From Standard & Poor's European MarketScope
IPSOS was up €7.50 to €109.40 Monday after SocGen hiked its fair value on the shares to €126 from €102 and kept its buy rating. The broker says the stock is very attractive, combining growth and visibility, an important lever for margin as well as speculative interest. It says the valuation offers potential upside in case of a takeover as consolidation remains one of the main themes in the sector. SocGen kept its buy rating. Citigroup also upped its target price value to €117.40 last Friday.
AXA was up €0.60 to €22.44. Insurance sector analysts expect damages caused by Hurricane Rita to be between US$3 billion and US$6 billion, as opposed a bill of between US$35 billion-US$45 billion caused by Katrina.
SocGen was up €2.35 to €93.05. UBS says a merger between BNP Paribas and the company remains a possibility but is highly unlikely. UBS says SocGen remains its top pick in the sector. The company is interested in acquiring Ukrsibbank in Ukraine and Podgoricka Banka in Montenegro according to a report in La Tribune.
EADS was up €0.93 to €29.57. The parent of Airbus is expected to be hiring several thousand workers in a bid to increase output over the next two years, according to the FT. UBS raised its target to €38.0 from €32.0.
Porsche was down €59.38 to €618.49. The market has been ruffled by the company's announced plan to buy a 20% stake in VW. The company, which already owns 5% of VW, is seeking to prevent a hostile takeover of the group. The two companies have significant agreements in parts supply and part share on the Touareg model. Porsche has €2.5 billion in cash and could possibly buy part of the group's treasury stock as well as 5% held by Merrill. On the broker front, DrKW hardly sees any business logic in this transaction. It notes that VW's return on consolidated equity is at only 5%, while the company's stands at around 26%. In addition, DrKW points out that the company will need over €1 billion cash for the development of its new Panamera sports wagon that is due to be launched in 2009, which will be a further drain on cash and raising the possibility of raising debt to finance this project. Deutsche downgrades Porsche's stock to sell from hold, lowering the target to €550 from €740. Despite initial negative reaction in the company's share price to the news, CSFB says the fundamental growth story remains intact, and reiterated its outperform rating on Porsche.
Meanwhile, VW was up €0.54 to €52.40. DrKW says Porsche's announced intention to buy a 20% stake in the company again raises the question whether there is a conflict of interest. It says switch into DaimlerChrysler as it keeps its hold rating on the company's stock. Another broker, Sal. Oppenheim, upgraded the company's stock to buy from reduce, lifting the fair value to €60.8 from €40.9.
Munich Re was up €2.27 to €92.27. Hurricane Rita damage over the weekend was less than feared. In fact, about a third of what most forecasts had expected. Risk Management Solutions (RMS) estimates damage of US$4-7 billion, EQECAT projects US$3-6 billion and AIR Worldwide forecasts US$2.5-5 billion. Meanwhile, the company plans to tighten pricing policy and improve risk evaluation, reports Tagesspiegel, citing the head of the company's geo research division.
E.ON was up €1.23 to €77.17 on news it will buy Caledonia Oil & Gas for €690m
BASF was up €1.55 to €60.64, and Bayer was up €0.87 to €30.10, as both chemical producers escaped major damage to Texas plants from Hurricane Rita
Telecom Italia was up €0.06 to €2.63. Marco De Benedetti, co-CEO of the group, will step down from his post. De Benedetti will take up a consultant role at the company. This appears to be an additional step in streamlining the company and further steps are expected as the management accelerate integration between fixed-mobile activities aimed at cost cutting.
Impregilo was up €0.17 to €3.34, rallying over 5% as trade resumes following an earlier suspension. The company confirms that it expects to report net profit in 2007. The company has reported a first half net loss of €328.5 million, after the effect of restructuring costs, vs. net profit of €24.3 million one year earlier. Non-recurring costs come in at €345.7 million. In addition, Igli has lifted its stake in the company to 16.89% from 15.5%, according to the company's EGM. Gemina's stake is unchanged at 11.829%. There has been talk that Igli was preparing to launch a takeover bid at around €3 per share.
Banca Antonveneta was up €0.07 to €26.22. ABN Amro has signed a contract to buy a 39.37% stake in the company from BPI and its allies. The Dutch bank will pay €3.2 billion, or €26.50 per share, as expected. ABN now owns 69.28% of the company and has launched an €26.50 per share offer for outstanding shares.
Abn Amro was up €0.28 to €19.84 following the Antonveneta announcement.
ING Groep was up €0.55 to €24.31. The company says it will grow under its own steam, regardless of European consolidation, says CFO Cees Maas at an IMF conference in Washington, according to Reuters. However, Maas says he does not rule out cross-border mergers.
TNT was down €0.37 to €19.85. Cheuvreux downgraded the shares to underperform from outperform and following Friday's tax warning broker has also cut its target price to €21.0 from €23.5. Separately, CSFB downgraded the shares to neutral from outperform, given too much uncertainty. It kept its target price at €23.5, but will review the target and estimates as further information regarding potential tax liability is disclosed. ING downgraded the shares to hold from buy and cut its target to €21.00 from €25.20.
Outokumpu fell €0.93 to €10.49. The company warned of a third quarter operating loss due to difficult market situation and says it has slashed production during the period. It says it will cut costs by 10% in its stainless steel units, aiming to improve operating profit by €100 million annually from 2007. The company will cut production by 150,000 tonnes in the third quarter. It sees 2005 operating profit clearly lower vs. 2004.
Eniro was up SEK3.50 to SEK95.75 on the news it its buying Norwegian Findexa for SEK7.9 billion.
Ericsson was up SEK0.40 to SEK27.60. Morgan Stanley initiated coverage with overweight and a SEK32 target price. Morgan Stanley expects the company's powerful installed base customer relationships to help cushion the impact of price competition. In addition, it thinks efficiency in R&D and manufacturing should help drive Ericsson's operating margin higher, from 20% in 2004 to 23% in 2007.
ACS was down €1.44 to €23.78. Caja Madrid notes that the company expects the Union Fenosa deal to be 7.7% accretive to EPS in 2006 and 10.4% EPS accretive in 2007. The company's shares dropped following its acquisition of Santander's 22% stake in Union Fenosa. Fortis downgraded the company to sell from buy. Citigroup downgraded to hold from buy and lowered its target to €27 from €29. SocGen downgraded its recommendation to hold from buy and trims fair value to €25.5 from €27. Cheuvreux downgraded to sell from underperform and lowered its target to €23.33 from €25.33.
Endesa was up €0.31 to €21.97. The EU is considering whether or not to rule on Gas Natural's bid for the company, according to an interview with Joaquin Almunia in Expansion. The company has requested that the European Commission study the case while others believe the issue is a purely Spanish one.
Repsol YPF fell €0.71 to €27.25.Spain's industry minister Jose Montilla is to ask oil companies to lower their margins and increase investments. The request comes so that consumers do not suffer too much from the current high oil prices. Meanwhile, WTI crude oil traded at US$63.55 per barrel on ACCESS after settling on Nymex at US$64.19 on Friday. The fall comes as refineries in Texas escaped major damage from hurricane Rita.
Royal Dutch Shell fell £0.16 to £18.99... Production starts in October at Bonga - the company says the long-delayed Bonga oilfield in Nigeria is now expected to start production in late October, reaching 100,000 bpd. Note, Bonga is over two years behind its original target start date and already far above budget.
Rio Tinto was up £0.53 to £22.21. Australia's Macquarie Bank raised its iron ore forecasts. The bank raised the company's EPS estimates by 12% and BHP Billiton's estimates by 3%. It rates both stocks as outperform. Mining shares continue well bid on renewed confidence in the Chinese economy. Meanwhile, gold futures for December remain above US$460.0 per ounce.
O2 was up £0.02 to £1.57. Deutsche Telekom is believed to be plotting a £18 billion takeover of the company, The Business reported over the weekend. The newspaper notes the company's 3% gain on Friday and highlights the fact market expectations were fuelled last week when Deutsche Telekom's CEO Kai-Uwe Ricke told a Goldman Sachs conference in New York that there will be consolidation among the UK operators. At the weekend, Deutsche Telekcom declined to comment and the company said it was not in active merger talks.
BT Group was up £0.01 to £2.25. The company will announce this week it is to reduce charges on its VoIP product to 0.5p per minute, undercutting Skype that charges 1.2p per minute, according to The Times.
Tesco was up £0.02 to £3.18. The company has appointed a 65-strong team of top executives in the U.S. to value the possible acquisition of a grocery store chain, The Mail on Sunday reported over the weekend.