Markets & Finance

European Movers: BP, Deutsche Bank, Norsk Hydro


Plus more European stocks making headlines Wednesday

UK

BP (BP) was down £0.02 to £5.57. Cazenove has cut its third quarter estimates. Reduces preliminary estimate of third quarter07 net income of by 9% to US$3.915 billion, EPS 10.1p. The company says this number excludes any IFRS related adjustments. The broker adds this equates to EPS nine months ytd of around 35p. Also reduces fiscal 2007 EPS 9% to 48.0p, which is 6% below the current market consensus of 51.1p. Moves fiscal 2008 forecast EPS to 53.5p from 55.7p. Earlier traders noted talk of a profit warning from the company The FT on September 25 reported that CEO Tony Hayward said third quarter revenue will be 'dreadful'. A the company spokesperson says it is not unusual for analysts to call up ahead of the numbers announcement (23 Oct) but does not say whether they are being guided lower or not. The EIA says that crude stocks rose unexpectedly, while distillates fell last week.

NORTHERN ROCK was up £0.16 to £1.51... JC Flowers secures funding for possible bid - It emerged yesterday that private equity group JC Flowers had secured about £15 billion of funding which could be used for a takeover, the FT writes.

France

LAGARDERE was down €3.35 to €58.45... To take legal action over insider trading report - Le Figaro reports this morning that France's stock market watchdog, AMF, has accused top executives and shareholders at EADS of allegedly selling shares before it unveiled problems at Airbus. The company says these accusations of insider trading are unfounded. Adds it is going to take legal action over Le Figaro report.

BUSINESS OBJECTS (BOBJ) was up €1.05 to €33.25... Bid rumor from SAP at €37/share - Traders note rumor SAP may bid for the company at €37 per company share.

TECHNIP was down €3.02 to €64.86... Looking overbought - trader - A trading source believes the company is over bought vs a weak oil sector. Noting rumors regarding a takeover by Saipem pushed the company shares to a new recent high, says the company CFO recently acknowledged some benefits from a Saipem-Co. tie-up. However, trader believes benefits are not sufficient to justify a Saipem bid, particularly at these prices. Also thinks the market is too optimistic that the company will be able to present a satisfactory resolution to cost overrun issues relating to Qatar at the 17 October presentation.

Germany

DEUTSCHE BANK (DB) was up €1.98 to €95.50... Sees third quarter net earnings above €1.4 billion - While taking charges on leveraged loans and loan commitments of up to €700 million, the company expects third quarter net profit to exceed €1.4 billion. It reportedly sees some EUR 1.5 billion in charges on structured credit products, residential mortgage-backed securities and relative value trading in both credit and equities. the company expects corporate banking & securities as a whole likely reporting a net pretax loss in third quarter of €250-350 million. Overall, the company forecasts third quarter group pretax income of around €1.2 billion.

PORSCHE was up €50.22 to €1602.00... US sales rise 20% / Broker action - the company 's US sales rose 20% last month, helped by turnover of the new turbo convertible. On the broker front, UBS lifts target to €1,900 from €1,600, reiterating buy.

Italy

FIAT was up €0.39 to €21.48... Production of 500 could reach 150,000 units - the company could boost production capacity for its new 500 model next year, group marketing chief Luca De Meo says on the sidelines of a business conference. Output could be at the upper end of its forecast range of 140,000 to 150,000 units, he adds. Turkish automaker Tofas opens a new production line at its plant in Bursa, Turkey, that will make a new type of vans for the company

ENI (E) was down €0.21 to €25.67... Renews production licence in Algeria - the company and Algeria's Sonatrach have signed an agreement to renew the development and production licence for the fields belonging to Block 403 located in Algeria, in the Bir Rebaa area, in the south-eastern part of the Sahara desert. The renewal of this licence enables the company to confirm its reserves and production capacity in Algeria of up to c. 90,000 boe/d. Kazakhstan wants to resolve a dispute with the company over production delays at the Kashagan field through talks and wants to avoid resorting to legal measures, says Energy Minister Sauat Mynbayev.

Netherlands

RANDSTAD was up €1.68 to €42.20... US slowdown is exaggerated - Cheuvreux - Cheuvreux upgrades to selected list from outperform, but cuts target to €53 from €60. The company says even based on broker's conservative assumptions (8% below consensus), the stock seems seriously undervalued. Thinks US slowdown is exaggerated. See Broker Views and News - Netherlands.

Nordics

CARNEGIE was up SEK5.00 to SEK143.50... DNB NOR rumored to be preparing bid - Speculation DNB NOR is preparing to launch a SEK165 bid for the company the company 's new major owner Invik, which raised its stake in the company to 9.7% on Monday, aims to increase its holding to 20%, according to Dagens Industri. Separately, the company has asked the Swedish Minister for Financial Markets Mats Odell to be withdrawn from its assignment to assist the Swedish government in its sale of OMX and SBAB.

SAS was up SEK5.00 to SEK117.50... Dash8/Q400 back to traffic - Following an extensive inspection program and parts replacement, the company will return the Dash8/Q400 aircraft to traffic, it says in a statement. Flights will begin on Thursday.

NORSK HYDRO (NHY) was up NOK2.20 to NOK75.80... Citigroup upgrades to buy vs hold and ups target to NOK95 vs NOK79.48. The company says the demerger of the oil and gas business into Statoil has created a standalone top-five aluminium company and Europe's only pure play. Believes the stand-alone company offers plenty more upside.

Spain

VUELING was down €1.66 to €8.00... Has €110 million cash / Goldman downgrades - Goldman Sachs downgrades to sell from neutral and cuts target price to €2.50 from EUR 12.00. This follows the company 's second profit warning. The company says this raises concerns that the company may face substantial cashflow challenges. The company says it has €110 million in cash. The company says sales are in line with expectations for this time of year.

INDRA was up €0.54 to €19.74... Deutsche resumes with buy and €22 target. Argues that market concerns regarding integration risks and the impact of the deteriorating macro scenario in Spain are overdone and the relative de-rating of the stock vs the sector is not justified.

Switzerland

JELMOLI was up CHF139.00 to CHF3300.00... Rumors of real estate sale this week - Swiss website Marktpirat notes rumors that the company 's sale of its real estate for CHF3.4 billion will be sealed and done by the end of this week.

NOVARTIS (NVS) was down CHF0.20 to CHF64.25... Exane BNP Paribas downgrades to neutral from outperform and lowers target price to CHF74 from CHF80. The broker argues the company 's news flow will lack major events, with a tough basis of comparison for quarterly results in second half07/first half08 (patent expiries) and no new clinical data on key pipeline compounds before second half08 (FTY720 in MS, agomelatine in depression, QAB149 in asthma). Following broker's -5% EPS revisions in 2012, the company trades at a 1-5% premium to peers on 2009-2012 P/E multiples which broker says leaves little room for upside in the absence of pipeline news flow. Recommends switching into GlaxoSmithKline (GSK).


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