The latest Market Talks covering Equities. Published exclusively on Dow Jones Newswires throughout the day.
0852 ET - Mercedes-Benz's more cautious tone on first quarter car volumes is slightly negative, especially as the company presumably pre-shipped some vehicles ahead of the U.S. tariff deadline, UBS analysts write. The bank says it's not clear where the slight volume shortfall comes from, but it might be China or Europe. However, margins and free cash flow appear at least in line with expectations, which points to progress on the cost side. Tariffs remain the biggest earnings risk. "We see around 20% EPS risk." If tariffs become a reality on April 2, UBS thinks the company will factor them into guidance, potentially leading its 2025 cars margin guidance to fall by up to 200 basis points, leaving it at 4%-6% instead of 6-8%. Shares fall 0.1%. (dominic.chopping@wsj.com)
0836 ET - Verizon, T-Mobile and AT&T look like they have more upside potential as, for virtually the first time, all three carriers are implementing price increases at the same time, Oppenheimer analysts say in a research note. All three are also better monetizing their new 5G standalone networks and keeping spending flat, they say. Promotions are still aggressive and subscriber growth is weakening, but the level of intensity should wane in 2Q, the analysts say. The industry has been disciplined about pricing and growing free cash flow, the analysts say, adding that they expect the carriers to beat their current guidance. The analysts upgrade the price targets on all three carriers by about 10%. (dean.seal@wsj.com)
0822 ET - Intel is saying all the right things, according to Truist in a research report. Speaking at Intel's Vision 2025 conference, CEO Lip-Bu Tan emphasized establishing a startup culture of innovation, as well as the importance of getting customers' feedback to correct past mistakes and make Intel an engineering-focused company again, analyst William Stein says. He adds that Tan highlighted several additional plans including a spin off non-core businesses and strengthening Intel's balance sheet, among others. "While one speech doesn't form the basis of an upgrade, we thought this was the most constructive message we've heard from Intel in... for as long as we've covered the company," Stein says. Intel is off 1.2% premarket. (denny.jacob@wsj.com; @pennedbyden)
0819 ET - European bank stocks are attractive due to favorable valuations and strong earnings prospects, UBS Investment Bank analysts say in a note. They offer a good investment opportunity, particularly with Europe seen as a more attractive destination relative to other developed markets, they say. However, European bank stocks face near-term risks, including the prospect of U.S. tariffs and an unclear path for European Central Bank interest rates, the analysts say. (miriam.mukuru@wsj.com)
0804 ET - Rogers Communications' strained cash generation is putting pressure on its ability to deleverage, Maher Yaghi says in a Scotiabank report, downgrading the stock to sector perform from sector outperform. He says Rogers Bank, which offers financial products like credit cards, is the main culprit. It has been a drain on Rogers' cash generation these last two years, Yaghi says, making worse an already challenging telecom industry space. Rogers does have an deal in the works to sell a stake in its telecom infrastructure, but even that would only be a one-off benefit, and won't "impact real cash generation nor change the trends that the wireless business is facing," Yaghi says. He adds that "until we start to see positive earnings revisions we don't see an impetus to remain bullish." (adriano.marchese@wsj.com)
0737 ET - Johnson & Johnson says it will reverse about $7 billion of reserves it had set aside to help resolve its talc liabilities after a bankruptcy-court judge tossed the company's latest attempt to end the mass torts. J&J's proposed plan offered around $10 billion over time to tens of thousands of women who claimed the company's talc products contained asbestos and caused cancers. J&J's reserve had a total present value of roughly $11.6 billion at the end of 2024. The company says it will now return to the civil justice system to litigate the talc claims. J&J down 3.8% premarket to $159.57. (colin.kellaher@wsj.com)
0716 ET - Allianz's share price is unlikely to keep rising given that current consensus is already pricing in that it will deliver growth at the top end of its targets, J.P.Morgan says in a research note. "We see a lot that we like about the Allianz story at present; the company is set to deliver strong earnings growth in the business and get back to being viewed as one of the most dependable companies in the sector," analysts write. JPM resumes coverage after a period of restriction with a neutral rating from overweight before, setting a 350 euro target price. Shares trade at 353.6 euros and are up almost 20% year to date. (elena.vardon@wsj.com)
0705 ET - MDA Space may be the front-runner to win another Apple-related satellite contract, Benoit Poirier of Desjardins says in a note. The WSJ reported that Apple has explored investments in EchoStar to provide more satellites/spectrum to support iPhone connectivity. The analyst says he thinks MDA could win this given that "MDA is close to winning a contract for another large D2D satellite constellation." He says that Apple's close ties to MDA through two previous Globalstar constellation orders as well as its large capacity and spectrum needs "leads us to being fairly confident that MDA is the OEM satellite manufacturer front-runner for this upcoming Apple-EchoStar constellation." Poirier says this would be a big positive for the business, if true. (adriano.marchese@wsj.com)
0650 ET - Birkin bag maker Hermes should be able to contend with challenges in key markets, Stifel analyst Rogerio Fujimori says in a note. The analyst expects the company to report organic sales growth of 7% in the first quarter and anticipates slightly higher growth for the next two quarters. The French luxury group, which caters to the most affluent customers, seems well-placed to withstand lingering store traffic in China and softening consumer confidence in the U.S., the analyst says. Shares are 0.1% down at 2,409 euros. (andrea.figueras@wsj.com)
0648 ET - Mercedes-Benz used its pre-results call with analysts to stick to messaging from its capital markets day, but there is a near-term risk from U.S. tariffs, Berenberg analyst Romain Gourvil writes. "The company is still evaluating the full impact of the latest automotive-related tariffs announcements, but it has suggested that the effect will be significant." Mercedes previously indicated the gross impact of the U.S. lifting automotive tariffs on EU imports from 2.5% to 10% would hit its car margin by 100 basis points. Therefore, the 25% U.S. tariffs that are expected to be announced on April 2 could mean a 330 basis point reduction in the car margin. Overall, including Mexico, Canada and China, Berenberg thinks 35%-40% of 2025 operating profit could be at risk. Shares rise 0.5%. (dominic.chopping@wsj.com)
0648 ET - Indian stocks ended lower amid weak sentiment as investors await "Liberation Day" on Wednesday, when President Trump is due to announce a new slate of tariffs on its trading partners. The benchmark Sensex fell 1.8% to 76024.51. Financial and tech stocks led losses. Bajaj Finserv dropped 3.5% and HDFC Bank fell 3.35%. HCL Technologies was down 3.9% and Infosys was 2.7% lower. Meanwhile, food-delivery company Zomato edged 0.3% higher. Despite tariff jitters, Indian equity markets showed a promising turnaround in March, marking an encouraging departure from bearish trends observed in recent quarters, Angel One analyst Sameet Chavan said in a note. (sherry.qin@wsj.com)
0643 ET - Mercedes-Benz first-quarter car volumes likely fell on year, partly due to Europe but particularly to China, where the company maintains a cautious view, Deutsche Bank analyst Tim Rokossa writes. The bank looks for an adjusted EBIT margin for the car segment of 7%, which represents the midpoint of the 2025 guidance. The bank sees limited working capital headwinds and expects a solid first quarter in terms of cash generation. "To us, the key questions on the conference call will be implemented measures to manage the U.S. tariffs and potential impacts on the guidance." The bank is also curious about the underlying development in the U.S. given the tariffs have been known for a while now. Shares rise 0.3%. (dominic.chopping@wsj.com)
(END) Dow Jones Newswires
April 01, 2025 08:52 ET (12:52 GMT)
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