AbbVie Cuts 2025 Outlook on Acquisition Costs, Misses EPS Forecasts

Local Market Commentary

South African markets came under heavy pressure on Thursday, with the Top 40 and All Share indices falling by 3.30% and 3.39% respectively, ending at 79,111.1 and 86,082.5 points. The decline was driven by heightened political uncertainty and global trade concerns. Investor sentiment was rattled by the approval of a divisive fiscal framework—including proposed VAT hikes—that has deepened rifts within the ruling coalition, raising fears over its stability. Simultaneously, U.S. tariff threats added external pressure, particularly as South Africa relies on exports such as vehicles, metals, and citrus. Reflecting growing risk aversion, the cost of insuring South African debt rose to 254 basis points, the highest level since April 2024.

European Market Commentary%

European equities suffered their steepest decline in eight months on Thursday, as escalating trade tensions fuelled fears of a global economic slowdown following a new wave of U.S. tariffs. The pan-European STOXX 600 dropped 2.7%, hitting its lowest level since January, while major national indices in Germany, Italy, and France each shed over 3%. Notably, Italian and French markets recorded their worst single-day losses in more than two years.

U.S. Market Commentary

Wall Street endured its sharpest single-day decline in years on Thursday, as sweeping new U.S. tariffs triggered panic over a potential global recession and full-blown trade war. Risk aversion spiked, prompting a flight to government bonds, while equities tumbled—particularly tech heavyweights like Apple, Nvidia, and Amazon. Apple was hit hard by a 54% aggregate tariff on China, a key manufacturing base. The S&P 500 and Nasdaq have now fallen 10% from their recent record highs, officially entering correction territory as markets increasingly factor in the economic fallout of aggressive trade policy.

Asia Market Commentary

Asia-Pacific markets continued their downward trajectory on Friday, mirroring Wall Street’s sharp losses amid heightened global trade tensions following U.S. President Donald Trump’s sweeping tariff measures. China swiftly condemned the additional 34% tariffs and pledged countermeasures, with analysts anticipating a pivot towards domestic stimulus and deeper engagement with non-U.S. trading partners. Meanwhile, the region saw fresh cybersecurity concerns, as multiple Australian pension funds reportedly suffered coordinated attacks compromising thousands of member accounts. Chinese exports to the U.S. have now been subjected to cumulative tariffs of 54%, significantly impacting trade flows and exacerbating market volatility.

Currency Market Commentary

The rand hovered near a three-month low on Thursday, pressured by renewed political uncertainty following a divisive budget vote and escalating global trade tensions sparked by fresh U.S. tariffs. The dollar, meanwhile, remained broadly steady after recovering from six-month lows against the euro and sterling, though it struggled against the yen, which approached a six-month high as investors sought safe-haven assets. Market attention has now shifted to the upcoming U.S. payrolls report, which is expected to offer key insights into economic momentum and the trajectory of future monetary policy.

Commodity Market Commentary

Gold prices slipped on Friday as markets recalibrated risk expectations following U.S. President Donald Trump's latest tariffs, which clarified trade policy direction but heightened fears of an economic slowdown. Oil prices also declined in early Asian trade, heading for their worst week in months amid concerns that a deepening global trade war could suppress demand. Bearish sentiment was reinforced by OPEC+ accelerating its supply ramp-up, now planning to return 411,000 barrels per day to the market in May—well above initial targets. Meanwhile, Russia's oil and gas revenues dropped 17% year-on-year in March and nearly 10% in Q1, according to finance ministry figures.

Primary Health Properties PLC (PHP) +5.13%

Primary Health Properties PLC has proposed an indicative cash and share offer to acquire Assura plc, offering 0.3848 new PHP shares and 9.08 pence in cash per Assura share, valued at approximately £1.5 billion. This deal, representing a premium of up to 25.2% over Assura’s recent share price, will create the eighth-largest UK-listed REIT with a combined £6 billion portfolio of long-leased infrastructure assets. The merger aims to deliver cost synergies, growth opportunities, and better access to capital markets. Assura shareholders will retain upcoming dividends, including a quarterly payment on 9 April 2025. The deal is expected to be earnings-enhancing in its first full financial year and will be financed through third-party debt.

Supermarket Income REIT PLC (SRI) +4.27%

Supermarket Income REIT PLC has declared an interim dividend of 1.53 pence per ordinary share for the period from 1 January 2025 to 31 March 2025, referred to as the Third Quarterly Dividend. The dividend, paid as a Property Income Distribution (PID), will be issued on Friday, 23 May 2025, to shareholders on the register as of Friday, 25 April 2025. Shareholders on the UK register will receive the dividend in GBP, while shareholders on the South African register will receive it in South African Rand (ZAR). The exchange rate and tax implications for the Rand payment will be confirmed by an announcement on SENS no later than Thursday, 17 April 2025.

Rebosis Property Fund Limited (REB) 0.00%

Rebosis Property Fund provided a quarterly progress update as per JSE Listings Requirements, detailing its ongoing efforts to reinstate its suspended listing. The Joint Business Rescue Practitioners (BRPs) reported that all properties, except Bloed Street Mall, have been transferred to buyers, with the mall's delay linked to a dispute over the land lease with the City of Tshwane. The BRPs are continuing engagement with lenders and purchasers on finalising adjustment accounts, while also managing recoveries and insurance claims. Monthly updates will be provided on the company’s investor portal, with further reports to be submitted to the JSE and relevant authorities.

AbbVie Inc. (ABBV) -1.73%

AbbVie lowered its 2025 adjusted earnings guidance on Thursday, citing $248 million in acquisition-related expenses, including milestone payments and R&D costs. The revised profit outlook now stands at $11.99 to $12.19 per share, below the prior forecast of $12.12 to $12.32 and the $12.30 consensus estimate. The downgrade follows a strategic pivot to rebuild its pipeline after Humira’s patent expiry, with over $20 billion spent in 2024 on acquisitions including Cerevel Therapeutics, ImmunoGen, and Aliada. Q1 adjusted EPS is expected at $2.34–$2.38, also trailing Wall Street's $2.51 forecast, ahead of its earnings release on 25 April.

Dollarama Inc. (DOL) +0.38%

Dollarama exceeded fourth-quarter sales and profit expectations, driven by budget-conscious consumers gravitating towards its value offerings during the holiday season. Net sales reached C$1.88 billion, slightly ahead of estimates, while earnings per share rose to C$1.40 from C$1.15, beating the consensus forecast of C$1.31. Improved gross margins of 46.8% were supported by easing logistics costs. The retailer also cited strong demand across consumables and seasonal categories, with recent international expansion via the acquisition of Australia's Reject Shop. For the year ahead, it forecasts sales growth of 3% to 4%, with the midpoint slightly below market expectations.

Lamb Weston Holdings, Inc. (LW) +10.01%

Lamb Weston surpassed third-quarter revenue and earnings expectations, with sales reaching $1.52 billion and adjusted earnings per share coming in at $1.10, well above the 87-cent consensus. The frozen potato products maker benefited from cost-cutting initiatives and the recovery of previously lost sales tied to a database transition. Shares rose around 8% following the announcement. The company, now working with AlixPartners to identify further efficiency gains, aims to reduce capital spending by up to $450 million by FY2026 compared to FY2024. Full-year guidance was reaffirmed.

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