Philips on course to outstrip growth in rest of healthcare sector
Dutch industrial group posts 4% rise in like-for-like sales and hits lower end of target
Philips is on course to outstrip growth in the healthcare sector this year after a strong fourth quarter helped the Dutch industrial group hit its full-year growth target for 2017.
The health and electronics conglomerate posted a 4 per cent rise in like-for-like sales to €17.87bn in 2017 — hitting the lower end of a 4 per cent to 6 per cent sales target and in line with forecasts.
Philips’ fourth-quarter sales jumped 5 per cent, driven by the group’s personal electronics business and medical diagnostics unit.
Once famous for selling lightbulbs and televisions, Philips has concentrated on slimming down its sprawling business to focus on the lucrative market for medical equipment and consumer electronics.
Medical technology — such as ultrasound machines and imaging scanners — now accounts for more than half the company’s sales, while it also still makes everything from electronic toothbrushes to sleep masks.
The group’s full-year core earnings — as measured by earnings before interest, taxation and amortisation (ebita) — rose from €1.9bn to €2.15bn, just shy of consensus forecasts. Net income in the period jumped from €1.49bn to €1.87bn.
Frans van Houten, chief executive, said the company was sticking to its 4 per cent to 6 per cent target for this year — outstripping a 3 per cent to 5 per cent forecast for the rest of the sector.
“It has been a very good year and we see increasing momentum across the world and across our product ranges. Our order growth is also a testimony to the fact our innovations in diagnostics are gaining traction,” said Mr van Houten.
Philips’ expansion into medical technologies and healthcare “informatics” — which provides patients with details of their health data — has been driven by a series of acquisitions.
Last year the Amsterdam-based group announced a $1.7bn deal to buy Spectranetics, a lossmaking US vascular devices group, and bought up two Dutch software businesses.
Mr van Houten said the group would “continue to look at a couple of targeted acquisitions” in 2018.
Philips completed the sell-off of a controlling stake in its LED business Lumileds last year and has steadily reduced its stake in Philips Lighting to a non-controlling holding of 29 per cent. Costs related to the Spectranetics deal meant restructuring charges jumped from €94m to €316m in 2017.
“The integration of these acquisitions is on track,” said Mr van Houten.
Personal health appliances was Philips’ best performing division in 2017, with like-for-like sales up 6 per cent compared with 7 per cent in 2016. Demand for wellbeing products was driven by double-digit growth in Latin America, the Middle East and Turkey, followed by China and central and eastern Europe.
Mr van Houten said the group’s collection of sleep and respiratory care products — which help people suffering from difficulties in breathing — was a “star performer” last year.
“Our sleep platform is a rapidly growing business and in big emerging markets conditions like sleep apnoea are often undiagnosed. The business is growing in the high single digits.”
Sales growth in Philips’ diagnosis & treatment businesses slowed from 4 per cent to 3 per cent, to €6.89bn in the 12 months ending in December.
Prefer ORA: fibre, cost control, inexpensive, CEO stability
Prefer DT: enlightened regulation, consolidated mobile market
Buy rating on KPN (good execution), BT (headwinds discounted)
HSD organic profit growth in sight and balance sheet muscle. Upgrade to Overweight
We expect Pernod Ricard to deliver HSD organic EBIT growth in FY19E/20E driven by strong growth in China. This marks a material change in trajectory from minimal organic profit growth since FY13. Strong operating leverage from China will enable the company to invest behind key brands (Absolut in the US, Chivas) and simultaneously expand margins. PR’s balance sheet is now rapidly de-gearing to a level that will provide near €7bn of firepower on our estimates which could finance a DD accretive takeover of Jose Cuervo (OW rated by JPM analyst Andrea Teixeira). We expect PR to increase its
organic EBIT guidance at its H118 results on 8th Feb. Any share price weakness on FX (likely -4% downgrade to FY19E consensus estimates) would be an opportunity to buy. Our DCF derived Dec-18 PT increases to €145 (€112). PR now trades on CY19E PE of 19.6x versus the European Beverages sector on 19.8x. We upgrade PR to OW from UW.
* China trends for high end spirits are improving materially with Kweichow Moutai and Remy Cointreau increasing price on strong underlying demand. Martell in China accounts for 10% of PR’s EBIT which we expect can fund investment behind Absolut in the US (6% of EBIT) and Chivas globally (9%). Strong growth in Martell can result in HSD organic EBIT growth for PR as it did in FY11 and FY12. This drives our 8% organic EBIT growth in FY19E vs consensus at 6%.
* Balance sheet muscle. We expect PR's net debt to EBITDA to be at 2.4x by June 2018. An acquisition of Jose Cuervo (discussed in 2013; PR and Bacardi took full control of tequila brands Avion and Patron this month) would be HSD to LDD earnings accretive to PR, augment top line growth, would be margin accretive and leave ND/EBITDA at a manageable c.4x on our estimates. Importantly, it would give PR scale exposure to the fast growing tequila category with potential to expand premium tequila brands in international markets through PR’s strong distribution network.
* Our FY18E/19E EPS estimates change by -1%/+0.4% with adverse FX movements offset by stronger organic growth. Our DCF derived Dec-18 PT increases to €145 (prev €112) on higher MT estimates, lower WACC (lower cost of debt) and roll forward our explicit forecasts by one year.
ML
DOMINOS - LFL's ahead, £20m additional buyback and FY PBT to be ahead (360).+3%
SWATCH - '17 op income 1% ahead of cons driven by revs +10% in H2 (413.4).+2-3%
T.ITALIA - Telecom Italia is said to detail network spin-off proposal (0.71)+1%
SCA - Beats with EBIT 4% ahead on higher margins. Div SEK1.5 v cons 1.27(87)+1%
LONZA - BAML initiate with a BUY, CHF 310 PO due to its strong growth(272)+0.5%
MONDI - Positive read across from Mondi beat; 4% ahead at EBIT level(1904)+0.5%
IMERYS - BAML initiate with a BUY rating and an EUR 107 price obj (83.2)..+0.5%
TEF - Small nos update ahead of Q4, non-cash provisions across Spain (8.48).u/c
ALTICE - Intends to reduce its shr capital by cancelling treasury shrs (8.9)u/c
LUXOTTICA - 4Q revs inline with cons, +4.3% cFX YoY. Reiterated guide (51)..u/c
ALFA - Mixed with orders good, +6% v cons but slightly cautious on Q1 (201).u/c
UNITE - To build 1000 bed development in London for £195m/ 6.25% yield (785)u/c
CYBG - NIM of 216 is inline but down YoY. Capital at 12.4% also inline (331)u/c
ZPG - Good start to '18.Says comfortable with market forecast for '18(345)-0.5%
MINERS - Copper -0.8%, Iron ore fut -0.65% & BHP OZ -1.27%, RIO OZ -0.66%...-1%
SAP - 4Q revs beat, small EBIT miss. Guide implies small d/g to street (91).-1%
PHILIPS - Q417 revs 2% and EBITDA 5% miss v cons but '18 should be solid(33)-
CS
Alfa Laval +1-2% Q4 orders 6% beat, sales 5% beat, adj EBITA 1.5% beat
Alstom -1-2% Reports CFE-CGC union will vote against Siemens deal
Anglos S/P De Beers announced revs from first sight of 2018 at
$665m
Doms Pizza +2-3% Q4 LFL +6.1% vs CS ests +5.1%, outlook good
Elis +1-2% Berendsen synergy targets better, capex plans reduced
Ericsson M/P Cevian says Ericsson has more than 20% upside potential
Informa R Sees FY 17 results inline, confirms offer for UBM
Luxottica +0.5-1% Q4 sales 1% beat, confirms 2017 outlook
Miners -1-1.5% Copper -0.90%, Brent -0.35%, Iron Ore -0.65%, China
-1.00%
Philips UNCH Q4 revs 2% miss, EBITA 1.5% miss, orders ahead
PZ Cussons M/P H1 revs inline, lower margins Europe/Africa, Asia
better
SAP -1% Op profit EU2.36b vs EU2.39b, to buy Callidus software
Swatch +3-4% Sales and op profit ahead, outlook positive
Tele Italy M/P Pitched Italian officials on landline network spin off
ZPG M/P Remains comfortable with 2018 market expectations
Investec:
UK
* CAMBIAN-Update.Trading I/L.Cash better, further Special Div(£15M).......+1-2%
* COHORT-SEA unit Awarded Gvt contract,inital £700k,could rise to £3m(2021).+1%
* CYBG-Update.Trading in line,confident o/look for remainder of FY18........+1%
* DOMINO'S PIZZA-Update.Strong Q4.Sees FY Profit slightly ahead of exp's....+3%
* ENT.ONE-Buys remaining stake in Mark Gordon.Raises $75m @ 305p(cl 312.2p).+1%
* INFORMA-Recommended offer for UBM(163p cash + 1.083 shs).....UBM +2%..INF -1%
* KIER GRP-Wins £8m British Red Cross facilities M'gt contract.............unch
* LSL PROP-Extends £100m banking facility(matures May 2022).................+1%
* MELROSE-Offered £150m voluntary contribution to GKN pension scheme.......unch
* PZ CUSSONS-H1.Asia strong,Afric&Euro weaker.Overall in line with exp's...unch
* SPORTECH-Continues formal sale process,extends process through first qtr.unch
* UDG HEALTH-Update.Strong trading, #'s ahead of last year.+ve outlook......+1%
* UNTIE GRP-Acquires 1000 bed site in E1, costs estimated at £195m.........unch
* VITEC-Changing to segmental reporting. U/G fcast, net debt will be lower..+1%
* ZPG-Update.Comfortable with FY exp's.Platform traffic remains strong......+1%
EURO
* ALFA LVAL-Q4 ptp 5% ahead,div small miss,Q1 demand lower (in line)........+1%
* ALSTRIA OFFICE-placed 15.3m new shs (10%) to fund aqns @ €12.6 (2% disc)..U/C
* CNH-results due this afternoon
* ELIS-FY rev miss but raises synergy ests from Berendsen aqn...............+1%
* ERICSSON-Cevian sees more than 20% upside for Ericsson(SVD)...............+1%
* HELLOFRESH-Q4 rev beat, sees FY rev €902-905m vs est €874m................+4%
* PHILIPS-Q4 ebitda small miss.Guidance : improvements at back end of yr....-2%
* LOOMIS-Q4 sales 2.5% miss,ptp 5% miss,div in line,not much detail.........-2%
* LUXOTTICA-Q4 sales small beat,w/sale +4.7%,retail +4.1%,confirms o/look...U/C
* ROCKET INTERNET-positive read from Hellofresh s/holding...................+1%
* SAP-Q4 mixed,buys Callidus for $2.4bn,FY18 guidance good,reits 2020 tgts..-1%
* SIEMENS GAMESA-Q1 results due
* SCA-FY sales in line, op pforit and dividend beat.........................+1%
* SWATCH-FY op profit 1% ahead, sales beat, margin tiny miss, +ive outlook..+2%
* TIT-said to detail network spinoff today..................................+1%
Commerz:
AIR -0.7% Alphavalue raised to ADD (reduce)
UK
* CAMBIAN-Update.Trading I/L.Cash better, further Special Div(£15M).......+1-2%
* COHORT-SEA unit Awarded Gvt contract,inital £700k,could rise to £3m(2021).+1%
* CYBG-Update.Trading in line,confident o/look for remainder of FY18........+1%
* DOMINO'S PIZZA-Update.Strong Q4.Sees FY Profit slightly ahead of exp's....+3%
* ENT.ONE-Buys remaining stake in Mark Gordon.Raises $75m @ 305p(cl 312.2p).+1%
* INFORMA-Recommended offer for UBM(163p cash + 1.083 shs).....UBM +2%..INF -1%
* KIER GRP-Wins £8m British Red Cross facilities M'gt contract.............unch
* LSL PROP-Extends £100m banking facility(matures May 2022).................+1%
* MELROSE-Offered £150m voluntary contribution to GKN pension scheme.......unch
* PZ CUSSONS-H1.Asia strong,Afric&Euro weaker.Overall in line with exp's...unch
* SPORTECH-Continues formal sale process,extends process through first qtr.unch
* UDG HEALTH-Update.Strong trading, #'s ahead of last year.+ve outlook......+1%
* UNTIE GRP-Acquires 1000 bed site in E1, costs estimated at £195m.........unch
* VITEC-Changing to segmental reporting. U/G fcast, net debt will be lower..+1%
* ZPG-Update.Comfortable with FY exp's.Platform traffic remains strong......+1%
EURO
* ALFA LVAL-Q4 ptp 5% ahead,div small miss,Q1 demand lower (in line)........+1%
* ALSTRIA OFFICE-placed 15.3m new shs (10%) to fund aqns @ €12.6 (2% disc)..U/C
* CNH-results due this afternoon
* ELIS-FY rev miss but raises synergy ests from Berendsen aqn...............+1%
* ERICSSON-Cevian sees more than 20% upside for Ericsson(SVD)...............+1%
* HELLOFRESH-Q4 rev beat, sees FY rev €902-905m vs est €874m................+4%
* PHILIPS-Q4 ebitda small miss.Guidance : improvements at back end of yr....-2%
* LOOMIS-Q4 sales 2.5% miss,ptp 5% miss,div in line,not much detail.........-2%
* LUXOTTICA-Q4 sales small beat,w/sale +4.7%,retail +4.1%,confirms o/look...U/C
* ROCKET INTERNET-positive read from Hellofresh s/holding...................+1%
* SAP-Q4 mixed,buys Callidus for $2.4bn,FY18 guidance good,reits 2020 tgts..-1%
* SIEMENS GAMESA-Q1 results due
* SCA-FY sales in line, op pforit and dividend beat.........................+1%
* SWATCH-FY op profit 1% ahead, sales beat, margin tiny miss, +ive outlook..+2%
* TIT-said to detail network spinoff today..................................+1%
Commerz:
AIR -0.7% Alphavalue raised to ADD (reduce)
AOX +0.2% Places 15.3mn shares in 10% hike with 2% discount at €12.60
COM +1.0% FY pretax profit 2% ahead consensus, dividened 3.7 cent ahead
HFG +1.5% FY Sales seen between €902 and €905mn, consensus @ €874mn
LEG -0.9% Exane cut to NEUTRAL (outperform) pt €96
LINU -0.6% FAZ says Linde was possibly sold below value in Praxair deal
RWE -1.8% Jefferies cut to HOLD (buy) pt €15
SAP -1.2% Q4 EBIT 2% below cons, new cloud bookings up 31%,2018 guidance inline
TKA -0.9% Thyssenkrupp union members are said to support Tata deal: BöZ
ZIL2 -0.2% Independent cut to SELL (hold)
Numis:
* Cambian u/c In line TU & CMD (special divi 8.2p)
Numis:
* Cambian u/c In line TU & CMD (special divi 8.2p)
* CYBG -1% CET1 ratio was 12.4% , Q1 NIM of 216 bps
* DIPLOMA +1% Names Richard Ingram CEO (Former Smiths Detection)
* DOMINOS PIZZA: +2%, Q4 UK ex splits lfl +6.1% and ahead of cons. FY PBT to be ahead of mkt expectations.
* EMIS -3% lost NHS Wales contract (worth only 1% of group profits), negative for sentiment
* ENTERTAINMENT ONE: -1%, placing price 305p (closed 312p), acquisition and placing announced after hours last night
* GREENCORE +1% Headline #’s inline, Outlook fine, FX levels if sustained would be a drag, been weak into this
* INFORMA: Unch, announces recommended offer for UBM, same terms as previous flagged, £60m annual synergies and confirms expects Full Year Results to be in line with expectations
* MENZIES MKT Sees no material impact for US tax changes
* NOSTRUM O&G: -2%, Announces plans to slow drilling ramp up drilling process.
* PZ CUSSONS -3% PBT £34m vs 36.3 NUM(e), tough trading in most markets, should see small downgrades
* UBM +2% confirms Informa's recommended offer on same terms as previously flagged. Confirms trading in the fourth quarter has been ahead of company expectations
* UNITE +2% acquires 1000 bed site near Liverpool St, great for earnings visibility
* YOUGOV: +3%, half year trading is anticipated to be ahead of previous expectations
* ZPG Mkt, in line statement and remains comfortable with year end expectations
JPM:
ALFA LABAL (ALFA SS) +1%
ALFA LABAL (ALFA SS) +1%
CAMBIAN (CMBN LN) +2%
DEUTSCHE BANK (DBK GY) -1%
DOMINOS (DOM LN) +2%
ERICSSON (ERICB SS) +1%
DEUTSCHE BANK (DBK GY) -1%
DOMINOS (DOM LN) +2%
ERICSSON (ERICB SS) +1%
HELLOFRESH (HFG GY) +5%
LUXOTTICA (LUX IM) +1%
PZ CUSSONS (PZC LN) +1%
PHILIPS (PHIA NA) -2%
SAP (SAP GY) -1%
SWATCH (UHR SW) +2%
UDG (UDG LN) +2-3%
UNITE (UTG LN) +1%
PZ CUSSONS (PZC LN) +1%
PHILIPS (PHIA NA) -2%
SAP (SAP GY) -1%
SWATCH (UHR SW) +2%
UDG (UDG LN) +2-3%
UNITE (UTG LN) +1%
MS:
ALFA SS +2% BIG BEAT, HUGE ORDER NUMBER IN KEY MARINE DIV. EXPECTS DEMAND IN Q1 LOWER THAN Q4 - NORMAL SEASONAILITY?
CYBG LN +1-2% CYBG 1Q CONFIDENT OF DELIVERING GROUPS FY18 AND MEDIUM TERM GUIDANCE
DOM LN +2-3% DOMINOS PIZZA GROUP 4Q SYSTEM SALES GBP321.8M,4Q PERFORMANCE AHEAD OF FORECASTS,EXPECTS FY UNDERLYING PBT TO BE SLIGHTLY ABOVE CURRENT RANGE OF MARKET EXPECTATIONS
HFG GY +3% GOOD SET OF NUMBERS / KEPT FY OUTLOOK
LUX IM +1% NUMBERS A TOUCH AHEAD OF CONSENSUS, POSITIVE 2018 OUTLOOK
PHIA NA -1% HEADLINE NUMBERS SMALL MISS, HURT BY A CHARGE IN H'CARE. DIAGNOSTICS ORDERS V STRONG. OUTLOOK REIT'D
SAP GY -1-2% TOTAL REVS INLINE BUT EBIT MISS. CLOUD SUBS €997 VS €1009. CONST CCY GUIDE IS INLINE BUT 3% CUT WHEN INCLUDED. 2018 EBIT GUIDANCE ALSO INCLUDES ACCOUNTING CHANGE.
UHR SW +1-2% SMALL BEAT ON SALES & EBIT. EXPECTS GROWTH ACROSS "ALL DISTRIBUTION CHANNELS" I.E INCLUDING WHOLESALE
ZPG LN +1-2% ZPG LN MANAGEMENT REMAIN COMFORTABLE WITH FINAL YR 2018 ESTIMATES,GOOD DEMAND SEEN IN PROPERTY DIVISION,SOLID SWITCHING VOLUMES IN COMPARISON UNIT
ShoreCap:
PZ CUSSONS - H1 ptp 34m.H1 op pft 37.5m.Divi 2.67p..........................-1%
PZ CUSSONS - H1 ptp 34m.H1 op pft 37.5m.Divi 2.67p..........................-1%
JOHN MENZIES - Doesnt see any material impact to underlying U.S tax........UNCH
ZPG - Says good start to 2018.Comfortable with market forecasts.............+1%
DOMINO'S - sales +18.2%,UK +9.8%,FY PBT seen slightly above range...........+3%
GREENCORE - rev +53.6%,strong growth in Food to Go business,well positioned.+2%
SPORTECH - sale talks continuing with interested parties...................UNCH
SAFESTAY - strong FY,significant increase in EBITDA,sales & occupancy......UNCH
SPRUE AEGIS - sees improvement in margins albeit against lower sales........-1%
YOUGOV - H1 trading seen ahead of expec, confident in meeting FY targets....+5%
EMIS - not chosen as vendor for NHS Wales GP framework agreement............-3%
ENTERTAINMENT ONE - raises £53m in placing of 17.5m shares at 305p..........MKT
CYBG - Q1 mortgage growth of 7.4%,on track to meet med-term guidance........+1%
NWF - revs +15%,PBT +10% inline with expec,sig.increase in feeds profits....+1%
OXFORD BIODYNAMICS - FY revs of £1.2m,Shore Capital named sole broker......UNCH
Citi:
UK
*BATS -Indian Government may look to put restrictions on tobacco sales -1%
UK
*BATS -Indian Government may look to put restrictions on tobacco sales -1%
*British L.-Dividend declaration of 7.52p per share u/c
*CYBG Plc -Q1 NIM of 216bps,small miss confident in FY guidance -1%
*Diploma -Names Richard Ingram as CEO u/c
*Domino Piz-Q4 performance ahead od forecasts, Q4 sales £294.7m +2%
*Informa -TU sees FY '17 in line, confirm recommended offer for UBM u/c
*ZPG Plc -AGM remains comfortable with final 2018 estimates u/c
EURO
*Philips -Q4 rev 5.3bn vs est 5.39bn, exp mkts to grow at 3-5% in '18. -2%
*SAP -Sees '18 op pft 7.3-7.5bn vs est 7.1bn, online orders climb. -1%
*Swatch -FY net sales 7.99 vs est 7.83bn, op margin 12.6% vs est 12.7% +1%
*Elis -Sees '18 ebit margin improving by c100bps vs '17. +2%
*Alfa Laval -Q4 net sales 10.11bn vs est 9.70bn, sees H1 demand lower. -1%
*Loomis -Q4 net sales 4.36bn vs est 4.48bn, organic rev +2%. -1%
*Julius Baer -CEO said to plan more aquisitions. FT. u/c
*Alstria Off -Places 15.5m new shs and confirms will meet guidance. -2%
*HelloFresh -FY rev 902-905m vs est 874m, on track to reach breakeven. +3%
*Svenska Cell-FY net sales in line at 16.66bn, div 1.5 vs est 1.27. +1%
Dow -0.67% S&P -0.67% Nasdaq -0.52% Russell -0.62%
Stocks retreated from record highs on Monday as investors took some profits following four weeks of nearly nonstop gains and ahead of a busy week that will feature President Trump's first State of the Union address (Tuesday), the Fed's latest policy directive (Wednesday), the Employment Situation Report for January (Friday), and a host of tech earnings.
11 of 11 sectors declined on Monday, with the top-weighted technology group (-0.9%) showing relative weakness. Apple (AAPL 167.96, -3.55) lost 2.1% after the Nikkei Asian Review reported over the weekend that the tech giant plans to slash its iPhone X production for the first quarter by 50% following a disappointing holiday season. Conversely, Twitter (TWTR 25.18, +0.91) jumped 3.8% after Fox Business reporter Charlie Gasparino tweeted that the company is trying to sell itself. Equities fell across Asia and U.S. stock-index futures retreated as a selloff in government bonds deepened and investors took profits after one of the best starts to a year in recent history. The dollar edged higher after Monday’s decline and oil dropped for a second session. Stocks in Japan, Hong Kong and Australia retreated after the S&P 500 Index declined from a record high. Treasuries extended a retreat that’s taken yields to the highest since 2014, as traders gear up for a hectic week of economic data and the last Federal Reserve policy decision with Janet Yellen at the helm. The yen climbed and sterling fell for a second day.
Nikkei -1.43% Hang Seng -1.22% CSI -1.17% Shanghai -1.07% Shenzen -0.65%
Eur$ 1.2351 CNH 6.3439 CNY 6.3352 JPY 108.74 GBP 1.4015 CHF 0.9386 RUB 56.2520 WTI$ 64.86 -1.02%
S&P -0.35% EuroStoxx -0.52% FTSE -0.52% Dax -0.74% SMI -0.31%
Macro :
- UK Growth Will Slow in 2018 Due to Brexit Uncertainty: Moody’s
Keep ane eye on :
- ALFA SS : Alfa Laval Fourth Quarter Pretax Profit Beats Estimates
- ALO FP : Alstom CFE-CGC Rep Says Union Will Vote Against Siemens Deal
- ALT FP : Altice Intends to Cut Share Capital by Cancelling Treasury Shrs
- AOX GY : Alstria Successfully Places 15.3 Million New Shares
- ASH US : Ashland Prelim. 1Q Sales Beat Estimates; Reaffirms Year Outlook
- CS FP : Le Maire to Meet Insurers Tuesday on French Floods
- CLLN LN : Carillion, Ex-Directors May Face Sanctions on Pensions:Telegraph
- ELIS FP : Elis Full Year Revenue Misses Estimates
- ERICB SS : Ericsson LM Top Holder Cevian Boosted Stake to 9.06% From ~8.05% --> Cevian Sees More Than 20% Upside Potential in Ericsson, SVD Says
- GAS SM : Gas Natural, Funds Dispute Distribution Charge Cut: Expansion
- GE US : GE Gains as Gabelli Says He’s Buying, Praises Management Team
- HEIA NA : Heineken Espana Is Said to Prepare Layoffs: Expansion
- HFG GY : HelloFresh Sees 2017 Revenue EU902-905m vs Est. EU874m (5 Ests)
- IPH FP : Innate Pharma Says in Clinical Trial Pact With MedImmune
- ITP FP : Interparfums Sees Full Year Revenue EU430 Mln
- BAER VX : Julius Baer CEO Said to Plan Acquisitions, FT Reports
- KTM AV : KTM Industries Full Year Ebit EU132.5 Mln
- LDO IM : Leonardo’s Profumo Sees Continued Growth for DRS in U.S.: Sole
- LUX IM : Luxottica 4Q Shows Progress, LensCrafters Challenged: Jefferies
- BAER VX : Julius Baer to Redeem CHF250m of Bonds With 5.375% Coupon
- KN FP : Natixis Appoints Daniel Louis Head of Strategy
- PHIA NA : Philips Fourth Quarter Adjusted Ebita 1.6% Below Estimates
- PNL NA : WorldQuant Takes Short Position of 0.57% in PostNL: AFM
- PUB FP : Publicis Says Microsoft to Build Its AI Platform ‘Marcel’
- RIO LN : Rio Sale of Grasberg Stake Increasingly Likely, Deutsche Says
- SFL IM : Safilo Says HAL Has No Intention of Changing Shareholding in Co.
- SAP GY : SAP Sees 2018 Non-IFRS Rev EU24.6B-EU25.1B, Repeats 2020 Targets
- SAP GY : SAP to Buy CallidusCloud at Enterprise Value of About $2.4B
- SAP GY : SAP Comments on IFRS 15 Revenue Accounting Policy Adoption
- SAS SS : SAS Postpones AGM as Chairman Search Continues
- SGRE SM : Siemens Gamesa to Cut 133 Jobs From Miranda Del Ebro Factory
- TIT IM : Telecom Italia Is Said to Detail Network Spinoff Proposal
- UHR SW : Swatch FY Oper. Profit CHF1b vs Est. CHF990m; Positive Outlook
>>> Up
* Airbus Upgraded to Add at AlphaValue
* AMS Upgraded to Buy at AlphaValue
* CNP Assurances Upgraded to Neutral at Natixis
* Dechra Pharma Upgraded to Buy at Jefferies
* Getinge Upgraded to Hold at Danske Bank; PT 105 Kronor
* Iberdrola Upgraded to Outperform at MedioBanca; PT 7.40 Euros
* Inditex Upgraded to Buy at BPI; Price Target 33.20 Euros
* Merlin Upgraded to Outperform at Exane; PT 12.70 Euros
* Mycronic Upgraded to Buy at Danske Bank; Price Target 111 Kronor
* Novartis Upgraded to Add at AlphaValue
* Orsted Upgraded to Overweight at Morgan Stanley; PT 425 Kroner
* Pernod Ricard Upgraded to Overweight at JPMorgan; PT 145 Euros
* REN Upgraded to Neutral at MedioBanca; PT 2.50 Euros
* Retail Estates Upgraded to Buy at ING
* Umicore Upgraded to Equal-weight at Barclays; PT 37 Euros
* Vonovia Upgraded to Buy at UBS; PT 50 Euros
>>> Down
* Ablynx ADRs Downgraded to Neutral at Baird; PT $56
* Derwent London Downgraded to Neutral at Exane; PT 32.40 Pounds
* ElringKlinger Cut to Sell at Independent Research
* Enav Downgraded to Neutral at MedioBanca; PT 4.70 Euros
* LEG Immobilien Downgraded to Neutral at Exane; PT 96 Euros
* RWE Downgraded to Hold at Jefferies; PT 15 Euros
* SIAS Downgraded to Neutral at MedioBanca; PT 16.40 Euros
* Snam Downgraded to Neutral at MedioBanca; PT 4.50 Euros
>>> Initiation
* Albioma Rated New Buy at Kepler Cheuvreux; PT 23 Euros
* Altice Rated New Buy at Spin-Off Research; PT 12 Euros
* Altice USA Rated New Buy at Spin-Off Research; PT $30
* BCP Rated New Neutral at MedioBanca; PT 33 Cents
* Jackpotjoy Rated New Buy at Echelon Wealth; PT 12 Pounds
* Outotec Reinstated at Hold at DNB; PT 7.40 Euros
>>> Call
>>> Up
* Airbus Upgraded to Add at AlphaValue
* CNP Assurances Upgraded to Neutral at Natixis
* Dechra Pharma Upgraded to Buy at Jefferies
* Getinge Upgraded to Hold at Danske Bank; PT 105 Kronor
* Iberdrola Upgraded to Outperform at MedioBanca; PT 7.40 Euros
* Inditex Upgraded to Buy at BPI; Price Target 33.20 Euros
* Merlin Upgraded to Outperform at Exane; PT 12.70 Euros
* Mycronic Upgraded to Buy at Danske Bank; Price Target 111 Kronor
* Novartis Upgraded to Add at AlphaValue
* Orsted Upgraded to Overweight at Morgan Stanley; PT 425 Kroner
* Pernod Ricard Upgraded to Overweight at JPMorgan; PT 145 Euros
* REN Upgraded to Neutral at MedioBanca; PT 2.50 Euros
* Retail Estates Upgraded to Buy at ING
* Umicore Upgraded to Equal-weight at Barclays; PT 37 Euros
* Vonovia Upgraded to Buy at UBS; PT 50 Euros
>>> Down
* Ablynx ADRs Downgraded to Neutral at Baird; PT $56
* Derwent London Downgraded to Neutral at Exane; PT 32.40 Pounds
* ElringKlinger Cut to Sell at Independent Research
* Enav Downgraded to Neutral at MedioBanca; PT 4.70 Euros
* LEG Immobilien Downgraded to Neutral at Exane; PT 96 Euros
* RWE Downgraded to Hold at Jefferies; PT 15 Euros
* SIAS Downgraded to Neutral at MedioBanca; PT 16.40 Euros
* Snam Downgraded to Neutral at MedioBanca; PT 4.50 Euros
>>> Initiation
* Albioma Rated New Buy at Kepler Cheuvreux; PT 23 Euros
* Altice Rated New Buy at Spin-Off Research; PT 12 Euros
* Altice USA Rated New Buy at Spin-Off Research; PT $30
* BCP Rated New Neutral at MedioBanca; PT 33 Cents
* Jackpotjoy Rated New Buy at Echelon Wealth; PT 12 Pounds
* Outotec Reinstated at Hold at DNB; PT 7.40 Euros
>>> Call
Asia Market Update: Dollar remains at multi-year lows, bond yield higher with equities cautious ahead of FOMC
***Headlines/Economic Data***
General Trend: Asian equities trade generally lower following negative leads out of the US
- Energy shares underperform vs outperformance seen on Monday
- Japan Dec Jobless Rate rises for the first time since May 2017; job-to-applicant ratio highest since Jan 1974
- US Treasury Futures extend losses during Asian session
- PBoC sets yuan weaker for first time in 8 sessions
Japan
-Nikkei 225 opened -0.3%; closed -1.4%
- TOPIX Securities Index -1.2%, Electric Appliances -1.7%
- Hitachi Metals [5486.JP]: Declines over 5% (9-month profits declined y/y)
- Fuji Electric [6504.JP]: Trades lower by over 1% (affirmed FY net profit forecast)
- Hitachi Construction [6305.JP]: Gains over 7% (Raised FY18 guidance)
- Canon Electronics [7739.JP]: Gains over 9% (FY profit rose by ~38%)
- (JP) Japan's Topix passes 1,900 for the first time since 1991
- (JP) Japan Dec Overall Household Spending Y/Y: -0.1% v 1.5%e
- (JP) JAPAN DEC JOBLESS RATE: 2.8% V 2.7%E; JOB-TO-APPLICANT RATIO: 1.59 (highest since Jan 1974) V 1.57E
- (JP) Japan PM Abe Adviser Hamada: Yen could 'firm' in short-term on factors such as US currency policy
- (JP) Japan Econ Min Motegi: Will closely watch FX rates as they have impact on Japan economy
- (JP) Japan Fin Min Aso: Coincheck event is very regrettable; if needed authorities will search crypto exchanges
- (JP) JAPAN DEC RETAIL SALES M/M: +0.9% V -0.2%E; RETAIL TRADE Y/Y: 3.9% V 2.2%E
- JSR, 4185.JP Reports 9M Net ¥27.7B v ¥22.3B y/y; Op ¥37.2B, 44.5% y/y; +14.4%
- (JP) Japan MoF sells ¥2.2T v ¥2.2T indicated in 0.10% (prior 0.10%) 2-yr JGBs; avg yield -0.130% v -0.136% prior; bid to cover 5.02x v 4.32x prior
-(JP) Japan 10-yr JGB yield trades above 0.09% (highest since July)
Looking Ahead: Japan Dec Prelim Industrial Production due on Wednesday, along with comments from BoJ official Iwata
Korea
-Kospi opened -0.3%
- Chipmakers trade broadly lower: Hynix and Samsung Electronics decline over 2%
- (KR) South Korea customs data shows washing machine exports have nearly halved over the past 5-yrs; with more declines likely from new US safeguard measures - Korean press
- (KR) According to Korea Financial Investment Association, the Korea stock market has seen the number of participants pass 25M for the first time - Korean press
- (KR) South Korea Feb Business Manufacturing Survey: 77 v 82 prior; Non-Manufacturing Survey: 78 v 78 prior
- Samsung, LG open new logistics facilities in US over safeguard measures - Korean press
-(KR) South Korea Dec Department Store Sales y/y: 3.2% v 8.5% prior; Discount Store Sales y/y: 2.2% v 0.0% prior
-(KR) North Korea armed forces have reportedly scaled back their winter military exercises due to shortages of fuel and food - press
Looking Ahead: South Korea Dec Industrial production due for release on Wed
China/Hong Kong
-Hang Seng opened -0.7%, Shanghai Composite -0.3%
- Hang Seng Materials Index -2.6%, Energy -2.5%, Info Tech -1.5%, Financials -1.4%, Property/Construction -0.9%
- Wynn Macau, 1128.HK Forms special committee following recent sexual misconduct allegations related to Steve Wynn; -5.5% (declined 6.5% Monday)
- (CN) Some China banks said to have been ordered to curb overnight lending - Chinese press
- (CN) China Premier Li: China will properly manage the timing, pace and intensity of macroeconomic controls to achieve higher quality growth – CD
- (CN) PBoC: Skips OMO (4th straight session) v skipped prior; Net drain CNY240B v CNY140B drain prior
- (CN) PBOC SETS YUAN REFERENCE RATE AT 6.3312 V 6.3267 PRIOR (1st weaker setting in 8 sessions)
-(CN) China targeting to meet crude steel capacity cut target early
-(CN) China province of Shanxi (2nd largest coal producer) has asked coal miners to shorten or eliminate Spring Festival holiday - press
Looking Ahead: China Jan Official Manufacturing and Non-Manufacturing PMIs due on Wed
Australia/New Zealand
-ASX 200 opened -0.1%; closed -0.9%
- ASX 200 Energy Index -1.3%, Resources -1.4%, Utilities -1%, Financials -0.6%
- (NZ) NEW ZEALAND DEC TRADE BALANCE (NZD): +640M V -125ME; YTD -2.84B V -3.44BE
-Fortescue, FMG.AU Reports Q2 ore mined 47.5 Mt v 50.1 Mt y/y; ore shipped 40.5 Mt v 42.2 Mt y/y
-Village Roadshow, VRL.AU Reports H1 substantially lower y/y
Looking Ahead: Australia Q4 CPI due for release on Wed
-(AU) Wholesale energy prices more than doubled in last 12 months in Victoria and S. Australia - AMEO data
-(NZ) S&P affirms New Zealand sovereign rating at AA; outlook stable
Other Asia
- (PH) Philippines Central Bank Gov Espenilla: Peso is broadly stable over medium term
-(TH) Thailand Central Bank: GDP may grow 4% in 2018; interest rate to remain accomodative to help economy
North America
- US equity markets ended broadly lower: Dow -0.7%, S&P500 -0.7%, Nasdaq -0.5%, Russell 2000 -0.6%
- S&P500 Energy Sector -1.5%, Utilities -1.3%, Real Estate -1.2%
- Maxim Integrated Products [MXIM]: Declines over 8% in the afterhours, as Japan’s Renesas denied media report related to $20B merger.
- MetLife [MET]: Declines over 6% in the afterhours: Reports prelim Q4 $0.61-0.66 v $1.10e; discovered material weakness in internal control over financial reporting; to see $135-165M FY17 net income impact; to increase reserves by $525-575M; to postpone earnings
- Thomson Reuters [TRI] Confirms Advanced Discussions with Blackstone Regarding Financial & Risk (F&R) Business; no terms disclosed yet
- Callidus Software [CALD]: To be acquired by SAP for $36.00/shr for $2.4B (~10% premium to closing price)
- (US) FBI Deputy Director McCabe reportedly plans to step down effective today, sooner than expected - NBC News
- (US) Treasury Sec Mnuchin comments before Tuesday's Senate Banking Committee Testimony: Reiterates Treasury can fund government into Feb
- (US) Treasury quarterly financing estimates: to borrow $441B in Jan-Mar quarter (v $512B prior projection); Treasury to borrow $176B in Apr-Jun quarter; Treasury borrowed $282B in Oct-Dec quarter v $275B estimate
Looking Ahead: Weekly US API Crude Oil Inventories due for release
Corporate earnings are expected from companies including AK Steel, AMD, Aetna, Corning, Electronic Arts, Harley-Davidson, Juniper, McDonald’s, Pfizer, Robert Half
Europe
- (EU) Reportedly ECB officials are assuming the QE program will wind down over about 3 months (rather than suddenly halting the program); Even the hawkish members of the council are said to support a short taper period rather than a sudden halt to QE ; There has still not been a decision made on QE after the nominal end date in Sept - press
- (UK) EU Chief Brexit Negotiator Barnier: EU institutions and govts are united in Brexit talks; Brexit transition to take 21 months
- (UK) PM May spokesperson: "there remains some distance" between the UK and EU on more than one issue over the UK's transition deal - Sky News
- (UK) Unreleased UK Brexit analysis: UK would be worse off outside the EU under every scenario modeled - Buzzfeed
- (UK) Moody's: UK corporate credit quality to remain stable in 2018 despite Brexit uncertainty
- (DE) Germany govt to raise 2018 GDP forecast to 2.4% from 1.9% prior - press
- Luxottica [LUX.IT]: Reports Q4 Rev €2.09B v €2.07Be
- Telecom Italia [TIT.IT]: CEO expected to announce plan for network spin off proposal on Monday
Looking Ahead: Euro Zone Q4 prelim GDP and Germany Jan Prelim CPI due for release
***Levels as of 01:00ET***
- Nikkei225 -1.4%, Hang Seng -1.0%; Shanghai Composite -0.6%; ASX200 -0.9%, Kospi -1.1%
- Equity Futures: S&P500 -0.5%; Nasdaq100 -0.7%, Dax -0.7%; FTSE100 -0.5%
- EUR 1.2388-1.2361; JPY 109.20-108.66; AUD 0.8100-0.8066;NZD 0.7338-0.7314
- Feb Gold -0.4% at $1,334/oz; Mar Crude Oil -1.0% at $64.88/brl; Mar Copper -0.9% at $3.17/lb
After Hours Summary: MET -7%, RMBS -6% following earnings/guidance... EXTR +7.5% / PMT +4% joining S&P SmallCap 600After Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: HA +4%
Companies trading higher in after hours in reaction to news: PTI +13.4% (still checking for specific catalyst), SMRT +11.1% (rebounding from 36% decline today; announced after the close plans to assemble team to improve performance and explore strategic alternatives), EXTR +7.5% / GNBC +7.1% / PMT +4%(to join S&P SmallCap 600), DFFN +4.3% (doses the first patient in the Phase 3 clinical trial with trans sodium crocetinate in patients with newly-diagnosed inoperable glioblastoma multiforme), GERN +4.3% (continued strength), AR +4.1% (to evaluate various potential measures to address the discount in trading value of its stock relative to some of the premier U.S. large capitalization upstream independents), XXII +2.6% (modestly rebounding after closing near lows), TWTR +1.7% (continued strength), MXIM +1.1% (after late spike on CNBC report that the company is in talks to be acquired by Renesas), CY +1% (following late move higher on MXIM merger speculation)
A few optical names are higher following Loop Capital initiations: OCLR +1.5%, ACIA +1%, LITE +0.8%, ARRS +0.4% (initiated after the close with Buy rating at Loop Capital)After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: MET -7.4%, RMBS -5.8%, SNHY -3.9% (ticking lower; also commenced public offering of 4 million shares of common stock), SANM -3.4% (light volume), IDTI -1.6%
Companies trading lower in after hours in reaction to news: EARS -18.9% (entered into a securities purchase agreement with investors providing for the purchase and sale of 12,499,999 common shares at a price of $0.44 per share), VTGN -11.8% (issues letter to stockholders as company prepares to initiate AV-101 Phase 2 study for major depressive disorder), UCTT -6.9% (commenced public offering of ~$100 mln of its common stock; intends to disclose in connection with the offering former shareholder dispute), SLNO -6.7% (files for 14,165,541 share common stock offering by stockholders including 6,024,425 warrant shares that may be purchased upon exercise of issued and outstanding warrants), AMRN -4% (commences offering of ADS), PE -3.8% (expects 4Q17 net production of 80-81 MBoe per day and 51-52 MBo per day), MYO -1.7% (continued weakness following today's 9.5% decline), CIFS -1.6% (pulling back -- was up more than 5% today), CBAY -1.2% (commences underwritten public offering of common stock)