By Swissquote Analysts
STMicroelectronics Shares Jump on Better-Than-Expected Revenue Guidance
Topic of the day
Shares of STMicroelectronics NV - a key Apple Inc. supplier - jumped in trading after the company posted better-than-expected results for the fourth quarter of 2022 and guided for revenue growth ahead of analysts’ forecasts for the current quarter and the full year. The European chip maker is targeting net revenue of $4.20 billion at the midpoint for the current quarter. Analysts at Jefferies wrote in a note to investors that the forecast is above consensus of $3.81 billion as well as their own $3.84 billion estimate. STMicroelectronics is also expecting a first-quarter gross margin of 48.0%, plus or minus 200 basis points, well above consensus and Jefferies’s estimate of 45.2%. For the year, the company targets revenue of $16.8 billion to $17.8 billion, also above consensus of $16.28 billion and Jefferies’s $14.96 billion forecast. “ST’s positioning in automotive and with silicon carbide power is providing a strong offset to typical cyclical pressures, leading to its much stronger growth outlook for 2023,” Citi analysts said in a note. STMicroelectronics posted a surge in revenue and profit for the fourth quarter led by growth at its automotive and microcontrollers divisions. Net revenue climbed to $4.42 billion from $3.56 billion in the fourth quarter of 2021, with the company’s automotive business contributing $1.70 billion. Net profit jumped to $1.25 billion from $750 million.
After a positive start and a subsequent drop from higher levels, the Switzerland market stayed in a tight range till late afternoon on Thursday, before drifting down to eventually end the session on a weak note. The benchmark SMI, which advanced to 11,441.10 in early trades, ended the day with a loss of 87.21 points or 0.76% at 11,317.56, the session's low. Novartis dropped more than 3%. Nestle ended nearly 2.6% down, and Roche Holding ended lower by about 1.6%. Swisscom ended lower by 0.8%. Credit Suisse climbed more than 2.5%. Logitech, Lonza Group, Sonova, Givaudan and Sika gained 1.5 to 1.8%. UBS Group, Richemont, ABB, Alcon and Partners Group ended higher by 1 to 1.4%. In the Mid Price Index, Belimo Holding ended nearly 1% down. Barry Callebaut, SGS, PSP Swiss Property and Flughafen Zurich lost 0.4 to 0.6%. Straumann Holding rallied nearly 5%. AMS, Julius Baer, Temenos Group, Schindler Holding, Schindler Ps, Ems Chemie Holding, Swatch Group, Clariant and Georg Fischer gained 1 to 2.2%.
European stocks closed higher on Thursday, lifted by recent data showing an improvement in German business sentiment and a surge in eurozone manufacturing activity. The pan European Stoxx 600 gained 0.42%. The U.K.'s FTSE 100 ended higher by 0.21%, Germany's DAX climbed 0.34% and France's CAC 40 closed stronger by 0.74%, while Switzerland's SMI tumbled 0.76%. Among other markets in Europe, Czech Republic, Finland, Greece, Ireland, Netherlands, Poland, Portugal and Spain posted sharp to moderate gains. Austria, Belgium and Norway edged up marginally. Iceland, Russia, Sweden and Turikiye closed weak. Denmark ended flat. In the UK market, 3I Group soared more than 9%. Ashtead Group climbed 4.3% and Hargreaves Lansdown surged 3.5%. Lloyds Banking Group, Kingfisher, Prudential, ABRDN, Beazley, Standard Chartered, JD Sports Fashion, Halma, Admiral Group and BP gained 2 to 3.1%. Diageo drifted down 5.52%. Convatec Group, Ocado Group, Glencore, AstraZeneca and British American Tobacco lost 1 to 2.25%. In the German market, Sartorius gained nearly 6% after posting upbeat financial results, and Infineon Technologies surged about 4.2%. Fresenius Medical Care, HeidelbergCement, MTU Aero Engines, Deutsche Bank, Brenntag, Continental, Zalando and Merck advanced 1 to 2%. Fresenius and Puma both ended lower by about 2.5%. SAP ended nearly 1% down after it reported a steep drop in profits.
U.S. stocks rose Thursday as a fresh slate of economic-data and corporate earnings reports continued to paint a mixed picture of the economy's direction. The S&P 500 added 1.1% as of 4 p.m. ET and the Nasdaq Composite gained 1.8%. The Dow Jones Industrial Average was up 204 points, or 0.6%. On Wednesday, the major indexes had closed nearly flat after a slew of earnings reports. New data on Thursday showed U.S. economic growth slowed less than expected in the fourth quarter of 2022, capping last year's cool-down from a pandemic rebound that fueled red-hot growth in 2021. Initial jobless claims also declined last week, indicating the U.S. labor market remains strong, despite having lost steam in recent months. Investors were also sifting through another batch of corporate earnings, with Intel and Visa among the major companies still due to report. Shares of Tesla, popular with individual investors, were up 11% after the electric car maker reported a record quarterly profit after the markets closed Wednesday. On Thursday, shares of Seagate Technology were up 11% and poised to be the best performer in the S&P 500 after the company posted earnings results that beat analysts' expectations. Sherwin-Williams shares fell 8.9%, on pace to be the index's worst performer, after saying it expects sales and profits to decline in 2023 from a year earlier. Dow's stock fell early in the day, but recovered to rise 0.4%, after the chemical company said it would lay off about 2,000 staff as it seeks $1 billion of cost cuts. Shares of BuzzFeed rose 120%, after The Wall Street Journal reported the media company plans to use artificial intelligence to help create content.
East Asian equity markets are quiet as the week draws to a close, with most indices moving little. After positive guidance from Wall Street, where better-than-expected GDP growth in the fourth quarter had fuelled hopes of a soft landing for the economy in the course of the interest rate hike cycle, South Korea's Seoul is still the busiest with a gain of 0.7 per cent. Tokyo is unchanged, as is Hong Kong. In Shanghai, trading paused for the fifth and last time due to the New Year celebrations. Sydney has already ended the day with a plus of 0.3 per cent.
On the U.S..bond market, falling quotations drove yields. The positive US data is ambivalent news for the stock markets. The robustness of the US economy is pleasing, but on the other hand, with such good data, the Fed could become a spoilsport. Stock market participants continued to assume that the US key interest rate would fall again in the autumn.
UBS raises the Bawag target to EUR 74 (73) – Buy
SocGen raises the Adidas target to EUR 149 (135) – Hold
Citi lowers the Airbus target to EUR 166 (171) – Buy
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