Management expect a positive pre-tax result for 2009. Decline in group revenue led by the Auto division. We confirm our FY10E- FY11E estimates: recovery in sales and earnings.
Category Archives: Company
Daimler strong car sales in 4Q09 are just the beginning of an earnings recovery
The Daimler share price doubled from a LT low a year ago, to EUR 36.24 currently, valuing Daimler shares at 11.1x 2011E earnings, which is at a 31% discount to the 5-year average historic valuation. Our estimates imply that 2011E EPS (EUR 3.28) are 14.7% below 2007’s pre-crisis 2007’s EUR 3.83 and 6.2% above the 5-year average of EUR 3.08
BMW set for sales recovery, after 10.4% decline in FY09
We confirm our FY09E estimates of a group EBIT of EUR 393m/0.8% and earnings of EUR 0.24 per share. The Auto division is set to exit a dismal 2009 with a strong EUR 140m/1.1% in 4Q09E, leading to a negative EBIT of EUR -218m in FY09E. Higher sales, a further ramp-up in production and improving model momentum should drive the EUR 216m qoq earnings improvement in 4Q09E.
BMW praying for a weaker euro
BMW group remains at the mercy of currency, the US dollar in particular.
Porsche-VW Merger Progresses
VW’s extraordinary general meeting (Dec. 3rd) prepared the ground for two important steps in the two-year multi-stage merger with Porsche SE: VW’s acquisition of 49.9% of Porsche AG for EUR 3.9bn cash (that took place on Dec. 7th) and a EUR 4bn capital increase in VW preferred share capital in 1H10.
BMW 3Q09E preview & results table, comment and guidance
BMW – 3Q09 comment. Auto division incurred deeper 3Q09 EBIT loss as de- stocking continued. Underlying FCF remained positive. Financial Services: financial risk marginally receded in 3Q09. Management confirmed its FY09 guidance of a group profit and a sales decline by 10-15%.
Diamler 3Q09 final results
Our estimates imply that 2011E EPS (EUR 3.01) are 21.5% below 2007’s EUR 3.83, whereas the prospective multiple 2011E of 12.2x is 8% below the historic 2007 average valuation of 13.3x.
Albeit not cheap for a stock in a sector with many more troubles ahead, Daimler is in our opinion the best car stock in Europe, and we advise to add to positions at current prices, and particularly on a pullback in the markets…
BMW 2Q/1H09E preview & results table and guidance
Our view: 2010E outlook: BMW should remain unaffected from a post-incentive hang- over in 2010 and be able to benefit from any recovery in demand globally and the US specifically. We expect that this, together with an improving model momentum (introduction of the 5-Series in 2Q10E) should lead to an EBIT of EUR 1.2bn/2.9%. However, as the dependence on FS is expected to continue to grow, BMW is becoming potentially more vulnerable to any future shocks to the global financial system.
VW 2Q/1H09E preview & results table and guidance
We expect a EUR 365m group operating profit/1.3% margin, considerably better than 1Q09’s EUR 313m, that included EUR 600m capital gains.
Renault 1H09E preview & results table and guidance
The group failed to increase market share in Europe and even lost share in France, despite an accelerating model momentum and the roll-out of several new versions of the C segment Mégane. We also detect deterioration in mix as the discount brand Dacia benefited most from government incentive schemes and saw its European sales triple in 2Q09.
Daimler – 2Q/1H09E preview & results tables and guidance
After an expected EUR 2.48 loss/share in FY09E, we expect Daimler to return to profit in 2010E (EUR 0.84 EPS): MBC’s return to profitability should not be affected by the expiry of incentive programmes and trucks should benefit from restructuring as demand stabilises at low level. At price revenue of 0.39x (2009E) Daimler shares are valued at a 20% discount to the average 10-year high (0.44x) and a 55% premium to the average 10-year low (0.25x). (See pp.5-7.)
Fiat – Earnings 2Q/1H09E preview & results tables
Management update on Chrysler and FY09 guidance. Our 2009E estimate is more cautious: a EUR 734m group trading profit
implies a net loss of EUR 644m or EUR 0.52 per share, a negative EUR 0.4bn industrial FCF and a net debt of EUR 6.65bn by YE09E.
Peugeot – 1H09E preview
We have upgraded our FY09 estimate to a EUR 1.59bn group operating loss (vs. EUR 1.71bn previously) following the new guidance for Faurecia. We confirm our estimate that the auto division will incur a EUR 1.75bn operating loss on a 11.5% decline in sales (fully cons. comps.). At price revenue of 0.10x (2009E), Peugeot shares are valued at a 27% discount to the avg. 10-year low. (See pp 4-5.)
Renault– 1H09: no cash burn despite 16.5% sales slump
Renault announced a ‘significantly positive FCF’ for 1H09, despite an expected loss. European performance remains greatly disappointing. 1H09 sales decline -16.5%; rate of decline halved qoq to 11.0% in 2Q09.
Western Europe passenger car market– July 2009 update
Car market is set for an extended V-shaped recession. Our baseline scenario of an 11.7% correction to 11.68m in 2010 is based on the assumption that the schemes in Italy and France will be extended into part of 2010, the German scheme will expire at year-end as planned, and that car manufacturers will continue to aggressively discount.
Peugeot and Fiat-Chrysler possible Merger
Peugeot – looking for a suitable partner. Industrial logic of three-way merger Fiat-Chrysler-PSA has more negatives than positives.
BMW 4Q08E preview & results table and guidance
Group headline results worse than expected: BMW incurred a EUR 1.2bn pre-tax loss in 4Q08 and reported a EUR 351m profit (0.7% margin) in FY08.
Daimler 4Q08E preview & results table and guidance
Chrysler losses depress group EBIT and earnings. Mercedes-Benz Cars incurs 4Q08 loss from operations.