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By Swissquote Analysts
Published on 15.02.2022
Morning news

Michelin Reports Higher Sales, Profit for 2021

Topic of the day

Compagnie Generale des Etablissements Michelin (-2.2%) reported a rise in sales and profit for 2021 and proposed a higher dividend. The French tire maker said aftertax profit was 1.85 billion euros ($2.10 billion) for the year, compared with EUR625 million a year earlier. Segment operating income, one of the company's key indicators, rose to EUR2.97 billion from EUR1.88 billion. Analysts had expected EUR2.96 billion, according to consensus estimates provided by the company. Sales increased to EUR23.80 billion from EUR20.47 billion, beating analysts' expectations of EUR23.20 billion, according to the consensus estimates. The rise was partly due to rebounding tire volumes as well as positive effects from pricing and sales mix, said Michelin. Michelin suggested a dividend of EUR4.50 per share, up from EUR2.30, and said its performance in 2021 was in line with targets that are part of its strategic plan for 2030. The company also confirmed targets for 2023. For the current year 2022, Michelin expects segment operating income of more than EUR3.2 billion at constant exchange rates and structural free cashflow of more than EUR1.2 billion.

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Swiss stocks

On Monday, the SMI lost 1.7 per cent to 12,026 points. All 20 SMI stocks closed in the red. 51.44 (previously: 43.05) million shares were traded. Banking stocks showed heavy losses of 3.3 per cent across Europe and were the weakest sector. Credit Suisse (-3.5 per cent), UBS (-2.8 per cent) and Julius Baer (-4 per cent) fell significantly in Switzerland. Increased geopolitical risks were cited as the main reason for the markdowns, but expectations of interest rate hikes by the ECB had also received a small damper over the weekend. Swatch escaped the broad sell-off. After an upgrade by Bank of America to "buy", the shares closed with a premium of 4.5 per cent. Clariant's decision to delay its 2021 earnings on an investigation into accounting issues will hopefully not destroy the reputation that its new management started to install among investors, Baader Helvea said. The Swiss chemical company announced an investigation triggered by internal whistleblowers is focusing on booking of certain provisions and accruals, with years 2020 and 2021 under review. Furthermore, Clariant stated it may be required to restate previously published financial statements. However, the underlying business of Clariant seems to have developed better than expected, after the company published preliminary 2021 sales from continuing operations of CHF4.37 billion, Baader said, underpinning the equity-research firm's positive view of the stock. Nevertheless, shares fell 16%.

International markets


European stocks were pummelled in early action Monday on concerns a Russian attack of Ukraine could happen as early as this week. The Stoxx Europe 600 index closed down 1.8% at 461 points, led lower by travel and banking sectors. In Paris, the CAC 40 and SBF 120 lost 2.3% and 2.2% respectively. In Frankfurt, the DAX 40 dropped 2% and the FTSE 100 in London gave up 1.7%. In Moscow, the RTS index fell 3% after dropping as much as 4.5% in late morning trading. Fears of armed conflict led to the cancellation of many flights to Ukraine, including those of the Dutch airline KLM. The Air France-KLM subsidiary (-4.2%) announced on Saturday that it was suspending its flights to Ukraine and would not fly over the country until further notice. Tourism and transport stocks, already shaken by the health crisis over the past two years, continued their decline. ADP lost 1% and Accor 2.4%. In London, IAG dropped 5.6% and easyJet 1.7%. In Dublin, Ryanair gained 0.6%, while Lufthansa fell 3.1% in Frankfurt. European banks were also under pressure, notably Austria's Raiffeisen (-5.7% in Vienna), one of the institutions most exposed to Eastern Europe. In Paris, Société Générale, also exposed to Russia, lost 6.5%, BNP Paribas 5.1% and Crédit Agricole SA 3.6%. In Frankfurt, Deutsche Bank lost 3.7%.

United States

U.S. stocks fell for the third straight day on Monday as investors braced for a possible war between Russia and Ukraine and monitored for signs that the Federal Reserve might step up the pace of interest-rate increases. The Dow Jones Industrial Average ended the day with a loss of 171.89 points, or 0.5%, to close at 34566.17. The Dow was down more than 400 points at its low for the day, before recouping some of its losses in the afternoon. The S&P 500 declined 16.97, or 0.4%, to 4401.67. The broad market index has shed just over 4% during the past three trading sessions, its steepest three-day decline since October 2020. The technology-heavy Nasdaq Composite was little changed Monday, slipping 0.24, or less than 0.1%, to 13790.92. Among individual U.S. stocks, Splunk rallied $10.46 a share, or 9.1%, to $124.97 after reports that Cisco Systems had made a takeover offer worth more than $20 billion for the software maker. Vaccine-maker stocks fell as data showed the Omicron wave of Covid-19 receding and after U.S. health regulators said Friday they would delay a decision on authorizing a vaccine for children under 5 years. Shares of Moderna tumbled $18.85, or 12%, to $142.47, making it the worst-performing stock in the S&P 500 on Monday. Pfizer shares declined 98 cents, or 1.9%, to $49.80, while U.S.-listed shares of its partner BioNTech SE sank $16.42, or 9.6%, to $154.53. Shares of airlines were hammered in Europe after reports that several were avoiding Ukraine’s airspace. Budget carrier Wizz Air dropped 6.3%, while British Airways owner International Consolidated Airlines Group lost 5.6%.


On Tuesday, the stock exchanges in Tokyo, Hong Kong and Seoul fell by up to 1.3 per cent, dragged by falls in financial stocks, as uncertainty continues about the Fed's tightening pace and geopolitical tensions over Ukraine keep boiling. Earnings remained in focus, with Bridgestone scheduled to report its results later in the day. In Shanghai, however, the index held its ground. Data on Japanese gross domestic product (GDP) had hardly any discernible influence. With 1.3 per cent growth in the December quarter compared to the previous quarter, it fell marginally short of the consensus estimate. Financials in the region were down. In Hong Kong, Ping An Insurance lost 4.1 per cent and HSBC fell 1.9 per cent. In Tokyo, Japan Post Bank is down 10.4 per cent.


U.S. Treasury yields bounced higher Monday after Russia’s foreign minister suggested that talks over Ukraine with the U.S. and its allies should continue but moderated the rise as investors remained jittery over the potential for a Russian invasion of its neighbor. Investors also continued to assess the speed and scope of rate increases and other measures by the Federal Reserve as policy makers attempt to inflation that continues to run at its hottest in nearly 40 years. The yield on 10-year Treasury notes rose by almost 5 basis points to 1.988%, compared with 1.943% on Friday evening. The two-year Treasury rate rose by 6 basis points. The yield on the German Bund with the same maturity fell to 0.271% from 0.299% on Friday evening.


UBS lowers Adidas target to EUR 344 (365) - Buy

Citi cuts Adyen target to EUR 1,750 (1,800) - Sell

Berenberg raises Mercedes-Benz target to EUR 90 (85) - Buy

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