(BFM Stock Exchange) – Upstream of the season of the results which started this week on CAC 40, several French actions reacted to publications of foreign companies playing in similar sectors. But these cross readings sometimes have their limits.

The results season has now taken off. LVMH, Stmicroelectronics, Sanofi and Eurofins have published their annual accounts this week. A dozen CAC 40 companies will follow next week.

Upstream of these publications, several residents of the CAC 40 had already reacted to results which had been published by companies evolving in their sector or having comparable activities.

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This is called, on the stock market, a “read-across” or, in good French, “a cross reading”. Investors dissect the publication of a company and draw conclusions for one of other listed groups in the same sector.

“This type of cross -reading can be very informative, especially when the source is a major player in the sector,” explained in 2023, Joachim Klement, an analyst and former employee of UBS Wealth Management, in a post on the substack platform. com.

“Of course, this cross -reading also explains why the equity of companies in the same sector as that of the company which publishes its results tends to evolve in the same direction as the share of the company which publishes His results the same day, “he added.

In a more recent post of January 21, Joachim Klement also judged that analysts tended to underestimate these cross readings in their assessments. At least for American companies.

A large number before the season of results

The examples that have occurred in recent weeks, however, show that these “cross readings” can have a significant or even considerable influence.

L’Oréal saw its action take off in one go on January 22 to finish up 2.5%. This movement occurred just after the American specialist in hygiene Procter & Gamble products announced a return to growth in its “beauty” division.

Safran was, a few days later, was supported by the quarterly results of his American partner Ge Aerospace. The two groups co-send the CFM International company, which markets the CFM56 engine, the best-selling aircraft in the world, as well as its successor, Leap. The operating margin significantly higher than the expectations of the American group in its division of engines and civil services has been perceived as a good indication of the results of the French aeronautical equipment supplier. The action took more than 2%.

This week, the Capgemini digital service company was carried out by the activity of the German professional software publisher SAP, published Tuesday. The company across the Rhine has delivered growth greater than expectations and raised its objectives for 2025. The Capgemini action won 3.7%.

The sector where these cross readings have been the most significant, in recent weeks, remains luxury. Richemont, the Swiss owner of Cartier, atomized expectations on January 16. Then, a little more than a week later, the British leather maker Burberry did the same. Each time the luxury sector has been fired up. LVMH jumped 9.15% after the announcements of Richemont and won 1.9% after those of Burberry. Kering, tried closer to Burberry by analysts than LVMH and Hermès, took 6.2% then 4.5%.

Reverse of the medal: These cross readings led investors to review their expectations up the luxury sector for this season of results. LVMH paid the price on Wednesday. The number one of luxury may have delivered an activity superior to the consensus of analysts, market operators had placed the higher bar. Deutsche Bank stressed that investors were tabling on growth of 2% to 3% in comparable data, in the fashion and leather goods division, while income has on the contrary fell 1%.

Limits

A sector is fairly often to these cross readings: semiconductors. The number of players listed in this industry is very important in all world places. It is also quite diverse, with companies present on the different stages of the value chain (founders, manufacturers of substrates, processors and microprocessors, chips, etc.). The Texas Instruments and Micron Americans, the Taiwanese TSMC, the Samsung Korean, are all actors whose results can have collateral effects on French companies such as Soitec, Stmicroelectronics or X-FAB. On Wednesday, the results of ASML further gained their lessons.

Conversely, some actors may suffer from a lack of comparable, thus making the cross readings rare. For a long time, Edenred was a fairly singular player on the stock market. Present in the advantages of employees (restaurant titles, gift vouchers), fuel cards or inter -company payments, the group did not really have a direct comparable. Which may have penalized its stock market status. The situation changed last year, with the IPO of Pluxee, the former Division of advantages to Sodexo employees.

Note that these cross readings sometimes have their limits, comparison not always right. If Richemont had enchanted luxury after its publication in mid-January, the Swiss group evolves on a particular niche, that of watchmaking jewelry, a segment that suffered less from the slowdown in the demand for luxury products than others, like the leather goods. Analysts noted that the lessons to be learned from its publication were, consequently, to be put into perspective for the actors little or not present in the jewelry.

Renault caught in the storm

Renault suffered a little unfairly from cross readings. In the first half of 2024, the car manufacturer had published results generally a little above expectations. However, the title has unscrewed 7.5% in stride. “There may be a little poorly placed sympathy with the drop in stellantis,” said an analyst. Stellantis had, on the contrary, of Renault, published results in free fall in the first half and its action had then plunged 8.7%.

The diamond group had still found itself under pressure on the stock market after almost all its European rivals (Volkswagen, Stellantis, Aston Martin, BMW, Mercedes-Benz, Porsche …) had in turn issued warnings on results last fall.

The Renault action lost around 20% between early September and early October, a period when these “warning profits” multiplied in mess.

The investors had then neglected two points a little. First Renault is not present in China, where German manufacturers are abused by local actors, or in the United States, where Stellantis is struggling to sell its important stocks. Second, Renault has new products that support its results.

At the end of October, the group then reassured the market with revenues above expectations in the third quarter and the confirmation of its annual objectives. The action had resumed almost 5%.

Renault will be, with Ferrari, the only European car manufacturer to display a positive performance on the stock market in 2024, with an increase of 27.5%.