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Highly volatile day in Piazza Affari in a climate of waiting for the indications that will arrive from the Federal Reserve (Fed). No breaking news is expected on the interest rate front, but investors are also looking at macroeconomic projections and so-called dotplots. As always, great attention has also been paid to the words of President Jerome Powell, who could provide insights into the cycle of rate cuts.
Meanwhile on the markets attention was captured this morning by the statements of the number one of the European Central Bank (ECB), Christine Lagarde. During conferenza ‘The ECB and Its Watchers XXIV‘ in Frankfurt, the former IMF number one reiterated: “in the coming months we will have more data availablewhich will help us evaluate whether the certainty we have about the future path is sufficient to be able to move on to the next phase of our monetary policy cycle”.
Returning to the performance of the Italian Stock Exchange, the Ftse Mib index remains in flux and after a recovery it is now trading slightly down at 34,238.92 points (-0.07%). Among the stories of the day are Terna and Poste Italiane who presented their respective new industrial plans to the market. However, luxury stocks such as Moncler and Brunello Cucinelli are in trouble under the weight of Kering’s warning.
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With the new plan, Terna turbocharges the stock market
Terna runs to Piazza Affari and places itself at the top of the Ftse Mib, thanks to an increase of over 4%, one step away from reaching 8 euros. In the spotlight the new industrial plan for the five-year period 2024-2028 which includes investments of 16.5 billion euros, the highest level ever announced in the history of the group of the energy sector, to accelerate the decarbonisation process.
Given the growth in the financial targets outlined in the plan with revenues expected to increase up to 4.6 billion euros in 2028, with an Ebitda of 3.25 billion and a net profit per share estimated at 55 euro cents.
Meanwhile last night S&P Global Rating (S&P) has arrived. The US rating agency confirmed the company’s long-term rating at BBB+ with a stable outlook, one notch above that of the Italian Republic. The agency’s assessment, we read in a Terna note, comes following the presentation of the 2024-2028 Business Plan, with the highest investments ever recorded in Terna’s history, aimed at strengthening the Company’s central role as an enabler of the transition energy and an increasingly complex, sustainable and innovative electricity system.
Equita says buy and raises tp by 5%
A plan that has been positively received by the market, with analysts who are deferring to the evaluations. Among which Equita promoted Terna to buy, with the target price rising by 5% to 8.7 euros. In particular, the experts of the Milanese SIM listed the reasons behind the promotion of the rating, including the fact that the plan “includes net capex of 30% higher than the estimates we align with, leading to an improvement in the Ebitda estimates of 9% in the next 5 years and a net profit of 10%” and “confirms that Terna’s growth prospects remain the most interesting among the regulated companies”.
Poste Italiane broken down, market disappointed by the plan
Another big Ftse Mib today presented the new five-year plan 2024-2028. This is Poste Italiane which aims for group revenues of 13.5 billion in 2028, growing by approximately 3%, operating profit (Ebit) at 3.2 billion in 2028, growing by approximately 4%, and finally a net profit of 2.3 billion in 2028, growing by approximately 4%. At the coupon level, we move from a proposed dividend per share of 0.80 euros in 2023 to no less than 1 euro starting from 2026, which grows from 2023 by 7% per year with at least a 65% expected pay-out ratio in a flat arc. According to the first indications coming from analysts, the targets would be below expectations.
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Luxury under sales after Kering numbers
Luxury sector under pressure in Europe after the Gucci alert from the French big Kering which is collapsing by 13% on the Paris Stock Exchange. On the Ftse Mib the Kering effect is felt on the big names in the sector, with Moncler and Brunello Cucinelli at the bottom of the Ftse Mib.
Yesterday came the warning from Kering which announced a 10% drop in sales in the first quarter of 2024, in the wake of the decrease in revenue from Gucci, its main brand.
“This performance primarily reflects a steeper decline in Gucci, especially in Asia-Pacific. Therefore, Gucci’s turnover should show a decline of almost 20% on a comparable basis to March 31st”, we read in the Kering note which specifies that the first quarter results will be released on April 23rd with the markets closed. Kering’s warning once again stirs the waters and raises concerns for the entire luxury sector, with particular reference to demand in the Asia-Pacific region.
Luxury, how to read the Kering alert: eToro’s view
“This profit warning represents an exception among the main players in the sector: as fears of a possible recession have receded, and given the solid performance and prospects that have emerged from the quarterly season in the luxury sector, the market has been looking more optimism for 2024”, he comments Gabriel Debach, market analyst at eToro. And he adds: “The uncertainty on European demand, the reliability of American demand and the expected recovery of Asian demand play in the sector’s favour, with possible support deriving from the strengthening of the dollar. However, if Asian demand is now called into question, the outlook remains uncertain“.
