The CAC 40 Index has slumped into a correction after falling by over 11% from the year-to-date high of €8,753 in August to the current €7,782. The retreat has coincided with the ongoing protests in France and the rising bond yield. This article looks at some of the top French stocks to watch this week, including Airbus, BNP Paribas, TotalEnergies, Societe Generale, and Credit Agricole.
TotalEnergies in focus as oil prices jump and earnings loom
TotalEnergies stock has been in a strong rally this year and is now trading at its all-time high. It ended last week at €83.45, up by 70% from its lowest level last year, with its market capitalization hitting €187 billion.
TotalEnergies stock has jumped because of the ongoing crude oil rally. Brent, the global benchmark, is slowly nearing the important resistance level of $120, and analysts expect the surge to continue as the US and Israel prepare to launch a major attack against Iran.
Another attack against Iran will be more severe than in the past, with Iran warning that it will target all energy targets in the region. Officials warn that Iran’s capabilities are better than that of the Houthis, who have wreaked havoc in Saudi Arabia.
The most recent earnings showed that Total’s sales jumped to €61.7 billion in the second quarter, up sharply from €49.6 billion in the same period last year. Its net income soared to €5.4 billion from €2.68 billion a year earlier. The upcoming earnings are expected to show that its revenue accelerated in Q3 and this trend will continue as energy prices remain elevated.
Airbus to publish its earnings as its stock retreats
Airbus stock has slumped in the past few months, moving from a high of €217 in August to the current €192. This retreat has coincided with the ongoing weakness of other aerospace companies like Boeing, Bombardier, GE Aerospace, and Rolls-Royce.
The upcoming earnings report is expected to show that its consolidated revenue rose to €17.9 billion. Airbus is expected to jump to €12.9 billion, while its helicopters and defense & space are expected to bring €1.99 billion and €3.2 billion, respectively. Its net income is expected to come in at €1.29 billion.
Airbus is facing challenges as the civil aviation business struggles. As a result, the company lowered its deliveries target to 870, lower than the expected 880. The decline was mostly due to the ongoing challenges caused by Pratt & Whitney.
BNP Paribas, Société Générale, and Crédit Agricole
Top French banks have slumped in the past few months, mirroring the performance of other European banks. BNP Paribas has dropped by over 26% from the year-to-date high. Similarly, Societe Generale and Credit Agricole have dropped by 30% and 27%, respectively.
These banks have erased most or all of the gains they made earlier this year. This decline is because of the view that their growth will decelerate and that their valuations have become overstretched.
French banks will react to their upcoming earnings and the upcoming European Central Bank (ECB) interest rate decision. Economists expect the bank will leave interest rates unchanged and hint of further hikes.
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