European Movers: SABMiller, LVMH, Nokia
STANDARD LIFE was down £0.09 to £2.80... In talks with Swiss Re over Resolution - the company says is in talks with Swiss Re regarding a bid for Resolution - which would be mainly cash and rest in the company shares. the company adds Swiss Re will purchase a substantial proportion of Resolution's closed-book assets for cash. The Takeover Panel has set 25 October as put up or shut up deadline for Pearl and the company regarding an offer for Resolution.
JOHNSON MATTHEY was up £1.30 to £18.04... Praxair bid talk persists, shrs rocket - Shares gain on talk that US industrial gases supplier Praxair could be interested in the company and could offer as much as £20/sh. Traders think that the deal is 'doable'. the company 's IR and Corporate Communications director Ian Godwin refused to comment. Also, the company said in a regulatory statement on 11 October that it had appointed Merrill Lynch International as joint corporate broker to work alongside Credit Suisse. Moreover, note that the platinum spot price and lease rates have jumped due to supply concerns and increased borrowing. Also, gold prices hit 28-year high tracking high oil prices.
SABMILLER was down £0.69 to £14.14... Builds on strong start, vols up 11% - the company says has continued its strong start to the year, with organic growth in lager volumes of 11% for 6M ended 30 September, adding financial performance remains in line with expectations. The company says in Latin America, lager volumes rose by 8%; Europe organic growth in lager volumes 12%; North America, Miller's domestic sales to retailers up 5.9% and South Africa lager volumes up 2%.
LVMH was up €2.18 to €87.68... Reports nine months revenues up 13% organically - the company achieved nine months revenues of €11.446 billion, reflecting organic growth of 13% compared to the same period in 2006. the company recorded accelerated growth in third quarter compared to the already very favorable trends at the beginning of the year. Organic revenue growth reached 15% during the period. Wines & Spirits business group achieved nine months organic revenue growth of 14%. Fashion & Leather Goods business group achieved 14% nine months organic revenue growth. Perfumes & Cosmetics business group recorded nine months organic revenue growth of 12%. Watches & Jewelry business group saw nine months organic revenue growth of 22%.
PSA was down €2.22 to €57.85... UBS downgrades to sell from neutral and cuts target to €55 from €60. In a highly competitive sector and weaker macro environment broker is becoming increasingly worried that the company 's late decade targets may simply not be attainable. Thinks someone has to miss and the company looks vulnerable. The broker is also worried that the company 's model cycle will not propel earnings due to another overweight and over budget car (308). The broker has lowered 2007 and 2008 EPS estimates by 10% and 3%, respectively.
COMMERZBANK was unchanged at €31.25... SocGen ready to make offer of €35 a share for the company , Italian daily Libero Mercato reported on Saturday.
GEA was up €0.28 to €26.40... Talk of Salzgitter hovering - Unsubstantiated market gossip at this point in time.
RWE was up €0.18 to €89.62... No talks with EWE / Broker action / Oil find - the company hasn't approached EWE with a view to buying it, the weekend press reported the company 's smaller rival as saying. On the broker front, Morgan Stanley lifts target to €101 from €92, reiterating overweight. Merrill Lynch adds the company to its most preferred list. In other news: reports have it that the company has made a new oil find in the Sirte Basin in Libya.
HERA was up €0.10 to €2.99... Shareholder pact meets - eyes potential alliance - the company 's shareholder pact meets today to discuss possible alliance.
For some time now there has been speculation that the company could eventually be merged wth Iride and Enia - which are currently in merger talks - and the three-way alliance could eventually be extended to AEM-ASM.
PHILIPS (PHG) was down €1.82 to €30.33... Mixed third quarter results - third quarter core earnings beat expectations, with EBITA coming in at €438 million, up from €71 million for the same period a year ago when profit was dented by asbestos-related liabilities. However, the company 's CFO is quoted by Reuters as saying Medical Systems' fiscal targets may be a 'bit shy'. Indeed, ABN AMro writes 'net profit of EUR331 million, below consensus due to a a number of factors.' Disappointed by lack of buy back announcement. Keeps hold and EUR 31.60 target.
HENNES & MAURITZ was up SEK1.50 to SEK426.00... September sales figures beat forecasts - the company 's September sales figures rise 25% year-over-year vs 20.8% forecast, following a 11% rise in August. Like-for-like sales for September show a 12% rise vs 9% forecast, following a 1% fall in August.
NOKIA (NOK) was down €0.59 to €25.63... Consensus looks for 62% rise in third quarter EPS - the company is set to deliver third quarter results on 18 October and a Reuters poll sees a 62% year-over-year rise in EPS to €0.34, with net sales at €13.2 billion vs €10.1 billion year-over-year, EBIT at EUR1.63 billion vs EUR1.1 billion year-over-year, pretax profit at EUR 1.7 billion vs €1.1 billion year-over-year, and net income of €1.3 billion vs €845 million year-over-year. ABN Amro downgrades to hold vs buy after a very strong run. JP Morgan ups target to €29 vs €25, keeps overweight recommendation. UBS raises target to €30 vs €27, keeps buy. See Broker's Views and News - Nordics.
YARA was up NOK2.50 to NOK180.00... M. Stanley upgrades to overweight from equal weight and ups target to NOK206. Broker lifts mid-cycle EPS estimate by 13.1% to NOK14.70. The broker argues improved demand outlook could trigger a surge in fertilizer prices. The company says near-term fears of increasing capacity from China and the Middle East have been more than offset by better-than-expected fertilizer demand from Brazil and India. The company says combined with historically high crop prices and a largely buoyant agrochemicals market, this has led to significant increases in fertilizer prices.
SANTANDER (STD) was up €0.11 to €13.93... UBS resumes coverage with buy and €16.00 target. Recognises macro risk embedded in Spain and a possible risk of medium term portfolio re-balancing due to LatAm. Nevertheless, notes stock is trading on an 8% discount to the European bank sector with earnings expected to outpace the sector in 2008. Merrill Lynch resumes coverage with buy and €16.30 target. The company says price objective offers near 20% upside based upon YE08 earnings estimates which do not yet begin to include the upside potential from the inclusion of the acquired assets from ABN Amro.
TELEFONICA (TEF) was down €0.03 to €21.51... Credit Suisse raises target to €24 from €20.50. Lifts forecasts for the company post recent investor day. Cheuvreux downgrades to outperform from selected list on valuation grounds. Notes shares are up 66% since joining the broker's selected list vs a rise of 33% for the Ibex. Chairman doubles stake in the company by reportedly having bought 1.86 million shares last week, taking his stake to 0.08%.
JULIUS BAER was down CHF1.50 to CHF98.40... UBS downgrades to neutral from buy for valuation reasons. Mentions that during the mid-year sell-off, the company 's share suffered in-line with Eurobanks but bounced back much more since. UBS lifts target to CHF100 from CHF96 as it ups EPS estimates for 2007, 2008 and 2009. The company says it can't exclude corporate action such as a potential spin-off/sale of the US Asset Management business and/or GAM.