EU HEALTHCARE: Sandoz (SDZSW: Baa2/BBB): FY24
Growth of Biosimilars (esp in US) is a positive. Not a spread mover though.
- FY Sales $10.4bn +9%; Q4 $2.7bn +9% as well
- Biosimilars have increased from 23% to 28% of mix with US seeing 80% regional growth. Good for margins
- Core EBITDA $2,08bn +19% as reported; +24% CER
- Adjustments to Core include $598m legacy litigation; $348m Separation costs; $233m Transformation costs. Reported EBITDA $820m. One off costs due to separation will drop in 2025/26.
- Core margin of 20.1%
- Net Debt to Core EBITDA 1.6x from 1.8x. "Committed to <2.0x" so don't expect any real improvement here.
- Guiding for mid-single digit sales growth; Core EBITDA margin around 21% but growing to 24-26% by 2028
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BTP TECHS: (H5) Corrective Bull Cycle Remains In Play
- RES 4: 121.88 76.4% retracement of the Dec 11 - Jan 13 bear leg
- RES 3: 120.98 61.8% retracement of the Dec 11 - Jan 13 bear leg
- RES 2: 120.25 50.0% retracement of the Dec 11 - Jan 13 bear leg
- RES 1: 120.06 Intraday high
- PRICE: 119.86 @ 07:06 GMT Feb 3
- SUP 1: 118.65/117.16 Low Jan 24 / 13 and the bear trigger
- SUP 2: 116.59 76.4% retrace of the Jun - Dec ‘24 bull cycle (cont)
- SUP 3: 116.07 Low Jul 8 ‘24 (cont)
- SUP 4: 115.45 Low Jul 3 ‘24 (cont)
Recent gains in BTP futures continue to highlight a corrective phase. The latest move higher has resulted in a breach of both the 20- and 50- day EMAs. This signals scope for an extension and sights are on 120.25, a Fibonacci retracement. On the downside, initial key support to watch lies at 118.65, the Jan 24 low. Clearance of this price point would highlight a reversal and the end of the correction.
EGBS: Commerzbank Remain Constructive On Bunds
Commerzbank maintain a “constructive duration stance in Bunds.”
- They suggest that any “setbacks from U.S. headwinds or an uptick in euro area inflation should provide better buying opportunities. “GB spreads are more likely to consolidate, in line with the general risk sentiment.”
USDJPY TECHS: Resistance Remains Intact
- RES 4: 159.45 High Jul 12
- RES 3: 159.26 0.618 proj of the Sep 16 - Nov 15 - Dec 3 price swing
- RES 2: 158.08/87 High Jan 15 / 10 and the bull trigger
- RES 1: 156.75 High Jan 23
- PRICE: 155.46 @ 07:14 GMT Feb 3
- SUP 1: 153.72/34 Low Jan 27 / Low Dec 18
- SUP 2: 152.55 61.8% retracement of the Dec 3 - Jan 10 bull leg
- SUP 3: 151.81 Low Dec 12
- SUP 4: 151.06 76.4% retracement of the Dec 3 - Jan 10 bull leg
The primary trend condition in USDJPY is bullish. However, the Jan 27 move down highlights a stronger bear threat. The pair has breached the 50-day EMA and a trendline drawn from the Sep 16 ‘24 low. A resumption of weakness would open 152.55, a Fibonacci retracement point. Initial firm resistance is at 156.75, the Jan 23 high. Clearance of this hurdle would be a bullish development.
