On the Move: British Energy, Corus, Philips

United Kingdon

BRITISH ENERGY was up £0.23 to £4.50. Goldman upgrades to neutral from sell, raises target to £4.34 from £3.84, after yesterday's 24% share price fall, following a further output warning. says the shares are now in line with the revised price target. Goldman otes that since initiation with a sell on 25 July, 2005, the shares have risen by 9% compared to the market +23%. UBS upgrades to buy from neutral, cuts target to £5.30 from £6.85, saying sharp reaction to outages yesterday creates a buying opportunity. Morgan Stanley cuts target to £4.10 from £5.15, retains underweight. says based on fundamental valuation, the risk/reward profile does look more attractive now following the fall in the shares, down 24% on the outage news. However, the brokerage thinks the risk of further operational problems outweighs the potential upside from the resolution of these problems, in particular the boiler tube cracking issues. Citigroup cuts target to £4.70 from £6.20; retains hold. SocGen upgrades to hold from sell, retains £4.10 target. Dresdner ups to reduce from sell, cuts target to £4.00 from £6.05.

CORUS (UK) was down £0.00 to £4.79. The company confirms has got a proposal from Tata Steel at £4.55/share in cash, adding that discussions are taking place with Tata Steel.


LVMH was down €2.00 to €80.65. The company posts nine months sales of €10.626 billion, +11%; Wines & Spirits unit sales of € 1.894 billion, +12%; Fashion & Leather Goods unit sales of €3.729 billion, +11%; Perfumes & Cosmetics unit sales of €1.807 billion, +11%; Watches & Jewelry unit sales of €489 million, +22%. Confirms its objective of a 'very significant' increase in its results in 2006.

DANONE was up €1.80 to €113.30. The company posted nine months sales of €10.772 billion, +9.1% like-for-like; third quarter sales of €3.55 billion up 4.1%, +9.5% excluding currency effects and Britannia Industries. Raises fiscal 2006 sales growth target. Expects organic sales growth to be above 8%. Separately, Fideuram Wargny raises target to €120 from €115. says the company published very satisfying results. says third quarter oganic growth of 9.5% is better than what the broker expected (7%). Keeps buy.


RWE was down €0.92 to €77.14. Macquarie has won the auction for Thames Water. The Australian bank is paying £4.8 billion plus £3.2 billion of debt for the UK

's biggest water company, owned by the company This is towards the low end of expectations. HVB notes that the company did not disclose what will happen with the proceeds from the sale. Points out that in earlier statements, CEO Roels stressed that the company will focus on electricity and gas in future investments. Broker lifts target to €60 vs €58, reiterating underperform. WestLB ups target to €82 from €80 sticking with add. Meanwhile, International Power shares gain amid rumours that the company is planning to bid for it.

MAN was down €0.59 to €67.85. Dagens Industri reports that the company will raise its offer for Scania to SEK500 per share. Scania and Investor seem to be willing to start talks with the company following pressure from VW, according to the Swedish daily.


TENARIS was down €0.03 to €14.39. In an interview with the FT today, CEO, Paolo Rocca, has said that the acquisition of Maverick, the St Louis-based pipe-maker for US$3.2 billion in June, was a major coup - as it has allowed the company to expand its operations in both the US and Canada. The pipe-maker has seen its revenues grow during the recent high capital spending in the oil and gas industry, reported the paper. With the acquisition Citigroup assumes that leverage will increase near-term (as the company is financing a large portion of the deal with debt) and EBITDA grows between US$400 million-US$500 million per annum. Reiterates buy and notes that the company should continue to benefit from a strong outlook for E&P spending, improving product mix and successful growth strategy, which has been adequately implemented by a strong management team.

AUTOSTRADE was down €0.39 to €22.50. The company has confirmed it received a letter from Anas, the Italian road regulator, regarding the Abertis merger. The letter confirms the govt and the company 's position on the merger, signifying there are no obstacles in the way of the deal. Italian Prime Minister, Romano Prodi, yesterday in Madrid gave the green light to the the company /Abertis merger. Also, the EU is set to deliberate in two weeks whether the Italian govt breached regulations governing free trade, in its interference in the merger, reports press.


PHILIPS (PEG) was down €0.58 to €27.03. Following yesterday's third quarter results, the company sees recommendation and target price changes: ABN downgrades to hold from buy and lowers its target to €30.40. SocGen also downgrades to hold from buy, fair value of €29.50. UBS raises the target to EUR 32 to €31, maintaining buy recommendation. Deutsche Bank downgrades to hold from buy, target of €30. Kempen raises the target price to €32 from €31, maintains buy recommendation. For details, see Broker Views and News. Separately, the company announces the appointment of Stephen H. (Steve) Rusckowski as CEO of Philips Medical Systems, effective 1 November 2006.

ING GROEP (ING) was down €0.75 to €35.20. The company will sell its insurance unit Nationale Borg to HAL Investments and Egeria. No financial details were disclosed, but Nationale Borg has assets of €147.4 million.

NUTRECO was down €2.04 to €45.20. Kempen downgrades to hold from buy and lowers target price to €50 from €52. The broker lowers estimates for the company 's fish feed business and poultry meat business as raw material costs are on the rise. Following excellent share price performance on the back of strong fish feed first half results, super dividend and share buy back and with an eye on valuation, broker sees little upside from here. Additionally, the International Council for the Exploration of the Sea says Atlantic waters need more time to rebuild stocks.


SCANIA was up SEK2.00 to SEK487.50. Dagens Industri reports that Germany's MAN will raise its offer for the company to SEK500 per share. Meanwhile, the company and Investor seem to be willing to start talks with MAN, following pressure from VW, according to the Swedish daily. Separately, Cheuverux raises its 2006-2008 EPS estiamtes by 2-5% following the company 's third quarter results. Notes the company has reiterated its view of >10% sales growth per annum for the next four years along with margins up to 15%. Meanwhile, JP Morgan raises target to SEK370 from SEK325.

SWEDISH MATCH was down SEK4.50 to SEK114.00. The Swedish budget proposal includes a 100% increase in the tax on snuff products, to SEK246 per kilo, Dagens Industri reports. This would imply a 30% increase in the price of loose snuff and a 15% increase in the price of pouched. Carnegie notes Swedish Snuff represents 15% of the company 's group sales, but one third of group earnings. The broker cuts its sales estimates by slightly less than 1% for 2007 and 2008 and earnings estimates by 3%.

HENNES & MAURITZ was unchanged at SEK314.00. Handelsbanken reportedly downgrades recommendation to accumulate from buy and lowers price target to SEK355 from SEK360. The broker is said to believe that upside potential from now on is limited as stock trades at a 10% premium to peers. The broker cuts EBIT estimates by 2.8% due to weak September sales numbers, increasing German worries.


REPSOL YPF was down €1.65 to €25.70. Construction firm Sacyr-Vallehermoso has bought a 9.23% stake in the company at an average price of €25.32/share. Total investment was €2.86 billion. Sacyr wants to lift its stake in the company to 10%. the company 's shares fall after a delay to the start of trade. Bear Stearns downgrades the stock to peer perform saying that after the company 's 10% move in less than one week, shares are likely to pull back. Thinks the Sacyr mover does not preclude another bid from a third party, but sends a signal that some powers will seek to keep the company in Spanish hands.


ROCHE was down CHF1.80 to CHF219.70. Third quarter sales come in at CHF10.478 billion, up 20% year-over-year, amid strong demand for cancer treatments. Guidance maintained. Dresdner notes that Avastin sales were light at CHF741 million vs its estimate of CHF823 million and CHF486 million third quarter05. The broker presumes this slowing in Avastin is due to the high penetration in colon cancer. Thinks the company 's stock is overvalued at these levels. Rates sell.

CONVERIUM was down CHF0.05 to CHF15.90. The company agreed to sell its North American operations to Berkshire Hathaway for a total consideration of US$295 million, comprised of US$95 million in cash and US$200 million in assumption of debt.

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