Before the bell: Ferrari hits resistance, Fagron bumps into the dollar

Even gold — and Wall Street — can take a step back.

Sometimes it helps to take a small step back to see things more clearly. Gold halted its record run yesterday afternoon, slipping back below the 4,000-dollar mark. If that was the peak, Umicore (+4.3%) deserves a Nobel Prize for timing. The major stock indices also pulled back slightly, though the losses were limited — only a few tenths of a percent on Wall Street, and occasionally a bit more in Europe. Some markets, such as the DAX (+0.1%) and Bel20 (+0.3%), even managed to close higher. The DAX’s hesitation follows several warnings earlier in the week, particularly weak figures from carmakers. Mercedes (-0.7%), BMW (flat), and Porsche (+0.2%) all reported disappointing sales. Yesterday it was Ferrari’s turn to let investors down: the stock plunged 15.4%, not because of bad results, but because its growth outlook fell short of lofty analyst expectations. Among investors, Ferrari isn’t seen as an automaker but as a luxury brand — though as we’ve seen before, that sector isn’t immune to headwinds either. In Brussels, the Bel20 was again buoyed by UCB (+1.4%) and Argenx (+1.1%). Remarkably, Financière de Tubize (+3.2%) continues to nibble away at its large discount. EnergyVision fell 2% after releasing its third-quarter figures. On Wall Street, PepsiCo climbed more than 4% thanks to quarterly results that were less bad than feared.

This morning, Asian markets are losing ground. The Topix in Japan fell 1.9%, while the Hang Seng Index in Hong Kong dropped 1.4%. Friday’s agenda looks quiet, though Belgium will find out whether Moody’s decides to downgrade its credit rating. A few weeks later comes the more consequential verdict from Standard & Poor’s. In the U.S., investors can look forward to employment data and consumer confidence figures.

Fagron: Headwinds from the dollar, but still solid

Fagron, the pharmaceutical compounding specialist, gained 0.7% yesterday after reporting third-quarter revenue of 228 million euro, up 6.4% year-on-year and in line with expectations. Growth was slowed by headwinds in the United States, where revenue fell 3.1% — mainly due to the weaker dollar, since sales volumes were actually up 3.6%. Even so, the performance was modest. The company faced delays in regulatory approval for capacity expansion and can no longer sell semaglutide, now that Eli Lilly and Novo Nordisk have resolved shortages. Fagron still expects a slight improvement in profitability. Analysts forecast 10% profit growth for the full year. The stock trades at roughly 16 times expected earnings.

At least the goods aren’t as expensive as the stock

Costco, the U.S. warehouse retailer, gained 3% after posting strong September sales. Revenue rose 5.7%, beating market expectations of 4.6%. The company has been delivering steady growth for years, and despite tougher comparisons, sales continue to increase sharply. That’s better than many other retailers, who report that consumers are becoming more cautious with their shopping carts. For the full year, Costco expects revenue growth of 7.8% to 296.8 billion dollar, and profit growth of 10.4%. But the stock is already priced for perfection — trading at 50 times earnings.

Did you know…

Belgian Economy Minister David Clarinval (MR) has asked the Competition Authority to investigate Live Nation’s acquisition of Pukkelpop? If approved, Live Nation would control four of Belgium’s five largest music festivals, as well as most major concert venues and ticket sales.

This article was translated from Dutch and was originally published on Spaarvarkens.be.