From Standard & Poor's European MarketScope
Television broadcaster ITV was up £0.07 to £1.23 after its license fees were lowered. The company said that that license payments for 2005 are less than £80 million under the regulator Ofcom's proposals, a fall of £135 million. The new terms also provide further significant reductions in payments beyond 2005. Commenting on the change, Bear Stearns said that the Ofcom news is good, but it remains increasingly concerned about the poor performance of ITV1's viewing share. The broker is keeping its underperform rating. Airport operator BAA was up £0.24 to £6.23 after the bank UBS upgraded the company to buy from neutral, and increased its target price to £7.0 from £6.50. The broker said that regulation is key for the company, but it believes that the current share price is discounting too much risk for the upcoming review, which will not take place until 2008.
Cigarette maker Gallaher was up £0.11 to £8.20 after the bank Societe Generale cut earnings per share forecasts for 2005 to 59.6 pence from 60.3 pence. The broker said that yesterday's uninspiring trading update, with numerous references to 2005 results weighted towards the second half, probably reflects the company's caution towards first-half results. It retains its sell rating, and fair value target of £6.60. Deutsche Bank raised its target to £8.10 from £7.35 and reiterated a buy rating, saying that in a sector consolidation, the group is more likely to be a target than a predator.
Drugmaker Astrazeneca was up £0.23 to £22.68, after Lehman Brothers lifted target its price to £24.10 from £22.80, and kept its equal-weight rating.
Oil group BP was down £0.08 to £5.88, after the benchmark crude oil price fell to just above $57.00 per barrel after the U.S. Energy Department's weekly inventory report showed an unexpected build-up of 1.1 million barrels of crude oil last week compared to forecasts of a drop of 1.4 million barrels. Meanwhile, in Bolivia, the government has passed a tax increase on foreign oil groups operating in the country, which include BP.
France Telecom was up €1.18 to €23.78 after chairman and chief executive, Didier Lombard said that the company proposes lifting the dividend per share to €1 for fiscal 2005, compared to the consensus expectation of €0.90. Lombard confirmed fiscal 2005 targets and said that the company will pursue debt reduction.
Air France-KLM was up €0.31 to €12.61 after the company presented International Financial Reporting Standards net income of €770 million to March 31 2004, compared to €351 million net income under Generally Accepted Accounting Principles in the year to May 18.
Construction group Vinci was up €1.95 to €67.50, as the company is considering placing an offer to buy Autoroutes du Sud de France after the French state announced it could be selling its stake in the highway operator. Goldman Sachs said that if Vinci acquires ASF everybody would be a winner. The broker kept its outperform rating.
STMicroelectronics was up €0.39 to €13.42 after Credit Suisse First Boston upgraded the company to outperform from neutral and raised its target price to $18 from $14. The broker views second-quarter 2005 results as a potential positive catalyst for the stock; they make it the broker's top near-term pick. Separately, U.S. software maker Oracle posted a better-than-expected fourth quarter profit gain of 3.2%.
Deutsche Telekom was up €0.25 to €15.11, as the company said that its mobile unit T-Mobile is introducing new wireless plans which will allow customers to download three times as much data from the Internet onto mobile phones each month for no extra charge. The company also said that it is on track to save upwards of €500 million this year, and it unveiled a partnership with Google to preset its search engine on T-Mobile's phones. Separately, France Telecom announced it would double its dividend for this year.
Chipmaker Infineon was up €0.09 to €7.73, after Credit Suisse First Boston upgraded the company to neutral from underperform and raised target price to €8 from €6.5. The broker said with low valuation, slightly more supportive prices in DRAM, investor excitement around press reports of a possible break-up, and new management that appears firmly committed to a turnaround, investors should not be short the stock at this point. Separately, HSBC assigned the company an overweight rating and set a target price of €9 on a two-year investment horizon.
Airline Lufthansa was up €0.11 to €10.21 as the company plans to cut five domestic bases for flight attendants in an attempt to cut costs to counter competition from discount carriers.
Deutsche Bank was up €0.73 to €64.23, after the Wall Street Journal reported that the company may say today that it is to buy a group of warehouses and other properties totalling about 2.1 million square meters in 18 US markets for around $1.3 billion. Separately according to the daily Il Sole 24 Ore, the company could have launched a counter bid for Italian bank BNL alone but it decided not to go for it. However, the company's decision not to run alone doesn't exclude the possibility of the bank joining a consortium that could launch a counter bid for control, the paper adds.
Software maker SAP was up €2.08 to €143.08 after its peer Oracle reported fourth-quarter earnings rose 3.2% to $1.02 billion and sales rose 26% to $3.88 billion.
Oil group Royal Dutch was down €0.85 to €54.00 as the company is understood to be considering acquisitions worth up to $9 billion in the immediate aftermath of the historic unification of its Dutch and British holding companies, the Financial Times reports. The newspaper noted that shareholders brought an end to nearly 100 years of corporate history when they voted overwhelmingly to merge the two arms of the company. In the meantime, the benchmark crude oil price remains steady above $58 per barrel.
Mittal Steel was up €0.31 to €19.76, after the company announced that it plans to reduce its global production by one million tonnes in the third quarter of 2005, following similar reductions in the second quarter. CEO Lakshmi Mittal pointed out that this will help to reduce the inventory build up that the market is currently experiencing and help to restore equilibrium to the global supply and demand equation.
Shipping group Moeller Maersk was up 1500.00 Danish kroner to 60,000.00 kroner, after British ports, shipping and ferry firm P&O agreed to sell its entire 25% take in container shipping group P&O Nedlloyd at a price of €62.5 per share in cash, totalling €571 million, to two banks acting on behalf of Moeller Maersk. The company holds now over 44% of P&O Nedlloyd.
Wind turbine maker Vestas Wind was up 1.25 Danish kroner to 102.25, after the U.S. Senate last night approved a new energy bill, that will give support to the wind turbine industry as it includes a production tax credit that is crucial for financing wind projects. The bill must now be reconciled with an energy package passed by the House of Representatives before a final version will be sent to President George W. Bush for approval.
Appliance maker Electrolux was up 2.50 Swedish kronor to 165.00 kronor. Dresdner Kleinwort Wasserstein upgraded the company to buy from hold and increased its target to 200 kronor from 150 kronor, saying that the company is reinventing itself.
Drugmaker Roche was up 2.30 Swiss francs to 161.40 francs, after the company and other vitamin makers won dismissal of an anti-trust lawsuit filed by foreign companies seeking potentially billions in compensation. On the broker front, Lehman Brothers lifted its target on the company's stock to 153 Swiss francs from 130 francs, reiterating its equal-weight rating.