Another session characterized by weakness for the main European stock exchanges, including Piazza Affari. The day was dominated by the wait for the publication of some American data, including the annualized US GDP and durable goods orders, in addition to the usual weekly update on unemployment benefits. On the eve of one of the market movers of the week, namely the PCE Core. Also to be marked on the agenda is the first debate between Trump and Biden in view of the November 5 elections.
And finally European spreads should also be monitored in view of the appointment on Sunday 30 June, with the elections in France. “Government yields have started to rise again as have the spreads of France and Italy, penalizing Eurozone stock markets. Given the approach of the elections in France, and the very uncertain outcome, risk-on opportunities are currently being exploited by operators to reduce the risk in portfolios”, report the strategists of Mps Capital Services.
Looking at the movements of individual stocks on the Milan Stock Exchange, the best is Brunello Cucinelliwhile it is at the end of the list Stellantis.
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Stellantis on analysts’ radar, Equita cuts to hold
Stellantis trading in the red, which has ended up in the sights of analysts. Among which Equity which cut its recommendation on the European auto giant to hold and Hsbc which reduced the target price to 22 euros from the previous 23.5 euros, signaling that the first part of the year could be weaker than consensus expectations.
The experts of the Milanese SIM have lowered the recommendation to hold from the previous buy “because we believe the positive elements of the equity story that we have highlighted several times will be overshadowed by the weak news flow that we expect soon“. In particular, they cite the decline in volumes and pressure on prices, the weak performance of the first half of the year with the financial director who has already anticipated that free cash flow will be “visibly lower” on an annual basis, and finally the macroeconomic context which does not help to improve the visibility of the second half of the year and the new models which will have a positive contribution at mix level, but mainly from next year.
All in all analysts remain divided on the Stellantis stock, even the majority still positioned on buy. Currently, the Bloomberg consensus sees 19 buys, 10 holds and 2 sells on the stock with an average target price of 25.67 euros, with a potential return of almost 37%.
Cucinelli moves forward with Stifel’s buy upgrade
Positive tone for Brunello Cucinelli which advances by around 4% and reaches the top of the Ftse Mib. Also in this case, what influences the stock (positively, however) is the evaluation of the analysts. Stifel, the American investment bank, promoted the Umbrian luxury giant, bringing the recommendation to buy from the previous hold (target price at 115 euros) and indicating that the recent “de-rating offers an interesting entry point”. “We believe that the Italian company will remain one of the strongest in the long term in the luxury sector”, they report from Stifel.
Among the big names in the European luxury sector, the Kering stock is also moving sharply higher, recording growth on the Cac40 of around 5%. Morningstar reports that Kering, the owner of Gucci, is among the stocks trading at the highest discount rates in the luxury sector in Europe. In detail, the analyst writes that “Kering is the second largest group active in the luxury goods sector in terms of sales and currently trades at 18 times expected earnings, or with a premium of 60% compared to our estimate of fair value”.
