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Gapping down
In reaction to strong earnings/guidance:

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Gapping up
In reaction to earnings/guidance:

M&A news:

Other news:

Analyst comments:

Abengoa has struck a €1.17bn restructuring deal with its creditors, ensuring the survival of the debt-laden Spanish renewables group after a year of financial turbulence that pushed it to the brink of bankruptcy

In a regulatory statement issued on Thursday, Abengoa outlined the details of the restructuring, which included a debt-for-equity swap for creditors who otherwise face a 97 per cent haircut on their loans. Under the terms of the deal, 70 per cent of pre-existing debt will convert into 40 per cent of Abengoa’s new share capital.

“At the end of the restructuring process, the current shareholders in the company would hold around 5 per cent of the share capital,” Abengoa said in a statement.

Once hailed as a standard bearer for Spain’s high-flying renewables industry, Abengoa was forced to launch insolvency proceedings last November, raising the possibility that it could become one of the country’s largest ever bankruptcies. After years of expansion, the group had built up an €8.9bn debt load, which it was no longer able to service.

Abengoa has since committed to a more focused approach, selling non-core stakes as well as photovoltaic plants in Spain and a wind farm in Uruguay. The group — which in the past both built and owned renewable energy plants — has told investors that it wants to concentrate on designing, building and servicing such installations for outside owners.

In April, a Spanish bankruptcy court gave Abengoa until the end of October to come to a deal with its creditors. Thursday’s announcement outlined the terms of an agreement, although it has not yet been signed and still has to be accepted by 75 per cent of creditors, as required by Spanish law. The company said it would update the markets in a conference call next Tuesday.

Under the terms of the deal, Abengoa will receive €1.17bn in funds, made up of fresh investment as well as the rollover of existing credit facilities. In addition, Abengoa will be able to call on a new credit facility worth €307m.

The group’s new financiers include big name hedge funds and other investors, including Abrams Capital, Baupost Group, Canyon Capital Advisors, Centerbridge, D.E. Shaw, Elliott Management, Hayfin Capital Management, KKR, Oaktree Capital Management and Värde.

Abengoa said it was being advised by Lazard, the investment bank, and Cortés Abogados, a Spanish law firm.

FT Artcile :

'..Shire edged 0.6 per cent lower to £50.75 amid continued speculation around Radius Health, a US-listed osteoporosis drugmaker with a market value of $2.2bn.

Our stance remains that the US equity market is the best one in the world. Why? Because we think EPS expectations are reasonably achievable for the next two quarters, that the base case for the US is positive earnings growth, whereas it is a decline in any other region of the world, and when most people do asset allocation, they will find the US relatively attractive. On that score, if you think of the US equity market as having modest positive (not declining) EPS growth, a 2.3% net buyback, a dividend yield over 2%, plus over 70% of all equities in the world with $100 million or more in daily trading volume, you start finding it difficult not to allocate some meaningful capital to at the very least a high quality basket of US equities. Hence, our guess is that the price-to-earnings ratio of the S&P500 could continue to expand.

We have been breaking the market into three groups: defensives, growth, and “the unknown”, which is our phrase for energy and financials given that forecasting the oil price and 10-yield has been nearly impossible.

–Defensive: we prefer utilities to consumer staples.

–Growth: we are overweight healthcare and underweight technology and prefer biotechnology to software.

–Unknown: we are neutral on financials and energy. For financials, we are generally attracted to the valuation, and think it is interesting they have recently performed well without a back-up in the long-end of the yield curve, but our house view is for a 1% US 10-year by Q1 of 2017, balancing our optimism. For energy, the oil market is healing, but the fundamentals of the offshore group are poor and the valuations of the exposed E&Ps don’t seem attractive. Exposure to the best properties in Texas and Oklahoma seems prudent.

Putting it all together, we forecast 4% earnings growth per year from now through Q1 of 2018. We apply a 17x multiple, 12 months from now, on earnings 13-24 months from now. This yields a 12-month forward S&P500 price target of 2200.

Delivery of another large beat in 1H 2016 is laudable, but we note the cyclicality of Peugeot's market, earnings, cash flows and valuation; and, given signs that the up-cycle is slowing, now does not seem the right time to own a European mass OEM. Remain Underweight.

Great 1H execution, huge improvement in returns: Peugeot reported 1H Auto

EBIT of €1.3bn, a record high 6.8% EBIT margin, driven by positive market

demand, lower production costs and lower SG&A. Cash flow was also very

strong with FCF at €1.85bn. Peugeot again highlighted its net cash, now at €6bn

(obviously a large proportion of its market cap), although we continue to treat its

"negative working capital" of €3.5bn as more akin to debt than actual Peugeot

cash. We update our forecasts, and our price target rises from €11 to €12.

Cyclicality – how sustainable are Peugeot's improved returns? The market rarely

forecasts cycle downturns before they happen. In the case of autos, we think it is

a crucial debate. We do not believe the market should (or will) extrapolate (close

to) cyclical peak earnings, or value them on through-cycle multiples. We show

how Peugeot's key markets have always been very cyclical (e.g. China in FY16),

how its historical EBIT margins and cash flows have been very cyclical and,

maybe most importantly, how investors' views of investments such as Peugeot

have also been very cyclical. While acknowledging the very significant

improvements that CEO Tavares has made, we reiterate our view that in mass

autos, when it comes to share price returns, auto markets have the upper hand

over management action. Thus, we note that the key upside risk to our call is

better-than-expected EU auto demand.

Conclusion: excellent results, but it is very hard to see how this is not the peak:

Whilst Peugeot has again surprised on the upside, we continue to believe its

current performance should not be extrapolated. European market growth looks

set to slow as most country sales approach previous peaks and 2H comps get

much tougher. Historically, Peugeot auto EBIT margins have proved very

vulnerable going into such a European slowdown. Whilst guidance on margins –

"an average of 4% 2016-2018" – now looks conservative, we cannot forecast

much upside from the 1H 16 performance. The question is, with the higher base

1H 2016 earnings, how will investors value the shares? We believe they will

continue to discount peak earnings, and remain Underweight.

Macro :

- U.K. Property Market Seen Stabilizing Post-Brexit Vote: City Dev

Keep an eye on :

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- AGN NA : Aegon Posts 2Q Net Loss; Dividend In Line; Buys Cofunds

- AIXA GY : Aixtron 2Q Rev. Misses Ests., Confirms 2016 Outlook

- AR4 GY : Aurelius 1H Revenue Rises; Says Prospects for 2H Are Promising

- POST AV : Austrian Post 2Q Ebit Rises 12% on Cost Cuts; Outlook Confirmed

- POP SM : Banco Popular Mulls Sale of U.S. Unit, Cinco Dias Reports

- BC8 GY : Bechtle Confirms FY Forecast for Significant Rev, Earnings Rise

- CWC GY : CEWE Raises 2016 After-Tax Earnings Forecast Range

- DTE GY : Deutsche Telekom 2Q Sales Miss Ests.; Confirms Full-Year Outlook

- FNTN GY : Freenet Says 2Q Ebitda Rises 18% to EU104.8 Million

- HHFA GY Hamburger Hafen 1H Revenue Drops, Confirms FY Forecast

- HEN3 GY : Henkel 2Q Adj. Ebit Beats Ests, Raises 2016 Margin Forecast

- JUN3 GY : Jungheinrich 2Q Sales, Ebit Rise; Raises FY Forecast

- SDF GY : K+S Says Lower Result Expected for 2016, Keeps Med-Term Forecast

- KBC BB : KBC 2Q Net, Revenue Beat Ests.; Interim Dividend of EU1/Share

- KBC BB : KBC Sees Irish Loan Provisions as Small as Zero After 1H Release

- SKB GY : Koenig & Bauer 1H Order Intake Up, Raises 2016 Guidance

- LEHN SW : Lem 1Q Net CHF10.8M vs CHF8.88m, Bookings Rise 7.2%

- NESN VX : New Nestle CEO Picked for Strategic Reasons, Brabeck Tells HZ

- PLND LN : Steinhoff Final Revised Offer For Poundland at 227p/share

- SBMO NA : SBM Offshore 1H Rev. In Line; Keeps FY Targets, Starts Buyback

- SAX GY : Stroeer 2Q Earnings Rise, Confirms FY Guidance

- RFRG NA : Refresco Sees 2016 Volumes Below Medium-Term Guidance

- RWE GY : RWE 1H Ebitda Misses Estimates, Innogy IPO Before Year End

- SFQ GY : SAF-Holland Confirms Guidance, Says Won’t Raise Haldex Offer

- G24 GY : Scout24 Highly Confident Will Meet Full Year 2016 Targets

- SGL GY : SGL Posts 1H Ebit Profit, Adjusts Guidance

- SLHM SW : Swiss Life 1H Shows Lower Premium Volume, Higher Net

- SYM GY : Symrise 2Q Ebitda Beats Estimates, Maintains Full Year Outlook

- TEG GY : Tag Immobilien Raises FY FFO Forecast

- TIT IM : Italy Govt Won’t Exercise Veto Power on Wind/3 Italia Merger

- TKA GY : Thyssenkrupp 3Q Profit Falls 18 Percent, Still Beats Estimates

- TUI GY : TUI Reiterates FY Underlying Ebita Forecast, 3Q Rev. Falls

- UTDI GY : United Internet 1H Sales, Ebitda Increase; Reiterates Outlook

- VIH GY : VIB Vermoegen 1H Operating Revenue Rises; Confirms FY Forecast

- VWS DC : Vestas Gets 278 MW Order in U.S.; No Financial Terms

- WMH LN : William Hill Holder to Get 199p in Cash And 0.725 New 888 Shrs

- ZURN X : Zurich Insurance 2Q Net Beats; Business Operating Profit Rises