Clarins Rises on Guidance
From Standard & Poor's European MarketScope
Cosmetics maker Clarins was up €1.60 to €51.95, after the brokerage Cheuvreux increased its target to €57 from €55 and kept its outperform rating, after the company reiterated its fiscal-year guidance. The company expects revenue to exceed €1 billion, compared to €939 million in fiscal year 2004, based on 18% growth in perfumes (which accounts for up to 37% of revenue) and 23% growth in beauty (which accounts for 63% of revenue). Operating margins are forecast to be lower, at 12.2% compared to 13.2% last year.
Aerospace and defense giant EADS was down €0.32 to €23.33, as the Times newspaper reported that the decision to delay the launch of the Airbus A350 aircraft was made in order to allow time for the European Union and the U.S. to negotiate a settlement in their trade dispute. The newspaper added that Airbus insisted the delay did not indicate any weakening in its stance in the dispute over subsidies. Separately, there are more deals coming from the Paris Air Show, from Tiger Airlines, CCM Airlines and Air Cairo.
Videogame maker Infogrames, which owns Atari in the U.S., was up €0.21 to €1.54 after the company reported a fiscal-year 2004/2005 net loss of €25.3 million, narrower than the €31.5 million loss reported in the previous financial year. Operating profit rose to €22.2 million from €2.6 million, beating the company's own guidance of €20 million. Debt also fell to €188.6 million compared to €313.3 million.
Media group Vivendi Universal was up €0.28 to €25.50 after the company's unit Def Jam Music Group won the reversal of a $54 million judgment over a claim it had blocked a rival label from releasing an album by rapper Jeffrey "Ja Rule" Atkins. The New York court found the unit and its former CEO Lyor Cohen had backed out of an agreement that would have allowed TVT Records to commercialize the record, Bloomberg reported.
Carmaker Renault was up €1.20 to €70.75, as European registrations fell 2.9% for the company's cars during May, compared to a 1.4% drop in registrations for the overall market.
KarstadtQuelle was up €0.78 to €10.49, as the company's majority shareholder Madeleine Schickedanz is increasing her stake. Last week she is reported to have bought more than €2.6 million worth of shares, and the week before that, more than €1.95 million worth.
HypoVereinsbank was up €0.47 to €21.07, after the Financial Times wrote that it wonders if new owner Unicredito's chief executive Alessandro Profumo has been conservative enough to offset the risks that may be lurking in the bank's massive loan book. The report said that the bank insists the books are clean, but points out that it said something similar a year earlier, after making a €2 billion adjustment to its investment portfolio. Further, it has been dogged by loan-book problems since the merger of Vereinsbank and Hypobank in 1998.
Industrial group Linde was up €0.81 to €59.11 after The Financial Times highlighted speculation that British industrial gas group BOC was talking with Linde about acquiring its gas operations. The newspaper noted that BOC has been linked in the past with Linde's industrial gas assets, although the rumor was denied late last year by chief executive Tony Isaac.
Hospital operator Rhon Klinikum was down €1.48 to €54.09, after the company said that the HypoVereinsbank banking group plans to sell its 27.7% stake in the company. The bank Sal Oppenheim said that, although a placement was to be expected, it did not anticipate it so early.
British American Tobacco was up £0.15 to £11.08 after JP Morgan lifted its price target on the stock to £13.00 from £10.90, implying 18% upside potential, and kept its overweight rating. The broker said that a steep decline in U.S. legal risk could allow the company over the next three years to re-leverage its balance sheet.
Retailer Marks & Spencer was up £0.09 to £3.56, after the broker Seymour Pierce estimates that even with a likely pick-up during the last week and half of June, first quarter like-for-like sales for non-food will be down around 7% to 8%. Despite this, the broker thinks that in the current year chief executive Stuart Rose will achieve its near top of the range estimate of £680 million, unless something else goes seriously wrong. Meanwhile, the Guardian newspaper reported that an Icelandic investment group has made a £170m raid on the company. The report said that the group is thought to be building a stake in the company of more than 3%.
Mining group Antofagasta Holding was up £0.16 to £11.95, after JP Morgan noted that copper's current performance looks fully justified on the basis of its extremely low inventory levels. However, the broker thinks that buying copper at these levels is somewhat akin to buying a skiing holiday in April: it could be good, but it is late in the season, and the odds are increasingly stacked against you.
Miner BHP Billiton was up £0.16 to £6.94 after Morgan Stanley said that it believes that dollar weakness and robust longer-term prospects for China are leading to a period of stronger commodity pricing. The broker kept its European metals and mining industry view as in-line, noting that valuations are only moderately attractive when compared with the market.