Schering Rises on Broker Upgrade
From Standard & Poor's European MarketScope
Television broadcaster ProsiebenSat1 was up €0.49 to €13.83 after French television group TF1 told S&P MarketScope that it has no plans in the near future to enter the capital structure of ProsiebenSat1, as has been rumored in the market. Spokeswoman Anne Blazy said that TF1 had the chance to enter the company four years ago and it did not do so then and it is unlikely to do so now. Speculation started on the back of TF1's scheduled fiscal-year 2004 update on May 30, with some investors expecting more than just figures.
Drummaker Schering was up €0.69 to €50.99 after Goldman Sachs upgraded the company to outperform from in line.
Hypovereinsbank was up €0.02 to €20.19, after the Wall Street Journal reported talk of Italy's Unicredito buying the company, as reported by Il Sole 24 Ore yesterday and by MarketScope on Wednesday. The newspaper said the two sides have yet to settle on an exact price in what is expected to be an all-stock transaction. Sources in Italy told MarketScope at mid-week that the market is expecting an all-paper offer by the Italian group, with each share valued at € 22.
Deutsche Post parcel service was down 0.15 to € 19.30, as the German newspaper Die Welt reported that rival Red Parcel Post is planning to fight the company with very competitive prices.
Barclays was down £0.06 to £5.23, after brokers lowered targets on the bank. Lehman Brothers lowered its target to £5.98 from £6.24, and kept its overweight rating. It said the company's first-quarter personal loan trends are negative for the shares and for the peer group. The brokerage Cheuvreux downgraded the company to underperform from outperform and trimmed its target to £5.50 from £6.30. Morgan Stanley cut its target to £5.00 from £5.40, and kept its underweight rating, saying the company is one of three British banks with above average exposure to unsecured credit. The bank UBS lowered its target to £6.20 from £6.80, and reiterated its buy rating.
Ryanair was up £0.14 to £6.33 after Citigroup said the discount airline's March quarter results, which are due out on Tuesday, are expected to be much stronger than last year's March quarter, which was the subject of the company's surprise profit warning. For the full year to March 2005, the broker is expecting a 9.3% increase in earnings per share to EUR 0.32, with passenger traffic up 19.3% and the average fare down just 0.6%. Operating cost per passenger is expected to rise 3%, due to higher oil prices, according to the broker.
Whitbread, the hotel, restaurant and health club group, was down £0.10 to £9.15 after Credit Suisse First Boston put the company on short-term sell, with a fair-value of £8.65. The broker believes that all of yesterday's 9% move, which followed a report that venture capital groups may launch a takeover, is unfounded. The broker fails to see the upside to a venture-capital bidding for the company at the current valuations. Publisher Reed Elsevier was down £0.05 to £5.34 after the bank ING noted that the company's 2004 fiscal-year earnings per share decline 9.9% under International Financial Reporting Standards compared to local Generally Accepted Accounting Principles. The bank believes that the company is the most attractive publishing stock, saying that positive near-term catalysts should be organic revenue growth coming in at the high end of the publisher range and accelerating advertising and science markets. As a result, the broker maintains its buy recommendation and EUR 13 target.
Retail group Gus was up £0.08 to £8.63, after JP Morgan trimmed its target to £9.42 from £9.60 and kept its overweight rating as part of a report on general retailers in which the broker cut fiscal year 2005 to 2006 earnings per share forecasts by 2% on average.
Television group TF1 was down €0.43 to € 22.11 after the company told S&P MarketScope that it has no plans in the near future to enter the capital structure of Germany broadcaster ProsiebenSat1, as has been rumored in the market. Spokeswoman Anne Blazy said that TF1 had the chance to enter the company four years ago and it did not do so then and it is unlikely to do so now. Speculation started on the back of TF1's scheduled fiscal-year 2004 update on May 30, with some investors expecting more than just figures.
France Telecom was down €0.29 to €23.40, as European telecom operators are facing tougher competition as they introduce triple-packages of TV, telephone, and broadband internet services, according to the Reuters Telecoms, Media & Technology conference. Mike Fries, CEO of Europe's largest cable company, UnitedGlobalCom, said companies in the sector are racing to the middle. Fries said competition is driving product innovation, but pushing down prices.
BNP-Paribas was up €0.65 to €56.50, after Fitch rating agency upgraded the company's individual rating to A/B from B. The company's short-term, long-term and support ratings are affirmed at F1+, AA and 1.
Broadband internet equipment provider Alcatel was up €0.04 to €8.91, as brokers are cautious about the company's own targets following a long-awaited meeting that failed to deliver additional information or news on new contracts.
Aerospace giant Eads, parent of Airbus, was up €0.20 to €23.81 after the German daily Handelsblatt reported that German and French shareholders have agreed to name Gustav Humbert as head of the company's Airbus unit. The appointment should terminate a long-standing row over the management of the unit.
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