EUROPEAN OPEN: DHL GY misses, warns on geopolitics and trade; ENT LN beats in Q4, sees FY26 growth; MAERSKB DC suspending further bookings; MRK GY flags FY26 earnings fall; AVGO rises after earnings

• EUROPEAN OPEN: Equities are rebounding from yesterday’s sell-off; APAC stocks took the positive lead from Wall Street, where the Nasdaq led advances. Overnight, China set its 2026 GDP growth target at between 4.5-5%, the lowest since 1991, as Beijing seeks flexibility to manage economic challenges including weak consumption, a property-sector crisis, slowing population growth and global trade tensions; it also pledged its strongest effort yet to end deflation, and will keep its budget deficit target at around 4% of GDP in 2026, maintaining the record-high level set in 2025 as Beijing continues fiscal stimulus to support growth amid domestic economic challenges and rising geopolitical risks. Iron ore rose to over USD 101/tonne after China reiterated plans to tackle overcapacity in its steel sector and implement orderly production cuts at mills during the National People’s Congress. Meanwhile, geopolitics continues to dominate headlines, with US and Israeli forces continued bombing of Iran, while Iran fired missiles across the region, targeting energy infrastructure and blocking the Strait of Hormuz; the IRGC pledged to intensify and expand strikes. An Iranian military official speaking to local TV said Iran has not closed the Strait, and are dealing with ships in line with international protocols. Oil extended gains as the US and Israeli war against Iran disrupted crude flows to key importers; Brent approached USD 85/bbl overnight, having risen by 12% in the first three days of the week. Gold rose, with bullion prices currently trading around USD 5,170/oz, supported by a weaker USD and safe-haven demand as the Middle East war entered a sixth day without resolution. Bitcoin held above USD 70k after rising in US hours, as global markets stabilised following volatility triggered by the Iran conflict.
• STOCK SPECIFICS: In tech, Broadcom (AVGO) shares rose 4.8% in extended US trading after the company reported quarterly earnings and revenue above expectations, and issued stronger-than-expected revenue guidance, driven by robust demand for AI chips. Of note for data centre names, President Trump and executives from companies including Amazon (AMZN), Google (GOOG), OpenAI, Meta (META), Microsoft (MSFT), Oracle (ORCL) and xAI backed a “ratepayer protection pledge” under which AI data centre developers commit to build or supply their own electricity, and pay for related grid infrastructure. Nvidia (NVDA) has halted production of China-bound H200 AI chips and reallocated manufacturing capacity at TSMC (TSM) to its next-generation Vera Rubin hardware, FT reports. In industrials, Maersk (MAERSKB DC) gave its fourth update amid the Middle East disruptions, and said it is temporarily suspending cargo booking acceptance in and out of the UAE, Oman (except Salalah), Iraq, Kuwait, Qatar, Bahrain and parts of Saudi Arabia, with exceptions for critical food, medicine and essential goods; several regional airspaces have also been suspended, causing flight rerouting, delays and potential extended transit times. DHL (DHL GY) reported FY25 revenue EUR 82.9bln (exp. 83.4bln), EBIT EUR 6.1bln (prev. 5.88bln Y/Y); Q4: Revenue EUR 22.1bln (exp. 22.3bln), EBIT EUR 1.83bln (exp. 1.84bln). Expects FY26 EBIT of at least EUR 6.2bln (vs 6.1bln in 2025), despite anticipating continued uncertainty in the global economic environment; it raised its dividend to EUR 1.90/shr (prev. 1.85/shr). Exec noted that major geopolitical uncertainty persists, and changes in tariff and trade policy are affecting international freight markets. Rentokil (RTO LN) reported FY25 revenue of USD 6.91bln (exp. 7.61bln), EBITDA of USD 1.43bln (vs 1.365bln Y/Y); recommended a final dividend of 8.24 cents, and a total FY25 dividend of 12.39 cents (+3% Y/Y). Said it is on track to deliver North America 2027 targets of USD 100mln cost reduction and above 20% margin. Said board chair Richard Solomons will retire once a successor is appointed, triggering a formal search; Solomons will remain in the role until the new chair takes over. Serco (SRP LN) FY25 revenue GBP 4.9bln (exp. 4.9bln), with underlying operating profit of GBP 272mln (vs 274mln Y/Y); order intake reached GBP 5.5bln, lifting the total order book to GBP 14.5bln. Raised its dividend, and completed a GBP 50mln buyback, while announcing a new GBP 75mln programme. In materials, China will target overcapacity in the steel and oil refining sectors with plans for orderly capacity reductions. In healthcare, a large study of over 600,000 US veterans found that patients with Type 2 Diabetes who started GLP-1 receptor agonist drugs, including Ozempic (NOVOB DC) and Mounjaro (LLY), had significantly lower rates of addiction and overdose over three years compared with those using SGLT-2 inhibitors such as Jardiance (LLY), suggesting the drugs may help reduce substance-use disorders. Merck (MRK GY) reported FY EPS of 8.34 (exp. 8.34), Net revenue EUR 21.1bln (prev. 21.2bln Y/Y), FY25 adj. EBITDA EUR 6.11bln (exp. 6.01bln). Proposed a dividend of EUR 2.20/shr. Management indicated that pressure from generics is expected to impact profitability in the near term, contributing to a more cautious outlook for the year ahead. Sees FY26 adj. EBITDA between 5.5-6.0bln (exp. 6.01bln), implying a potential decline in earnings as generic competition for its multiple sclerosis drug Mavenclad weighs on the healthcare division. FY26 revenue seen between EUR 20.0-21.18 (exp. 21.2bln). Smith & Nephew (SN/ LN) CEO said it remains confident that it can withstand decline in revenues from slowdown in China business, tariff uncertainty and the Middle East conflict. In consumer sectors, Entain (ENT LN) reported a FY loss after tax of GBP 680.5mln (widening vs GBP 461mln Y/Y), after booking a GBP 488mln charge linked to UK gambling tax increases announced in November (it prev. saw a GBP 200mln impact). It reported FY25 net gaming revenue of EUR 5.33bln (exp. 5.32bln), underlying EBITDA of EUR 1.16bln (prev. 1.09bln Y/Y), adj. diluted EPS of 61.8 (prev. 29.9 Y/Y). Sees FY26 Online NGR (ex-US) rising between 5-7%, and remains comfortable with market expectations for FY26 Group Underlying EBITDA. Reckitt (RKT LN) FY25 adj. EPS 352.8p (+1.1% Y/Y), FY25 revenue GBP 14.5bln (+1.9% Y/Y); Q4 LFL revenue +5.4% Y/Y; adj. operating profit for FY25 increased +2% Y/Y to GBP 3.54bln. Proposed a final dividend of 127.8p, taking the FY25 total dividend to 212.2p (+5% Y/Y), reflecting its progressive dividend policy and confidence in cash generation and balance sheet strength. Management said trading conditions remain challenging in Europe but reiterated its medium-term outlook. In notable broker updates, Inditex (ITX SM) was upgraded at Deutsche Bank; Kering (KER FP) was upgraded at Bernstein; Airbus (AIR FP) was upgraded at Citi; Heidelberg Materials (HEI GY) was upgraded at Citi; Vistry Group (VTY LN) was upgraded at Stifel, but downgraded at Barclays; Segro (SGRO LN) was downgraded at Peel Hunt.

TODAY’S AGENDA:

• DAY AHEAD: Construction PMI data from Europe will be out across the morning. The BoE will release its monthly Decision Maker Panel data. The ECB will publish the Monetary Policy Accounts from the February meeting, at which the Governing Council left rates unchanged, and reiterated a data-dependent stance. The US Day sees the release of weekly initial jobless claims (exp. 215k from 212k) and continuing claims (exp. 1.85mln from 1.833mln) - neither coincide with this week’s official jobs data. Challenger Job Cuts for February are due (prev. 108.4k), and Revelio’s jobs gauge will also be released, and the Chicago Fed will publish its labour market statistics. US export and import prices are out, and will help analysts refine their Core PCE views. US Productivity and Unit Labour Costs for Q4 are also due. Elsewhere, US Factory orders data for January is due. In speakers, Fed’s Bowman (voter, dove; no text expected, but there will be a Q&A); ECB President Lagarde, VP de Guindos, Machado (supervisory), and Nagel are due to deliver remarks. Notable corporate earnings due today include Costco (COST), Marvell (MRVL), Ciena (CIEN), Kroger (KR), JD (JD), Cooper Companies (COO), Gap (GAP). Today’s supply comes by way of: Spain selling EUR 4.5-5.5bln of 2029, 2033 and 2041 Bonos, and EUR 0.25-0.75bln of 2036 linkers; France will sell EUR 11.5-13.5bln of 2035, 2036, 2043 and 2046 debt; UK to sell GBP 3.5bln of 2029.