European Movers: British Airways, Thomson, Nokia
BRITISH AIRWAYS Down GBP0.10 to GBP2.23... Brokers wary of oil costs, downgrade Deutsche Bank downgrades to sell from buy. Cuts target to GBP2 from GBP3.61. Reduces EPS to 9.7p from 28.8p for '09, and to 15.8p from 37.5p for '10. Believes the majority of Co.'s network is now loss making and that rising fuel costs are not being reflected in higher revenues. ABN Amro downgrades to sell from hold. Says sees Co.'s recent rally in the face of rising oil prices as unjustified and sees downside risks to revenue and challenges in lowering non-fuel costs. Co. plans to ground part of its fleet from October to cut costs and stem potential losses causes by the crippling price of fuel, The Sunday Times writes. Notes analysts have warned Co. may only break even or worse for the next two years.
BAE SYSTEMS Down GBP0.08 to GBP4.58... Boss held in the US Chief executive Mike Turner and a senior colleague were detained as their entered the US last week by officials investigatin corruption allegations about Co.'s business dealing in Saudi Arabia, The Sunday Times reports.
KAZAKHMYS Up GBP0.81 to GBP19.14... Credit Suisse raises target to GBP27 from GBP23, keeps outperform. Adds Co. to the European Focus List. Also raises EPS estimates by 3.9% to US$3.95 in 2008 and 8.5% to US$3.90 in 2009 to reflect increase in copper forecasts to US$4.00 per pound.
SCHNEIDER Up EUR 3.53 to EUR 83.72... Goldman Sachs adds to Conviction Buy List and ups target to EUR 100 from EUR 94. Lifts 2009 EPS by 8%. In broker's view, the market sees Co. as a pure play construction-exposed stock and overlooks the change in mix driven by the c.EUR 10bn spent on 38 acquisitions since 2002.
THOMSON Up EUR 0.27 to EUR 4.51... Trades higher on Siemens rumour - Traders report market rumour doing the rounds that Siemens is interested in bidding for Co.
STM (FR) Up EUR 0.01 to EUR 8.60... Lifted by iSuppli report Co. is lifted by a report from tech researcher iSuppli that it was the No.3 mobile chip player in 2007 vs No.5 in 2006.
EPCOS Up EUR 0.75 to EUR 12.31... Higher on CEO comments that new orders are developing positively and that talks to find a strategic investor in Asia are at an advanced stage, reportedly.
STADA ARZNEIMITTEL Up EUR 0.24 to EUR 45.26... Does not want to be acquired and is, instead, looking for takeovers itself, CEO Hartmut Retzlaff told Frankfurter Allgemeine Sonntagszeitung.
METRO AG Down EUR 0.49 to EUR 51.03... Upping the ante in Egypt - Co. plans to open up to 10 Cash & Carry wholesale outlets in Egypt at an investment cost of some EUR 150m.
FINMECCANICA Up EUR 0.69 to EUR 20.28... Augusta signs EUR 450m contract in Russia - Saturday's Il Sole 24 Ore reports that Co.'s helicopter unit, Agusta Westland, has signed a EUR 450m contract to provide with helicopters Russia's Oboronprom up to 2012. Co.'s CEO told La Repubblica newspaper that there could be a rival offer for DRS Technologies, and likely from a European group.
ERG Up EUR 0.38 to EUR 14.66... Exane lifts target to EUR 15.3 from EUR 14.5. Keeps neutral rating. Citigroup downgrades to hold from buy after Co.'s 1Q08 results were strong, supported by a sharp rebound in coastal refining and a good performance from the combined Energy division. Upgrades FY08E earnings by 25% and are now 14% ahead of consensus. As a result of higher 2008 estimate, raises target price to EUR 15 from EUR 14. Lowers 2009/10E EPS by 6%/8% respectively to reflect the later phasing of wind generation capacity
ING GROEP Up EUR 0.29 to EUR 25.75... Bids EUR 64/sh for Interhyp AG - Co. makes a public offer for Interhyp AG, Germany's largest independent residential mortgage distributor, at EUR 64 per share.
SCHIBSTED Up NOK13.50 to NOK190.00... Shuts down Punkt SE - buys 35% in Metro Sweden - Co. will acquire 35% of Metro International's free sheet Metro Sweden for c.
SEK350m and will through Aftonbladet form a j/v with Metro Sweden, for collaboration within advertisement sales. Meanwhile, Aftonbladet has decided to close down its loss-making free paper Punkt SE. Svenska Dagbladet will take part in a local advertisement collaboration in Stockholm, with Co. estimating revenue synergies for Svenska Dagbladet and Aftonbladet amounting to SEK40-SEK50m in two to three years. S&P Equity Research sees the shutdown of Punkt SE as positive news, but argues the 35% acquisition of Metro Sweden is a bad move. See Broker Views & News - Nordics.
NOKIA Up EUR 0.76 to EUR 19.31... Brightpoint estimates 20% rise for handset - Brightpoint, the world's No. 1 handset wholesaler forecasts that the strong growth within the industry will continue in 2008, with global deliveries of 1.25-1.35 billion units expected vs. 1.15 billion in 2007. If the upper range of estimates are reached, deliveries will see a 17% increase y/y vs manufacturers' indications of c.10% growth, Kauppalehti reports.
(Note: unit figures from Brightpoint have been corrected.)
ERICSSON Up SEK0.40 to SEK16.70... Guides for 10% sales growth in China - Head of Co.'s China operations Mats Olsson sees good potential for Services going forward, while Multimedia is forecast to show rapid growth, Dagens Industri reports. In total, Olsson forecasts 10% sales growth in China in 2008 and expects Co. to land 3G licenses in the country before the year end.
FERROVIAL Up EUR 2.05 to EUR 55.45... S&P, Fitch to raise credit qualification - Standard & Poor's and Fitch will raise BAA's credit qualification to A- after Co. announced that BAA will raise its share capital, Expansion reports. Sir Nigel Rudd, chairman of Co.'s BAA airports unit, was one of two BAE Systems executives detained last week by US officials investigating corruption allegations at the UK defense company, the Telegraph reported.
IBERIA Up EUR 0.03 to EUR 2.34... Spanish gvt opposes expansion plan - press - Spain's Finance Minister Pedro Solbes told Co.'s investors that the government opposes the carrier's low-cost network expansion plans, Expansion reported, without saying where it got the information. Co. will hire more pilots should it complete the purchase of smaller competitor Spanair, ABC reported, without saying where it got the information.
REPSOL YPF Up EUR 0.39 to EUR 27.28... HSBC raises target/Bolivia's warning - HSBC ups target to EUR 28 from EUR 23. Says Co.'s 1Q result beat consensus by around 15%. Broker upgrades 2008/09 EPS ests by 5-9%. Values Co.'s stake in Brazilian BM-S-9 license at EUR 2.5 per share. Keeps neutral. Bolivia's President Evo Morales reportedly warned foreign companies Sunday to step up investment in Bolivia's natural gas industry or risk losing access to its lucrative deposits. Morales said his government is readying an 'ultimatum' to Co., Petrobras and BP. According to CincoDias, Gespevesa, 50% owned by Co. and El Corte Ingles, is set to increase its share capital to EUR 39.4m as part of its expansion plan that includes open c.37 new Supercor shops in petrol stations this year.
SWISS LIFE Down CHF4.50 to CHF304.25... UBS downgrades, citing risk profile - UBS downgrades to neutral from buy, keeping CHF320 target price. Says that AWD, Co.'s newly acquired subsidiary, reported disappointing 1Q results. Thinks that both Co. and AWD face stronger operating risk in Germany. Broker sees increasing acquisition risk, with Co. reported to be interested in Lombard and in an early stage of an auction to acquire the offshore insurance branch of Friends Provident.
ABB LTD Up CHF1.26 to CHF35.04... Positive article in Barron's - Barron's says Co.'s shares could reach US$50 by end of 2009, quoting an analyst at Sterne Agee.