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Political gridlock in Washington? No problem for the investor, who mainly buys Big (& Medium) Pharma. And parcel evening arrived a month earlier at Bpost.
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Even though the hoped-for ‘blue wave’ with resounding Democratic victory – and accompanying sounding stimulus package – did not materialize in the American elections, this does not translate into a red wave on the European stock markets.
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There is even one sector that is clearly making a profit: pharma & biotech. This is thanks to the prospect that whoever eventually becomes president in the United States will sit with a divided Congress. And will therefore not really have a free hand to impose lower prices against the pharmaceutical lobby in the sector. Those high prices in the United States – which spends 18 percent of its gross domestic product on health care – have long made the American market the holy grail for every (bio) pharmaceutical company.
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Also in the Bel20
the pharmacy forms a green spot. UCB wins 2.9 percent, Argenx 4 percent and Galapagos
3 percent. That trio thus helps to almost completely eliminate the initial loss for the Bel20: the stock market barometer is almost stable at 3,152 points and can thus maintain the recovery of the past few days – in anticipation of a blue wave that never came.
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We have to look for the star share of the exhibition floor outside the Bel20: Bpost
. Analysts are short of superlatives to praise the postman after it quarterly report Tuesday evening, which became a ‘package evening’ a month before the time.
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Thanks to the parcel boom, the postal group surprised with a turnover growth of 10 percent to 973 million euros, operating profit even increased 81 percent to 65 million euros. With both figures, Bpost quickly passed expectations. The consensus aimed at 953 million euros in turnover and 45 million in operating profit.
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CEO Jean-Paul Van Avermaet raises the annual forecast after this second strong quarter in a row: the forecast for the operating profit for the whole of 2020 is no longer at 240-270 million euros, but at ‘at least 270 million euros’.
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Jefferies reminds us of the buying advice, with a target price of 10 euros. ‘A wonderful report’, analyst David Kerstens summarizes. In addition to the booming parcel branch, the analyst also points to the classy letter post. This summer it shrank only 8.3 percent, a lot less than the minus 11 percent expected by the stock exchange.
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“Incredibly strong profitability,” writes KBC Securities. “The volumes are better than expected, but the real surprise is strong earnings growth,” notes analyst Thomas Couvreur. The advice continues to ‘buy’, with a target price of 11 euros. “We think the consensus forecast for operating profit will have to rise by about 10 percent,” said ING analyst Marc Zwartsenburg. He also reminds that there will be more news on the (virtual) investor day on December 8 about the suspended dividend. Potentially package night # 2.
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At Ontex
the parenthetical dividend was completely removed this spring. While Bpost gets the turbo set up thanks to the pandemic, the pandemic affects the diaper manufacturer in three different ways. Firstly, through a disruption of the customer’s purchasing behavior. Second, through increased competition, as all major players in the industry are seeing sales in traditional channels decline. And third, the pandemic is undermining emerging market exchange rates. And the latter impact is “expected to be the largest of the year” in terms of both revenue and EBITDA during this quarter.
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Not really a cheerful outlook. The share therefore crumbles 1.6 percent to 9.41 euros, while Ontex was close to a record low before the report.
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Interm CEO Thierry Navarre admits that he is not satisfied. He promises to cut costs even more, including his own remuneration, and also tries to placate the grumbling shareholders with the message that there is ‘no taboo’ in the strategic review.
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