Euronext Brussels: snow on the screen at Barco

While the stock markets continued to recover, Barco was a dissonance on Euronext Brussels. The imaging group was disappointed across the board in the first quarter and suffered a blow.

The recovery on European stock markets that started on Monday continued on Tuesday. Geopolitical concerns are subsiding and the realization that the first American interest rate cut may not come until after the summer is reflected in the prices. The indexes on the old continent were lifted by some excellent quarterly reports: including from the German business software specialist SAP

and the Swiss pharmaceutical company Novartis.

The Euro Stoxx 50 closed 1.5 percent higher. The profit since the beginning of this year is again more than 10 percent. The Bel20

rose 0.7 percent to 3,891 points.

The annual profit for the Brussels indicator is more than half smaller – barely 4.5 percent. The strongest Bel20 engine this year was UCB

but that stunning performance was thwarted by two other heavyweights: Argenx

which remained almost stable and AB InBev

which is 4 percent lower than at the beginning of January.

Profit-taking is not surprising for the share, given the strong climb in recent weeks. Until Monday, Solvay had risen in value by 19 percent since US ‘hedgie’ David Einhorn described the company as his ‘top pick’ at a Wall Street conference two weeks ago.

In the broad market, Barco gained

firmly. The imaging group fell by more than 16 percent to 12.49 euros. At the opening bell, the price even briefly dropped to 12.40 euros, below the pandemic low of 12.75 euros from 2020.

Barco saw its turnover shrink by 21 percent to 196 million euros in the first quarter. That is a lot worse than the shrinkage to 213 million that analysts had feared on average. The same goes for the new orders: at 220 million euros, they came in well below the expected 236 million euros.

For the whole of 2024, management continues to expect a turnover in line with that of 2023 – 1.05 billion euros. But Barco now only expects recovery from the second half of the year. When the annual figures were published, it was stated that growth would resume from the second quarter.

Stock exchange Kepler Cheuvreux immediately places its advice (buy) and price target (19 euros) ‘under review’. Analyst Matthias Maenhaut had expected weak performance for the Enterprise and Healthcare branches, but expected a flat turnover evolution at Entertainment. However, that branch experienced a decline in turnover of 21 percent.

He also points out that Barco is aiming for stable turnover for the whole of 2024. This implies that the rest of the year should yield 6 percent turnover growth, growth that will therefore have to come from the second half of the year.

Now that Barco is seeing turnover and orders shrink more than expected, the analyst community will also adjust the forecasts for the rest of the year, says analyst Marc Hesselink of ING. He points to Barco’s telling comment that the company is targeting growth “assuming the market does not deteriorate further.”

“That comment underlines that the market is still weak, which means downside risks remain.” The analyst maintains his ‘hold’ recommendation and price target of 18 euros for the time being.

Bpost was among the climbers

(+0.4%, 3.75 euros). De Tijd learned that the postal and parcel company will probably be able to maintain the majority of the distribution of newspapers in our country.

“Although we are still waiting for the final outcome of the negotiations, it would clearly be good news for Bpost if the group were to retain the majority of press and magazine distribution in Belgium,” said Michiel Declercq, analyst at KBC Securities.

“If Bpost were able to transfer some of those volumes to the subsidiary AMP, while redistributing 4,000 employees within the group, we believe that restructuring costs would be more limited.” Pending more news in the coming days, Declercq remains with his buy recommendation and price target of 6.90 euros.

Nextensa

made some profit (by 0.9 percent to 46.6 euros) from a price target increase of Kepler Cheuvreux. According to the stock exchange, the results of the real estate landlord and developer are clearly improving.

Kepler sees the debt ratio falling from 45 percent in 2023 to 39 percent in 2026 and the ‘funds from operations’, or the cash flow, increasing from 2.10 euros per share in 2023 to 2.70 euros in 2026. He withdraws his price target from 54 euros to 57 euros and maintains its buy recommendation.