From Standard & Poor's European MarketScope
Nordic Brewer Carlsberg was up 3.50 Danish kroner to 334.50 kroner, after the company reported a fall year over year in first half earnings before interest to 1.3 billion kroner, but beat expectations of 1.2 billion in a Reuters' poll. First half net profit came in at 314 million kroner, up from 104 million kroner last year. First-half sales landed at 17.8 billion kroner, lower than forecasts of 18.3 billion kroner, but up from last year's 17 billion kroner. The group repeated its forecast of a 15% rise in net profit for fiscal-year 2005.
Drugmaker Schering was up €1.49 to €53.47, bucking the overall trend in Frankfurt, with traders highlighting talk that Swiss drugmaker Novartis might be interested in the compan. Novartis, however, told MarketScope that it does not comment on market speculation. Its stock was down 0.25 Swiss francs to 62.90 francs.
Commerzbank was down €0.37 to €21.42 after JP Morgan increased its target on takeover hopes. The broker lifted its target to €20 from €17, but sees the price going up to as much as €25 in a takeover scenario. It kept its neutral rating.
Deutsche Telekom was down €0.19 to €16.27 after posting first-half results slightly below estimates. The company reported first-half revenue of €29.1 billion, up 3% and adjusted earnings before interest, taxes, depreciation and amortization of €10.1 billion, up 5.7%. The company highlighted strong revenue growth in mobile communications, up 7.9% year over year to €13.9 billion. Broadband and fixed network net revenue slipped 2.6%. Following the results, the investment bank Dresdner Kleinwort Wasserstein highlighted that the company slightly missed on sales, but said that domestic wireline cost control and US mobile earnings were ahead. It rated the company buy and kept its €18.5 target price.
Air France-KLM was down €0.21 to €13.80 after posting first-quarter revenue up 5.5% year over year to €5.19 billion. The airline registered passenger traffic up by 6.5% on a 4.9% increase in capacity during the period. Traffic is up around 8%, compared to the European airlines association average of 5.7%. Meanwhile, the company faces a second class-action lawsuit for $124 million in Toronto after its Airbus A340 jet crashed and caught fire while attempting to land, according to the newspaper La Tribune.
Vallourec was down €9.50 to €310.50, on news that financier Vincent Bollore's Sumatra Investissements has reduced its voting rights in the company to around 20% from 26% in January, according to the newspaper La Tribune. This places Bollore as the second main shareholder after steelmaker Salzgitter.
Luxury-goods group Hermes was down €1.90 to €160.10. Societe Generale lifted its target to €183 from €176 and kept its hold rating. The broker said that the foreign exchange rate should benefit the group, allow it to redress margins back up to the historical peaks of 2003. However, the broker noted that the company's internal growth will be among the least dynamic in the sector, inferior to its original estimates and slowing down in relation to 2004. It said that internal problems, particularly in the leather section, are penalising the company. It kept its hold rating.
ING Groep was down €0.70 to €24.40 after reporting second-quarter net profit down 8.9% year over year to €0.72 per share. Pre-tax profit excluding the impact of divestments arrived 7.6% lower year over year at €1.833 billion. The financial services group proposed to pay a first-half dividend of €0.54 per share in cash, up from €0.49 in the first half of 2004. The company remains confident about the remainder of 2005. The brokerage Cheuvreux said that pre-tax profit is lower than expected, due to weaker-than-expected banking and insurance results. It rates the group outperform with a €28.40 target.
Mittal Steel was up €0.39 to €23.85 after Lakshmi Mittal said he might be willing to dilute his 88% stake in the company, in a move that could release a tranche of shares worth up to $2 billion, the Financial Times reported.
Standard Chartered bank was down £0.22 to £12.25 after Credit Suisse First Boston recommended waiting before buying. The broker raised its earnings per share forecasts by between 3% and 8% to reflect the better-than-anticipated interim figures. It said that after the very strong run in the share price since mid July, it is highly likely that the shares will pause for breath.
News and information group Reuters was down £0.02 to £3.64 after Deutsche Bank removed the stock from its recommended "Pan-European Focus List." The broker said that considerable value creation is likely from management's comprehensive restructuring programme. Though the broker believes this is the right strategy, it does not expect results to be tangible soon, with full benefits in 2008, and argues that other stocks are likely to outperform the company in the coming weeks. It retains its buy rating with a target price of £5.30.
Gambling website Sportingbet was up £0.05 to £3.62 after Morgan Stanley raised its target to £4.10 from £3.80, and reiterated its overweight rating. The broker explained that the increase in price target reflects the earnings enhancement from the acquisition of ISC, and stronger underlying trading. It raised its 2005 earnings per share estimates by 4% for 2005, 7% for 2006 and 5% for 2007.
Italy Textile group Marzotto was down €0.63 to €4.03 and the stock suspended limit down. Previously, the company's shares rallied without any clear explanation. The market was betting on a battle for control over the group between different members of the Marzotto family.