December 14th, 2020 | 12:54 CET
TUI, Blackrock Gold, ThyssenKrupp - This news will move the share prices
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The native Rhineland-Palatinate has been a passionate market participant for more than 25 years. After studying business administration in Mannheim, he worked as a journalist, in equity sales and many years in equity research.
TUI - Further price losses to be expected
On December 2, 2020, the travel group reported that it had reached an agreement with a consortium of banks, KfW and the Economic Stabilization Fund on a further financing package worth EUR 1.8 billion. In retrospect, this agreement came just in time before the upcoming lockdown.
Last Thursday, the Group reported on the fiscal year that ended on September 30, 2020. The figures presented a devastating picture. Revenue slumped by 58%; guest numbers fell by as much as 62%. Operationally, a loss of EUR 3 billion was incurred. The Group's plans to streamline its operations in the future and raise its annual savings targets from EUR 300 to EUR 400 million failed to excite many market participants given the losses incurred and the intangible change processes.
Analysts downgraded the TUI share in succession. The Swiss UBS was particularly negative. The analyst in charge put the share up for sale with a price target of 110 pence (equivalent to EUR 1.20). The share has already lost almost a quarter of its value since the beginning of December. Now that several factors are intensifying negatively (lockdown, low figures and analyst downgrades), the TUI share is likely to head further south. The EUR 3 area has marked the end of the downward movement several times in recent months.
Blackrock Gold - 2021 will be exciting
The exploration Company Blackrock Gold is focusing its efforts exclusively on its two projects, Silver Cloud and Tonopah, in the US state of Nevada. The goal is to discover new, economic gold and silver deposits along established trends or zones of mineralization.
In early December 2020, the Company reported drill results from the DPB zone of the Tonopah project. Several intercepts of high-grade mineralization were encountered, confirming the Company's geological model. Blackrock Gold also announced its intention to establish a resource definition by the end of 2021. Additional drilling programs must be run for this.
After a consolidation that has been ongoing since the summer, the Company is currently valued at CAD 65 million. Rising precious metal prices and, in particular, the newsflow from new drilling programs should boost the share price again next year. Traditionally, the month of December offers good entry opportunities, especially in Canada, as investors exit for tax reasons. It is not uncommon to see a significant price increase already after the turn of the year.
ThyssenKrupp - no state aid
The Group already initiated the strategic realignment in May 2019. But as is so often the case, transformation processes prove to be more protracted than expected and put investors' patience to the test.
The focus is currently on the Group's ailing steel division. On Friday thyssenkrupp reported that the Group was rejecting a state investment. With its strict conditions, the economic stabilization fund is not the right vehicle for restructuring the steel business with equity. The Company now wants to decide by next March on how to proceed with the steel business. If the Group continues with the business, this will entail massive cost reductions and job cuts. Another option is to sell the business. There is currently an offer from the British Liberty Steel.
The stock has recovered significantly from the lows of recent months. The news situation, sentiment and many question marks over the future of the steel business argue for continued weaker share prices.
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