Novo Reigns, Stellantis Resilient: EMEA Earnings Week Ahead

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(Bloomberg) — Novo Nordisk A/S’s reign as Europe’s most valuable company leaves “no reason for disappointment” with its first-quarter report, said Michael Shah of Bloomberg Intelligence.

The Danish drugmaker is expected to dominate a week of results that will also show how European automakers fare in the face of increasing competition from China.

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While appetite for Novo’s weight loss and diabetes drugs shows no signs of abating, British rival GSK Plc – also due – is seeing lower enthusiasm for its biggest sellers as it struggles with the potential arrival of new rivals.

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The Mercedes-Benz Group AG, Volkswagen AG and the Maserati manufacturer Stellantis NV also face a more crowded field. Chinese automakers BYD Co., Nio Inc. and Li Auto Inc. are not only increasing their domestic market shares but are also becoming more of a threat on home soil.

British oil giant Shell Plc also reports next week, when investors will likely look past a weaker first quarter and the energy sector will regain momentum following a price rebound, BI said. The Italian bank Intesa Sanpaolo SpA and the French media group Vivendi SE complete the offer.

Highlights to pay attention to:

Monday: Vivendi’s (VIV FP) two largest units, Canal+ and Havas, face increased scrutiny as the French conglomerate considers a split. Canal+ and Havas would be separate entities under the plan to create four separately listed companies. The consensus shows that Canal+’s revenue rose 2.4% and Havas’s revenue rose 3.8% in the first quarter. Find out more about his intentions with MultiChoice, for which African broadcaster Canal+ has made a $2.9 billion offer.

Tuesday: Stellantis’ (STLA US) sales update is likely to show that the company is coping with falling demand in the European electric vehicle market for now. Consensus shows that sales in the extended Europe segment are expected to have increased by 1.6% in the first quarter, while sales in North America fell by 10% and sales in China, India and Asia Pacific fell by 8. decreased by 3%. Total sales are estimated to have fallen 6.3% to 44 billion euros ($47 billion). The Jeep maker is cutting jobs – including 8% of its workforce in Italy – as it pushes the transition to electric vehicles, much to the anger of employees. Thousands protested earlier this month, demanding job security and assurances about the future of the historic Mirafiori factory.

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• Mercedes’ (MBG GY) sales decline in the previous two quarters is likely to worsen in the first three months of 2024 as the company struggled with supply shortages. The company reported an 8% decline in global auto deliveries in the first quarter, with sales of high-margin luxury vehicles falling 27%. This puts pressure on the automotive division’s adjusted EBIT margin, which is expected to weaken to 10.1%, the lower end of the forecast range of 10% to 12% for the year. While pricing remains a risk, Mercedes is likely to stick to its forecast as supply issues ease, BI said. Vans are seen as a ray of hope.
• Volkswagen (VOW3 GY) faces an uphill battle to convince investors it can turn around its business in China, where BYD has overtaken it to take the top spot the German automaker held for years. Consensus shows first-quarter revenue likely fell 2.4%, while adjusted operating income may have fallen 16%. The company forecasts revenue growth of up to 5% in 2024, compared to a 15% increase last year.

Wednesday: Sales of shingles vaccine Shingrix and RSV vaccine Arexvy are expected to help GSK (GSK LN) meet its full-year targets. There is no guidance increase in sight as the threat of Moderna Inc. entering the RSV market looms, BI’s John Murphy and Sam Fazeli said. While reduced costs should boost operating margin sequentially, this may not be enough to prevent a slight year-over-year decline.

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Thursday: Novo Nordisk (NOVOB DC) likely sold its blockbuster weight-loss drug Wegovy worth 10.4 billion Danish crowns ($1.5 billion) in the first quarter, more than double last year, consensus shows . A steady increase in initial dose scripts suggests even greater sales in the second half of the year, Barclays said. Don’t be surprised if the company adjusts its full-year outlook, as the consensus is already near the upper end of the guidance range, Citi said. Stocks are not far from the record set in March, leaving little room for disappointment, BI notes.

• The adjusted net income consensus of $6.3 billion for Shell (SHELL NA) looks somewhat weak after the company pointed to “significantly higher” oil trading and still-strong gas trading in an April 5 update, Will said Hares from BI. Both should help offset further weakness in downstream refining margins. Shell’s decision in March to slow the pace of carbon emissions reductions was “prudent” given the robust demand situation, Hares said. Expect the company to maintain the pace of repurchases and forecast another $3.5 billion tranche in the second quarter.

Friday: Intesa Sanpaolo (ISP IM) is expected to report a rise in net profit to about 2.1 billion euros as Italy’s biggest domestic lender continues to benefit from higher interest rates. Analysts at Equita SIM also forecast a “good quarter for commission and insurance income”, both of which will increase by 2% compared to the first quarter of 2023.

—With assistance from Valentine Baldassari, Christopher Jungstedt, Laura Malsch and Antonio Vanuzzo.

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