(MS) European Software : Temenos, SAP & DS in Software, Atos & Cap Gemini in IT

Looking for Catalysts and Surprises

After two strong years of sector re-rating, a return to EPS upgrades looks priced in here. We focus on companies where EPS can still surprise or where we see catalysts to change investor perception. Atos is our top pick, with Temenos and Telecity the best potential surprises in the mid-cap space.

We like Temenos, SAP & DS in software: After a tough period, Temenos has stabilised and we believe it has a variety of levers to drive licence growth and deliver EPS upside. We still see room for investor perception to improve here. Our stance on SAP is based on an improving macro continuing to help growth and the market warming to the business model transition. We are more cautious on DS in the very short term but see a strong setup once we get past 4Q results.

We favour Atos, Telecity & Capgemini in IT Services: We still see a SOTP discount at Atos, which
we expect to narrow this year, and M&A and deal wins are further possible catalysts. We see significant room for sentiment to turn more positive on Telecity provided the gentle improvement in growth we forecast comes through. Finally, we believe Capgemini is nicely levered into an improving macro in Europe, which could drive better EPS growth than the market forecasts.

We downgrade both Amadeus & Aveva to EW from OW: We remain very positive on the long-term
opportunities and business models at both companies. However, we feel the growth is now more fairly discounted at Amadeus and see less room for upside surprises. We fear slowing growth in Oil & Gas capex could impact Aveva negatively. 

More cautious on Indra, Tieto, SOWG & Sage: Generally we feel growth prospects are fairly valued by the market and we have less confidence on upside surprises at these companies.

>>> Credit Suisse Pre-Market Indication

Accor +1-2% Q4 overnight. Sls inline, guidance at top end of range
Carlsberg +0.5% Daily Mail report SAB looking at Carlsberg
Essilor -2% 2013 sls growth target cut to 5.4% (cons 6%)
HSBC +0.5% Stk not reacting to -ve analyst rpt saying assets o/stated
Intertek -1-2% CS d/grade to N from OP (see better valuation elsewhere)
K&S +2% Spec Uralkali may sign China Potash contract @ decent price
Lufthansa +1-2% WSJ pushing stock (+ve on restructuing strategy)
Miners unch Copper +0.3%, Brent -0.5%, China -1%
SAB unch Daily Mail report SAB looking at Carlsberg
Sainsburys +1-2% Spec Phil Green & QIA may team up with PE to bid 450-500p
Shell -4-5% Profit warning. Says net to be $2.9b (cons was mid $4b)
Spectris +1% No's all fine. Q4 fine vs a tough comp. Margins inline
Tech Stks -1% Negative read from poor Intel no's and Nintendo warning
Tullow unch The Times rpt on bid spec (mentions Statoil, not new)
Will Hill +3% Good stmnt. Underlying growth gd despite tought start to yr

WSJ : Nintendo Sees Loss on Dismal Wii U Sales

Nintendo Sees Loss on Dismal Wii U Sales Game Maker Slashes Wii U Console Sales View

Shoppers take escalators under the logo of Nintendo and Super Mario characters at an electronics store in Tokyo in December. Associated Press TOKYO—Nintendo Co. Friday said it now expects to post an operating loss in the current business year ending in March, blaming much weaker than expected sales of game consoles and software during the year-end shopping season.

The Kyoto-based company said it estimates an operating loss of ¥35 billion, considerably worse than the ¥100 billion profit it previously predicted in April. The revised figure compares with the ¥36.41 billion operating loss it posted in the last fiscal year.

The dismal performance highlights how Nintendo, which competes with Sony Corp. and Microsoft Corp., in the videogame market, has been struggling to sell its Wii U consoles and software as its rivals pull ahead with the latest generation of devices.

For the full fiscal year, the company sharply cut its Wii U console sales outlook to 2.8 million units from 9 million.

As a result, it cut its overall sales outlook to ¥590 billion, 36% below its previous forecast of ¥920 billion.

(BFW) Enel Repaid Banks EU4b, Continuing With Debt-Cut Plan: Corriere

+------------------------------------------------------------------------------+

Enel Repaid Banks EU4b, Continuing With Debt-Cut Plan: Corriere 2014-01-17 07:22:53.270 GMT

By Daniele Lepido Jan. 17 (Bloomberg) -- Co.’s target is to reduce debt by 2014 to EU37b, Corriere della Sera reports without saying where it got information. * Co. may dispose of Slovenske Elektrarne: Corriere * NOTE: Enel said to offer six spot LNG cargoes from Nigeria via tender NSN MZDR2L6JIJV7 <GO>

Link to Company News:ENEL IM <Equity> CN <GO>

For Related News and Information: First Word scrolling panel: FIRST<GO> First Word newswire: NH BFW<GO>

--Editor: Jerrold Colten

To contact the reporter on this story: Daniele Lepido in Milan at +39-02-8064-4266 or dlepido1@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at +49-30-70010-6215 or kwong11@bloomberg.net

>>> What to look at today : 17/01/2014

US MArket Closed lower, pushed by consumer disc. & Financials, Retail was trading lower too, trading volume were below average @ 641m shares...VIX @ 12.53 +2.04% SKEW @ 136.35 +2.76%...US earnings season heating up; Intel misses Q4 estimates on the bottom line and forecasts more job losses in 2014 during the earnings conference call,
sending shares down nearly 5%. AXP and COF also miss on earnings, registering modest declines in extended session. TMUS +3% after Hours on talks of Sprint financing for a bid in excess of $30bil...Japan cabinet office raises economic assessment for the first time in four months, as anticipated in Japan press overnight. Govt upgrades view on private
consumption (2nd consecutive month) and capital spending (1st time in four months). Separately, govt officials indicating capex will start to see stronger growth after coming in flat in the most recent quarter....Nikkei-0.1%...1-week Shibor rates in China hit 2-week highs as investors brace for the release of Q4 and 2013 GDP on Monday. Recent reports have indicated shadow banking in China has risen to nearly a third of all credit in 2013, up from 23%
in 2012....Shanghai -0.9%

Eur$ 1.3615 S&P Fut +0.14% European fut +0.16%

Keep an ey on :
- Iron Ore : Iron Ore for China delivery falls below $130/tonne (lowest level in 6 months), Equity Market are discounting around $110/ tonne already, should not be as -ve.
- AC FP : Accor 4Q Rev. In Line With Ests., Raises 2013 Forecast {NSN MZI6MX6TTDU1 <go>}, Boosts 2013 Ebit Forecast, Helped by Cost Savings
- BC IM : Brunello Cucinelli 2013 rev. up 15% to EU322.5m, est. EU322.6m., Sees “gracious” double-digit growth in rev., profit, Earnings release scheduled March 10
- BME SM : Caixabank Selling 5% Stake in Bolsas y Mercados: Terms
- BMPS IM : There is speculation that Pamplona Fund may invest in capital raise
- DAL IM : Reports preliminary Q4 revenue €119.8M, +4.4%, 2013 revenue seen €450M v €462M y/y
- DBK GY : Short Deutsche Bank, Santander; Go Long Nordea, Berenberg Says
- DTE GY : TMobile US : Sprint said to have lined up possible financing packages from banks for purported bid for the T-Mobile valued in excess of $30B - financial press; +3.1% afterhours
- DTE GY : Deutsche Telekom, Orange Puts EE Listing Plan on Hold, FT Says
- EDF FP : City of Prague Mulls Sale of Heating Utility to Dalkia, CTK Says
- EI FP : Essilor Cuts 2013 Sales Growth Forecast to 5.4% Ex Currencies
- IM NA : Imtech NV Concludes strategic review in Turkey; to dispose of AE Arma-Elektropanç (Arma) 80% stake for €21M to previous owner
- IPN FP : Ipsen Says Somatuline Met Primary Endpoint in Phase 3 Study
- LHA GY : Lufthansa AG There is speculation that board member Spohr could be named as the new CEO
- ORA FP : Deutsche Telekom, Orange Puts EE Listing Plan on Hold, FT Says
- PLT IM : Parmalat Bernier family's Sofil, acquired 33.8M shares from Dec 2-23
- PG IM : SeatPagine Seeking to raise up to €20M in capital
- PSM GY : Lavena Holding (KKR & Permira) Selling 16.6% Stake(~36m shares) in ProSiebenSat.1
- PVA SM : Pescanova Deadline for Bids Said to Be Extended: FIS Link
- RDSA NA : Royal Dutch Shell Guides Q4 results to be significantly lower
- SAN SM : Short Deutsche Bank, Santander; Go Long Nordea, Berenberg Says
- SBRY LN : Philip Green could be interested by the Company
- SCYR SM : Bechtel Ready to Replace Sacyr on Canal Works, Expansion Reports
- THR BB : ThromboGenics's Jetrea Gets Positive Initial Review in France
- TIT IM : Telecom Italia To Set up Procedure for Eventual Brazil Deals
- TIT IM : Telecom Italia Has Begun Governance Review, CEO Tells Repubblica
- TKA AV : America Movil Holds 26.81% of Telekom Austria After Transaction
- TKA AV : Buy Telekom Austria, AMX May Be Interested In Raising Stake: UBS
- TKA GY : Thyssen CEO Mulls Expansion of Board to 4 Members: Handelsblatt
- TLW LN : Rumors again in the press abvout potential interest for the company
- URKA LI : Uralkali May Sign China Potash Contract Next Week: Kommersant
- VOD LN : Vodafone Cited Most Often as Merger Target in M&A Desk Survey

>>> Brokers Upgrades & Downgrades -17/01/2014

>> Up
*ABB RAISED TO OVERWEIGHT VS EQUALWEIGHT AT MORGAN STANLEY
*BPOST RAISED TO BUY VS HOLD AT KEPLER CHEUVREUX
*EIFFAGE RAISED TO OUTPERFORM VS MARKET PERFORM AT RAYMOND JAMES
*MEGAFON RAISED TO OVERWEIGHT VS EQUALWEIGHT AT MORGAN STANLEY
*PETROFAC RAISED TO BUY VS NEUTRAL AT NOMURA
*SKF RAISED TO EQUALWEIGHT VS UNDERWEIGHT AT MORGAN STANLEY
*STATOIL RAISED TO BUY VS HOLD AT DEUTSCHE BANK
*TOTAL RAISED TO BUY VS NEUTRAL AT CITI

>> Down
*AHOLD CUT TO HOLD VS BUY AT ING
*CSR CUT TO HOLD VS BUY AT LIBERUM
*DEUTSCHE WOHNEN CUT TO NEUTRAL VS BUY AT UBS
*INTERTEK CUT TO NEUTRAL VS OUTPERFORM AT CREDIT SUISSE
*KCELL CUT TO NEUTRAL VS BUY AT UBS
*OMV CUT TO SELL VS HOLD AT DEUTSCHE BANK
*OPERA SOFTWARE CUT TO HOLD VS BUY AT SEB
*POLARCUS CUT TO EQUALWEIGHT VS OVERWEIGHT AT BARCLAYS
*REDROW CUT TO NEUTRAL VS BUY AT UBS
*ROTORK CUT TO UNDERWEIGHT VS EQUALWEIGHT AT MORGAN STANLEY
*SIEMENS CUT TO EQUALWEIGHT AT MORGAN STANLEY
*SYNTHOMER CUT TO NEUTRAL VS BUY AT UBS
*WIRECARD CUT TO HOLD FROM BUY AT BAADER BANK; PT UP 19% TO EU31
*ZUMTOBEL CUT TO EQUALWEIGHT VS OVERWEIGHT AT MORGAN STANLEY

>> PT Changes
*Generali PT Raised to EU18.3 at Goldman; Kept at Neutral
*RICHEMONT PT CUT TO CHF82 VS CHF88 AT CANTOR; KEPT AT HOLD
*TYMAN RATED NEW BUY AT BERENBERG; PT 327P

>> Initiation
*DS SMITH RATED NEW BUY AT BERENBERG; PT 400P
*INTER RAO RATED NEW BUY AT UBS
*MONCLER RATED NEW HOLD AT KEPLER CHEUVREUX; PT EU14
*MORRISON RATED NEW SELL AT SOCGEN; PT 200P
*OCADO RATED NEW SELL AT DEUTSCHE BANK, PT 440P
*SAINSBURY RATED NEW HOLD AT SOCGEN; PT 370P
*VALMET RATED NEW BUY AT UBS; PT EU8

>>Call
>Stock
*GDF SUEZ ADDED TO EUROPEAN FOCUS LIST AT CREDIT SUISSE
*POSTNL ADDED TO SMALL & MID CAP FOCUS LIST AT CREDIT SUISSE
>Sector
*UBS AG UBS reiterates Global Bank Sector at Overweight
Preferred names are: C CS ACA FP DBK GY INGA NA KEY MS LLOY LN SBER.RU
* Short Deutsche Bank, Santander; Go Long Nordea, Berenberg Says

>>> Brokers Upgrades & Downgrades -17/01/2014

>> Up
*ABB RAISED TO OVERWEIGHT VS EQUALWEIGHT AT MORGAN STANLEY
*BPOST RAISED TO BUY VS HOLD AT KEPLER CHEUVREUX
*EIFFAGE RAISED TO OUTPERFORM VS MARKET PERFORM AT RAYMOND JAMES
*MEGAFON RAISED TO OVERWEIGHT VS EQUALWEIGHT AT MORGAN STANLEY
*PETROFAC RAISED TO BUY VS NEUTRAL AT NOMURA
*SKF RAISED TO EQUALWEIGHT VS UNDERWEIGHT AT MORGAN STANLEY
*STATOIL RAISED TO BUY VS HOLD AT DEUTSCHE BANK

>> Down
*AHOLD CUT TO HOLD VS BUY AT ING
*CSR CUT TO HOLD VS BUY AT LIBERUM
*DEUTSCHE WOHNEN CUT TO NEUTRAL VS BUY AT UBS
*INTERTEK CUT TO NEUTRAL VS OUTPERFORM AT CREDIT SUISSE
*KCELL CUT TO NEUTRAL VS BUY AT UBS
*OMV CUT TO SELL VS HOLD AT DEUTSCHE BANK
*OPERA SOFTWARE CUT TO HOLD VS BUY AT SEB
*POLARCUS CUT TO EQUALWEIGHT VS OVERWEIGHT AT BARCLAYS
*REDROW CUT TO NEUTRAL VS BUY AT UBS
*ROTORK CUT TO UNDERWEIGHT VS EQUALWEIGHT AT MORGAN STANLEY
*SIEMENS CUT TO EQUALWEIGHT AT MORGAN STANLEY
*SYNTHOMER CUT TO NEUTRAL VS BUY AT UBS
*TOTAL RAISED TO BUY VS NEUTRAL AT CITI
*WIRECARD CUT TO HOLD FROM BUY AT BAADER BANK; PT UP 19% TO EU31
*ZUMTOBEL CUT TO EQUALWEIGHT VS OVERWEIGHT AT MORGAN STANLEY

>> PT Changes
*Generali PT Raised to EU18.3 at Goldman; Kept at Neutral
*RICHEMONT PT CUT TO CHF82 VS CHF88 AT CANTOR; KEPT AT HOLD
*TYMAN RATED NEW BUY AT BERENBERG; PT 327P

>> Initiation
*DS SMITH RATED NEW BUY AT BERENBERG; PT 400P
*INTER RAO RATED NEW BUY AT UBS
*MONCLER RATED NEW HOLD AT KEPLER CHEUVREUX; PT EU14
*MORRISON RATED NEW SELL AT SOCGEN; PT 200P
*OCADO RATED NEW SELL AT DEUTSCHE BANK, PT 440P
*SAINSBURY RATED NEW HOLD AT SOCGEN; PT 370P
*VALMET RATED NEW BUY AT UBS; PT EU8

>>Call
>Stock
*GDF SUEZ ADDED TO EUROPEAN FOCUS LIST AT CREDIT SUISSE
*POSTNL ADDED TO SMALL & MID CAP FOCUS LIST AT CREDIT SUISSE
>Sector
*UBS AG UBS reiterates Global Bank Sector at Overweight
Preferred names are: C CS ACA FP DBK GY INGA NA KEY MS LLOY LN SBER.RU
* Short Deutsche Bank, Santander; Go Long Nordea, Berenberg Says