Total Shares Drop on Strike Concerns
From Standard & Poor's European MarketScope
NEOPOST gained €1.15 to €84.25 Wednesday. Cheuvreux raised its price target on the shares to €100 from €88, after strong first half results. Maintains selected list rating. UBS raises target to €96 from €93, rates buy. CSFB notes on the back of strong first half 2005 results, the company 's management is increasing fiscal 2005 targets. The broker rates the shares neutral. The company posted first half attributable net profit of €64.5 million, up 31.4%; net operating profit of €99.6 million, up 20%; gross operating profit of €126.3 million, up 11.3%; and operating margin of 24.4%, vs. 22.2% in first half of 2004. Sales came in at €404.4 million, up 9%. Neopost raised its fiscal 2005 operating margin guidance to above 24% and reiterated its organic sales growth target of 7%. This is the third time this year that the company has lifted guidance.
TOTAL (TOT ) fell €7.10 to €216.40. French port workers are extending a strike, which has blocked port activities at Marseille for nine days, until Friday. Production at the Lavera refineries could be threatened by the extended industrial action.
ACCOR (ACRFY ) fell €0.07 to €42.80. Benjamin Cohen, the hotel operator's vice chairman, tells La Tribune the company will have no problem refunding Colony, in the event of a disagreement over group strategy. Colony has invested €1 billion in the company, €500 million in the form of bonds redeemable in shares (ORAs), in exchange for two seats on the supervisory board. The company confirms it will not sell 28.93% in Club Med, writes the daily. Ixis rates buy with €50 target.
DEGUSSA was down €0.39 to €36.75. The company will take an impairment charge of €830 million in fine chemicals, to be a non-cash, one-off item in the third quarter. Says it is stepping up its restructuring efforts in fine chemicals. Reaffirms 2005 outlook.
SCHERING (SHR ) fell €0.38 to €52.54. The company received EU approval for vasovist, its magnetic resonance angiography contrast agent.
BILFINGER declined €3.83 to €41.99. The company sees fiscal 2005 net earnings at €65-70 million, against an earlier forecast of more than €70 million, but still has a net target of €100 million by 2007.
INDESIT added €0.19 to €9.45. The company expects to close 2005 with revenues above the €3.2 billion registered in 2004, Finanza & Mercati writes. Meanwhile, Il Sole 24 Ore reports that the company has opened its first Russian logistic center with capacity of 250,000 finished pieces per year. This represents the first step for the company in the creation of an industrial district which will produce and sell 3 million pieces per year. Separately, ING says the company suffers from strong price pressure and high raw material prices, which is not easily transferable to selling prices, undermining industrial margins. Citing consensus multiples, the broker says the company does not appear particularly expensive.
VIAGGI DEL VENTAGLIO gained €0.01 to €1.03. According to Il Sole 24 Ore, Blackstone fund is interested in buying two holiday resorts from the company for €85m.
LUXOTTICA (LUX ) fell €0.63 to €20.98. Fashion designer Giorgio Armani, who owns a 5% stake in the company , is considering selling its stake soon, Finanza & Mercati reports.
ROYAL DUTCH SHELL (NL) (RD ) fell €0.42 to €26.66. International terrorism, corruption and local activism are threatening oil operations in many countries, the FT reports, quoting Ian McCredie, head of Global Security Services at Shell International. He says the growing risks had forced the company to make its own security arrangements in hostile environments, covering many of the most important areas in which it operates.
KPN (KPN ) rose €0.07 to €7.95. The company is now the sole owner of mobile telco Telfort in the Netherlands for a total takeover sum of €980 million.
SBM OFFSHORE fell €1.60 to €67.75. After upgrading Frans Maas to buy from hold, Kempen removed the company from its Favorite List and replaces with Frans Maas. The broker says momentum in oil services and contract wins have pushed the shares up 28% since June. It adds that valuation now leaves little upside to the shares, while forthcoming contracts for ExxonMobil are well flagged. Kempen says that new capital requirements could even put pressure on the shares.
TDC gained DKK11.00 to DKK340.50. The company has received a bid worth US$12 billion from a group of US and UK equity firms, the Wall Street Journal writes. Separately, the company is moving into the Swedish market for residential broadband and telephony.
VESTAS WIND added DKK12.50 to DKK159.75. The company won a large U.S. order for delivery of 127 V80-1.8MW turbines. Shipping of the turbines will start in June, 2006. No financial details were released. The company reiterated its fiscal 2005 outlook.
SOGECABLE rose €0.11 to €32.63. ING initiated coverage of the company with a buy rating and a €39.1 target. It says the company is its top pick in the Spanish media sector. ING thinks the value of Canal Cuatro (to be launched Nov. 7) is not reflected in current ratings.
BANCO SABADELL was up €0.09 to €22.44. The company 's strong gains in recent days are linked to talk of a corporate move involving Banco Popular, Spanish sources say. Elsewhere, La Caixa has cut its stake in the company to 14.3% from 14.8%, according to La Gaceta. The paper adds that La Caixa may need the funds if it wants to maintain its stake in Gas Natural.
SWISS LIFE added CHF7.60 to CHF196.60. Deutsche Bank lifted its target to CHF198 from CHF191 and keeps its hold rating. Separately, the shares are bucking the market's negative trend, and are up almost 6% on reports that the company 's Banca del Gottardo unit will hold a meeting to discuss a management shake-up on Thursday, increasing speculation that the company is selling Gottardo. A company spokesperson denied that the banking unit is being sold, while Gottardo had no comment.
BP (BP ) fell £0.15 to £6.40. Citigroup downgraded the shares to hold from buy, saying the party is over, fow now. The broker thinks the shares may languish until visibility in a number of areas improves. Citi is slashing earnings estimates by 21% for the third quarter and 4% for fiscal 2005 due to significantly greater hurricane effects, notably volumes, U.S. gas price differentials, and marketing margins.
WHITBREAD was up £0.28 to £10.04. Numis Securites upgraded the shares to buy from hold and raised its price target to £12.00 from £10.17 on bid hopes. Numis argues that the two main obstacles to Whitbread's being taken over have now been removed: pension deficit and the sale of Marriott. It argues that the company could be bought by a VC group, which could subsequently sell units like David Lloyd leisure to another group like Duke Street Capital.
BRITISH AIRWAYS (BAB ) fell £0.03 to £2.93. ABN Amro downgraded the shares to sell from hold and cut its target to £2.40 from £2.80 as it cuts forecasts across the board in the sector (by an average of 34%), doubting the revenue environment will sustain its "present nirvana". ABN argues fuel surcharges should be overtaken by fuel costs and believes hedging is a delay mechanism, not an escape route. Separately, the company is facing a twin-pronged challenge in its most profitable market from two new airlines that are launching business class-only flights between London and New York, The Times reports. The daily notes Eos yesterday brought forward its launch date to Oct. 18 in an attempt to steal a march on the fellow start-up airline MAXjet, which is launching on Nov. 2.
MICHAEL PAGE was down £0.07 to £2.42. Investors took profits in the shares after the company reported third quarter revenues (gross profit) of £69.2 million, up 29.2%, year-over-year, and beating market expectations of around £66.0. In the UK, revenues were up 18.4%, while in continental Europe, revenues were up 44.4%. They were up 29.5% in Asia Pacific, and up 71.5% in the Americas. The company says it is encouraged with the strengthening growth of its European businesses, particularly from its permanent recruitment business in France, and remains confident of its prospects for the remainder of the year. The third quarter is traditionally the company's weakest quarter.
ITV fell £0.01 to £1.12. Ad revenues for ITV1, the company 's core terrestrial channel, are expected to fall by 4.9% this year and by 3.6% in 2006, the FT reports, citing a study from media buyer ZenithOptimedia.