Markets & Finance

On the Move: BNP-Paribas, Tesco, Deutsche Post


From Standard & Poor's European MarketScope

Spain

ARCELOR was up €0.23 to €20.43. The company and Umicore are both selling 80% of their stakes in joint venture Traxys, in which they each had a 50% share. Umicore has said that the sale of its stake will give it a net capital gain of €12 million. Meanwhile, HSBC initiated coverage with an overweight rating and €28 target price.

ABERTIS was up €0.24 to €22.90. The company could be the strongest candidate to acquire Sanef ahead of the hearing with the French government commission next Tuesday, according to a report in Les Echos. The bids for Sanef range between €54 and €59 per share.

France

BNP-PARIBAS was up €0.45 to €68.00. Brokers were pleased with the company's third quarter figures. Citigroup raised its target to €75 from €67 and kept a buy rating. SocGen lifts its fair value to €72 from €67 and kept a buy rating.

TF1 was down €0.12 to €21.16. Euronext confirmed earlier Friday that the recently-floated EdF will replace the company in the CAC 40 on December 19.

SAINT GOBAIN was up €0.53 to €48.89. Deutsche Bank raised its target price to €60 from €56 and kept a buy recommendation. The broker said the BPB deal makes compelling financial and strategic sense.

Germany

DEUTSCHE TELEKOM (DT) was down €0.03 to €14.40. Local newspapers reported that the German government plans to sell off €31 billion of state assets. This included the company and Deutsche Post. On the broker front, DrKW downgraded the company 's stock to add from buy, reckoning that 2006 free cash flow is likely to be low and could be less than the anticipated €3 billion dividend payout. SocGen has cut its target on the company 's stock to €17.4 from €18.7 as it reiterated a buy rating.

DEUTSCHE POST was down €0.15 to €18.83. The company won EC approval to buy the UK's Exel for an agreed £3.7 billion to create the world's No. 1 logistics group. The company's investor day is on November 28 in New York. Sal. Oppenheim noted that it will highlight the situation in US Express and the growth story of Express Asia Pacific.

VW was down €0.10 to €43.90. The company may sell its Europcar International car rental unit to financial investors in the next four months, Handelsblatt reported.

Nordics

VESTAS WIND was down DKK3.75 to DKK105.50. UBS cut its target to DKK86 from DKK101, and rated the stock reduce. Carnegie downgraded it to neutral from outperform. Morgan Stanley cut its target to DKK73 from DKK84, and kept an underweight rating. Thursday the company said it expects EBIT margin of minus 3%, a shocking contrast to the positive 4% the company forecast in August. Rival Gamesa is to install 200 MW of wind capacity in Sweden. This is Gamesa's first project in Scandinavia, the company 's home territory.

DANISCO was up DKK19.50 to DKK437.00. Danske Equities argued that the decision on the new sugar reform initially appears more positive for sugar producers than the first proposal by the EU Commission. It believes the most important result is that the reform is long term, increasing the chances of consolidation in the sector.

Switzerland

NESTLE was up CHF2.00 to CHF396.75. Italy's Health Minister Francesco Storace has received an apology from the company 's CEO Peter Brabeck related to false statements made regarding the recent baby milk recall. However, Storace still plans to take Brabeck to the courts for falsely claiming that the company agreed in July with the European Union and Italy's health ministry to let the products expire and to change the production process for the cartons. Separately, the buyback of shares starts Friday through a second trading line on virt-x.

ROCHE was up CHF1.60 to CHF199.70. Indonesia is allowed to produce Tamiflu for local use without a license because the drug is not protected with a patent in that country. The Indonesian government plans to ask local firms PT Kimia Farma or PT Indofarma to make the drug in preparation for a potential outbreak of avian flu.

United Kingdom

TESCO was down £0.03 to £3.10. Merrill Lynch cut its price target to £3.35 from £3.55, and kept a buy rating saying its old target was too aggressive. It added that UK operations are panning out as the company foretold, and sees no need to alter forecasts. The company said group sales increased 13.9% during the third quarter. The company is on track to open 150 international stores in second half. Its numbers were in line.

AEGIS was down £0.03 to £1.18. The FT noted that investors lost confidence that WPP and US private equity firm Hellman & Friedman, would bid for the company.

TATE & LYLE was up £0.40 to £5.67. Numis upgraded the stock to add from hold and lifted its target price to £6.00 from £5.52. The broker pointed to amendments to proposed changes in EU sugar regime. It also sees growing contribution from value-added activities.

KESA ELECTRICALS was up £0.03 to £2.48. JP Morgan trimmed its target to £2.70 from £2.90, and kept the stock neutral. Deutsche Bank cut its target to £2.50 from £2.70 on concerns that the company is underperforming against its biggest competitors in the UK and France.

HALFORDS was up £0.07 to £3.26. Deutsche Bank lifted its target to £3.15 from £3.10, and kept a hold rating. It said the company 's defensive characteristics are now showing through, explaining that not only are like-for-like sales positive, a rarity for UK retail stocks, but current trading trends have improved further.

INTERCONTINENTAL HOTELS (IHG) was up £0.16 to £8.00. JP Morgan started coverage with an overweight rating and a 12 month price target of £8.85. Britvic's price range for its initial public offering to institutional investors in the UK and elsewhere will be £2.10 - £2.50 per share, implying a market capitalization of £451 million - £537 million and an enterprise value of £771 million - £857 million. Intercontinental, Whitbread and Pernod Ricard are intending to sell, in aggregate, approximately 153 million shares in Britvic, approximately 71% of the total issued share capital. Conditional trading is expected to take place on or around December 9.

Netherlands

FUGRO was up €1.40 to €25.25. The company projected a turnover growth of more than 10% on an annual basis, mainly from organic growth. It expects net profit margin of above 8% this year, higher than its 7.5%-8.0% range forecast in August. Prepared by Zaida Espana, Valerie Vidal, Michael Sanderson, Mariella Mongio, Alexander Wisch, Holly Cook, Emma Stevenson, Pawan Girglani, Julien Manrique, and Rocio Opazo-Aniotz (Standard & Poor's); Alex Halperin (BusinessWeek Online)


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