Moody's says the UK sovereign rating would be downgraded if the UK was unable to conclude agreement with EU that protected core elements of its access to the Single Market
A key factor in Moody's assessment of the impact of Brexit on the UK's credit profile will be how far any new trade arrangement between the UK and the European Union replicates EU membership, as well as how long it takes to achieve a new settlement.
Early premarket gappers
Gapping up: TNAV +23.9%, RGLS +16.1%, AVXS +14.3%, TTOO +13.8%, OCLR +12.4%, CALX +10.4%, CRTO +9.8%, FLKS+8.5%, SQ +7.2%, ENPH +6.9%, IPHI +6.7%, BRCD +6.6%, HLS +6.3%, TNET +6.2%, VECO +5.9%, PBPB +5.8%, CPPL+5.6%, URRE +5.6%, ODP +5.6%, EA +5.4%, WING +5.3%, KNOP +5%, FNSR +4.6%, TSRA +4.5%, TSRA +4.5%, PZZA+4.1%, BGFV +4.1%, NYMT +4%, LNTH +3.9%, HZN +3.6%, BABA +3.4%, NBLX +3.3%, ORBK +3.3%, XCO +2.8%, CYH+2.6%, JIVE +2.5%, CIM +2.1%, NPTN +2%, EXTR +2%, DVN +1.9%, ELGX +1.8%, BBOX +1.8%, ATVI +1.7%, ABC +1.7%,AVH +1.6%, AGN +1.6%, TSRO +1.5%, FNBC +1.5%, ETSY +1.4%, TWX +1.4%, TWX +1.4%, CALD +1.2%, DLPH +1.1%,TRNC +1%, KATE +1%, NVMI +1%
Gapping down: ADPT -51.2%, ZAGG -19.9%, DXCM -17.9%, MEMP -15%, DATA -10.8%, MYGN -9.9%, SBAC -9.8%, DHT-9.3%, RDHL -9%, X -8.6%, PAYC -6.6%, TISI -6.3%, CERN -6%, ZEN -5.6%, BYD -5.4%, FTR -5.1%, VRX -4.3%, PXD -4%,BFAM -3.7%, TSE -3.6%, HWAY -3.4%, HWAY -3.4%, TRUP -3.3%, MTCH -2.9%, CAVM -2.9%, TRP -2.8%, UIHC -2.4%, CCI-2.3%, QUOT -2.3%, Q -2.3%, PRMW -2.1%, CLX -2.1%, HLF -2%, SE -2%, NEE -1.9%, CACC -1.9%, SHOP -1.9%, ILMN -1.8%,WBA -1.6%, CXRX -1.5%, TG -1.4%, MHG -1%, VSI -1%
Gapping down: ADPT -51.2%, ZAGG -19.9%, DXCM -17.9%, MEMP -15%, DATA -10.8%, MYGN -9.9%, SBAC -9.8%, DHT-9.3%, RDHL -9%, X -8.6%, PAYC -6.6%, TISI -6.3%, CERN -6%, ZEN -5.6%, BYD -5.4%, FTR -5.1%, VRX -4.3%, PXD -4%,BFAM -3.7%, TSE -3.6%, HWAY -3.4%, HWAY -3.4%, TRUP -3.3%, MTCH -2.9%, CAVM -2.9%, TRP -2.8%, UIHC -2.4%, CCI-2.3%, QUOT -2.3%, Q -2.3%, PRMW -2.1%, CLX -2.1%, HLF -2%, SE -2%, NEE -1.9%, CACC -1.9%, SHOP -1.9%, ILMN -1.8%,WBA -1.6%, CXRX -1.5%, TG -1.4%, MHG -1%, VSI -1%
Time for a more positive stance on leading LCCs
* Downward earnings momentum close to bottoming: fragmenting of low cost industry is understood
* easyJet’s shares and estimates have been hit the hardest. Its strategic position remains strong. Double upgrade to Buy
* Ryanair has recovered from its post Brexit trough. A longterm winner, but less attractive risk reward. Upgrade to Hold
* We prefer low cost carriers to flag carriers: We continue to see a challenging
market for short haul airlines in Europe with excess capacity. Structural instability in
the low cost carrier sector continues as Wizz and Norwegian absorb very significant
fleet deliveries and Eurowings, Transavia and Vueling all target the bronze medal in
the Pan European low cost industry. We see these challenges as widely understood.
We do not think this is the case for the flag carriers’ key profit-generating North
Atlantic market, which we expect to become increasingly competitive.
* Ryanair and easyJet should outperform low cost peers: Next year Ryanair and
easyJet will benefit from significant fuel price improvements, in contrast to their low
cost competitors, whose fuel hedging has seen the benefit from falling market prices
sooner. Ryanair and easyJet remain the long-term strategic winners in the market
with solid strategic positions and strong balance sheets. Despite easyJet’s current
short-term commercial and operational challenges, we continue to see it as one of
the two market leaders.
* easyJet strong valuation case: On our estimates, easyJet trades on a CY17 PE of 9.2x,
a 21% discount to Ryanair and an 18% discount to its own 5-year average. Thinking long
term, assessing easyJet and Ryanair on the basis of their mid cycle PBT margins of 10%
and 19% respectively, easyJet trades on 8.7x, at a 35.8% discount to Ryanair. If easyJet
management fail to turn its trading around, we would expect peers to be interested in its
strategic position, network and brand.
* Upgrade easyJet from Reduce to Buy; Ryanair from Reduce to Hold: We raise our
DCF based target prices from 800p to 1,150p for easyJet, from EUR8.50 to EUR12 for
Ryanair, both on raised near-term estimates and slightly higher mid-term margins.
Stada attracts possible financial investors including Advent, Bain, Blackstone, CVC and Permira - report (translated)
Stada management has been approached by several financial investors interested in obtaining a stake in the German drug company, Frankfurter Allgemeine reported.
The German-language daily, without identifying sources, said that since a shareholders' meeting two months ago, financial investors including Advent, Bain, Blackstone, CVC and Permira have sought conversations with the management about making an equity investment. However, the newspaper was told that the management has blocked such talks.
Sources close to Stada were cited as saying that in principle, the listed company's leadership is not totally opposed to such talks, but will only provide a deep look into company finances if the interested party has a concrete proposal.
The report said Stada's management, advised by the investment bank Perella Weinberg, is seeking strategic options to keep Stada operating independently. Stada management is considering whether the company might make large acquisitions, according to the daily's information.
The report said Stada has a market capitalization of EUR 2.8bn.
Hyperloop TT postpones IPO
Hyperloop Transportation Technology (HTT), the US-based innovative transportation solutions developer, is postponing its IPO, reported Hospodarske Noviny. The Czech language item cited CEO of the company, Dirk Ahlborn, who was visiting a conference in Slovakia last week.
HTT last year announced its intention to float , however Ahlborn said that the time is not right for a IPO and hence the company is looking for alternative routes.
He added that HTT does not need to raise money; however it wants to offer possibility to its shareholders to monetize their stake.
The report explained that the company has received funding from 800 private investors and 50 companies in exchange for company shares.
HTT is currently preparing vacuum tubes to facilitate travel at high speeds between San Francisco and Los Angeles.
The route measures 550 kilometres and building one mile (1.6 kilometres) will cost USD 20m, the item added.
EasyJet could consider taking part in European consolidation; Wizz Air too expensive
The listed UK low-cost airline EasyJet is considering taking part in the consolidation of the sector in Europe expected to happen in the next two years, French daily Les Echos reported.
EasyJet Chief Executive Caroline McCall said the group could look at opportunities if they arrive although it was prioritizing organic growth. She added that Hungarian carrier Wizz Air was attracting a lot of interest at the moment but that its value was too expensive, the article noted.