Luxury Tariff Fears, Infineon, Repsol Down

On this episode of Stock Movers:

- It is currently difficult to call the valuation bottom for the European luxury sector due to limited visibility on earnings from tariffs impact and how that will impact global demand, JPMorgan writes in note as downgrades Pandora to neutral.

- Infineon Technologies AG signed a deal to buy Marvell Technology Inc.’s automotive networking business for $2.5 billion in an all-cash deal to strengthen its industry-leading car unit.

- Repsol shares pare early gains Tuesday after its 1Q upstream production missed analyst estimates on lower refining margin, weaker utilization rates amid maintenance works. Analysts expect a cut to consensus. Stock trades 0.2% higher after rising as much as 4.5%.

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.

Speaker 2 (00:08):
The Stock Movers podcast, your roundup of companies making moves
in the stock market. Harnessing the power of Bloomberg data.

Speaker 1 (00:18):
Let's take a look at some stocks on the move
today in Europe. Were joined by Our Equity's reporter Joe
Easton for that Joe Good Morning, starting with JP Morgan
talking about luxury in Europe potentially opening a Pandora's box.

Speaker 3 (00:30):
Absolutely a Pandora's box opened up by JPM. So JPM
with a note today saying that it's difficult to cool
the bottom of the luxury market and downgrading Pandora to
neutral from by and hence that segwe there, but the
bank more broadly saying that these tariffs really going to
continue hitting the sector and they can't see an end

(00:52):
two declines at the moment. So they see the companies
with strongest brand momentum and pricing power, so Richemont, Pradams
with those burking bags, anything that kind of is able
to weather the storm in a broader macro downturn. That's
the only place to be in terms of where to
buy in luxury at the moment.

Speaker 4 (01:11):
In terms of Pandora itself.

Speaker 3 (01:13):
That was a company hit particularly hard by the tariff
news because they make all of their products over in Thailand,
as we discussed before, and Thailand facing a thirty six
percent tariff front Trump, so that is part of the
reason for that downgrade. And Pandora down almost three percent
again this morning, and Joe Infinian showing the markets that
automakers can still drive through deals. Yep, so the Infinia

(01:38):
driving that deal. It's an automotive deal. So the company
is buying the automotive networking business from Marvel Technology over
in the US for about two point five billion dollars.
So this appears to be a company that helps vehicles
connect to each other and to softwares for automated driving,

(02:00):
that kind of thing. So therefore they can pay two
point five billion dollars for that firm. But it's priced
at around thirty five times earnings, which is one of
the most expensive deals we've seen for a while. So
in Finian shares actually not reacting well to the news,
down around half of one percent at the moment. But
keep an eye on Marvel Tech over in the US
because that one is to drive higher perhaps later today.

Speaker 1 (02:23):
Okay, And then turning into the oil markets Repsol and
their latest to earnings.

Speaker 4 (02:28):
So Repsol looking a little bit weak.

Speaker 3 (02:31):
They are reporting its softness in their refining margins. Now
this coming amid this massive drop we've seen in the
crude price recently, however, we are seeing the market recovering
very slightly state but nonetheless Repsol warning that the lower
crude price is going to hurt their margins and therefore
downgrading some of their earnings forecast. So that stock down

(02:51):
around half of one percent at the moment, actually one of.

Speaker 4 (02:54):
The weakest in the sector.

Speaker 3 (02:55):
Because pretty much all of those stocks are bouncing back
with the broader market this morning. Repsul kind of buck
in the trend. With that, we can expect a production
guidance today.

Speaker 2 (03:05):
The Stockmovers podcast from Bloomberg Radio. Check back with us
throughout the day for the latest roundup of companies making
news on Wall Street and for the latest market moving headlines.
Listen to Bloomberg Radio Live, catch us on YouTube, Bloomberg
dot com, and on Applecarplay and Android Auto with the
Bloomberg Business app.