FactSet StreetAccount publishes regular company-level and summary-style ESG news. Below is our recap of key ESG developments and insights over the past week.
Cybersecurity stocks higher alongside an AI-driven rally in tech. Palo Alto reported a Q3 beat and raised Q4, FY guidance, pushing the stock to 52-week high. Analysts noted resilient demand for security solutions, driven by the growing threat of hacks, despite broader economic slowdown. Meanwhile, Fortinet is seeing losses this week following Microsoft’s warning that a state-sponsored Chinese group has attacked its software.
Figure 1: Table of cybersecurity stock prices and valuations versus broad tech
Source: FactSet (PE FY2 column shows price to earnings ratio for earnings forecasted two years ahead)
Thematic sectors mixed on the week with US names broadly outperforming European and APAC peers. In the EV space, US charging names are seeing sustained gains from last week while established EV pureplays continue to outperform smaller rivals as the latter struggle to ramp up production and secure funding. Chinese EV makers trading lower with Xpeng seeing sharp losses on Q1 results which highlighted weaker demand and lower margins, prompting several analyst downgrades.
Chinese PV makers leading solar gains following reports the country is on pace to beat 2022's record-braking pace of installations; gains led by Flat Glass, one of the few Chinese solar names higher YTD. Xinyi Solar and GCL Tech also higher following positive analyst action. US solar players firmer this week led by residential names, with analysts noting resilient demand in the segment. US energy storage also higher; reports on surging US solar installations highlight a resulting surge in demand for battery storage.
Australian lithium miners underperforming in sympathy with the country's broader mining sector amid weaker iron ore prices. JPMorgan downgraded Core Lithium and IGO. Elsewhere, Ford signed supply deals with Albemarle and SQM and others in a bid to reduce costs and simplify supply chains.
Global climate experts have criticized the lack of G7 agreement on tougher fossil fuel cuts. Germany, Japan continue to use of gas and coal respectively. Leaders at the meetings supported development of global sustainable disclosure standards. Politicians are calling for oil exec Al Jaber removed as head of COP28 and want further action to limit influence of fossil fuels at summit. Amnesty International condemned UAE for invite of Syria President. Swiss Re became the fourth insurer to leave industry Net Zero Insurance Alliance; says sustainability strategy remains unchanged. SBTi released its first nature goals, selecting pilot companies to participate. Researchers have questioned the validity of Chevron carbon credits while CEO of Verra resigned after claims the offsets are worthless. Meanwhile, a study suggests global heating is likely to push billions of people outside of survivable conditions.
The US House voted to overturn EPA emissions restrictions on heavy-duty trucks though Biden expected to veto. Seven US states reached an agreement to cut water consumption from the Colorado River. USA Today listed 401 companies it screened as climate leaders. In Europe, MEPs supported stricter rules against industrial pollution. France banned short-haul flights where rail alternative exists in order to cut emissions. Meanwhile, the country remains at odds with Germany over nuclear role in energy transition amidst necessary extra spending. Floods in Italy have killed at least 13 and forced thousands from their homes, bringing calls for increased action on climate change impacts. Indonesia, Malaysia voice concerns over new EU deforestation law.
Tech was in the news on multiple fronts as the US Surgeon General warned about social media impact on kids' mental health while the Supreme Court declined to limit social media platforms protections, ruling for Google, Twitter on terror-related content. Meta was fined $1.3B by EU over data privacy. In AI, the UK will work with firms to protect from disinformation and other threats as regulators struggle to catch up with the new technology. M&S, Diageo pension plans were attacked with personal data likely stolen.
In governance, Justice Department blocked American and Jet Blue's Northeast Alliance on competition grounds. UK's FRC proposed overhaul of corporate governance code, increasing director accountability. Microsoft appealed UK's veto of Activision Blizzard takeover. Entain accused of dishonest lobbying for funding campaign urging people to write to MPs. Disney scrapped plans to move CA workers to FL. AGM's continue with protestors delaying Shell's annual meeting, Norway's sovereign wealth fund to oppose Follow This climate vote at TotalEnergies, and LGIM co-filed a resolution for McDonald's to lower use of antibiotics in meat production.
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