China raises business hopes, CAC40 accelerates

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Photo credit © Reuters

(Boursier.com) – THE TREND

Already well oriented this morning, the CAC40 now exceeds 5,400 points, progressing by 1.3% near the middle of the day. Stock markets have been accelerating since the late morning, the Chinese Ministry of Commerce said that Beijing and Washington would discuss the possibility of a visit of an official Chinese delegation in the US as early as September. Trade negotiations could therefore resume soon, at least if the two superpowers succeed in creating more peaceful and conducive conditions for talks.

Brexit worries remain in the background despite Boris Johnson's desire to suspend Parliament longer than usual, which would strengthen the Brexit hypothesis in "hard" mode. We will take notice today (14:30) of the final estimate of US GDP for the 2nd quarter. Highly anticipated, it will measure whether the fears of dropping out of the world's largest economy are true. At the time of its first production, the expansion of the Gross Domestic Product of the United States stood at 2.1%, against 3.1% in the first quarter.

VALUES INCREASED

* Pernod Ricard earns 2.2% to 170.3 euros. The ROC 2018/19 amounted to 2.58 billion euros, with organic growth of + 8.7% and + 9.5%. The operating margin rate, excluding changes in Group structure and foreign exchange, was up + 74bps (+ 108 bps in the face due to a positive currency effect of + € 25m). The organic growth of the ROC at + 8.7% reached its highest level since the 2011/12 financial year. Net current income, Group share amounted to 1.65 billion, with a +9.5% growth on the face of 2017/18. Net income attributable to equity holders of the parent amounted to 1.46 billion euros, down 8% from 2017/18. This decrease is due to exceptional items in 2018/19 and an unfavorable basis of comparison. Pernod Ricard expects to accelerate the distribution of dividends by increasing the rate to 50% as of the 2018/19 financial year. The group will also launch a share buyback program of up to 1MdE between 2019/20 and 2020/21. A dividend of 3,12 Euros is therefore proposed to the vote of the General Assembly on November 8th. In addition to raising the dividend distribution rate.

In addition, Pernod Ricard and Castle Brands, listed on the NYSE, have announced the conclusion of a definitive agreement for the acquisition by Pernod Ricard, through one of its subsidiaries, of 100% of the outstanding common shares of Castle Brands. This acquisition, which values ​​Castle Brands at $ 1.27 per share, for an aggregate amount of approximately $ 223 million, will be the subject of a take-over bid. Castle Brands owns the Jefferson's bourbon.

* At the head of the CAC40, Bouygues gains 5.7% to 34.46 euros after results exceeding analysts' expectations and confirmation of annual targets. Over the first six months of the year, the conglomerate recorded a current operating profit of 453 million euros, up 36%, for a turnover of 17.4 billion euros, an increase of 11% and 5% at constant scope and exchange rates. The consensus was based on a current operating profit of 397 ME for income of 17.13 MEI. On the other hand, net income attributable to equity holders of the parent amounted to ME 225 million, down by MEUR 36 million year-on-year, mainly due to the decrease in Alstom's contribution (ME 33 million in the first half of 2019 compared to ME 73 million in the first half of the year). 2018). In 2019, Bouygues confirms an improvement in the Group's profitability with the achievement of free cash flow of € 300 million at Bouygues Telecom.

* Orange (+ 1.4% to 13.77 euros) borrowed on the bond market 2.5 billion euros in 3 tranches: 750 million euros at 7 years with a coupon of 0%, 1 billion at 13 years with a coupon of 0.5% and 750 ME at 30 years with a coupon of 1.375%.

* Eurofins (+ 7% to 402 euros) saw its adjusted Ebitda rise by 29.5% in the first half, to 415 ME, for a turnover up 24.3% to 2.168 billion. Adjusted EBITDA margin improved 70 basis points to 19.1%. Adjusted net profit was 156.9 ME against 155.9 ME a year earlier, while net profit amounted to 58.9 ME against 91.1 ME.

* Sanofi earns 1% to 78.2 euros. A US judge on Wednesday ruled in favor Sanofi and Regeneron, who market Praluent anti-cholesterol together, by invalidating first-instance decisions that considered valid Amgen patents on his Repatha.

VALUES FALLING

* M6 and TF1 are heckled (-4.5% for both titles) after a note from Bank of America ML. The US bank has degraded the two media groups from 'neutral' to 'underperforming', preferring to position itself on more expensive titles but with greater defensive qualities. The broker wants to avoid groups that have too much leverage as macroeconomic trends have started to deteriorate, and favors companies with recurring revenues, potential for internal recovery and exposure to digital. On TF1, the broker now targets 8 euros per share (against 9 euros previously) while he reduced his target on M6 from 16.5 to 15 euros.

* No significant drop on the CAC40.

* Idsud yields 2% to 67 euros despite the confirmation of the process of privatization of the French Games that will be effective in the coming months after the Minister of Economy, Bruno Mayor. Idsud holds 2,626% of the capital of the FDJ.

© 2019, Boursier.com





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