Bluebell stake in Kering and the rising importance of hard luxury 

Bluebell, an activist fund, which already owns a stake in Richemont announced this week being also a shareholder in Kering. Bluebell objective is to revive the merger discussion between Kering and Richemont which failed through, 2 years ago. The case for a merger seems appealing. Following the recent underperformance of Kering and the strong performance of Richemont, it would be more a merger of equals than a takeover of Richemont by Kering as it was perceived 2 years ago.

Our reading is that LVMH with its strong financial position, should be the ultimate buyer of Richemont as Cartier and Van Cleef, Richemont jewelry brands, are far more powerful brands than Bulgari or Tiffany (LVMH jewelry brands). The Bluebell move underlines the rising importance of jewelry and watches (hard luxury) in the sector. On the other side, the volatility of Gucci earnings and its negative impact on Kering share price underlines the risk of overexposure to fashion. 

Strong easyjet results

The strong Easyjet Q2 2023 numbers issued this week confirmed the strength of the recovery of tourism in Europe.  EasyJet’s strong third-quarter financial performance, which beat analysts’ expectations, was boosted by a 22 per cent rise in ticket prices year on year. Management made bullish comments on winter bookings.

SAP Q2 results in line

For the period ending June 30, SAP published results in line with the consensus which was a 19% year-over-year growth in cloud-related revenue. SAP slightly lowered the high-end of its revenue forecast for the rest of the year as it now expects €14.0 to €14.2B in cloud revenue, up from €11.43B in 2022. It previously forecast €14.0 to €14.4B.

ASML revising up its 2023 outlook 

ASML Q2 was strong and above market expectations. Management revised its growth outlook for 2023 from +20-25% to +25-30%.