The latest Market Talks covering the Auto and Transport sector. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.
0917 GMT - Jet2 continues to show impressive momentum, Begbies Traynor partner Julie Palmer says in a note to clients. The London-listed leisure-travel group's results underline the resilience of the package-holiday market and the raised interim dividend shows confidence, she says. "Jet2 looks well-positioned to maintain its momentum during the quieter trading period over the winter months and, as the festive season approaches, the company's value proposition is likely to resonate with those seeking a winter escape," she says. Challenges include an estimated 25 million pound increase in annual labour costs this fiscal year, she says. Shares trade up 9% at 15.45 pounds. (pierre.bertrand@wsj.com)
0914 GMT - Rheinmetall was upgraded to buy from hold by Deutsche Bank. Its analysts say in a note to investors that they had been too conservative in assessing the revenue growth potential of the German arms maker. The group now targets sales of about 20 billion euros by 2027, higher than the 16 billion to 17 billion euros range previously modeled by Deutsche Bank. The key differences in their modeling are faster order to sales, for example in Rheinmetall's electronic solutions, and a higher order intake expected in the vehicle-systems business, the analysts say. Deutsche Bank raised its target price for Rheinmetall to 700 euros from 550 euros. Shares are up 1.17% at 603.4 euros. (cristina.gallardo@wsj.com)
0713 GMT - NIO's 4Q guidance for deliveries of 72,000-75,000 units and revenue of CNY19.7 billion-CNY20.4 billion looks encouraging, Deutsche Bank analyst Bin Wang writes in a note. The company's vehicle gross margin could further improve in 4Q to 15% on reduced promotions, he says. The company's vehicle margin rose in 3Q due to lower material and fixed costs per unit, he adds. Looking ahead, the company's quarterly expenses may rise sequentially as NIO plans to expand its Onvo brand store network to around 300 stores by end-2024. Deutsche Bank raises its target price to HK$73.80 from HK$73.00 while maintaining a buy rating. Shares are last at HK$36.55. (jiahui.huang@wsj.com; @ivy_jiahuihuang)
0438 GMT - Geely Automobile will likely report strong earnings next year, thanks to higher sales volume and an accelerating product cycle, HSBC Global Research analysts write in a note. The company is on track to exceed its annual target this year of 2 million units given thw 1.72 million units sold in the first ten months of the year, they add. The strong performance of Geely's newly launched models have supported that growth, they say. The Chinese automaker aims to maintain this sales momentum in 2025, targeting a 22% rise to 2.6 million units, driven by an accelerating product cycle. HSBC Global Research maintains a buy rating on the stock and raises the target price to HK$19.30 from HK$10.90. Shares last at HK$13.56.(jiahui.huang@wsj.com; @ivy_jiahuihuang)
0437 GMT - XPeng will likely report stronger sales volume for the rest of this year and next year, thanks to demand for its new models, CCB International analyst Qu Ke writes in a note. The Chinese automaker is on track to reach its monthly delivery target of 30,000 units in December due to strong sales of its Mona M03 and P7+ models, he adds. Supported by the strong momentum, XPeng could achieve a significant leap in sales volume next year, which could result in 50% growth by the end of 2025, he says. The brokerage forecasts 280,000 units of deliveries next year, which would mean deliveries of an average of 70,000 units per quarter. CCB raises its target price on the stock to $17.80 from $9.10 while maintaining an outperform rating. Shares last closed at $12.64. (jiahui.huang@wsj.com; @ivy_jiahuihuang)
2148 GMT - PWR Holdings, a provider of cooling systems to motorsports including Formula One, gets a new bull in Citi despite hitting a recent speed bump. Analyst Jack Dunn thinks it's understandable that investor optimism has been dented given the loss of three niche EV programs and a softer aftermarket, among other issues. PWR's stock fell as much as 1/3 in value after Wednesday's update, closing at A$6.85. "We view the share price reaction as overdone," Citi says. It highlights Aerospace and Defence as the key driver of long-term growth for the company. PWR expects revenue from that business to be up 67% in 1H of FY 2025. Citi moves to buy, from neutral, but lowers its price target by 13% to A$9.45/share. (david.winning@wsj.com; @dwinningWSJ)
1912 GMT - Retailers are accelerating imports ahead of possible tariffs and a potential resumption of labor disruptions at East Coast and Gulf Coast ports. The ports of Los Angeles and Long Beach in October handled the equivalent of 950,304 20-foot containers, up 3.9% from September and the fourth month in a row that imports have exceeded 900,000 boxes. President-elect Trump has threatened to impose punishing tariffs on imports from China. Meanwhile, the labor union that represents dockworkers at Atlantic and Gulf coast ports has walked out of labor talks, raising the threat of a strike in mid January. (paul.berger@wsj.com)
1743 GMT - An apparent increase in used-vehicle prices so far this month is a speed bump for pre-owned car sellers. Manheim's used-vehicle value index increased 0.5% year-on-year in its mid-November report. Falling used-car and truck prices after pandemic highs have been a general positive for used-car sellers like CarMax and Carvana in recent quarters. Many used cars became unaffordable during the pandemic, which drove away some shoppers, but declines in average selling prices have led to improvements. Another uptick in prices could threaten that progress. (ben.glickman@wsj.com; @benglickman)
1434 GMT - Target's inventory was higher than typical in 3Q after some costly efforts to avoid port strikes during the period. CEO Brian Cornell says on a call with analysts that the company shifted the timing of shipments and redirected some receipts to West coast ports, to avoid the strike that affected the East and Gulf coast ports. Target had higher-than-expected costs related to supply chain, as its inventory levels were elevated. Inventory was 3% higher than a year ago at the end of 3Q. More extensive supply chain snags in 2021 and 2022 led to bloated inventories for Target, leading to massive markdowns.(ben.glickman@wsj.com; @benglickman)
1300 GMT - Talk of ceasefires in Ukraine and the Middle East could persuade investors to lock in profits, AJ Bell Investment Director Russ Mould says. This is especially true as defense stocks have been strong performers, on average, since the Russian invasion in early 2022. The Kremlin said Wednesday that Russian President Vladimir Putin won't agree to freeze the war in Ukraine along the current front lines. This counters reports that he might be ready to discuss that option with U.S. President-elect Donald Trump. European defense companies Rheinmetall, Leonardo, BAE Systems, Thales and SAAB are all trading down by 1%-2% against a backdrop of headline indices that are generally marginally higher, Mould notes. But he says it will be actions that count. EU nations in particular are likely to remain aware of their obligation to meet defense spending requirements, as members of NATO and facing potential pressure from Trump. (cristina.gallardo@wsj.com)
1007 GMT - Rheinmetall's new targets for 2027 appear realistic and exceed Warburg's previous mid-term projections, Warburg analyst Christian Cohrs says. The German arms maker's financial goals and guidance back the assessment that Rheinmetall is well positioned to capitalize on the defense boom and expand its top line. It should also be able to convert the increased business volume into proportionately higher profit growth, Cohrs writes in a note. The group's 2027 targets should be fully anticipated by consensus and further boost Rheinmetall's stock-price rally, he says. Shares are down 1% at 599 euros. The stock has more than doubled in value over the last 12 months. (cristina.gallardo@wsj.com)
1002 GMT - Investors are watching closely for signs of further escalation in Ukraine's war against Russia, AJ Bell Investment Director Russ Mould says. The Russian government said Tuesday that Ukraine fired U.S.-made long-range missiles into Russian territory after U.S. President Joe Biden gave Kyiv the greenlight to do so. For now, investors seem to have largely shrugged off concerns about Ukraine war, Mould notes. Europe's biggest arms makers trade downward on Wednesday morning, with Thales down 1.3% at 151.9 euros, Rheinmetall falling 0.9% at 599.6 euros, BAE Systems down 0.5% at 13.06 pounds, and Leonardo decreasing 0.2% at 25.16 euros. (cristina.gallardo@wsj.com)
(END) Dow Jones Newswires
November 21, 2024 04:20 ET (09:20 GMT)
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