EUROPEAN OPEN: AIR FP guides 2026 deliveries below estimates; RNO FP profits seen declining; NESN SW talks to sell rest of ice cream business; VOW3 GY reportedly conducting risky accounting; Elliott pushes for divestments and buybacks at LSEG LN

• EUROPEAN OPEN: European equities are starting Thursday mostly lower. The earnings slate has been busy on the continent, which we recap below. Overnight, APAC stocks were higher following a positive handover from the US. Gold rose back above USD 5,000/oz as traders focused on the Fed rate outlook in thin trading conditions, with some Asian markets still closed for Lunar New Year. Oil held gains seen on Wednesday on concerns over potential US military intervention in Iran; Brent neared USD 71/bbl, and WTI was above USD 65/bbl.
• STOCK SPECIFICS: In materials, Rio (RIO AT) increased its stake in Nemaska Lithium to 54%, taking majority control as it expands its lithium footprint in Quebec; it reported FY net profits fell 14% Y/Y to USD 9.97bln, adj. net profits fell 0.8% Y/Y to 10.9bln (exp. 10.8bln), underlying EBITDA was USD 25.4bln (exp. 24.7bln), and revenue was USD 57.6bln (exp. 57.0bln). In industrials, Airbus (AIR FP) targets 870 aircraft deliveries in 2026 (exp. 880), and delivered 793 aircraft in 2025; Q4 adj. EBIT topped expectations, revenue was slightly short; FY EPS beat while FY revenue was in line; sees FY26 adj. EBIT around EUR 7.5bln (exp. 8.91bln). Air France-KLM (AF FP) reported Q4 operating income of EUR 393mln (exp. 306mln), Q4 revenue was EUR 8.19bln (exp. 8.1bln); said it remains positive on North Atlantic longhaul travel, supported by premium demand, despite heightened geopolitical tensions. In autos, Renault (RNO FP) FY25 net profit EUR -10.7bln (exp. -9.9bln), FY25 revenue EUR 57.9bln (exp. 57.7bln); saw an operating margin of 6.3% (vs prior guidance of around 6.5%); said profitability is expected to decline in 2026 amid intensifying competition in Europe and continued investment in new EV launches. WiWo cites insiders who say Volkswagen (VOW3 GY) has generated an unexpected EUR 6bln cash flow increase, raising concerns over risky accounting practices involving Luxembourg holding companies. Sources described the measures as potentially dangerous financial manoeuvres. In consumer sectors, Nestle (NESN SW) FY25 net profit CHF 9.03bln (exp. 10.08bln), FY25 revenue CHF 89.5bln (exp. 89.7bln); said sales growth is expected to accelerate under its reorganisation efforts; it is reviewing options to reduce its exposure to ice cream, and is in advanced negotiations to sell its remaining ice cream business to Froneri as part of portfolio optimisation. Pernod Ricard (RI FP) H1 2025 revenue -5.9% Y/Y (exp. -5.7%) as weaker demand in the US and China weighed on performance; US consumer spending fell 15% over the period, while Chinese sales dropped 28%. Pernod is targeting cost savings to offset slowing demand., and Bloomberg reports that it is considering listing its India business. Brunello Cucinelli (BC IM) reported FY net profit up 10.5% Y/Y to EUR 142mln (exp. exp. 141mln), while revenue met expectations at EUR 1.41bln; expects balanced revenue growth of around 10% in 2026, sees an improved financial position from following completed investments. In energy, Repsol (REP SM) reported a Q4 profit of EUR 722mln (vs -36mln Y/Y); said it expects to return around EUR 1.9bln to shareholders this year via dividends/buybacks. In communications, Orange (ORA FP) CEO said there is “no incentive for investment” in Europe due to regulation and the group will reduce European investment, targeting growth in the Middle East and Africa; aims to add 40mln subscribers by 2028, and sees organic cash flow reaching EUR 5.2bln by 2028 (vs 3.65bln in 2025), with its dividend floor rising from EUR 0.79 in 2025 to EUR 0.85 in 2028. In financials, UK banks face rising scrutiny over potential underestimation of flood risk in mortgage portfolios as more homes are threatened by flooding; Nationwide, which in 2024 stopped lending on some flood-risk properties, is seen as an early mover amid growing industry concern, according to Bloomberg citing PriceHubble exec. Activist investor Elliott is reportedly pushing for a divestment and a GBP 5bln share buyback at LSEG (LSEG LN). Zurich Insurance (ZURN SW) FY operating profit of USD 8.9bln (exp. 8.8bln), net income rose 17% Y/Y to USD 6.8bln. In healthcare, in a Sounding Board article published in The New England Journal of Medicine, Vinay Prasad and Martin Makary announced a new FDA policy making one robust pivotal trial plus confirmatory evidence the default requirement for drug approvals, replacing the prior standard that typically required two pivotal trials. GSK (GSK LN) said its majority-owned ViiV Healthcare, alongside shareholders Pfizer (PFE) and Shionogi (SGIOY), reported final phase III LATITUDE data showing long-acting injectable Cabenuva was superior to daily oral therapy in maintaining viral suppression in people with HIV and prior adherence challenges. In tech, SAP (SAP GY) raised its annual dividend to EUR 2.50/shr (prev. EUR 2.35/shr). In notable broker updates, Capgemini (CAP FP) was upgraded at Morgan Stanley.

TODAY'S AGENDA:

• DAY AHEAD: In the UK, CBI industrial trends orders for February are due. Eurozone consumer confidence is seen rising a little to -11.5 in February from -12.4. Stateside, weekly initial jobless claims (which coincide with the traditional survey window for the BLS' February jobs data) are expected little changed at 225k (prev. 227k), while continuing claims (this week does not coincide with the BLS window) are seen unchanged at 1.87mln. December's advanced goods trade balance and the Philly Fed manufacturing data for February will also be released. The Atlanta Fed will update its GDPnow tracking estimate after today's data; yesterday, the gauge was revised down to 3.6% in Q4 (from 3.7%). Supply comes by way of Spain issuing EUR 4.5-5.0bln of 2029, 2031 and 2036 debt; France will sell EUR 11.5-13.5bln of 2029, 2031, and 2032 debt, as well as EUR 1-1.5bln of 2032, 2034, and 2040 linkers. The US Treasury will announce sizes for next week's 2yr, 5yr, 7yr Note and 2yr FRN supply; it will also sell USD 9bln of 30yr TIPS. In energy, the DoE will report weekly energy inventories today; API data published after the close on Wednesday reportedly showed headline crude stocks posting a build of +0.6mln bbls (exp. 2.3bln), Cushing seeing a draw of -2.4mln bbls, distillate -1.6mln bbls (exp. -1.6mln), gasoline -0.3mln bbls (exp. -0.2mln). Today's speakers' slate includes: Fed's Bowman (voter; text expected, but no Q&A), Fed's Kashkari (voter; no text expected, but Q&A is), Fed's Goolsbee (2028 voter; no text/Q&A confirmed), Fed's Bostic (non-voter, retiring; no text or Q&A expected). ECB's VP de Guindos and ECB's Cipollone are also due. Notable US corporate earnings due today include Walmart (WMT), Deere (DE), Wayfair (W), Klarna (KLAR), Opendoor (OPEN), Newmont Mining (NEM), Southern Company (SO), Constellation Energy (CEG).