On the Move: Total, Commerzbank, RWE

Plus: Roche, Sainsbury, Land Securities, and other European companies making headlines Wednesday

From Standard & Poor's European MarketScope


TOTAL (TOT ) was down € 2.80 to € 211.90. Oil prices rose after the U.S. Dept. of Energy revealed crude stocks fell 2.16 million barrels in the week ending Nov. 11, vs. forecasts for a 2.0 million build. Gasoline reserves also fell.

DANONE was down € 1.05 to € 83.55. The company said it has completed the sale of DS Waters to Kelso and will take an exceptional charge of about €100 million in the second half. It added that in fiscal year 2005 exceptional profit will be significantly positive after capital gains on asset sales.

THALES was up €0.33 to €36.34. The company is ready to offer rival bidder ThyssenKrupp a stake in BAE System's Atlas Elektronik, should its offer be approved, according to Die Welt. The newspaper cited sources close to the negotiations saying Thales is prepared to give ThyssenKrupp the chance to buy a stake in Atlas and run the group jointly.


ROCHE was down CHF1.30 to CHF192.10. The company has ended its dispute with Gilead Sciences regarding the 1996 Development and License Agreement for Tamiflu. Tamiflu was invented by Gilead and licensed to the company in 1996, but in June this year Gilead sent a notice of termination to the company. Gilead and Roche will establish joint committees to oversee manufacturing, commercial, and pandemic planning for the product. Gilead will also have the option to co-promote Tamiflu in specialized areas in the U.S. In separate news, the company's cancer drug MabThera showed positive results in a study on the treatment of rheumatoid arthritis. Meanwhile, osteoporosis drug Bonviva is effective as an intravenous injection every two or three months over two years, according to another study.


RWE was down €1.28 to €56.55. The company reported nine months net profit of €1.697 billion, +5.3%; pretax profit €3.018 billion, +6.6%; after tax profit €1.947 billion, +5.9%; sales €29.409 billion, -1.8%, in line with expectations. The group reiterated its fiscal 2005 target of single-digit percentage growth in operating profit and net profit. It said higher fuel prices, power plant maintenance, and a shortfall of carbon dioxide emissions will probably dampen fiscal year earnings.

COMMERZBANK was up €0.06 to €23.35. The company's own traders in Frankfurt told S&P MarketScope that no share placement has taken place this morning. MarketScope contacted traders at other five institutions in Frankfurt, who earlier said the company was considering a placement of 50 million shares at 3%-5% discount to help fund the purchase of Eurohypo. The talk killed early gains in stock as analysts greeted the Eurohypo move as positive. CSFB raised its target to €22 from €18, having increased its 2005 and 2006 stand-alone adjusted EPS forecasts to €1.92 vs. €1.61 and to €1.77 vs. €1.26, respectively.

United Kingdom

SAINSBURY was down £0.04 to £2.87. Citigroup said first half 2005/2006 earnings were in line with expectations but there is bad news on Sainsbury Bank and a cautious outlook for second half of 2005 and 2006. The broker retained its sell rating.

LAND SECURITIES was up £0.79 to £15.82. The company's interim pretax profit jumped 89% as it reported first half adjusted diluted NAV per share of £16.94, +13.8%. It said its combined investment portfolio valuation rose 22.7% to £11.5 billion; pretax profit was £1.184 billion, +89.2%; revenue profit was £218.5 million, +16.1%. The company remained upbeat.

EMI was up £0.10 to £2.26. The company released first half 2006 revenues of £924.60 million, +5.8% (+4.6% CER); EBITA £86.70 million, +12.6%; EBITA margin 9.4% vs. 8.8%; adjusted pretax profit £41 million, +9%. It said music revenues returned to growth. The company added that its global market share rose to 13.1% from 12.5%.

VODAFONE (VOD ) was unchanged at £1.29. Dresdner KW cut its price target to £1.65 from £1.90, but kept its buy rating. JP Morgan downgraded the stock to neutral from overweight. Morgan Stanley cut its target to £1.65 from £1.75, and kept the stock's overweight rating. Citigroup reduced its target price to £1.35 from £1.55, and retained hold.


ASML was down €0.31 to €15.55. Samsung and Hynix are in talks to supply NAND chips to Apple (AAPL ) in a long-term contract. Separately, Deutsche Bank raised its target to €16.5 from €15.5. The broker believes the company will beat initial fourth-quarter 2005 bookings guidance, thanks to an imminent large order from TSMC.


SAAB was up SEK1.00 to SEK146.50. General Motors (GM ) is expected to spend almost SEK10 billion with the carmaker in order to widen its range of models, Dagens Nyheter wrote, adding that a smaller 9-2 model is at the top of the priority list. Meanwhile, Saudi Arabia's vice minister of defense is in Stockholm and is planning to discuss a multi-billion order of defense material from the company and Ericsson, Dagens Industri reported.


TELEFONICA (TEF ) was down €0.12 to €12.37. Urquijo noted that news of America Movil signing an agreement with Vodafone to provide international roaming services is not good news for the company. The broker kept its accumulate recommendation but noted that in the short term the shares could come under pressure.

Prepared by Zaida Espana, Michael Sanderson, Mariella Mongio, Alexander Wisch, Holly Cook, Emma Stevenson, Pawan Girglani, and Rocio Opazo-Aniotz (Standard & Poor's); Alex Halperin (BusinessWeek Online)

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