From Standard & Poor's European MarketScope
Shell Transport was down £0.09 to £5.40 after Lehman Brothers said, with the oil group's restructuring less than a week away, it is setting new price targets: for the A share, €23; for the B share, £16. The bank retained its fundamental recommendation of 3-underweight on both shares. Meanwhile, the Wall Street Journal reported that costs in the second phase of the massive Sakhalin II gas project may double to US$20 billion and the project is expected to be delayed by half a year.
British Airways was up £0.05 to £2.77 after Goldman Sachs noted that the company looks better placed, than Air France-KLM and Lufthansa, but said that the legacy cost bases will continue to be punished. The broker rates the stock outperform.
PartyGaming was up £0.03 to £1.52, after the bank UBS initiated coverage with a buy rating and a target price of £1.85. The broker highlighted that the gambling website's good growth is dampened by regulatory concerns.
Mothercare, the baby and parenting retailer, was down £0.11 to £3.08 after the group said that sales for the 15 weeks to 8 July rose 3.3%. Total British sales were up 0.1%, while like-for-like sales fell 1.8%. The group said that the timing of Easter compared to last year impacted the comparison adversely.
Air France-KLM was up €0.18 to €13.58 as oil prices retreated, with the benchmark crude oil trading at $58.28 per barrel. Separately, Goldman Sachs said that the burgeoning low-price long-haul airline Emirates, the new A380 with lower costss and ill-conceived asset growth are a toxic recipe for the company and Lufthansa, and rated both underperform.
Aerospace giant EADS, the parent of Airbus, was up €0.30 to €26.76 after UBS upgraded its rating to buy from neutral and increased its target to €32 from €23. It also raised estimates for 2005, 2006 and 2007. Air France-KLM's CEO Cyril Spinetta said during annual general meeting last week that the company said it has agreed with clients the delay in A380 deliveries will be around six months, reported the newspaper Les Echos. Negotiations are still under way with Emirates, which has ordered 43 A380s.
Oil group Total was down €3.40 to €204.40 as the company's letter of intention to buy 25% of Russia's gas group Novatek expires today. The newspaper Les Echos noted that Russia's Gazprom is also interested in Novatek, adding that the company will face difficulties trying to resuscitate it, even if it obtains a go-ahead from Russian authorities to proceed with the deal. Novatek is expecting to be floated in the London Stock Exchange.
Automotive supplier Faurecia was up €1.20 to €62.50 after the brokerage Cheuvreux said that the company's deal to provide door modules for DaimlerChrysler should support the strong turnover growth expected in North America. The broker noted that the group has long-term turnover growth target of 5% and said that the company might also benefit from an eventual shift towards outsourcing at Volkswagen. It kept its underperform rating and €59 target price.
Investment company WCM was up €0.05 to €0.48 after its shares were suspended following the dismissal by a Frankfurt court of a compensation claim brought by Rebon against the company for €79.5 million.
The conglomerate Siemens was up €0.95 to €64.03 after peer General Electric boosted its 2005 earnings per share forecast to $1.80 to $1.83, above the previous forecast of $1.78 to $1.83.
Banca Populare Italiana was down €0.12 to €8.32 as the company is expected to launch its two offers (at €24.47 cash and €27.50 paper) for Banca Antonveneta on Monday. Antonveneta's board has already rejected a takeover bid by Italiana, deeming it hostile. While the board says the value of Italiana's two offers are fair, it does not support Italiana's plans for integration. Meanwhile, ABN Amro's bid for Antonveneta closes on July 22. A Rome court will give its verdict on the takeover tussle for Antonveneta within one week, but said not to expect a disclosure before July 19.
Royal Dutch was down €0.80 to €53.15 after Lehman Brothers set a €23 target for A shares and reiterated its underweight rating, with the company's restructuring less than a week away. Separately, the company said that its Russian LNG venture Sakhalin Energy finalised a gas sales deal with Korean Kogas. This follows after both Mitsui and Mitsubishi fell in Asian trading overnight, after Royal Dutch delayed the first shipments of liquefied natural gas from its Sakhalin-2 project in Russia's Far East. The Sakhalin-2 gas project has been hit by an eight-month delay and $10 billion cost rise.
Supermarket operator Royal Ahold was up €0.20 to €7.13 after the company agreed to sell its food services unit Deli XL to South Africa's Bidvest for €140 million. Rabobank said that this figure is €10 million lower than anticipated.
Clothing retailer Inditex was up €0.44 to €22.35 after saying that like-for-like sales in the second quarter are showing a positive trend. Separately, sales of competitor Hennes and Mauritz came in 18% higher in June than the period last year, which was better than consensus estimates of 15%.