WEBVTT - Wizz Air Falls, Deutsche Post Drops, STMicro Rallies

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio News, The.

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<v Speaker 2>Stock Movers Report, your roundup of companies making moves in

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<v Speaker 2>the stock market, harnessing the power of Bloomberg data.

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<v Speaker 3>Well, let's take a look at some stocks on the

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<v Speaker 3>move today in Europe. I'm Stephen Carroll with Lizzie Burton

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<v Speaker 3>and we're joined by Bloomberg reporter Chloe mele Chloy. Good morning.

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<v Speaker 3>Continued flight disruption, of course, with the conflict continuing in

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<v Speaker 3>the Middle East. You've been looking at the shares and

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<v Speaker 3>Whizzer this morning.

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<v Speaker 1>Yeah, and they are down quite significantly, and that is

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<v Speaker 1>because we just cut its guidance because of that ongoing

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<v Speaker 1>conflict in the Middle East. The disruption has meant, of

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<v Speaker 1>course a lot of flight cancelations, and it also has

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<v Speaker 1>led oil prices to spike, and so that means of

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<v Speaker 1>course higher fuel costs that now Wizze has to absorb.

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<v Speaker 1>And so Whizzer expects the disruption to hit its net

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<v Speaker 1>profit by fifty million yeuros for fiscal twenty twenty six,

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<v Speaker 1>and then ANALYSSA also saying that the fact could extend

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<v Speaker 1>and even deepen into physical twenty twenty seven. And so

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<v Speaker 1>some analysts have said that this profit warning really shows

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<v Speaker 1>the groups lack of resilience, that there's you know, little profitability,

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<v Speaker 1>really high financial leverage. And it's also worth noting that

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<v Speaker 1>WIZ is also very exposed to that Middle East region,

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<v Speaker 1>much more than maybe other airlines as well. So it

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<v Speaker 1>might be that WE'RESA is uniquely badly prepared for such

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<v Speaker 1>a disruption and that the rest of the industry might

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<v Speaker 1>be a little bit better position. But given the magnitude

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<v Speaker 1>of the impact, all the flight cancelations that we've seen,

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<v Speaker 1>it's likely that we'll see more airlines coming out in

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<v Speaker 1>the next few days or weeks and clarifying that earnings impact.

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<v Speaker 3>And another sector that's of course hugely impacted by this

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<v Speaker 3>is logistics. And we've heard from DHR this morning, how

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<v Speaker 3>are they fair and chloge.

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<v Speaker 1>Yeah, they took a bit of a hit this morning

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<v Speaker 1>because the twenty twenty six guidance came in a little

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<v Speaker 1>bit lower than expected. And some of that cautious approach

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<v Speaker 1>is related to that disruption in the Middle East, given

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<v Speaker 1>that DHI is likely to be impacted by the closure

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<v Speaker 1>of airspace. So and LIS have noted that the margins

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<v Speaker 1>for freight carriers like FedEx and ups, and DHL as

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<v Speaker 1>well are impacted will be impacted because of longer transit

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<v Speaker 1>times driving up fuel costs. And so it's essentially a

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<v Speaker 1>similar story to Wizer and others birds about cargo planes

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<v Speaker 1>rather than those passenger planes. The one thing that DHL

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<v Speaker 1>does have going for it is that it's quite diversified company.

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<v Speaker 1>It has a post and parcel business, it has a

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<v Speaker 1>E and e commerce business, so the model is not

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<v Speaker 1>as threatened maybe by those fuel costs as airlines are,

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<v Speaker 1>for instance, but the guidance is still conservative. It does

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<v Speaker 1>indicate a degree of caution going into twenty twenty six,

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<v Speaker 1>and therefore we're seeing the shares down this morning.

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<v Speaker 3>Okay, and away from the events in the Middle East,

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<v Speaker 3>you've been also looking at the share as an st

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<v Speaker 3>micro and aventful day. Yeah.

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<v Speaker 1>Well, while all of this is happening in around, the

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<v Speaker 1>AI trade has faded into the background a little bit,

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<v Speaker 1>but it's still very relevant. And so we had Broadcom

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<v Speaker 1>in the US are coming up with very strong earnings,

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<v Speaker 1>very upbe outlook as well, saying that it expects the

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<v Speaker 1>sell of AI chips to a top one hundred billion

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<v Speaker 1>dollars in twenty twenty seven. And so we've seen that

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<v Speaker 1>positive read across into the likes of st Micro, but

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<v Speaker 1>also be Semiconductors ASML today because this outlook from Broadcom

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<v Speaker 1>suggests continued investment in AI and quite good order visibility

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<v Speaker 1>as well for those companies within that supply chain, and

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<v Speaker 1>then for st Micro specifically, what also pushed to shares

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<v Speaker 1>in the green today was the CEO saying that data

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<v Speaker 1>center related revenue would be well above one billion dollars

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<v Speaker 1>for next year. And so the number that a lot

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<v Speaker 1>of investors and analysts are going to keep coming back

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<v Speaker 1>to is that the world's four biggest hyperscalers, which are Alphabet, Amazon, Meta,

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<v Speaker 1>and Microsoft, are planning to spend a combined six hundred

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<v Speaker 1>and fifty billion dollars on data centers just this year.

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<v Speaker 1>And so this is really a major opportunity for everyone involved.

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<v Speaker 1>All of the companies involved within that supply chain includes STMCRO,

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<v Speaker 1>which was doing pretty good today.

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