquisitions and divestitures, projected to grow between 7% and 8%. That is down from 16% in 2022. The beverage giant said Tuesday its bottom line dropped to $2.03 billion, or 47 cents a share, for the three months ended Dec. 31 from $2.41 billion, or 56 cents a share, last year as input costs jumped 10% and other expenses edged higher. On an adjusted basis, earnings were in line with analyst expectations of 45 cents a share, according to FactSet. Sales for the fourth quarter topped analyst expectations at $10.1 billion, lifted by higher prices and a shift in the mix of products it sold. Volumes, meanwhile, slid 1% lower, largely from the company's suspension of operations in Russia, which offset pockets of growth elsewhere in the world, including in India and Mexico.

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Swiss stocks

On Tuesday, the SMI added 0.2 per cent and closed at 11,232 points. Among the 20 SMI stocks, there were 15 price gainers and four price losers; Novartis closed unchanged. 42.57 (previously: 44.53) million shares were traded. Telecommunications stocks were sought after across Europe following Liberty Global acquiring Vodafone. In Switzerland, Swisscom rose by 0.6 per cent - also boosted as a result of a positive analyst commentary by Julius Bär. Credit Suisse shares recovered slightly from their recent slide, rising 2.0 per cent. The bank is investing in the digital financial infrastructure of Taurus, both companies spoke of a strategic partnership. However, UBS also advanced significantly, up 1.2 per cent. Banking stocks in Europe benefited from interest rate speculation. SGS (-1.0 per cent) was weighed down by a negative analyst commentary from Société Générale. Among the second-line stocks, Basilea increased by 3.6 per cent. The biopharmaceutical company revealed convincing business figures and also presented a strong outlook. The company announced a "significant increase in net profit".

International markets


The European stock markets closed close to the waterline on Tuesday as inflation slowed less than expected in the United States in January. The Stoxx Europe 600 index climbed 0.1% to 462.40 points. In Paris, the CAC 40 and the SBF 120 each gained 0.1%, as did the FTSE 100 in London. In contrast, the DAX 40 in Frankfurt gave up 0.1%. TF1 (-4%) on Tuesday reported a decline in earnings and slightly lower than analysts' forecasts for the 2022 financial year, marked by non-recurring charges linked to the planned liquidation of Salto and the failure of the proposed merger with its rival M6. M6 (+1.2%) posted a decrease in its results last year, due to a drop in advertising revenue and provisions related to the upcoming disappearance of Salto. Air India placed a historic order for 470 aircraft with Airbus (up 0.3%) and Boeing (up 0.4% on Wall Street), of which 250 went to the European aircraft manufacturer and 220 to its American rival. Air India thus surpasses the mega-order of 460 aircraft placed in 2011 by American Airlines. Orpea (-3.6%) confirmed the signing of the agreement reached earlier this month with a group of French investors led by the Caisse des Dépôts (CDC) and a representative group of unsecured financial creditors on a financial restructuring plan. Michelin (+0.1%) communicated cautious targets for the current year, but investors had already lowered their expectations after recent comments on demand in the sector, several analysts pointed out. Pharmaceutical company Ipsen (+1%) disclosed that the phase 3 study evaluating its drug Cabometyx (cabozantinib) in combination with nivolumab had shown survival benefits in patients with advanced kidney cancer after three years. Thyssenkrupp (-10.4% in Frankfurt) forecast lower first-quarter earnings for its 2022-2023 financial year, amid a normalisation of prices.

United States

The Dow Jones Industrial Average edged lower Tuesday after data showed inflation cooled, but remained hot enough to keep the Federal Reserve on track for further interest-rate increases. The Dow lost 156.66 points, or 0.5%, to 34089.27. The broad-based S&P 500 was roughly flat, falling 1.16 points, or less than 0.1%, to 4136.13, erasing earlier gains. The tech-heavy Nasdaq Composite was the outlier. It rose 68.36 points, or 0.6%, to 11960.15. The U.S. consumer-price index showed annual inflation cooled for the seventh straight month to 6.4% last month, according to Labor Department data released Tuesday. Still, the reading came in slightly above what economists had expected. Inflation also increased in January from a month earlier, in large part due to rising costs for shelter. Marriott International stock rose $6.90, or 4%, to $181.27 after the hotel operator’s fourth-quarter results topped Wall Street’s expectations. Demand for leisure travel in the U.S. and Canada held strong in the fourth quarter, with travellers paying up for rooms despite being charged higher rates, the company reported. Boeing (+1.3%) received an order for 220 airliners from Air India, including 190 B737 Max jets, the White House announced on Tuesday. Berkshire Hathaway (-0.8%) increased its holdings in Apple (-0.4%) and Occidental Petroleum (+2.4%) during the fourth quarter, according to regulatory filings by Warren Buffett's investment firm. Ford (-0.9%) revealed on Tuesday plans to cut 3,800 jobs in Europe over the next three years, mostly in product development teams. Johnson & Johnson (-0.4%) confirmed the appointment of John Reed as executive vice president of pharmaceuticals, effective April 3. French group Sanofi had previously disclosed the resignation of John Reed from his position as global head of R&D.


Stocks in Asia mostly fell, with Japan’s Nikkei 225 down 0.4% and the Hang Seng in Hong Kong down 1.5%. China’s Shanghai Composite slipped 0.5% after the Chinese central bank left a one-year key interest rate unchanged at 2.75 per cent, as expected. Among the individual stocks in Tokyo, Nippon Paint Holdings shot up by 9 per cent, driven by better-than-expected quarterly figures. Shimano was a different story: the share price of the bicycle component manufacturer lost 6.5 per cent after forecasts of a significant drop in profits. South Korea’s Kospi shed 1.4% given slower growth in the domestic job market.


The rate on 6-month U.S. T-bills rose above 5% for the first time since 2007 on Tuesday, after January’s U.S. consumer price index report revealed signs of sticky inflation that’s likely to keep the Federal Reserve hiking interest rates for longer than expected. The counterpart 1-year rate briefly inched above 5% before settling below that level, while yields on 2- through 10-year Treasurys all rose. The pace of advances in yields was stronger in shorter-term maturities — pushing the Treasury curve further below zero. The spread on 2- and 10-year Treasury yields inverted to minus 86 basis points after the report. The 10-year Treasury note was yielding 3.753%, up 5 basis points while the 2-year Treasury note climbed 8 basis points to 4.622%.


Baader raises Swiss Prime Site to Add (Reduce) - Target CHF 83

Deutsche Bank lifts ABB target to CHF 29 (28) - Hold

CS lowers Logitech target to CHF 62 (71) - Outperform

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