Research Market strategy
By Swissquote Analysts
Published on 17.11.2022
Morning news

Alcon slowed by stronger dollar in Q3

Topic of the day

Bucking the negative trend of the Swiss stock market, Alcon rallied more than 5% after the presentation of figures for the third quarter. The eye care company slightly increased sales thanks to solid international revenues. However, the operating return fell due to the difficult economic environment. The group narrowed its outlook for 2022 to the upper end of the profit range. The group now expects revenue of $8.5 billion to $8.7 billion this year, compared to $8.6 billion to $8.8 billion Alcon forecast previously. Alcon now sees operating margin (core) between 18.0 to 18.5 per cent, up from 18 to 19 per cent previously expected. Core operating profit is anticipated to be between $2.20 and $2.25 per share. Previously, Alcon had expected 2.20 to 2.30 dollars per share. In the past third quarter, sales climbed by 2 per cent to 2.12 billion dollars. The operating margin (core) fell to 17.2 from 17.7 per cent. Earnings per share (core) dropped to 0.50 dollars from 0.54 dollars.

Swiss stocks

The Switzerland stock market ended weak on Wednesday, in line with the trend across Europe, as worries about geopolitical tensions and rising inflation in the Euro area rendered the mood bearish. The benchmark SMI ended with a loss of 89.60 points or 0.81% at 10,936.62. Partners Group drifted down 5.73%. Sika, Geberit, Credit Suisse and Logitech ended lower by 3.66% to 3.95%. Lonza Group and Givaudan lost about 3% and 2.8%, respectively. ABB, Richemont, Sonova, Holcim, Swiss Re and UBS Group shed 1 to 2%. Zurich Insurance Group gained 2.05% after announcing more ambitious financial targets for the next three years. Shares in defensive index heavyweight Nestle gained 0.7 per cent, stabilising the SMI. Pharmaceutical group Novartis (-0.8%) is apparently considering selling its business in drugs for treating respiratory and eye diseases in order to invest the proceeds in innovative medicines, the Bloomberg news agency wrote, citing unnamed sources. The eye care business alone could be worth around $5 billion. Shares in rival Roche also fell 0.8 per cent. The company has received emergency approval from the US Food and Drug Administration for its test to detect the monkeypox virus. Among the banking stocks, UBS fell by 1.1 per cent. Credit Suisse, meanwhile, slid sharply by 3.8 per cent. Partners Group slumped 5.7 per cent.

International markets


European stocks were weaker on Wednesday with sentiment weighed by geopolitical worries, although defense companies made gains following news of a missile strike in Polish territory. The DAX lost 1.0 per cent to 14,234 points, the Euro-Stoxx-50 fell by 0.8 per cent to 3,883 points. High losses in the wind energy business and burdens from the withdrawal in Russia have, as expected, left Siemens Energy with deep red figures in the past fiscal year 2021/22. However, the outlook and the order intake were viewed positively. Thus, Siemens Energy closed 0.2 per cent higher after a volatile trading session. Auto stocks were under more pressure. "Mercedes is significantly lowering prices in China for electric cars," said a trader. He said Mercedes was doing this to improve its competitive position. Mercedes fell 6.2 per cent, BMW 3.1 per cent, VW 4.2 per cent and Porsche 5.6 per cent. The car sector declined by 3.7 per cent across Europe. Dermapharm continues its growth course as planned. The manufacturer of branded pharmaceuticals increased group sales by 9.6 per cent and adjusted operating profit by 5.1 per cent. The share price has halved since the beginning of the year and is now up 2.5 per cent. Evotec lost 6.3 per cent after a downgrade by Deutsche Bank. Alstom's share price added 7.2 per cent after the company's figures. Two corporations from the travel sector issued convertible bonds. Regarding the expected dilution of profits, Air France-KLM slipped 10.5 per cent and Carnival 13.8 per cent.

United States

The S&P 500 fell Wednesday after stronger-than-expected retail sales data kept investors focused on the Federal Reserve’s interest-rate path. The broad stock market index fell 32.94 points, or 0.8%, to 3958.79, while the technology-focused Nasdaq Composite Index retreated 174.75 points, or 1.5%, to 11183.66. The Dow Jones Industrial Average lost 39.09 points, or 0.1%, closing the day at 33553.83. Target on Wednesday said its shoppers pulled back in the latest quarter amid a worsening economic outlook. Shares fell $23.51, or 13%, to $155.47. That contrasted with more upbeat results from Lowe’s, which reported stronger-than-expected sales and raised future expectations, boosted by home-improvement spending. Shares rose $6.29, or 3%, to $215.13. The best performing segments of the market were defensive-oriented businesses such as utilities, and healthcare stocks. Shares of technology and consumer discretionary firms that are more sensitive to the economic growth outlook suffered the most, with each down about 1.5%. Amazon (-1.8%) on Thursday announced a plan to cut staff in its administrative and sales departments, a rare move for the e-commerce giant, which has grown steadily since its founding. DIY chain Lowe's (+3%) reported better-than-expected quarterly results on Wednesday and raised its guidance for the current year. Chipmaker Micron Technology (-6.7%) cut its 2023 production forecast and plans to take steps to limit its inventories due to the deteriorating economic environment. Carnival shares fell more than 13.7% after the cruise operator launched a $1 billion capital increase, through a convertible bond issue maturing in 2027, to pay down debt and finance overheads. Cosmetics group Estée Lauder (-1.8%) will make the biggest acquisition in its history by taking over the Tom Ford brand in a deal valued at about $2.8bn, company executives said on Tuesday. Cryptocurrency prices were slightly lower as the fallout from the implosion of crypto exchange FTX spreads. Bitcoin slipped 2% from its 5 p.m. ET price on Tuesday to $16,538.05.


Stocks in Asia mostly fell on Thursday. China’s benchmark Shanghai Composite lost 0.8 per cent in late trading, while Hong Kong’s Hang Seng declined 2.1 per cent, weighed down by the technology sector. Meituan shed 5.8 per cent. Alibaba Health Information Technology loses 7.1 per cent. In Tokyo, the Nikkei-225 slips 0.4 per cent - weighed down by shipping stocks. The Kospi in South Korea edges 1.2 per cent lower. Samsung Electronics declined 1.3 per cent and SK Hynix 5.3 per cent.


The benchmark 10-year U.S. Treasury yield dropped to another one-month low on Wednesday, driving a popular bond-market gauge that is an indicator of a potential recession to its most negative level in more than 40 years. The spread between 2- and 10-year rates shrank to 67 basis points, a level not seen since Feb. 18, 1982, when it went to minus 70.5 basis points. The 10-year U.S. Treasury note fell nearly 10 basis points while the 2-year U.S. Treasury note climbed one basis point to 4.372%.


UBS lowers Vodafone target to 129 (131) p - Buy
Stifel raises Holcim target to CHF 52.50 (50) - Buy
CS lifts Infineon target to 47.40 (42.50) EUR - Outperform

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