>>> US Research Calls

Research Calls

  • Upgrades:
    • AmerisourceBergen (ABC) upgraded to Buy from Hold at Deutsche Bank; tgt raised to $178
    • Anglo American (NGLOY) upgraded to Buy from Hold at Jefferies
    • Arch Coal (ARCH) upgraded to Buy from Hold at Jefferies; tgt raised to $225
    • BHP Group (BHP) upgraded to Buy from Hold at Jefferies; tgt raised to $82
    • British Land (BTLCY) upgraded to Overweight from Underweight at Barclays
    • Exxon Mobil (XOM) upgraded to Outperform from In-line at Evercore ISI; tgt raised to $120
    • Lear (LEA) upgraded to Overweight from Equal Weight at Wells Fargo; tgt raised to $180
    • Liberty Global (LBTYA) upgraded to Buy from Hold at Berenberg; tgt $30
    • McKesson (MCK) upgraded to Buy from Hold at Deutsche Bank; tgt raised to $378
    • Mirati Therapeutics (MRTX) upgraded to Mkt Outperform from Mkt Perform at JMP Securities; tgt $72
    • Novo Nordisk A/S (NVO) upgraded to Overweight from Neutral at JP Morgan
    • Plexus (PLXS) upgraded to Outperform from Mkt Perform at Raymond James; tgt $100
    • Peabody Energy (BTU) upgraded to Buy from Hold at Jefferies; tgt raised to $36
    • Ramaco Resources (METC) upgraded to Buy from Hold at Jefferies; tgt raised to $25
    • Rio Tinto (RIO) upgraded to Buy from Hold at Jefferies; tgt raised to $93
    • South32 (SOUHY) upgraded to Buy from Hold at Jefferies
    • Tyler Tech (TYL) upgraded to Overweight from Equal Weight at Wells Fargo; tgt raised to $435
    • Vale S.A. (VALE) upgraded to Buy from Hold at Jefferies; tgt raised to $24
    • Warrior Met Coal (HCC) upgraded to Buy from Hold at Jefferies; tgt raised to $50
    • XP (XP) upgraded to Buy from Neutral at UBS; tgt lowered to $31
  • Downgrades:
    • Booz Allen Hamilton (BAH) downgraded to Equal Weight from Overweight at Barclays; tgt $95
    • Devon Energy (DVN) downgraded to In-line from Outperform at Evercore ISI; tgt $80
    • Leidos (LDOS) downgraded to Equal Weight from Overweight at Barclays; tgt $105
    • Occidental Petro (OXY) downgraded to In-line from Outperform at Evercore ISI; tgt $74
  • Others:
    • GXO Logistics (GXO) resumed with an Equal Weight at Barclays; tgt $60
    • Marqeta (MQ) initiated with a Buy at UBS; tgt $14
    • ProFrac Holding (PFHC) initiated with a Buy at Seaport Research Partners; tgt $26
    • ProFrac Holding (PFHC) initiated with a Buy at Stifel; tgt $24
    • ProFrac Holding (PFHC) initiated with an Overweight at JP Morgan; tgt $25
    • ProFrac Holding (PFHC) initiated with an Overweight at Morgan Stanley; tgt $30
    • ProFrac Holding (PFHC) initiated with an Overweight at Piper Sandler; tgt $31.50
    • RLI Corp (RLI) initiated with a Mkt Perform at Raymond James
    • WalkMe Ltd. (WKME) resumed with an Equal-Weight at Morgan Stanley; tgt $13

>>> US Gapping down

Gapping down
In reaction to earnings/guidance:

  • TGT -9.1% (lowers guidance), MOMO -5%, WELL -2.3% (raises its Q2 FFO guidance), REVG -1.8%, SJM -1.6%, TSCO -1.3% (guides Q2 EPS and revs slightly above consensus)

Select TGT peers showing early weakness:

  • WMT -3.4%, COST -3.3%, M -3.2%, WSM -3.2%, JWN -2.1%, BBBY -2.1%, TJX -2%

Other news:

  • ENOB -9% (provides updates to previously disclosed misrepresentations)
  • RVP -8% (announces workforce reduction)
  • TWTR -1.7% (Texas AG launches investigation into TWTR over fake bot accounts)
  • EBS -1.5% (JNJ plans to terminate Covid-19 vaccine supply deal with EBS, according to WSJ)
  • ZM -1.5% (hires Google Cloud exec to oversee go-to-market strategy)

Analyst comments:

  • LDOS -1.1% (downgraded to Equal Weight from Overweight at Barclays)
  • BAH -1% (downgraded to Equal Weight from Overweight at Barclays)
  • OXY -0.8% (downgraded to In-line from Outperform at Evercore ISI)

>>> US Gapping up

Gapping up
In reaction to earnings/guidance:

  • GTLB +8.5%, UNFI +6.9%, PLAY +6.3%, GIII +5.6%, HQY +4.2%

Other news:

  • KSS +10.4% (Board of Directors enters into three-week exclusive negotiations with Franchise Group (FRG)
  • ANNX +4.6% (reports phase 2 clinical trial results demonstrating upstream classical complement inhibition associated with clinical benefit in Huntington's disease)
  • NVAX +3.7% (FDA will hold meeting regarding NVAX COVID-19 vaccine for individuals 18 and older today at 8:30 ET)
  • VERU +2.7% (Tang Capital discloses 5.2% stake; submits emergency use authorization application to U.S. FDA for Sabizabulin)
  • FRG +2.7% (KSS Board of Directors enters into three-week exclusive negotiations with Franchise Group (FRG)
  • DNA +1.4% (collaboration with Novo Nordisk (NVO) to create novel expression hosts for pharmaceutical products)
  • RELY +1.1% (names new CFO)
  • FSM +1.1% (drills 18.3 g/t gold over 11.9 meters at the Séguéla Project, Côte d'Ivoire)
  • LSCC +1% (expands partnership with AMI)
  • PTON +1% (CFO to step down; names new CFO)

Analyst comments:

  • MRTX +4.5% (upgraded to Mkt Outperform from Mkt Perform at JMP Securities)
  • ARCH +2.5% (upgraded to Buy from Hold at Jefferies)
  • NVO +2.1% (upgraded to Overweight from Neutral at JP Morgan)
  • BTU +1.8% (upgraded to Buy from Hold at Jefferies)
  • METC +1.5% (upgraded to Buy from Hold at Jefferies)
  • RIO +1.4% (upgraded to Buy from Hold at Jefferies)
  • ABC +0.9% (upgraded to Buy from Hold at Deutsche Bank)

>>> US Early premarket gappers

Early premarket gappers

  • Gapping up:
    • KSS +14.3%, RWT +12.5%, GTLB +10.7%, NVAX +4.1%, EBS +3%, FRG +2.7%, HQY +2.5%, VERU +1.9%, LLY +1.2%, RELY +1.1%, FSM +1.1%, LSCC +1%, PTON +1%, TNDM +0.8%, COUP +0.8%, NHI +0.6%, KKR +0.5%, TSCO +0.5%
  • Gapping down:
    • RVP -8%, SDC -3.1%, MOMO -2.7%, WELL -2.3%, TWTR -1.6%, RIG -1.4%, GVA -1.1%, ZM -0.8%

>>> BAE Systems : To showcase combat vehicles and advanced defense technologies

To showcase combat vehicles and advanced defense technologies during Eurosatory defense and security tradeshow in Paris June 13-17

Will display a broad range of capabilities during the Eurosatory defense and security tradeshow in Paris June 13-17; including combat vehicles, artillery systems, and technologies for precision strike and situational awareness.

The full size vehicles on display at outdoor stand C371 in area Pe6a are the CV90MkIV infantry fighting vehicle which was recently selected by the Slovakia Ministry of Defence as its preferred system for the procurement of Infantry Fighting Vehicles (IFVs) for the Slovak Army, the ARCHER 155mm mobile howitzer, and the BvS10 all-terrain vehicle, along with advanced guided weapon systems and situational awareness technologies.

>>> Tuesday Morning Papers Summary

Tuesday Morning Papers Summary

LA REPUBBLICA
-European Best Destinations is a Brussels-based organization that promotes travel in Europe. Each year the association draws up rankings based on real surveys conducted among the European population. This year, those surveyed have identified seven ‘dream beaches’ from the top 22 located throughout the European continent. Therefore, one in three of the most coveted and fascinating beaches in Europe is located in Italy. Due to waters, which have long been counted among the cleanest and richest in biodiversity in the world, Sardinia has three of the seven starting with Cala Goloritzé , in the province of Nuoro. Then there is Cala dei Gabbiani , a natural continuation of the very popular Cala Mariolu, also on the Gulf of Orosei, and Cala Cipolla, one of the pearls of the Chia bay, in the south of the island. In Tuscany there’s the island of Elba along with Cavoli beach and La Sorgente. Puglia could not be missing from the list, now a beloved destination by tourists from all over the world. Baia delle Zagare in the Gargano promontory was one of the top beaches. Last but not least, in the list of European Best Destinations there is Campania with the Cauco beach , of sand and gravel, unique for its crystalline sea and the sloping seabed towards the open sea. It is located less than half an hour southwest of Salerno.

FRANKFURTER ALLGEMEINE ZEITUNG
-In the Baltic States, Scholz will find little support for his and Paris's policies. The Baltics do not fear Putin's humiliation as much as they do humiliation from the West. After his Berlin meeting before the Russian invasion, Chancellor Olaf Scholz will meet the heads of government from Latvia and Estonia and the Lithuanian President in Vilnius today. There has been a slightly different philosophy towards Russia than in Berlin for the past three decades. In this corner of Europe, experience has taught (them) not to underestimate Russia's will to expand.
-What does former Chancellor Angela Merkel say about her successor Chancellor Scholz and the war? Half a year after the end of her chancellorship, Angela Merkel has engaged in a ‘public discussion’ for the first time. She wants to face “the challenging questions of our time”.Relations with Russia: The conversation between Merkel and "Spiegel" editor Alexander Osang will take place on Tuesday at 8 pm in the Berliner Ensemble and will be broadcast live. In addition to the war in Ukraine, it should also be about Merkel's relationship with Russia and her view of the work of Chancellor Olaf Scholz and the current political situation in Germany.

HANDELSBLATT
The software from Volkswagen should be groundbreaking according to the website of the subsidiary Cariad, which was founded in 2020. But after start-up investments valued at some EUR6B, the future project mainly produces trouble. The various programs are very slow and not compatible with each other, while the promised leaps in quality are not forthcoming. The cause of the ‘misery’ stems from a fundamental rift on the board. At the beginning of the year, VW CEO Herbert Diess took over responsibility for Cariad from Audi CEO Markus Duesmann. Today they both blame each other for the problems. Porsche CEO Oliver Blume is also upset, as the controversial software does not fit into the success story of the sports car manufacturer's planned IPO.
-As a result of the war in Ukraine, the current German government coalition (so-called ‘traffic light’) has had to change course on energy policy. Security of supply has become just as urgent as climate protection. The situation has forced consumers to reconsider their energy consumption: there are new arguments for electric cars or heat pumps.People are dramatically feeling the rising prices for electricity, oil and gas. Is it really realistic to extract 100% of a country’s energy needs from renewables? How will the CO2 price develop?

IL SOLE 24 ORE
-The European Union has reached an agreement on the minimum wage, announcing it through the Social Affairs Commission of the European Parliament’s Twitter account. The new directive on the European minimum wage now awaits the approval of the Plenary of the EU Parliament (which, however, can no longer amend the text) and the ratification of the EU Council. It will then be up to the member countries to implement it. According to the latest rumors about the agreement in the EU, there will be no maximum and minimum wages. Instead, the directive will aim to establish a framework for setting adequate and fair minimum wages. Italy is among the six EU countries without regulation on the subject: the issue is at the center of a political clash in the majority and it has fueled the debate between the social forces.
-Energy might be expensive for consumers, but it has made the state richer. In the first four months of the year, the Italian Treasury collected between VAT and excise duties on energy products, earning some EUR3.7B more than in the same period of 2021. Driving the higher revenue is above all the VAT on imports, which has grown by almost EUR2B, accounting for a 55.1% increase. An increase which, as the Finance Department explains, is largely attributable to the dynamics of the oil price. In the month of April alone, crude oil experienced a trend rise of 62 percent. Not least the excise duties, despite the government's actions to soften the increases in the bill and at the pump. On electricity and gas, for example, the highest overall revenues for the state amounted to over EUR1.3B.

LES ECHOS
-Inflation will give the budget management teams cold sweats this summer. The bill on purchasing power, which provides for new public spending (pensions, food, etc.), must be presented at the end of June but it will not end the problem. Far from that. The exceptionally high rise in prices that we have been seeing for months – the 5% bar was crossed in May – will also raise the question of the level of revaluation of the income tax scale. In its draft budget for 2023, will the finance minister maintain indexation to inflation? This would protect the purchasing power of taxpayers. But it would also be expensive for the state.
-Globalization has never been completely accepted even though it has lifted hundreds of millions of people out of poverty. It was also accompanied by a problem of redistribution of wealth between countries and within countries themselves. These inequalities in distribution gave rise to a second wave of recriminations from anti-globalists. Their movement has been fueled by a perception that China's entry into the World Trade Organization (WTO) has led to job losses in Western countries, for example.

ABC
-During the gradual US rapprochement with Spain that should culminate in Joe Biden's trip to Madrid to participate in the Atlantic Alliance summit at the end of this month, there is an unresolved issue on which Pedro Sánchez's Executive has managed to convince his counterpart only partially: a series of harsh penalties for Spanish producers and companies, in the form of tariffs and sanctions that have lasted since the Trump era: Large Spanish companies continue to pay a high price for the sanctions against Cuba and Venezuela, and the harmful tariffs on black olives and wind towers have not been completely withdrawn, as the Spanish government expected after several ministerial visits to Washington. It is true that Repsol has now been allowed to send a limited amount of Venezuelan crude to Europe, but this is minimal and covers debt, and the company cannot, unlike the North American Chevron, explore new agreements with the Venezuelan government.

>>> Europe : Brokers Upgrades & Downgrades - 7th of June 2022 V2(+)

>>> Up
* Anglo American Raised to Buy at Jefferies; PT 4,500 pence
* BHP ADRs Raised to Buy at Jefferies; PT $82
* British Land Raised to Overweight at Barclays; PT 580 pence
* Liberty Global Raised to Buy at Berenberg; PT $30
* Novo Nordisk Raised to Overweight at JPMorgan; PT 925 kroner
* OTP Bank Raised to Buy at Erste Group; PT 12,000 forint
* Pennon Raised to Buy at Citi; PT 1,160 pence
* Remy Cointreau Raised to Hold at SocGen; PT 185 euros
* Rio Tinto Raised to Add at AlphaValue/Baader
* Rio Tinto ADRs Raised to Buy at Jefferies; PT $93
* Vale ADRs Raised to Buy at Jefferies; PT $24

>>> Down
* Capri Holdings PT Cut to $91 from $107 at UBS
* Dassault Systemes Cut to Underperform at Jefferies; PT 33 euros
* Flutter Cut to Reduce at Numis; PT 8,360 pence
* National Grid Cut to Sell at Citi; PT 998 pence
* PVH PT Cut to $132 from $156 at UBS
* Victoria's Secret PT Cut to $49 from $59 at UBS

>>> Initiation
* Digital Bros Rated New Buy at Stifel; PT 40.10 euros
* Induction Healthcare Group Rated New Buy at Canaccord (+)
* Trident Royalties Rated New Buy at Stifel; PT 100 pence (+)

>>> Call
* British Land Raised to Match Peer Land Securities: Barclays (+)
* Dassault Systemes Cut at Jefferies on Costs From Cloud Shift
* European REIT Re-Positioning M&A Curbed by Funding Obstacles
* Goldman Strategists See Rising Yields as a Headwind for Stocks (+)
* Liberty Global Raised at Berenberg on Growth Trends, Synergies
* US Is Most Attractive Equity Market, Citi Quant Strategists Say

FT : US trading firm Jane Street sues LME for nickel trade chaos

US trading firm Jane Street sues LME for nickel trade chaos
Lawsuit comes a day after similar action by Elliott against metals exchange over March trade halt

Jane Street, a top Wall Street market-maker, has followed US hedge fund Elliott Management and launched a lawsuit against the London Metal Exchange over the nickel short squeeze fiasco.

Jane Street filed the judicial review claim against LME and its clearing house on June 6, seeking $15.3mn after nickel trading was suspended and trades were cancelled on March 8, when prices surged as much as 250 per cent, the metal exchange’s owner Hong Kong Exchanges and Clearing said on Tuesday.

The move followed a $456mn claim made by Elliott, which was announced by HKEX on Monday.

The LME’s handling of the nickel chaos has come under increasing scrutiny, with UK regulators probing the trading suspension.

The surge in nickel price centred on Xiang Guangda, a self-made Chinese billionaire who runs Tsingshan Holding Group, the world’s biggest producer of nickel and stainless steel.

Xiang had bet that the price of nickel would fall, but Russia’s invasion of Ukraine upended his wager by sending prices of raw materials soaring, leaving him exposed to losses of potentially billions of dollars.

The LME, which sets global reference prices for industrial metals, cancelled several hours of trades for the day and suspended trading in nickel for days.

International fund managers including the chief executive of AQR Capital Management, one of the world’s largest hedge funds, have accused the LME of cronyism over the decision to cancel the trades.

LME has denied that parent company HKEX influenced its decision to suspend nickel trading.

“Exchanges function to create an orderly market and a level playing field for investors. The LME’s arbitrary decision to cancel nickel trades during a period of heightened volatility severely undermines the integrity of the markets and sets a dangerous precedent that calls future contracts into question,” Jane Street said.

“As a leading global market maker, Jane Street has undertaken this action to recoup its losses caused by the LME’s illegal actions and to strengthen the exchange and restore the market’s trust in it.”

LME will contest the claim “vigorously” and views it as “without merit”, HKEX said.

A person familiar with Jane Street’s case said that the amount claimed, which is significantly smaller than in the Elliott suit, was “secondary” and that the company wanted to “send a message” that it would take action against “unreasonable” market actions.

“If your job . . . is to essentially ensure an orderly smooth functioning of the global financial markets, they can’t do that if the counterparties, aka an exchange, don’t align with the contracts that they enter into,” the person said. They added that uncertainty created by actions such as the LME’s increased the risks of providing liquidity for exchange traded fund markets, one of the group’s biggest businesses.