European Movers: EADS, Allianz, Heineken
HBOS Down GBP0.22 to GBP2.97... Sees a 9% house price fall, big writedown - Says trading (1 January to 31 May) is in line. Sees 9% decline in FY house prices, to will have an adverse impact on secured impairment charges. Since 29 April, says negative FV adjustments in securities held in Treasury Trading Book have increased by GBP58m to GBP1.028bn.
CADBURY PLC Up GBP0.02 to GBP6.27... Sees 1H revenue above guidance Reports strong 1H revenue momentum, with growth expected above the 4%-6% goal range. Adds there has been good growth across all categories and double-digit growth in emerging markets; margins are at least 150bps ahead; higher input costs passed on.
CENTRICA Up GBP0.07 to GBP3.12... Trading in line with guidance - Confirms trading remains in line with guidance. Co. wants to take control of SPE, Belgium's second-biggest electricity supplier, but will have to match a bid from EDF to do so, The Times writes. Says sources in Paris suggested that EDF could offer a premium of between 5% and 10% in an effort to knock Co. out of the race.
MARKS & SPENCER Up GBP0.01 to GBP3.42... UK retail sales jump 3.5% m/m in May or 8.1% y/y, compared with estimates of a 0.1% fall (+4.1% y/y). This is the highest m/m increase in 22 years.
IMPERIAL TOBACCO Down GBP0.63 to GBP18.80... To cut 2,440 jobs, shut six factories - Says plans to cut 2,440 jobs from a global workforce of 40,000 after the Altadis buy. To close six factories from a global portfolio of 58 manufacturing units.
VEOLIA ENVIRONNEMENT Down EUR 1.15 to EUR 36.92... Net profit target 'difficult to reach' - CEO - An article on Challenges.fr reports that Co. CEO Jerome Contamine has said in an interview to be published by Le Revenu tomorrow that Co.'s FY sales target will be beaten, with growth likely coming in above 10%. However, he adds that fx and oil volatility could mean 'the envisaged net profit target could therefore be difficult to reach.'
UNIBAIL RODAMCO Down EUR 4.11 to EUR 151.60... UBS downgrades to neutral - UBS downgrades to neutral from buy and cuts target to EUR 170 from EUR 175. Believes the stock is vulnerable to disappointing valuation results, slower macro growth, and rising interest rates. Says Co.'s NAV growth is likely to slow, but should stay positive with EUR 291m in development gains in 2008 and 5.4% LFL rental growth across the portfolio.
EADS Down EUR 0.34 to EUR 13.21... US review deals blow to US$35bn tanker deal - FT - Co. suffered a heavy blow when US congressional investigators urged the US Air Force yesterday to reopen a US$35bn tanker deal that Co. won against Boeing, the FT reports. Says the Government Accountability Office agreed with Boeing that there were flaws in the process used to choose Co. and Northrop Grumman, its US partner, over Boeing. Separately, Co. may wait until end-July or early September to announce cost cuts it plans to make from 2010, La Tribune reports.
TOTAL Up EUR 0.06 to EUR 51.66... GS upgrades/Four Western oil majors enter Iraq - Goldman Sachs upgrades to buy from neutral and ups target to EUR 64 from EUR 61. Reiterates bullish call on the Energy sector in Europe based on strong expected EPS growth and FCF generation for the integrated oils. Exxon Mobile, BP, Royal Dutch Shell and Co. are close to signing oil agreements with the Iraqi government, The New York Times reports. Adds the deals are expected to be announced on 30 June and will be awarded on a no-bid basis.
VALLOUREC Up EUR 12.31 to EUR 212.60... Morgan Stanley raises target by 32% to EUR 245 and 2009-10 EPS by 5%-12%, as broker estimates that Co. will be able to fully pass-on the considerable raw material cost inflation of the last few months by 2009-10, as prices have been rising in the seamless tube market considerably as well; its cost saving program will offset the weakness of the US$ by 2010; and the new facility in Brazil will have a positive impact on margins in 2H10. Keeps overweight.
ALLIANZ Up EUR 0.40 to EUR 117.40...
Talk Santander interested in Dresdner - according to sources, cited by Reuters.
BASF Down EUR 0.27 to EUR 92.38... Plans EUR 3bn share buyback until mid-2010. Says its EUR 3bn repurchase programme for 2007 and 2008 was completed ahead of schedule.
TISCALI Down EUR 0.09 to EUR 2.16... Vodafone pulls out of bidding auction - writes the FT. A trader says this could be slightly positive for Vodafone shares if it avoids paying full price for UK broadband assets just as the UK broadband market starts to slow.
ENI Down EUR 0.16 to EUR 24.09... Italian govt approves tax rise for oil firms - Italy's cabinet has approved a three-year plan to cut public spending and reduce the budget deficit. The measures include a tax rise on oil company profits Goldman removes from conviction buy list and downgrades to neutral from buy. Points out that still sees 19% potential upside to target price and reiterates the attractiveness of Co.'s highly free cash flow generative utilities business and its stronghold in high growth, high value E&P regions such as North and West Africa. Says that has also witnessed strong exploration performance throughout its E&P portfolio since the beginning of the year while the assets acquired in 2007 have mostly performed better than expected.
ASML Down EUR 1.13 to EUR 16.39... Offers 'no comment' on margin warning rumour - Traders report market rumour Co. will come out with a profit margin warning. Sources say they are hearing margin will not be the targeted 40%, but more 36-38%. In its 1Q press release, Co. said it was targeting a gross margin of 'approximately 40%'. Co. offers no comment, in line with its policy regarding market rumours.
HEINEKEN Down EUR 1.77 to EUR 32.79... Down on technicals - traders - Shares have broken support at EUR 35.00, according to traders. One market source suggests it could fall to EUR 32.50, but not any further. Co. has indicated to Asian partner Asia Pacific Breweries (APB) that it will not abandon it, despite entering into a partnership agreement with Indian competitor United Breweries, The Economic Times reports. Co. is taking a 37.5% stake in United Breweries, though APB's presence in India through its Tiger beer brand is reportedly causing tension.
CSM Down EUR 1.43 to EUR 23.33... Shares fall on downgrade - Co. stock falls after Petercam reportedly downgrades the stock to hold from buy on valuation grounds following strong performance since February.
SSAB Up SEK5.50 to SEK181.00... Cr. Suisse resumes coverage with outperform with a SEK310 tgt. The broker revises its numbers post the sale of the IPSCO tubes business. Sees booming plate markets in the US, ongoing strength in demand for Quenched and Tempered plate, with Co. being core niche producer. Also expects high strength steels should lead to a very strong earnings outcome for the group.
STORA ENSO Down EUR 0.21 to EUR 6.69... Merrill and S&P ER downgrade, UBS cuts tgt - Merrill Lynch downgrades to underperform from neutral, with a EUR 5.00 target, following yesterday's 8% fall in the wake of the profit warning. Sees worse to come, given prospects for European slowing and Russian timber duty escalation in Jan-09. S&P Equity Research double-downgrades to sell from buy, cutting its target to EUR 5.28 from EUR 9.04, on similar logic. Also mentions rising oil prices and fx concerns. UBS cuts target to EUR 7.00 from EUR 8.00, keeps neutral. With or without consolidation, broker sees material downside risk to est. 2008 and 2009 earnings in the sector.
INDITEX Up EUR 0.80 to EUR 30.51... UK retail sales jump in May - UK retail sales for May rose 3.5% m/m, 8.1% y/y. Textile, clothing and footwear sales rose 9.2%.
GAS NATURAL Up EUR 0.53 to EUR 35.66... GDF Suez may join bid for Co. - FT - GDF Suez, the European energy champion to be created next month, would join a bid for Co. if asked by its Spanish partner La Caixa, the FT reports. Exane cuts target to EUR 39.10 from EUR 42.0, underperform.
UBS Down CHF0.92 to CHF23.86... Credit Suisse downgrades to neutral from outperform and cuts target to CHF27.5 from CHF45.24. Now assumes CHF2.5bn of writedowns in 2Q08 to add to those already taken & reduced investment banking earnings, but says the largest effect on its estimates comes from no longer assuming private bank will quickly recover. Deutsche Bank lowers target to CHF33 from CHF40 as it is updating forecasts post-rights issue. In other news, Co. sells JPY91.5bn worth of Samurai bonds - yen bonds issued in Japan by non-Japanese entities - in four tranches.