Quarterly Outlook
Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?
John J. Hardy
Global Head of Macro Strategy
You can access all of our platforms from a single Saxo account.
Airbnb battles headwinds as fee hike may boost profits, can Airbus soar past Boeing?
Equities 5 minutes to read
Peter Garnry
Chief Investment Strategist
Summary: Airbnb heads into earnings with declining growth, war-related demand concerns, and oversupply worries. However, a recent fee hike and lower marketing expenses offer hope for improved margins. Investors also await news on geographical revenue split and the company's future growth trajectory. Meanwhile, Airbus boasts a strong post-pandemic recovery, outperforming Boeing and nearing market value dominance. Analysts expect positive earnings, potential delivery guidance lift, and colour on a cybersecurity acquisition. With 74% buy recommendations, Airbus seems to have investor confidence on its wings.
Airbnb: troubles brewing but fee hike helps
Airbnb reports FY23 Q4 earnings tomorrow after the US market close with analysts expecting revenue growth of 14% y/y and EPS of $0.68 up 45% y/y. While Q4 revenue growth is still double digit it will be the eight straight quarter of declining revenue growth has the post pandemic opening wave is adjusting the long-term structural growth rates. The concerns going into the earnings release are around demand hit from the war between Hamas and Israel, oversupply of overnight rooms and increased costs related to payments and insurance. Airbnb’s 2% guest fee hike for cross-border travel may offset these headwinds and expected lower marketing expenses are also expected to improve operating margin.
Another key focus for investors is on geographical split on revenue as the North America segment has dominated in the past but in Q3 last year the EMEA took over as the largest segment, but Asia Pacific and Latin America segments are still small and not growing. Airbnb was previously a darling stock and seen as one of the more successful consumer technology companies coming out of Silicon Valley, but sell-side analysts following the company are split on their ratings with 54% on hold and the consensus price target is actually 7% below the recent closing price. Based on expected free cash flow of €4.4bn this year Airbnb is valued at around 5% free cash flow yield. Airbus: taking over the throne in aerospace?
Boeing was getting its mojo back late last year as the stock was back to the early 2021 levels on a total return basis, but then came another accident in January with an Alaska Airlines aircraft losing a fuselage panel in mid-air cruising. The accident added to investors uncertainty over Boeing’s lack of operational and production excellence that previously was its hallmark. As the chart below shows, the European aerospace giant Airbus has come through the pandemic in the best shape returning 17.7% since 1 January 2020 whereas Boeing shareholders are sitting on a 35.4% loss. For now investors like Airbus shares more than Boeing, and Airbus is close to overtake Boeing on market value, but in terms of revenue Boeing is still sitting on the aerospace throne.
Airbus reports FY23 Q4 earnings on Thursday after the European market close. Analysts expect revenue of €22.5bn up 9% y/y and EPS of €2.00 down 10% y/y. Airbus is still suffering from supply-chain bottlenecks and inflation pressures on materials, but the bright spot should be commercial aircraft revenue due to a strong December on deliveries. A key focus for analysts will be on a potential guidance lift on deliveries in FY24 and more colour on the potential acquisition of Atos BDS which will bring expanded cybersecurity capabilities into the company. Analysts are predominantly positive on Airbus with 74% of analysts having a buy recommendation with the current price target being 10% above the last price. It is also worth noting that the market is valuing Boeing at 24-month forward EV/EBITDA of 16.1x vs only 9.2x for Airbus. Earnings this week
With almost 75% of the S&P 500 Index having reported the impact on equities from earnings is fast disappearing with macro increasingly taking over as the driver of market direction and volatility. This week will still deliver a lot of earnings releases and besides the highlighted earnings from Airbnb and Airbus, other key earning releases to watch are Shopify, Genmab, Schneider Electric, Applied Materials, and Deere.
- Today: CSL, Arista Networks, Cadence, Waste Management
- Tuesday: Japan Tobacco, Marriott, Airbnb, AIG, Coca-Cola, Shopify, Zoetis, Moody’s Ecolab
- Wednesday: CBA, Sony, Heineken, Tokio, CME, EssilorLuxottica, Cisco, Occidental Petroleum, Barrick Gold, Genmab, Norsk Hydro, Kraft Heinz
- Thursday: Schneider Electric, Stellantis, Southern Co, Applied Materials, Airbus, Deere, Safran, RELX, Pernod Ricard, Renault, Commerzbank
- Friday: Eni, Sika, Swiss Re
Recent notes on equities
Equities
Q4 2023 earnings scorecard and Arm bonanza
Equities
Have US equities gone too far this time?
Equities
Earnings Watch: Busy week with focus on Caterpillar, Eli Lilly, and Siemens
EquitiesEarnings review: Apple, Amazon, and Meta
EquitiesWhat are the Fed’s possible considerations on rate cuts?
EquitiesEarnings review: Microsoft, Alphabet, AMD, and Novo Nordisk
Equities
Earnings Watch: Big earnings week with technology giants in focus
EquitiesTesla earnings review: Between two mountain tops?
Investment boom in technology and earnings review
Equities
Earnings Watch: Can Tesla convince the market about growth?
Equities
First US listed ETFs holding spot Bitcoin start trading today
Equities
Nvidia rides AI hype to new all-time high as Q4 earnings season nears
Quarterly Outlook
Equities: New extremes and challenging opportunities
Equities
Are you optimistic or pessimistic on equities?
Equities
BYD is the new leader in electric vehicles
Latest Market Insights
Quarterly Outlook
-
-
Quarterly Outlook
Equity Outlook: The ride just got rougher
Charu Chanana
Chief Investment Strategist
-
Quarterly Outlook
China Outlook: The choice between retaliation or de-escalation
Charu Chanana
Chief Investment Strategist
-
Quarterly Outlook
Commodity Outlook: A bumpy road ahead calls for diversification
Ole Hansen
Head of Commodity Strategy
-
Quarterly Outlook
FX outlook: Tariffs drive USD strength, until...?
John J. Hardy
Global Head of Macro Strategy
-
Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
-
Quarterly Outlook
Equity Outlook: Will lower rates lift all boats in equities?
Peter Garnry
Chief Investment Strategist
After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto... -
Quarterly Outlook
Commodity Outlook: Gold and silver continue to shine bright
Ole Hansen
Head of Commodity Strategy
-
Quarterly Outlook
Macro Outlook: The US rate cut cycle has begun
Peter Garnry
Chief Investment Strategist
The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c... -
Quarterly Outlook
FX Outlook: USD in limbo amid political and policy jitters
Charu Chanana
Chief Investment Strategist
As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ...