RTRS - THALES TCFP.PA CEO SAYS SHOULD NOT EXPECT COMPANY TO REPEAT STRONG PERFORMANCE OF H1 IN H2
Our view: Unilever’s become boring ... witness yesterday's 'in line' interim
results. That’s the best tribute we can pay to the management of a
company that we used to regard as ineffectual at best. EPS growth is solidly
underpinned and cash conversion has improved substantially. That’s now
in the price: downgrade to Sector Perform.
Key points:
Understanding desultory TSR performance. At first glance we
were intrigued by Unilever’s 16% total shareholder return (TSR)
underperformance versus the consumer staples sector since Paul
Polman’s appointment as CEO in January 2009. In part that reflects the
precisely corresponding outperformance in the preceding four months, in
anticipation of his arrival. In part it also reflects, in our view, an excessively
sanguine attitude from investors prior to his appointment. As a result,
the significant improvement in both the quality and quantity of Unilever’s
prospects has not been fully reflected in its share price.
Improved prospects are in the price. That said, the shares have performed
quite well more recently (+10% relative since the beginning of 2014).
In consequence we believe that the share price now fairly captures the
group’s prospects. Yesterday's interim results did nothing to alter our
opinion; we forecast organic sales growth at the higher end of a 3-5%
target range, 40 basis points of annual EBIT margin growth and ongoing
cash conversion of 85-90%.
Shares are fair value. This yields an Adjusted Present Value (APV) of €42
(£36) in line with the current share price. This is not to belittle the effort
required to deliver these results; merely to point out that the market
now expects it. Consequently we reduce our recommendation to Sector
Perform.
ML
SSAB - Beat with underlying EBITDA +18% v cons. Q3 demand looks stable....+5%
CRH - Raising EBITDA guidance based on trading in late Q2 to EU 1.1bn.....+3%
ACACIA - Beat. EBITDA +30% ahead driven by higher prodn & lower costs...+2-3%
EDENRED - Steady with EBIT +2.5% beat at EUR 161m. FY16 guidance inline...+2%
VODAFONE - MSR 1.9% ahead of cons on strong nos in Germany,Spain,SA&Turkey+2%
SWEDISH MATCH - Operating margin a 3% beat, margin in Snus also good......+2%
THALES - Solid growth with net sales 3% & operating profit a 2% beat....+1-2%
GAMESA - Awarded seven contracts to provide wind turbines for 460 MWs.....+1%
BIG YELLOW - Good, occupancy +7% from the same qtr last yr, LfL rev +8%...+1%
SYNGENTA - Sales $7.1b v bbg cons $7.15b, sales 2% lower at constant FX...u/c
GECINA - Inline. A little more yield compression drives +4.8% NAV growth..u/c
BEAZLEY - GWP +2%, ROE 19%, PBT $150.2m due to an uptick in activity......u/c
MINERS - Copper -0.45%, Iron ore -3.3% with RIO OZ -0.3%, BHP OZ +0.3%..-0.5%
RICHEMONT - Cartier to cut prices in Japan by average 10% from Aug 5th....-1%
HAVAS - H1 rev 0.6% beat but organic growth is 3.0% vs cons of 3.2%.......-1%
TODS - Same store sales growth -15.7% vs market expectation of -15%.....-1-2%
DASSAULT AV - Net income beat (due to Thales) but EBIT is a miss........-3-4%
ELRINGKLINGER - Very disappointing. Has cut its 2016 EBIT guidance......-5-6%
LSL - Warning on Brexit. Expects profits to be significantly lower....-10-15%
MF
*SYNGENTA-Ebitda 1.77b(1.91),Sales 7.1b(7.146),Ebitda 1.77b(1.9)....-1.2%
*TIETO-Sales 381m(383),OP 35.8m(34),outlook unch,strong into no's...U/C
*THALES-Sales 6.85b(6.55),No Brexit impact,confirms targets.........+1%
*EDENRED-Sales 526m(520),OP 161m(153.5),o/lk confirmed,SI 9.6%......+2%
*TODS-Rev 497.6m(488),Euro Ex Italy -2%(-3.4),Sales -4.3%(-5).......+1%
*DASSAULT AVIATION-Sales 1.66b(1.54),Cuts Falcon delivery outlk.....-4%
*ELRINGKLINGER-Cuts 2016 Ebit guidance 140-150m(164),stk -6% a/h....-7%
*LINDT-Sales 1.5b(1.51),Ebit 98.4m(100.5),Org Sales Grth 4.4%.......-1%
*HAVAS-Net 82m(93),Rev 1.09b(1.08),OG 3%,Confident on FY targets....-1%
*SKANSKA-Rev 37.3b(39.7),OP 1.66b(1.62),Brexit no impact on uk......-2%
*HUHTAMAKI-Sales 742m(755),Ebit 77.8m(75.7),Conditions stable.......+0.5%
*TF1-Rev 543m(545),Net 12.5m(20.3),op 22m(36.9),small grth on FY....-2%
*PHILIPS LIGHTING-Rev 1.73b(1.83),Sales Growth -1.5%,names CFO......+3%
*KONECRANES-Sales 523m(515),Sees 2016 Sales same level as '15.......+2%
*SFS-Sales 689m(687),Ebita 93.3m(88),NP 47.1m(48.4),o/lk mixed......+1%
*SWEDISH MATCH-Sales 3.92b(3.73),OP 1.06b(1.05),outlook unch........+2%
*SSAB-Sales 14.5b(14.4),OP 592m(341),Ebitda 1.6b(1.277),Q3 ok.......+3%
Why Oil Traders Are Writing Love Poems to Yahoo
End of trusty Messenger system has oil traders in despair; Mr. Barsamian’s poem
Powerful forces have been roiling oil markets this year. There are the vagaries of Chinese demand, shifts in American production, the enigma of OPEC policy.
And then, of course, there’s the imminent demise of Yahoo Messenger’s old software version.
“I’m very upset,” said Andy Lebow, an energy analyst and former oil broker who is lamenting the final days of the old version, which Yahoo plans to scrap Aug. 5 to steer customers to its new Messenger system. “My username is attached to all the people that I talk to. That’s important to me.”
For as long as many of them have been working in the field, tens of thousands of oil traders around the globe have relied on the Yahoo system when logging trades for millions of barrels of crude and fuels such as gasoline every day. But Yahoo’s new Messenger won’t separately archive chats and will include the ability to “unsend” a message, making it incompatible with many trading companies’ regulatory requirements.
That’s unsettling legions of oil traders who spend all day on Yahoo Messenger placing orders and circulating gossip, jokes and headlines the way others use Twitter.
“The first question that suppliers ask their customers in energy, and traders ask one another, is ‘What’s your Yahoo address?’ ” said Elaine Levin, president of brokerage Powerhouse, whose Yahoo username is elainetradesfutures.
Traders’ Yahoo shorthand, cribbed from the futures market, includes a letter for each month (January is “F,” December is “Z”) and abbreviations for ports and storage locations. The phrase “how’s WTI CS U7” translates: “What is the price for a West Texas Intermediate crude swap for September 2017?”
Brokers “blast,” or simultaneously message, hundreds of people at once, with price information or a friendly “gm” (good morning).
Fuel trader Marc Refsoe Holm has his Yahoo username on his business card and said about 80% of his financial trades are over Yahoo Messenger. His habit puzzles new hires.
“Young people are like, ‘Wait, what?’ ” said Mr. Holm, 33 years old, who is head of the U.S. fuel desk for Maersk Oil Trading Inc. “They are a little surprised that we’re using such an old-school system.”
On any given day, Mark Benigno, co-director of energy trading at INTL FCStone Inc., has 100 chat screens open. “Sometimes you’re just BS-ing with people,” he said. With some contacts, “you talk to them 50 times a day, like, ‘Take a look at this YouTube’…It’s like being a teenager.”
That makes trading floors quieter than they used to be, said Ms. Levin, the brokerage president. “My bread and butter—‘I need to do a TAS trade,’ ‘I have an EFP that needs to be posted,’ ” is all conducted over Yahoo, she said, rattling off transactions including “trade at settlement” orders and “exchange of futures for physical” trades.
The Messenger version’s sunset date has inspired nostalgia among old-timers. Ernie Barsamian, chief executive of storage brokerage The Tank Tiger, in a note to clients wrote a poem:
“We all agree that Yahoo Messenger was the natural habitat/For traders to discuss whether the market was volatile or flat…/Now Yahoo thinks they are the windshield and we are the gnat.”
Many traders express bewilderment, even anger, that Yahoo hasn’t done more to accommodate them. “I still cannot figure out why Yahoo couldn’t see the diamond they had,” said Jorge Montepeque, a senior vice president at Eni Trading & Shipping.
A Yahoo Inc. spokeswoman said the company was aware of its central role in the oil market. Traders are a “small fraction” of Yahoo Messenger’s millions of users, she said, adding that Yahoo is focused on its consumer audience with its new Messenger.
Instant messaging is popular with traders in every market, but Yahoo has a particular foothold in oil.
Some oil veterans take a less charitable view of Yahoo Messenger. Newer financial messaging systems tend to be more sophisticated, letting users share live data and charts and more easily record details about deals.
Mary Ellen Viola, a United-ICAP broker, communicates with friends and family on Facebook, Skype, Twitter and her iPhone. She has never used Yahoo Messenger outside of work, she said. “It’s outdated.”
When Yahoo launched it in 1998, Messenger was considered transformative. For years, oil trading was handled on exchange floors, with traders screaming at each other in chaotic pits or yelling into phones.
Once instant messaging arrived in the oil market, “I thought the floor was over,” said Ray Carbone, president of Paramount Options, who used to work on the New York Mercantile Exchange floor. “I just smelled it.” (Oil options are still traded on the Nymex floor, but not futures.)
It wasn’t long before Yahoo Messenger reached critical mass and became an essential trading tool. “It snowballed,” said Morgan Downey, who joined Yahoo Messenger in the 1990s while trading oil at a bank.
Brokers encouraged him to join the service, and soon the bank’s customers, such as refiners and airlines, were also on the system, he recalled. “After six months,” said Mr. Downey, now chief executive of data provider Money.net, “no one could leave Yahoo Messenger.”
With oil’s Yahoo Messenger era coming to an end, traders and brokers have been shopping around, signing up for multiple services or waiting to see what peers choose before making a decision.
The competition is fierce. Intercontinental Exchange Inc. cut the price for its chat application, ICE Instant Messaging, to zero in June and said its chat users are up 65% this year. CME Group Inc., which operates the Nymex, said it is using the Yahoo Messenger decommissioning to push its own instant-messaging application. Bloomberg terminals are widely used by banks, hedge funds and other traders, but many smaller participants in the oil market, such as gas-station chains, don’t use the terminals.
Doug King, chief investment officer at RCMA Asset Management, said he already communicates via Bloomberg, WhatsApp, email and telephone.
And his peers who are groaning about life after Yahoo? “They’re all dinosaurs,” he said.
RTRS - VODAFONE VOD.L CEO SAYS NOT WORKING ON A TIGHTER COLLABORATION WITH LIBERY GLOBAL
EUROPEAN BANKING STRATGEY: The next event is the EBA stress test on 29 July, and in isolation we argue this could be a positive outcome. We have run a model, which resembles the EBA exercise, covering 27 EU banks. We estimate total CET1 consumption to 164bp in the adverse scenario, but well above our Brexit 'shallow recession' impact of c.50bp. We note, banks should do better as 1) capital is better; 2) ESRB scenario is somewhat milder. Investors will screen for outliers; names with high NPL levels, small mgmt. buffer to SREP and/or material litigation costs since 2011 are sensitive: We see that UCG (N) and DB (N) could be c.100bp (or more) below their adj. SREP ratio, in the stress test.
Dow -0.42% S&P -0.36% Nasdaq -0.31% Russell -0.49%
US Market closed lower. A leg lower in oil futures and the weakness in the financial (-0.5%) and technology (-0.5%) groups added to the negative tone. The European Central Bank released its latest policy statement this morning, deciding to maintain its assets purchase program and its interest rate corridor. The decision was largely expected after the Bank of England stated earlier in the month that it was too early to assess the economic impact of the United Kingdom's exit from the European Union. However, ECB President Mario Draghi stated that the central bank is ready to act should the need arise. Materials (-0.6%), energy (-0.9%), and industrials (-1.0%) underperformed while the remaining decliners finished with losses between 0.3% (consumer staples) and 0.5% (technology). Conversely, health care (+0.4%) and utilities (+0.6%) finished above their flat lines. Volume were below average with 803mil shares. US after hours AMD +7.3%, SAM +3% on earnings/guidance... OLN -19.5%, SYK -4%, SBUX -3%, COF -3% on earnings/guidance. Asian equity markets are heading lower, tracking the first declining session in US indices in 10 days. Outside of the less dovish than expected commentary from BOJ Gov Kuroda overnight, there is still little to latch on to in terms of new macro oriented developments, but the US earnings season is ramping up steadily and results are increasingly more mixed. While tech and financials have been generally impressive, consumer discretionary stalwarts have hit a wall - Starbucks, Skechers, Chipotle, Pandora are all down afterhours on their results. On the earngins call, Starbucks CEO went as far as to cite deteriorating global conditions - terrorism, and Brexit included - as driving a cooling in consumer confidence. BOJ Gov Kuroda overnight reiterated that there is neither need, nor possibility of helicopter money in Japan, sending USD/JPY down by over 150pips back below 106. Li called for countries to maintain monetary stability and proactive fiscal policies as part of global economic recovery process. Li said economic structure is optimizing and economy is growing steadily despite continued downward pressure headwinds.
Nikkei -1.32% Hang Seng -0.50% CSI -0.55% Shanghai -0.67%
Eur$ 1.1025 CNH 6.6751 CNY 6.6693 JPY 105.82 GBP 1.3229 CHF 0.9854 RUB 64.3159
S&P -0.05% EuroStoxx -0.57% Dax -0.54% SMI -0.49%
Macro :
- Bank of Italy Said to Get at Least 3 Bids for Rescued Banks:Rtrs
- Apollo, Lone Star Said to Bid for 4 Italy Rescued Banks: Ansa
- LME Investigating Disruption on Electronic Trading: Reuters
- Italy Banks Need EU30b-EU100b; Sell Into Any Strength: Berenberg
Keep an eye on :
- AIR FP : Boeing Sees $2.1b 2Q Charge on 787, 747, Tanker
- CDA FP : Compagnie Des Alpes Confirms Talks to Sell Stake to Fosun: Echos
- DAI GY : Daimler Names Britta Seeger Board Member for Mercedes
- AM FP : Dassault Aviation 1H Sales Beats, Cuts Falcon Delivery Outlook
- EDEN FP : Edenred 1H Rev., Profit Beat Ests., Confirms Issue Vol. Outlook
- EDF FP : EDF Calls July 28 Board Meeting to Decide on U.K. Nuclear Units
- EDF FP : EDF Offices Said Visited by Market Regulator AMF: Le Monde
- EDP PL : EDP to Receive EU600m From Securitization of Tariff Deficit
- ENAV IM : Enav IPO Said to Price at EU3.30/Shr, FT Reports
- ENEL IM : Enel 1H Net Production Falls 8% to 128,178 GWh
- FAGR BB : Fagron Receives Claim of Up to $20m for Anazaohealth Purchase
- FINGB SS : Fingerprint 2Q Operating Profit Beats Ests.; Updates FY Outlook
- FRE GY : Pfizer’s Sale of Pumps to Fresenius Said to Stall on Valuation
- FDPA FP : Fonciere de Paris 1H EPS Falls to EU2.73
- GAM SM : Gamesa Awarded 7 Contracts to Provide Wind Turbines
- GFC FP : Gecina Says 1H Recurrent Net Rose 17%, Maintains FY Target
- HAV FP : Havas 1H Net Rises, Co. Confident of Meeting FY Targets
- IOC US : Exxon to Buy InterOil for $45/Shr Plus Contingent Payment
- LISP SW : Lindt 1H Organic Sales Miss, Earnings In Line, Berenberg Says
- MC FP : L Capital Asia to buy 7% stake in Clio Cosmetics for USD 50m
- MITRA BB : Mithra Gets FDA Nod for Estelle Phase III Clinical Trials
- NXI FP : Nexity 1H Net Rises, Co. Raises FY Operating Profit Target
- P US : Pandora Said to Rebuff $15/Shr Informal Offer from Liberty: DJ
- LIGHT NA : Philips Lighting 2Q Comp. Sales Growth -1.5%; Names CFO, CEO Says European Business Is Growing
- CFR VX : Cartier to Cut Prices in Japan by Avg. 10% From Aug. 5: Nikkei
- SBMO NA : FIL Limited Reports 3.02% SBM Offshore Stake, AFM Filing Shows
- SSABA SS : SSAB 2Q Sales Beat Ests.; Expects Stable Underlying Demand in 3Q
- SKAB SS : Skanska 2Q Operating Profit Tops Estimates, Says Brexit Has Not Yet Had Any Direct Impact
- UHR VX : Swatch CEO Says Watch Industry Isn’t in Crisis: Le Temps
- SYNN VX : Syngenta 1H Ebitda Misses Ests.; Confident on ChemChina Closing, Says Market Conditions ‘More Difficult’ in 2Q
- TFI FP : TF1 Reports 1H Net Loss on Euro 2016 Screening Costs
- HO FP : Thales 1H Revenue Beats Estimate; Forecast Confirmed
- TIE1V FH : Tieto 2Q Sales Misses Estimates, Profit Beats; Outlook Kept
- TOD IM : Tod’s 1H Total Sales, Constant FX Sales Results Beat Ests.
- VIV FP : Vivendi to Close German VOD Service Watchever: Les Echos
- VOW3 GY : Volkswagen Korea to Suspend Sales of Some VW, Audi Cars: Yonhap
- YNAP IM : Amazon Set to Unveil Italy Investment of ~EU500m: Reuters - http://reut.rs/2ahd0g4
- ZIL2 GY : Elringklinger Cuts 2016 Ebit Guidance, Reaffirms Revenue Range
>>> Up
*ALROSA RAISED TO SECTOR PERFORM AT RBC CAPITAL
*CELESTICA RAISED TO BUY AT CANACCORD GENUITY
*CENTRICA RAISED TO OVERWEIGHT AT JPMORGAN
*DIA RAISED TO HOLD AT JEFFERIES
*GAM HOLDING RAISED TO SECTOR PERFORM AT RBC CAPITAL
*KINGSPAN RAISED TO BUY VS NEUTRAL AT UBS
*LEONI RAISED TO NEUTRAL AT JPMORGAN
*MAN GROUP RAISED TO OUTPERFORM AT RBC CAPITAL
*METSO OYJ RAISED TO EQUALWEIGHT VS UNDERWEIGHT AT BARCLAYS
*SOMFY RAISED TO BUY VS HOLD AT SOCGEN
*UNIBAIL-RODAMCO RAISED TO NEUTRAL AT GOLDMAN
*WIENERBERGER RAISED TO BUY VS NEUTRAL AT UBS
>>> Down
*ALLIANCE DATA SYSTEMS CUT TO MARKET PERFORM AT BMO CAPITAL
*BANCO POPOLARE CUT TO SELL VS HOLD AT BERENBERG
*ELRINGKLINGER CUT TO HOLD VS BUY AT BERENBERG
*GEORG FISCHER CUT TO SECTOR PERFORM AT RBC CAPITAL
*MARKS & SPENCER CUT TO UNDERWEIGHT VS EQUALWEIGHT AT BARCLAYS
*NORSK HYDRO CUT TO HOLD AT PARETO SECS
*POP. MILANO CUT TO SELL VS HOLD AT BERENBERG
*SEVERN TRENT CUT TO NEUTRAL AT JPMORGAN
*SSE CUT TO NEUTRAL AT JPMORGAN
*SWATCH CUT TO NEUTRAL AT NATIXIS
*TELE2 CUT TO UNDERPERFORM AT RBC CAPITAL
*UBISOFT CUT TO NEUTRAL AT NATIXIS
*UNILEVER CUT TO SECTOR PERFORM AT RBC CAPITAL
>>> PT Change
>>> Initiation
*GVC RATED NEW BUY AT BERENBERG; PT 730P
*LADBROKES RATED NEW HOLD AT BERENBERG; PT 130P
*PADDY POWER BETFAIR RATED NEW SELL AT BERENBERG; PT 7,500P
*PLAYTECH RATED NEW BUY AT BERENBERG; PT 1,200P
*SAP SE RATED NEW OUTPERFORM AT CREDIT SUISSE
*WILLIAM HILL RATED NEW SELL AT BERENBERG; PT 240P
>>> Call
>> Stock
*TF1 REMOVED FROM CONVICTION BUY LIST AT GOLDMAN; STILL BUY