(Exane) Renault Nissan : The Urge to merge.

A Renault-Nissan merger has never been in itself a reason to own Renault. However, the probability of a government stake sale looks to be the highest for some time. Although not our base case, we see +20-30% upside, only adding to Renault’s optionality.
Is the probability of a full merger increasing?
The French government’s road block on a potential Renault-Nissan merger may soon be lifted. A sale of its 4.7% stake in the coming months could be the first stepping stone in the French government ending its 70-year involvement in Renault. With a seemingly pro-business president in place, the probability of a full government sell down looks to be the highest for some time, leaving the Alliance free to optimise its shareholder structure.

How could a combination work? How does it create value?
In this note we model 3 scenarios for how a potential merger may mechanically play out, showing that there is potentially 20-30% upside from combining the shareholder structure. The upside is not obvious at first, with the combined entity already trading at c.5.5-6x P/E - not notably cheap vs. peers GM, VW etc. However we believe a re-rating closer to 7x can be justified if sufficient new synergy targets accompany any announcement. As we have seen with PSA in the wake of the Opel deal, P/E is not the constraining factor given the promise of future synergies. The cleanest solution (with the most upside) would be for Nissan to buy the French government’s 15% stake before then merging with Renault.

When could it happen?
We expect the government first sells down the temporary 4.7% stake it built in 2015. Although the government can realise a profit if sold today (breakeven is EUR84 per share inc. dividends), it may wait until after the AGM on June 15th or until the 2016 dividend is paid on June 21st – not to mention the outcome of the French fraud investigation. This then leaves greater emphasis on the Alliance mid-term strategic presentation in October, where we expect Renault and Nissan to outline their coming 5 year plans – with the added optionality of any structural change.

WSJ : In Biotech, No News Is Bad News

In Biotech, No News Is Bad News
Lack of rally after cancer conference should concern investors


Biotech stocks have a special need for catalysts. The relative absence of them of late should concern investors.

The American Society of Clinical Oncology annual meeting passed without much of a stir, at least from an investor point of view.

There were exceptions like Loxo Oncology , whose shares rocketed 40% higher Monday after the company presented encouraging preclinical data. But that didn’t translate into a broad stock rally—the S&P Biotechnology Select Industry Index essentially hadn’t budged through Tuesday.

At first blush, that shouldn’t be too concerning. The index is up 19% so far this year, and plenty of companies within the index are focused on treatment categories besides oncology.

But the lack of a stronger rally isn’t something to dismiss altogether. The majority of stocks within the index aren’t profitable, and depend heavily on positive sentiment to attract investors. Major medical meetings, like recent ASCO one, are generally the best place to find such catalysts that attract investor interest. In true bull markets, like the one observed from 2013-2015, data presented at the meeting sends the biotech index sharply higher.

Without such obvious catalysts on the horizon, biotech stocks are at risk for a reversal.

That is especially true because expected blockbuster drug launches are in relatively short supply this year. Just three drugs being introduced this year are expected to top $2 billion in annual sales by 2022, according to research firm Evaluate Pharma.

Companies with obvious catalysts should continue to turn in a strong performance. Vertex Pharmaceuticals , the top performing stock in the S&P 500 so far in 2017 as of Tuesday’s close, will have hotly anticipated cystic fibrosis data later this year. Regeneron Pharmaceuticals shares are up more than 25% so far this year as its blockbuster dermatology drug, Dupixent, hits the market.

But for investors holding companies without such a hook, it is likely that no news will eventually turn into bad news.

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance
:
  • DLTH -11.3%, ALOG -9.5%, SIGM -7.3%, NAV -7%, AMBA -4.6%, (also authorized the repurchase of up to an additional $50 million of its ordinary shares over a twelve-month period commencing July 1, 2017), OXM -2.7%, PLAY -2.5%, (also adds $100 mln to repurchase ), UNFI -2.2%, USPH -1.1%
Other news:
  • KMDA -7.9% (to assume ownership from Shire (SHPG) of the Investigational New Drug application approved by the FDA for the Phase 2/3 study evaluating Alpha-1 Antitrypsin)
  • EXAS -4.1% (prices common stock public offering of 7 mln shares at $35/share)
  • GBDC -2.1% (announces public offering of 1.75 mln shares of its common stock)
  • SHPG -1.7% (KMDA to assume ownership from Shire of the Investigational New Drug application approved by the FDA for the Phase 2/3 study evaluating Alpha-1 Antitrypsin)
  • VLRS -1.2% (May traffic)
  • UPLD -1.1% (to offer and sell shares of its common stock)
  • AZN -1.1% (to divest rights to Zomig outside of Japan for $200 mln)
Analyst comments:
  • QHC -2.6% (initiated with an Underweight at Morgan Stanley)
  • RCII -2.6% (downgraded to Sell from Hold at Loop Capital)
  • IRM -2.3% (downgraded to Sell from Hold at Deutsche Bank)
  • IMAX -1.4% (downgraded to Hold from Buy at The Benchmark Company)
  • KO -0.8% (downgraded to Market Perform from Outperform at BMO Capital)
  • PEP -0.7% (downgraded to Market Perform from Outperform at BMO Capital)
  • CYH -0.5% (initiated with an Underweight at Morgan Stanley)

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance
:
  • CVNA +8.1%, SEAC +7%, KEYS +6%, HOME +1.3%
M&A news:
  • SAN +1.6% (to purchase Banco Popular Espanol SA)
Other news:
  • DRWI +58% (awarded contract from SmartSky Networks, a North American 4G LTE inflight service provider)
  • NNVC +37.8% (reports 'excellent' inhibitory effects of its topical shingles treatment candidates against VZV in multiple cell culture studies)
  • WINS +7.7% (after more than doubling share price yesterday - closed up 107%)
  • NVAX +4.9% (announces that data from the second of two Phase 2 trials of its RSV F protein recombinant nanoparticle vaccine candidate)
  • CTIC +4.6% (modestly rebounding following following yesterday's decline)
  • DVAX +4.3% (Point72 Asset Management increases passive stake )
  • PLX +4.2% (will present phase II trial results for alidornase alfa (PRX-110) for the treatment of Cystic Fibrosis)
  • AMD +3.4% (continued strength)
  • GRAM +3.4% (sells stake in GMD)
  • EGLT +3.3% (partners w/ Ascend Therapeutics to co-promote SPRIX Nasal Spray to more than 9,000 women's healthcare practitioners)
  • HA +2.2% (reports May 2017 traffic statistics with RPMs +8%, ASMs +5% and load factor +2.4 pts; sees Q2 Operating Revenue Per ASM +7.5-10.5%, prior +5.5-8.5%)
  • DXCM +1.2% (announces FDA approval of the Dexcom G5 mobile app for Android devices)
  • HOLX +1.2% (FDA has approved co's Genius 3D Mammography exam), .
Analyst comments:
  • CTSO +3.8% (initiated with a Outperform at Cowen; tgt $7)
  • RBS +2.6% (upgraded to Hold from Sell at Investec)
  • ORA +1.6% (upgraded to Overweight from Neutral at JP Morgan)
  • LPNT +0.9% (upgraded to Outperform from Mkt Perform at Leerink Partners)
  • DPS +0.5% (upgraded to Outperform from Market Perform at BMO Capital)

>>> Early premarket gappers

Early premarket gappers
Gapping up:
  • DRWI +62.6%, NNVC +37.8%, CVNA +10.2%, WINS +7.7%, SEAC +7%, KEYS +5.8%, DVAX+3.6%, CTIC +2.8%, HA +2.2%, AMD +1.4%, BCS +1.3%, HOME +1.3%, SAN +0.9%, DB +0.5%
Gapping down:
  • DLTH -11.3%, ALOG -9.5%, NAV -9%, KMDA -7.3%, AMBA -5.7%, PLAY -4.2%, SIGM -4.1%,EXAS -3.3%, WIT -2.7%, OXM -2.7%, QHC -2.6%, GBDC -2.5%, UNFI -2.2%, SHPG -1.2%,UPLD -1.1%, BEBE -1%, AZN -1%

>>> Brown-Forman misses by $0.03, beats on revs; guides FY18 EPS in-line (52.32

Brown-Forman misses by $0.03, beats on revs; guides FY18 EPS in-line
  • Reports Q4 (Apr) earnings of $0.37 per share, $0.03 worse than the Capital IQ Consensus of $0.40; revenues fell 4.9% year/year to $887 mln vs the $738.16 mln Capital IQ Consensus.
  • Co issues guidance for FY18, sees EPS of $1.80-1.90 vs. $1.87 Capital IQ Consensus Estimate; sees FY18 revs of +4-5% to ~$4.011-4.050 bln, may not be comparable to $3.17 bln Capital IQ Consensus Estimate.
  • Underlying net sales increased 3%, and improved from 2% in the first half to 4% in the second half: Developed markets grew underlying net sales 4% (-3% reported) and emerging markets also grew 4% (-7% reported) as second half trends in these markets improved to 8% (-1% reported)
  • Guidance Details: Underlying net sales growth of 4% to 5%, led by the Jack Daniel's family of brands, our premium bourbon and tequila brands, and helped by new products such as the launch of Jack Daniel's Tennessee Rye and Slane Irish Whiskey, as well as seeding of our single malt scotch brands. Underlying operating income growth of 6% to 8%.

(RFI) Is Qatar’s spat with its neighbours about the US and Iran?

Is Qatar’s spat with its neighbours about the US and Iran?

Qatar is facing potential food and supply shortages as Saudi Arabia led a pack of regional neighbours in severing economic and diplomatic ties on Monday. Though they have cited Qatar’s positions on the Muslim Brotherhood and Iran as reasons, the Gulf States are also facing external pressure and internal fighting that may have informed the closures.

The spat between Qatar and its neighbours in and around the Gulf is not unprecedented, and Saudi Arabia, Bahrain and the United Arab Emirates withdrew their ambassadors to Doha over its alleged links to the Muslim Brotherhood for several months in 2014.

But with Riyadh closing its land border and major carriers Qatar Airways and Emirates among those who have suspended or reduced part of their Doha services, the latest dispute’s scale goes beyond what has come before.

“The vast majority of Qatar’s imports – construction, food – come across this land border, so the impact there is going to be really quite severe,” says David Roberts, lecturer at King’s College London and author of Qatar: Securing the Global Ambitions of a City State.

“The states that are leading this are trying to escalate things to such a degree whereby Qatar can’t really compete, and it has to come to the table very quickly with ways that it can improve the situation.”

Two recent developments appear to have contributed to the coordinated breaking of ties, which by end of day Monday involved Saudi Arabia, the UAE, Bahrain, Egypt, Yemen and the Maldives.

The first involves emails hacked from Qatar’s state news agency in recent weeks that appear to show the country’s emir speaking favourably of Iran, the Muslim Brotherhood and the Palestinian Islamist movement Hamas.

The second is last month’s visit to Riyadh by United States President Donald Trump, who called on the region to unite against Iran, an area that sets Doha apart from its neighbours.

“The real difference between Saudi Arabia, the Emirates and Bahrain on one hand, and Qatar on the other, is their view of on the situation of the region, especially when it comes to Iran,” Arab world specialist Alain Gresh told RFI’s French services. “For Qatar, it’s necessary to maintain dialogue with Iran and to avoid portraying Iran as the source of all troubles in the region.”

(Atlantico) Ce que les Saoudiens "oublient" de dire sur la véritable motivation


Ce que les Saoudiens "oublient" de dire sur la véritable motivation de la rupture de leurs relations diplomatiques avec le Qatar
En matière de soutien au terrorisme, l'Arabie Saoudite n'a pas de leçon à recevoir de qui que ce soit ! Ce qui rend cette stratégie de Ryad et ses sbires tout à fait suspecte.

Quelques deux semaines après un déplacement annoncé comme historique en Arabie Saoudite où le monde arabe sunnite se proposait de montrer un visage uni et solidaire au Président américain, l’édifice envisagé comme inébranlable vient de connaître son démantèlement avec la rupture des relations diplomatiques entre l’Arabie Saoudite et le Qatar. Cette rupture des relations a été immédiatement suivie par celles des « usual suspects » ou la bande des pays clients de l’Arabie Saoudite soit l’Egypte, le pouvoir légal en exil du Yémen, le Bahreïn et enfin les Emirats arabes unis, l’allié indéfectible de Ryad.

La goutte qui apparemment a fait déborder le vase est le vrai faux « fake news » démenti par Doha faisant part de l’appel téléphonique entre le Président iranien nouvellement élu et l’Emir Al-Thani du Qatar, où ce dernier aurait qualifié l’Iran de « puissance régionale importante avec laquelle il fallait composer. » Vrai ou Intox, les autorités de l’Arabie Saoudite semble croire à sa sincérité. Or, il ne peut s’agir là de la seule raison, ni même de la principale. Rappelons que d’autres membres du Conseil de Coopération du Golfe, comme le Sultanat d’Oman ou encore le Koweït, avaient également félicité le Président Rouhani pour sa réélection et entretiennent de bonnes relations avec ce géant régional.

La vérité est peut-être ailleurs. Rappelons ainsi qu’au lendemain de l’attentant du London Bridge, le troisième en trois mois qu’a connu l’Angleterre, on apprenait que le fameux rapport commandait par l’ancien premier ministre britannique Cameron sur le financement des groupes djihadistes allait enfin, après d’innombrables reports, être rendu public. C’est un secret de polichinelle que ce rapport, à l’instar de celui du 11 septembre diligenté par le congrès américain, pointe le doigt vers l’Arabie Saoudite et ses ressortissants comme principale source de financement de ces mouvements terroristes. Ainsi, à un moment où le premier ministre anglais déclare que la tolérance britannique allait cesser face à l’idéologie islamiste, c’est un euphémisme que de dire que cela arrangeait fort bien Ryad de jeter au loup ce voisin encombrant qu’est le Qatar en le désignant comme financier de ces mouvements.

Or, s’il est vrai que le Qatar finance des mouvements islamistes, il ne s’agit pas des mêmes que financent les Saoudiens et en tout cas pas de ceux qui continuent de perpétrer des attentats en occident. En effet, le Qatar finance et soutient le mouvement des Frères musulmans, qui est un mouvement politique initiatique et hiérarchisé qui vise à imposer un gouvernement islamique par les urnes. Ce mouvement, n’est actif qu’en Egypte où il est en conflit avec le Maréchal Sissi, l’ancien attaché de défense égyptien à Ryad, qui a renversé leur Président Morsi, lui, pour le coup, démocratiquement élu. Les saoudiens, eux en revanche, financent les mouvements ultra salafistes marqués par la pensée de leur idéologue wahhabite, ibn Wahab, père fondateur de la version la plus rétrograde d l’Islam. Il est également vrai que les saoudiens ont aussi une dent personnelle contre les Qataris qui, eux aussi wahhabite, ont une égale prétention que les Saouds sur le contrôle des deux villes saintes de l’islam.

Mais par-dessus tout, c’est la question de financement des frères musulmans par le Qatar qui gêne le plus les pétromonarchies arabes du golfe persique, car leur idéologie et leur schéma de gouvernance sont diamétralement opposé. Ces derniers proposent un système où la légitimité du gouvernant vient de la distribution des richesses du haut vers le bas. Alors que chez les frères, la théorie d’Al-Bana, fondateur de la doctrine des Frères musulmans, considère que la légitimité du gouvernant ne peut venir que du bas vers le haut à travers le consentement volontaire de la majorité des citoyens tel qu’exprimé par les urnes.

Les saoudiens et leurs alliés voient donc le Qatar comme le financier et le protecteur de ceux qui cherchent à les renverser.

Pratiquement, ce conflit entre ces différents émirats, plus ou moins grands, ne regarde donc pas la politique de la nouvelle administration américaine, même si les saoudiens se sentent hardis par le soutien proclamé par Trump. Il ne peut s’agir de cela, car Washington dispose de 10.000 hommes sur sa base d’aviation « Al-Udeid » au Qatar d’où part la plupart des frappes contre Daech. En tout état de cause, il s’agit là d’un conflit sans précédent au sein des pays membres du Conseil pour la coopération du golfe. S’il est arrivé, comme il y a quelques mois, que les saoudiens aient déjà rappelé leur ambassadeur de Doha, une telle rupture avec la fermeture de la frontière terrestre ne s’était jamais produit.

Or le Qatar et sa péninsule comptent sur cette unique frontière pour l’importation de la totalité de leurs besoins en matériaux de construction et aliments. La pression sera rude pour Doha même si des solutions alternatives de remplacement des flux se présenteront rapidement. L’Iran avec lequel le Qatar partage le plus grand gisement gazier du monde ne manquera pas de venir à son rescousse avec un ravitaillement maritime, de même que la Turquie, dirigé par un Erdogan lui même frère musulman.

En somme ,cette rupture n’est rien d’autre que la recherche par les Saoudiens d’un bouc-émissaire afin de lui faire porter le chapeau du terrorisme islamiste qui martyrise l’Occident.

Chapeau qui ne mériterait d’être placé que sur leur propre tête !