|
|
Get Four
|  | NOVEMBER 1, 2005
 EUROPEAN MARKET MOVERS Altana Rises on Takeover TalkPearson gains on improved profit; plus more of Tuesday's European stocks in the newsFrom Standard & Poor's European MarketScope France EURONEXT was up €0.65 to €36.10. The company says it will review the report by the UK's Competition Commission and explore the divestment requirement relating to its stake in LCH.Clearnet. The Competition Commission will allow either Deutsche Boerse or the company to acquire the London Stock Exchange, provided each party works to ensure the independence of the LSE's clearing provider. The Commission says the proposed acquisition of LSE by either Deutsche Boerse or the company would substantially lessen competition. ARCELOR was up €0.34 to €20.15. Goldman Sachs says third quarter results were substantially better than expected, and raised its fiscal 2006 EBITDA estimates 10% to €5.5 billion and net income to €2.6 billion. The broker believes good news on contract pricing will lead to substantial estimate upgrades for the company. Goldman kept its outperform rating and €26.5 fair value. STM (STM ) was down €0.07 to €13.66. PC manufacturer Dell warned it will miss its fiscal third quarter earnings and sales forecasts because of weak US and UK business. Slowing PC sales could spell trouble for chipmakers such as STM. Germany ALTANA was up €0.74 to €47.74.Switzerland's Novartis is interested in buying the company 's pharma business, reports Handelsblatt. The two groups are understood to have already held talks on a possible deal, with the unit valued at US$7 billion. Analysts say the pharma unit is a good fit for Novartis. Other bidders are expected to appear. DEUTSCHE TELEKOM (DT ) was down €0.07 to €14.68. The Times speculated that the company is considering making a counterbid for the mobile phone company O2 which has received a £17.8 billion all-cash offer from Spain's Telefonica (TEF ). DEUTSCHE BOERSE was up €1.83 to €80.33 following the UK's Competition Commission ruling on a possible London SE takeover. Italy FIAT was up €0.08 to €6.88. According to Il Sole 24 Ore, sales in China increased by 30% between January and October. FASTWEB was up €0.45 to €38.40. European private equity groups and telecom firms, including British Telecom (BT ), are considering buying stakes in the company from founding shareholders, Reuters reports, citing La Repubblica. Leading shareholder, Silvio Scaglia, who owns a nearly 25% stake in the company , has reportedly told colleagues he will not sell until the company breaks even. Netherlands KPN (KPN ) was up €0.03 to €7.97. After Monday's M&A news, Lehman Brothers reiterated its overweight rating on the stock. Ascribing an €8 billion value for the company's E-Plus unit would increase target price on the company to €10.5 from €9.2, says Lehman. Nordic MOELLER MAERSK was up DKK2600.00 to DKK58900.00. Cheuvreux was upbeat after Monday's news on P&O kept the sector on M&A watch, boosting valuations. The broker reiterated its selected list of recommendations and DKK80,000 target following assurance from CFO on 5% and 3% growth rate on Transpacific routes for '05 and '06, and 2% for Intra-Asia routes in both years. Monday the company told MarketScope it would not comment on a possible P&O counterbid. DANSKE BANK was up DKK3.25 to DKK198.50 on strong third quarter results. Net interest income for the quarter was DKK4.46 billion, up from DKK3.66 billion in the third quarter of 2004, beating market estimates of around DKK4.38 billion. Pretax profit came in at DKK4.308 billion, up from DKK3.017 billion, and beating estimates of about DKK3.433 billion. The company also raised its fiscal year outlook, saying it now expects PTP to be 25% higher than in fiscal year 2004. SCANIA was down SEK4.00 to SEK264.00. The company reported third quarter net profit of SEK825 million, down from SEK898 million during the same period in 2004; operating profit also fell to SEK1.206 billion from SEK1.383 billion on revenues of SEK14.608 billion up from SEK13.323 billion. The operating margin fell to 8.3% from 10.4%. The outfit expects fiscal year profits to be somewhat higher than last year based on orders during the second third quarter and the current production rate. Spain TELEFONICA was down €0.18 to €13.13 on a report in The Times that Deutsche Telekom is weighing options for a possible O2 counterbid. CSFB downgraded the company to underperform from neutral and cut its target to €13.5 from €15. Morgan Stanley cut its target to €14.8 from €15.2, but kept equal weight. Fortis downgraded Telefonica to hold from buy. UBS downgraded to neutral from buy and cut target to €14 from €15.70. After the market closed Monday, Moody's said it placed the company's long term ratings on review for a possible downgrade. BBVA was up €0.11 to €14.82. The company won the auction to acquire 98.8% of Colombian bank Granahorrar for US$423.66 million. The deal will make BBVA the largest player in the Colombian mortgage market. Dresdner KW argued that the relevance of this deal exceeds the size since the company failed in its bid to acquire Unipol of Italy. There have been fears that stock performance could be capped by an increased M&A risk perception. Cheuvreux commented that the price is reasonable and there is a strategic fit and synergy potential. It said the deal is EPS enhancing by nearly 1% from year 1. The company is on the broker's selected list. Switzerland UBS (UBS ) was up CHF3.00 to CHF112.50. UBS beat third quarter earnings forecasts reporting net attributable profit CHF2.77 billion, operating income of CHF13.495 billion, return on equity of 29% (against a target of 15%-20%) and EPS of CHF2.75. S&P Equity Research noted the net result was CHF400 million ahead of consensus forecasts and CHF200 million ahead of its own. In the firm's view the private banking sector is benefiting from unusually high transaction volumes. Also, institutional asset management saw a high level of performance related fees and Corporate center benefited from higher treasury income. The firm noted some slippage in fixed income market share because the portfolio is less exposed to areas such as commodities, although the company is addressing these issues. Bank Sarasin says the reported third quarter 2005 results are very strong both in terms of earnings surprise and in terms of quality. UK PEARSON (PSO ) was up £0.13 to £6.41. The company reported nine-month underlying sales up 10% and operating profit up 20%; Education sales were up 13% with good growth throughout. School was up 17%; Higher Education was up 5%; Professional unit was up 17%; FT Group sales were up 5%; Penguin sales were up 2%. The company said 2005 is turning out to be a strong year with ongoing strong trading. The company is on track to achieve significant growth in earnings, cash and return on invested capital in fiscal year 2005. IMPERIAL TOBACCO (ITY ) was down £0.09 to £16.11. The company's fiscal year numbers were at the top end of forecasts. It announced fiscal year sales ex-duty of £3.149 billion up 4%; adjusted operating profit £1.307 billion up +7%; adjusted PTP £1.123 billion, +11%; and adjusted EPS of 112.8p, up +11%. The company raised fiscal year DPS to 56p up +12%. Says cigarette volumes in second half reversed the first half decline. The company plans organic growth and to make acquisitions. P&O was up £0.03 to £4.07. ABN Amro upgraded the company to hold from reduce, raising its price target to £4.20 from £2.59. Other interested parties in the company could include Hutchison, Port of Singapore, AP Moeller and even Macquarie Bank. JP Morgan upped its target price to £4.29 from £2.76, based on a sum-of-the -parts valuation including historical port acquisition multiples in a bid scenario. The firm kept its neutral rating on P&O. MAN GROUP was up £0.12 to £15.52. The company confirmed it intended to join the bidding for Refco, the stricken US brokerage group, according to the FT. The company joined a growing list of potential bidders including Interactive Brokers Group, a team including the Dubai Investment Group, and a group led by private equity firm JC Flowers, which withdrew an initial offer of US$768 million last week. the company is said to have entered in a non-disclosure pact with Refco. ROLLS-ROYCE was up £0.03 to £3.68. The company confirmed that trading was in line with existing guidance.  Prepared by Zaida Espana, Michael Sanderson, Mariella Mongio, Alexander Wisch, Holly Cook, Emma Stevenson, Pawan Girglani, and Rocio Opazo-Aniotz (Standard & Poor's); Alex Halperin (BusinessWeek Online) All of the views expressed in this research report accurately reflect the research analyst's personal views regarding any and all of the subject securities or issuers. No part of analyst compensation was, is or will be, directly or indirectly related to the specific recommendations or views expressed in this research report. Standard & Poor's Regulatory Disclosure Any advice, analysis, or recommendations contained in articles labeled "Insight from Standard & Poor's" reflect the views of Standard & Poor's, which operates separately from and independently of BusinessWeek Online. It is possible that BWOL may from time to time publish information that is not consistent with advice, analysis, or recommendations that are published by Standard & Poor's. Standard & Poor's and BusinessWeek Online are each units of The McGraw-Hill Companies, Inc.
BW MALL
SPONSORED LINKS
Get BusinessWeek directly on your desktop with our RSS feeds.
Buy a link now! Add BusinessWeek news to your Web site with our headline feed. Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video. To subscribe online to BusinessWeek magazine, please click here. Learn more, go to the BusinessWeekOnline home page  | | |
 Copyright 2005, by The McGraw-Hill Companies Inc. All rights reserved.Terms of Use | Privacy Notice |
Printer-Friendly Version
