EU HEALTHCARE: Healthcare: Week in Review
13 Names reported this week. Mainly neutral or slightly positive. Higher beta names outperformed with the general tightening.
• Baxter was moved to Outlook Negative with Moody’s. The company is already beyond the leverage threshold for a cut to Baa3. S&P has had the company at BBB Neg for 3 years now, so a cut to BBB- would not be a surprise given the slow pace of deleveraging.
• Viatris 1.908 32 was 14bps tighter on the week as higher spreads compressed. VTRS results showed a small beat, but the company is explicitly putting the interests of equity holders ahead of debt.
• Bayer’s equity dropped 10% post-results. Spreads, however, were 4.5bps tighter. The equity had rallied previously on upgraded guidance, so had room to fall. The slight earnings beat was seen as being of low quality with Xarelto’s imminent loss-of-exclusivity overshadowing its recent performance. Litigation provisions are going up, but the company is willing to raise equity if needed. Debt is falling, which clearly helps spreads.
• Novo Nordisk curve was up to 5bps tighter. Poor trial data for rival Eli Lilly’s latest weight-loss pill helped NOVOB equity to bounce 15%.
• Amgen continues to cut leverage following the 2023 acquisition of Horizon. The single EUR Feb 2026 is the next bond to mature; it also has 2 GBP bonds. Worth following should the company come back to the Euro market.
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
EQUITY OPTIONS: Long Dated EU Bank Strangle
SX7E (15/12/28) 150/250^^, bought for 28.3 in 12k vs ~6.5k at 210.00.
MNI: US MBA: MARKET COMPOSITE +9.4% SA THRU JUL 04 WK
- MNI: US MBA: MARKET COMPOSITE +9.4% SA THRU JUL 04 WK
OUTLOOK: Price Signal Summary - Monitoring Support In Gold
- On the commodity front, recent weakness in Gold resulted in a breach of the 50-day EMA, and a trendline drawn from the Dec 30 ‘24 low and connected to the Feb 28 low. A clear break of both trend tools would signal scope for a deeper correction, and open $3245.5, May 29 low. Note, the recovery from the Jun 30 low also highlights a possible false trendline break. A resumption of gains would refocus attention on $3451.3, Jun 16 high. The bear trigger is $3248.7, Jun 30 low. First resistance is $3365.80, the Jul 3 high.
- In the oil space, WTI futures maintain a softer tone following the reversal from the Jun 23 high, and recent gains still appear corrective. Support to watch is the 50-day EMA, at $65.09. The average has been pierced, a clear break of it would signal scope for a deeper retracement. This would expose $58.87, the May 30 low. Initial resistance to watch is $71.20, the 50.0% retracement of the Jun 23 - 24 high-low range. Key resistance is at $78.40, the Jun 23 high.
