Before the bell: investors take profits

What is bubbling beneath the surface? Strong results from Nvidia, Argenx and UCB are punished.

Looking at the index movements yesterday, one would think that little happened on the markets on Thursday. The Stoxx Europe 600 (-0.05%) moved sideways and on Wall Street the S&P 500 lost half a percent, while the Nasdaq fell 1.2% — always somewhat more volatile, that exchange for growth stocks. The world’s largest market capitalisation, Nvidia, nevertheless dropped a sharp 5.5%. That is not extraordinary in itself, but it came after the company had published particularly strong results and guidance the evening before after the close. They were also better than expected. There had been no strong rally in the run-up to the figures either. One index did stand out: the Bel20, which lost 3.2% yesterday. The causes of that decline were mainly Argenx (-8.2%) and UCB (-7.9%). Our pharmaceutical stars had nevertheless published strong results before the opening yesterday. That is the analogy with Nvidia: a sharp share price decline after good figures. At Argenx, just as with the American chip designer, we could not find a single flaw. UCB — as is customary — remained cautious with its guidance: growth of 10%. Investors may also have stumbled over CEO Tellier’s statement that UCB, now that it has a net cash position, has room for acquisitions. “Everything is going well, why take risks?” some investors may have thought. Are these share price declines positive or negative? We would rather choose the former: better behaviour that points to caution than the opposite.

Relative calm this morning in Asia: Tokyo is trading a few tenths of a percent higher and there is also little movement in China. In Belgium we will get the results from Ackermans & van Haaren, EVS, Proximus and Recticel. According to De Tijd, the families behind What’s Cooking want to take the company private after 40 years on the stock market. Who will be next? In Germany it is BASF’s turn to open the books. The chemical company does not expect a recovery this year.

Like a profitable fish in the water

Good figures and a positive share price reaction: classic market movements were also present. DEME (+4.5%) reported revenue of 4.2 billion euro for 2025 and generated EBITDA that was 22% higher at 931 million euro. The margin rose to 22.4%, higher than the 20 to 22% the group had previously guided for. On the other hand, the order book at 7.6 billion euro was slightly smaller than a year earlier. The company also said that results this year will be in line with 2025. DEME said the same thing last year, however. Moreover, it is well known that tenders for new offshore wind farms had been sluggish for a time but that many projects are now again in the pipeline. And what also helps: this share, with many years of growth ahead and a strong balance sheet, trades at 15 times 2025 earnings.

A share with few friends left

Let us continue briefly with Syensqo. It is not very common for a Bel20 share to fall by 30%. The share had already risen more than 10% this young year, somewhat against better judgement together with a number of value stocks. The new CEO is guiding for a similar result next year, assuming that conditions do not improve. In recent years Syensqo has been unlucky because its largest customer, Boeing, was severely limited in its production and therefore in its purchases of lightweight composite materials. That remains the company’s crown jewel. It is often said that Syensqo trades at a much lower valuation than Hexcel, for example, a competitor in composite materials. But Hexcel generates its entire 1.89 billion euro revenue from composite materials, whereas at Syensqo this represents only about 20% of revenue. Last year Syensqo sold 1.2 billion euro worth of composite materials, so in absolute terms it is not that far behind. With growth of 3.7%, Syensqo actually performed better than Hexcel, which recorded a slight decline. Syensqo also generates 40% of its revenue from specialty polymers, which together with composite materials belong to the growth division. That is where the problem lies: due to uncertainty in manufacturing industries, everyone ordered cautiously. Revenue there fell by 9.1%. Syensqo trades at 12.6 times earnings for the weak year 2025. But today analysts will undoubtedly once again be handing out downgrades generously.

Did you know…

that Paramount Skydance has won the bidding war for Warner Bros. Discovery? After the 111 billion dollar bid from Paramount, Netflix has walked away from the deal. According to the streaming service, it is not attractive to buy the owner of CNN, HBO and films such as Harry Potter and Batman at such a high price.