European Movers: Barclays, PPR, Continental
BARCLAYS (BCS) was up £0.28 to £5.25... 2007 EPS to be in line with mkt ests - the company expects 2007 EPS to be broadly in line with the current market consensus. The company says impairment performance in unsecured credit continued to improve and charges remained negligible in mortgages.Adds that at Global Investors strong growth in income and pretax profit in US$ translated into good growth in pretax profit in sterling terms.
SEVERN TRENT was up £0.51 to £15.13... first half pretax profit falls 6.4% - posted first half pretax profit of £149.5 million, -6.4%; PBIT £250 million, +14.2%; basic EPS 64.7p, +15.9%; interim DPS 24.34p, +6.9%; turnover £774.0 million, +3.7%.
NORTHERN ROCK was up £0.08 to £1.19... UBS, Deutsche cut target prices - UBS cuts target to £1.25 from £1.95 following news of Virgin being named preferred bidder. However, says uncertainity about the the company's main problems, funding and liquidity, remain until further details of the deal are out. Until then, the company remains an 'inexact science.' Keeps neutral. Deutsche Bank cuts target price to £1.00 from £2.25, reiterates sell. Sir Richard Branson's Virgin empire could earn up to £200 million in fees from the company by allowing the stricken mortgage lender to use its brand, The Daily Telegraph writes.
PPR was down €4.60 to €110.63... Credit Suisse downgrades to neutral from outperform and cuts target to €105 from €144. The broker has reduced EPS by 6% for both of the forecast years - largely to reflect cuts at Redcats, Conforama and Puma (slightly below consensus). Broker has re-appraised valuation and rating in light of emerging evidence of a slow-down in France and to take a more cautious short-term stance on luxury French watchdog AMF has asked the company and Clarins to explain whether the companies are in talks after increases in Clarins shares, Le Figaro reports. The company says the groups are discussing Clarins taking over the company's Yves Saint Laurent Beaute unit in return for the company getting a minority stake in Clarins.
AXA (AXA) was up €0.70 to €26.58... Credit Suisse upgrades to outperform from neutral but cuts target to €31.0 from €33.5. The company says that the stock's recent de-rating, triggered, broker believes, by concerns over the company's exposure to sub-prime, CDOs and CLOs (€1.4/share net) and by the potential negative impact of a slowdown in the US economy, has in broker's view opened up some interesting upside potential on the company Credit Suisse sees 17% upside potential on current levels to broker's EUR 31.0 target price.
CONTINENTAL was down €1.09 to €86.61... Expects very good winter tyre earnings this year due to an improved product sales mix. The company says it can reach 2006's record winter tyre sales level again this year only by including newly bought Slovak unit Matador. Press-wise, sales of winter tires in Germany will fall year-over-year, reported Handelsblatt.
DRILLISCH was down €0.01 to €6.09... Places 17.4 million new shares - which generated proceeds of €106.4 million.
TISCALI was up €0.05 to €2.29... Soru to participate in capital increase - Founder and main shareholder, Renato Soru, will participate in the company's capital increase, as announced by CEO Massimo Cristoferi. Adds Soru is ready to cover the capital increase for his 25% stake. the company is considering listing its UK operations in London early next year as it looks to promote its TV and video on demand business over the coming 12 months, writes the FT.com. the company's 2008-2012 business plan targets gross operating result in excess of €600 million in 2012 on revenues of over €2 billion. Forecasts revenues of €1.
3 billion for 2008 and aims to post a net profit.
FONDIARIA-SAI was up €1.16 to €29.96... Acquires 83% of DDOR for €220 million - the company has won an auction to acquire a 83.32% stake in Serbia's insurer DDOR Novi Sad for €220 million. The transaction is expected to be completed by the end of first quarter08.
AEGON (AEG) was up €0.28 to €11.96... Raises 2010 new business target by 14% - On the first of two investor days yesterday, the company raises its 2010 value of new business target (VNB) by 14% to €1.25 billion. The new target represents an average annual increase in the Group's VNB of approximately 18% over the period 2005 - 2010. The second investor day takes place today.
SBM OFFSHORE was up €0.13 to €23.25... ABN Amro upgrades to buy from hold and lifts target to €30 from €28. Notes that very high prices and the market's aim to limit its dependence upon only a few key supply regions have caused a frantic search for new oil and gas deposits. Including the negative dollar translation, broker adjusts the company's fiscal 2008 est. P/E multiple to 17.1x and EV/EBITDA to 9.17x.
BANCO SABADELL was up €0.36 to €7.75... M&A rumours boost shares - the company's shares gain on vague M&A talk. One source notes speculation that the Botin family could be interested in buying a stake, while another says Ram Bhavnani - who recently sold his stake in Bankinter - could be interested. In addition, another source notes rumours that Banco Popular could be eyeing the company.
IBERIA was down €0.09 to €3.05... Caja Madrid wants no more than 23% - TPG and BA abandon €3.4 billion bid for the company in the face of the hostile response to its proposed bid from Caja Madrid. The press notes that the way is now clear for Caja Madrid to buy stakes from two other core shareholders (BBVA and Logista) to become the company's largest shareholder. Caja Madrid has reportedly said it does not want its stake to go above 23%.
NORDEA was up SEK0.20 to SEK103.00... Interview with CEO/Acquires 67% of Privatemaklaren - In an interview with Reuters, CEO Christian Clausen says he believes the company has a stable risk portfolio regarding the Baltic region and looking foward the company is prepared for an eventual slow down. The CEO also said that the company will evaluate the acquisition of SBAB, once the govt decides to sell, and that the company is open for merger talks with other European banks. Separately, the company has acquired 67% of Privatemaklaren, a Norwegian property broker.