Truckmaker Man Falls on Gloomy Forecast
From Standard & Poor's European MarketScope
CARREFOUR rose €0.13 to €38.40 Thursday. The company posted third quarter sales of €21.276 billion, up 7.2%. Sales were up 5.1% at constant currencies or up 1.2% on a comparable basis with the prior year. The sales figure was ahead of the consensus estimate of €21.162 billion. The company remains committed to price competitiveness and gaining market share, despite current tough market conditions. Citigroup reiterated its sell rating with a €35 target price.
FAURECIA fell €2.35 to €58.75. The company reported third quarter sales of €2,496.3 million, up 1.2%. It notes exchange rate fluctuations had a positive impact of 1.0% while changes to the consolidation scope had a negative impact of 1.1%. It says sales were stable against the demanding comparison base, and despite the approximate 3% decline in European automobile production in third quarter of 2005. Faurecia expects fourth quarter to be similar to third quarter, with stable sales against a backdrop of declining European automobile production.
INGENICO was up €0.38 to €12.40. The company disclosed third quarter 2005 sales of €104 million, up 8.3%, better than expected. Cheuvreux says this suggests a catch-up after the 6.3% year-over-year gain in the second quarter, caused by delivery delays and quality issues. Reiterates underperform. Kepler says the company sales were surprisingly strong, significantly ahead of consensus of around €97m. It keeps its reduce rating and €11 target price.
MAN fell €1.68 to €39.21. The company's truck division head reportedly predicts no growth in the western European truck market next year, saying the price of oil is an "enormous burden". The company reiterates the 2005 increase in the truck unit's return on sales to 5.5%, and confirms the division's revenue target of €7.8 billion and order intake of around €9 billion.
SUEDZUCKER declined €0.90 to €17.80. The company's second quarter net fell to €82 million from €84.9 million for the same quarter a year ago (flat was expected) on significantly higher sales of €1.41 billion. The company reiterated fiscal year sales are expected to rise 9% to €5.2 billion but will not reach last year's operating profit.
STADA ARZNEIMITTEL was down €1.16 to €28.41. The company cut its forecast for 2005 net income by €10 million to around €50 million -- nearly flat compared to 2004's net earnings of €48.5 million -- due to a write-off linked to an expected marketing delay of a tumor vaccine (LipoNova/ Reniale). Merck Finck cut its earnings estimates from €1.22 to €0.96 for fiscal 2005. Its EPS estimates for the following years remain unchanged as the broker did not include Reniale into its forecasts. The firm keeps its buy rating as the core business is not affected.
ENI (E ) fell €0.56 to €22.44. WTI crude oil traded below US$63.50 per barrel on Thursday. In Italy, the company and Enel will be the first two state assets to be sold to reduce debt, Italian PM Silvio Berlusconi has reportedly disclosed.
MONTE PASCHI rose €0.05 to €3.70 on talk of a potential takeover following Italian government approval of a 30% cap on the voting rights of banking foundations' in banks.
FASTWEB shed €1.11 to €37.20. According to Germany's financial newspaper Handelsblatt, Carlo Micheli, currently owner of a 10% in the company, has appointed Deutsche Bank as advisor for the sale of his stake to institutional investors.
ROYAL DUTCH SHELL (RD ) fell €0.25 to €25.42. The U.S. Securities and Exchange Commission (SEC) has subpoenaed documents from the company, among others, as part of its investigation into an alleged US$170 million bribery case at a gas plant on Bonny Island in Nigeria, the FT writes. The paper adds that the companies involved -- including Total, ENI, a Halliburton subsidiary, and the company -- have denied any wrongdoing.
ASML (ASML ) was up €0.16 to €13.91. Cheuvreux downgraded the shares to outperform from selected list and trims target to €15.5 from €16.5. Separately, Petercam upgraded the shares to hold from reduce. The broker cites strong order intake and higher average selling prices, thanks to increase percentage of Immersion tools, as the cause of the upgrade.
TANDBERG fell NOK14.25 to NOK65.75. Following weak third quarter 2005 results for Tandberg Wednesday, UBS cut its target to NOK81 from NOK83 and keeps neutral rating. Separately, Handelsbanken downgraded the company's stock to accumulate from buy and cut its fair value to NOK90 from NOK100.
NOKIA (NOK ) was down €0.10 to €13.94. The company and China Putian signed an agreement to set up a joint venture to focus on R&D, manufacturing and sales of 3G network solutions for TD-SCDMA and WCDMA technologies.
IBERIA fell €0.03 to €2.21. The company has withdrawn from the bid process for Mexican airlines Mexicana and Aeromexico, says Cinco Dias.
INDITEX was down €0.14 to €24.62. Morgan Stanley says that cost cutting and top-line growth have pushed up European return on equity to 14% from 8% in 2002. The broker expects expect re-leveraging to drive the next phase of value creation, as European balance sheets are at their strongest in 20 years and borrowing costs are low. It says the company is one of its preferred stocks with re-leveraging potential, along with ASML, SAP, Dassault, SGS, Novartis, Roche, Schering, Hays, Mediaset, and Antena 3.
ENDESA (ELE ) declined €0.20 to €21.25. Thursday is the deadline for EU member states to demand the EU competition authorities intervene in the bid from Gas Natural. The EU has stated it will not be able to make a decision on whether or not to intervene until some time next week. The EU is likely to be tougher than Spain's anti-trust authorities, and may also take longer to reach a decision regarding competition.
BHP BILLITON (BHP ) fell £0.38 to £8.05. The company warned that for the current financial year, its net oil and gas production is likely to be as much as 10 million barrels of oil equivalent lower than previous guidance. It says approximately 4.50 million boe of this is associated with Gulf of Mexico operations. Deutsche Bank upped its target price to £10.40 from £9.50, keeps buy.
XSTRATA declined £0.57 to £13.25. Deutsche Bank upped its target to £14.0 from £13.75, reiterates hold.
ANGLO AMERICAN was down £0.73 to £15.85. Deutsche Bank upped its target to £16.90 from £14.90, keeps hold.
BP (BP ) shed £0.12 to £6.22. The company is pursuing a partnership with Sinopec, China's biggest producer and marketer of refined oil products, according to the FT.
RIO TINTO (RTP ) slipped £0.98 to £21.70. Deutsche Bank upped its target price to £27.50 from £22.80, and reiterated its buy rating.
ANTOFAGASTA HOLDING fell £0.72 to £14.65. Deutsche Bank upped its target to £15 from £14.10, retains hold.
Prepared by European MarketScope reporters Zaida Espana (France), Michael Sanderson (Germany), Mariella Mongio (Italy), Alexander Wisch (Netherlands), Holly Cook (Nordic), Emma Stevenson (Spain), Pawan Girglani (Switzerland), and Rocio Opazo-Aniotz (UK)