On the Move: Northern Rock, Renault, Siemens
NORTHERN ROCK was down £0.04 to £1.82... RAB Capital snaps 6% stake in the company One of London's most successful hedge fund managers emerged yesterday as a rare bull of the company, placing a £50 million bet that its share price would rally, The Times writes. The company says RAB Capital has snapped up a 6% stake. According to the Daily Telegraph, the company rejected an offer of emergency funding from JP Morgan. The paper, citing sources close to the company , says the US banking giant had only offered £500 million, although the loan is believed to have been part of a wider funding solution proposed by JPM.
KINGFISHER was down £0.03 to £1.78... The brokers cut target prices and adjust ests UBS lowers target price to £2.0 from £2.35. Keeps fiscal 2007-fiscal 2008 pretax profit at £400 million. Assumes flat B&Q second half like-for-like, down from 2%, while EBIT forecast falls 3%, offset by lower interest. Thinks that M&A activity is unlikely, but does give some view of theoretical value. Keeps neutral rating. Lehman reduces target to £2.48 from £2.75. The company says UK outlook dominated the company 's first half results. Cuts B&Q like-for-like estimates for fiscal 2008-fiscal 2009 to -1% and now expects flat profits. Adds given yesterday's sharp fall, current share price appears to value the UK operations for practically zero, which seems aggressive. Cuts fiscal 2009 pretax profit to £389 million; forecasts -1% B&Q like-for-like. Strongly reiterates overweight rating.
BRITISH ENERGY was up £0.31 to £5.19... Shares up on Cazenove push - Cazenove has reportedly put out a punchy note on the company in which it highlights that UK forward electricity price for 2008/9 has risen by 10% in the last three weeks and is now at £42/MWh, its highest level so far this year. If broker assumes that the company sells the remainder of its 2008/9 output at £42/MWh then 2008/9 EBITDA would rise by 5% to £1.3 billion. The broker adds that another area of potential upside is the reliability of the plant. Also mentions the UK government's consultation on new nuclear is due to end on October 10 and broker says any new build will only occur on existing sites, of which the company has the most attractive ones.
RENAULT was up €3.16 to €99.96... Goldman Sachs reiterates Conviction Buy - Broker says that European Autos is one of the best performing sectors in 2007 and has performed robustly in the recent market correction. Believes the market is discounting 2007 operating margins and no incremental growth in industry profitability thereafter. The company says that the market appears to be assuming either a substantial slowing in global growth or is again ignoring ongoing transformational restructuring benefits. The broker sees upside of c.60% to the €150 target price.
ARCELOR-MITTAL (MT) was up €0.96 to €53.14... Lehman initiates with overweight - Lehman Brothers initiaes with overweight and a US$85 target. Despite a view that Chinese production will 'keep a lid' on global steel prices, believes the company 's geographic, operational, and product diversification should allow it to deliver more steady results through the cycle than its peers that are largely levered to the supply/demand fundamentals of just one region. In other news, the company plans to bid for coal assets in Siberia's Sakha republic, according to local media reports. Starting price is reportedly at US$1.9 billion.
PERNOD RICARD was down €3.57 to €147.98... Lehman/UBS cut targets - both keep buy - Lehman Brothers trims target to €173 from €175, overweight. Despite in line fiscal operating results, recent fx moves weigh on broker's fiscal 2008 estimates. UBS cuts target €177 from €180, keeps buy, on similar logic, also citing slightly higher interest rates.
SIEMENS ( 2 Next Page