Friday, November 26

After the results of the IBEX 35 comes the highlight of the DAX 40

The season of results on the IBEX 35 hastens its last days but not those of the rest of the European stock exchanges.

This is taken over by some of the largest companies in Germany such as the pharmaceutical company Bayer, the textile group Adidas or the technology company Siemens, all listed in the renamed DAX 40.

The accounts will serve as a thermometer of the progress of German industry, a benchmark in Europe, in a context marked by the record prices of fuel and energy prices or the supply crisis that particularly affects important sectors.

Bayer to return to profit after provisions

The earliest will be the German pharmaceutical company, which presented losses in the first half of 246 million. Despite the fact that between January and March it obtained a net profit of more than 2,000 million, Bayer reported in August that it had to re-provision 3.5 billion euros to continue pending litigation in the United States over the glyphosate case.

Thus, the consensus consulted by estimates that the company will earn about 760 million in the third quarter; a return in year-on-year terms after it lost 450 million in the same section of 2020.

Adidas will release its accounts on Wednesday. The sportswear firm will follow the path of the first half of the year, in which it earned 955 million after losing more than 260 a year earlier.

Sales soared to exceed 10 billion, while the panel predicts that only in the last quarter they will exceed 5,800. It will, however, represent a slight setback compared to the third quarter of last year, in which it exceeded 6,000 million.

Allianz will also present on Wednesday. In the first semester, the insurer soared its profits by 60 percent compared to 2020 to 4.8 billion despite the impact of the climatic catastrophes that occurred in Germany and the surrounding regions.

For the quarter, analysts expect its profits to exceed 2 billion, although there is not much expectation. “We do not expect the results to be a great catalyst for the shares with the new announcement of the strategy for the next years in December,” notes the latest report from Deutsche Bank on the company.

Forecasts on earnings per share (bpa), one of the sections that investors will look closely at, will be 4.72 euros compared to more than 5 euros in the same quarter last year.

Technology and the supply crisis

Several of the big German tech companies will be in the spotlight due to the problems derived from the pandemic that affect the supply chain.

Siemens will earn 1,200 million in the quarter according to panel estimates, but the figure will be below the previous quarters after earning about 5 billion in the first half of the year.

“We expect a good ending, demand has remained strong, with supply chain problems mostly manageable. The key is in the guidance for 2022, which we hope reflects the current high uncertainty, especially in terms of demand from China, “said JP Morgan analysts.

Infineon, reference in the manufacture of semiconductors -one of the markets most affected by the pandemic- increased its profit between January and June by 172 percent compared to 2020. It earned more than 700 million, while the consensus estimates that it will now obtain a profit of 245. However, the company also raises concerns for the future.

“As sales growth slows, we are concerned that it could see a pressure on margins if costs remain high,” they explain in Bloomberg Intelligence.

“The first results from sectors such as industrial, chemical or technological already show a mixed tone and the focus shifts towards the ability to increase prices,” they detail.

Backdrop Confidence and Inflation

On the other hand, two important indicators will be known throughout the week, the ZEW index of investor confidence and inflation.

The current situation assessment, one of the key components of the ZEW, fell by more than 10 points in October from the previous month. The collapse will slow down, but the consensus gathered points to a further decline to 18 points.

Regarding the consumer price index (CPI), analysts expect it to remain at 4.5 percent year-on-year.

The warning signs are increasing, however, after knowing the fall in industrial production in September of 1.3 percent, three tenths more than expected. “Negative data ,. Disruptions in the supply chain, the shortage of semiconductors and the outbreaks of Covid in Asia are having a strong impact on the industrial sector and this is reflected in the indicator ”, they valued at Bankinter.

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