Oil & Gas : Moody's says plummeting oil prices will cause cash flow for the global integrated oil & gas industry to contract by 20% or more for 2015, with only a modest recovery expected in 2016
This reflects the rating agency's expectation of continued revenue declines and a negative free cash flow profile for the industry in 2015. Moody's outlook for the global integrated oil and gas industry will remain negative into 2016.
Gapping down
In reaction to disappointing earnings/guidance: FDX -3.1%, AEMD -2.1%
M&A news: SIRO -5.3% (SIRO and XRAY to combine in an all-stock merger of equals in a ~$13.3 bln deal), XRAY -5.2%
In reaction to disappointing earnings/guidance: FDX -3.1%, AEMD -2.1%
M&A news: SIRO -5.3% (SIRO and XRAY to combine in an all-stock merger of equals in a ~$13.3 bln deal), XRAY -5.2%
Other news: PCYG -7.6% (lower following filing of amended 8-K containing letter from auditors to Board raising 'substantial doubt' about ReposiTrak's ability to continue as a going concern; ReposiTrak was acquired by Park City in May 2015), PAYC -5.4% (announced a 4.5 mln share secondary offering by mgmt and selling stockholders associated with Welsh, Carson, Anderson & Stowe X and WCAS Capital Partners IV), MRTX -2.4% (prices offering of 2,250,000 shares of common stock at $45.00 per share), UPS -2% (in sympathy with FDX after earnings), RAI -1.1% (announced disagreement with FDA ruling on four of its cigarette brands; 'We're examining all of our options at this time')
Analyst comments: PEB -2.3% (downgraded to Neutral at Cowen), SNDK -2.2% (downgraded to Neutral from Buy at Goldman), MNST -1.5% (downgraded to Outperform from Buy at Credit Agricole)
Analyst comments: PEB -2.3% (downgraded to Neutral at Cowen), SNDK -2.2% (downgraded to Neutral from Buy at Goldman), MNST -1.5% (downgraded to Outperform from Buy at Credit Agricole)
Gapping up
In reaction to strong earnings/guidance: ITCI +47.5%, ELMD +6.1%, HPQ +1.3%, UNFI +0.7%, ASNA +0.7%
M&A news: ADEP +62.4% (to be acquired by OMRON for $13 per share), JST +10.1% (receives a 'going private' offer for $4.50/share from group including Chairman and CEO), STRZA +7.9% (Bloomberg reporting that co is in talks to be acquired by AMC Networks), SBMRY +2% (SABMiller plc confirms that Anheuser-Busch InBev SA/NV (BUD) has informed that it intends to make a proposal to acquire SABMiller)
Select spirit related names showing strength after BUD/SBMRY news: TAP +14.1%, ABEV +4.1%, DEO +2.7%
Other news: XNCR +25.4% (Xencor and Amgen (AMGN) announce a strategic collaboration in cancer immunotherapy; Xencor to receive a $45 mln upfront payment and up to $1.7 bln in milestone payments), SAEX +8.5% (announced three new project awards for onshore logistical support and seismic data acquisition services in North and South America, collectively valued at ~$90 mln), IMNP +8.1% (announced its CEO Dr. Daniel Teper has established a stock trading plan with respect to the purchases of up to an aggregate of $250k of shares of common stock), BUD +5.8% (Anheuser-Busch InBev confirms that it has made an approach to SABMiller's (SBMRY) Board regarding a combination of the two companies), GERN +4.2% (announces the dosing of the first patient in a Phase 2 clinical trial to evaluate imetelstat in patients with myelofibrosis), MO +4.1% (owns ~27% of SABMiller), FIT +4% (Bloomberg discusses that Target (TGT) plans to offer Fitbit Watches to 335K employees), CGEN +3.6% (reports new target validation results for CGEN-15052), NVAX +3.2% (announces that its RSV F Vaccine was shown to be highly immunogenic in a guinea pig model of maternal immunization), SUNE +0.8% (announces that a California court has granted the company's motion to dismiss charges filed by SunPower Corp), BABA +0.7% (affiliate sign MOU with USPS to increase cross-border logistics services)
Analyst comments: ORAN +2.1% (upgraded to Buy at Deutsche Bank), YNDX +1.7% (upgraded to Neutral from Sell at Goldman), ORCL +1.2% (upgraded to Buy from Neutral at Sun Trust Rbsn Humphrey), SNY +0.9% (upgraded to Buy at Safra Sarasin), GE +0.8% (added to U.S. and Global Focus Lists at Credit Suisse), ZION +0.7% (upgraded to Buy from Neutral at Goldman), JPM +0.6% (upgraded to Outperform from Market Perform at BMO Capital)
In reaction to strong earnings/guidance: ITCI +47.5%, ELMD +6.1%, HPQ +1.3%, UNFI +0.7%, ASNA +0.7%
M&A news: ADEP +62.4% (to be acquired by OMRON for $13 per share), JST +10.1% (receives a 'going private' offer for $4.50/share from group including Chairman and CEO), STRZA +7.9% (Bloomberg reporting that co is in talks to be acquired by AMC Networks), SBMRY +2% (SABMiller plc confirms that Anheuser-Busch InBev SA/NV (BUD) has informed that it intends to make a proposal to acquire SABMiller)
Select spirit related names showing strength after BUD/SBMRY news: TAP +14.1%, ABEV +4.1%, DEO +2.7%
Other news: XNCR +25.4% (Xencor and Amgen (AMGN) announce a strategic collaboration in cancer immunotherapy; Xencor to receive a $45 mln upfront payment and up to $1.7 bln in milestone payments), SAEX +8.5% (announced three new project awards for onshore logistical support and seismic data acquisition services in North and South America, collectively valued at ~$90 mln), IMNP +8.1% (announced its CEO Dr. Daniel Teper has established a stock trading plan with respect to the purchases of up to an aggregate of $250k of shares of common stock), BUD +5.8% (Anheuser-Busch InBev confirms that it has made an approach to SABMiller's (SBMRY) Board regarding a combination of the two companies), GERN +4.2% (announces the dosing of the first patient in a Phase 2 clinical trial to evaluate imetelstat in patients with myelofibrosis), MO +4.1% (owns ~27% of SABMiller), FIT +4% (Bloomberg discusses that Target (TGT) plans to offer Fitbit Watches to 335K employees), CGEN +3.6% (reports new target validation results for CGEN-15052), NVAX +3.2% (announces that its RSV F Vaccine was shown to be highly immunogenic in a guinea pig model of maternal immunization), SUNE +0.8% (announces that a California court has granted the company's motion to dismiss charges filed by SunPower Corp), BABA +0.7% (affiliate sign MOU with USPS to increase cross-border logistics services)
Analyst comments: ORAN +2.1% (upgraded to Buy at Deutsche Bank), YNDX +1.7% (upgraded to Neutral from Sell at Goldman), ORCL +1.2% (upgraded to Buy from Neutral at Sun Trust Rbsn Humphrey), SNY +0.9% (upgraded to Buy at Safra Sarasin), GE +0.8% (added to U.S. and Global Focus Lists at Credit Suisse), ZION +0.7% (upgraded to Buy from Neutral at Goldman), JPM +0.6% (upgraded to Outperform from Market Perform at BMO Capital)
Aston Martin wasn't at the Frankfurt motor show, although rather sneakily its chief executive Andy Palmer was conducting interviews in the show grounds.
So away from the glitz of the Frankfurt motor show the company joined the general hysteria about the new Bond film Spectre by unveiling 007's own DB10 car, which will be seen in the new movie with three-times British rally champion Mark Higgins standing in for Daniel Craig on the loose-surface opening scenes.
The DB10 is loosely based on the two-seater Vantage model that has been on sale since 2005, while the engine is the 4.7-litre V8 which Aston Martin introduced in 2008.
Performance details of the DB10 haven't been released, but the standard Vantage V8 is capable of 180mph and can accelerate from 0-62mph in 4.8sec.
Capitalising on this one-off car are 150 special DB9 GT Bond editionswhich for £165,000 include special paint, a limited Omega watch, but alas no ejector seat. In spite of that, all 150 have been sold which has raised a useful £24.75 million towards keeping the lights on at Aston Martin's factory at Gaydon.
Spectre is scheduled to be released in the UK on November 6.
We didn't get a glimpse of next year's really important new car, the DB11, with its all-new chassis and (eventually) engines from Mercedes-Benz's AMG division, but Palmer dropped strong hints that the DB10's steering wheel and parts of the facia gave an indication of what was to come, so we pushed a cameraphone into the driver's door to get you this spy shot.
During interviews outside the Frankfurt show, Palmer said: "It's another million I've saved to develop cars with," referring to the firm's lack of presence there. He was later heard telling some Chinese journalists that the Chinese investment money is now in place to help develop the company's battery electric DBX crossover, which debuted as a concept at the Geneva show last March.
It's easy to forget sometimes just how much the job of being at top of this British bespoke GT maker consists of daily counting the money you don't have to not do the projects without which the long-term survival of the company is simply unthinkable.
Aston boss Andy Palmer says theinterior gives hints about next year's important DB11
Early premarket gappers
Gapping up: TRIV +60.2%, ITCI +37.9%, ITCI +34%, TAP +13.6%, JST +10.1%, SAEX +8.5%, IMNP+8.1%, STRZA +7%, BUD +7%, ADEP +4.8%, MO +4.4%, SOHU +3.5%, ELMD +3.1%, DEO +2.8%,VIPS +2.5%, CMCM +2.3%, NVAX +2%, QIHU +2%, YNDX +1.8%, TEDU +1.4%, HSBC +1.3%, ABX+1.3%, UNFI +1.3%, BIDU +1.1%, BABA +1.1%, WBAI +1.1%, JD +0.9%
Gapping down: PCYG -7.6%, PAYC -6.4%, SIRO -4.3%, XRAY -3.8%, RIO -1.3%, DB -1.3%, RAI-1.1%, MT -1.1%, ING -1.1%, SDRL -1%
Gapping up: TRIV +60.2%, ITCI +37.9%, ITCI +34%, TAP +13.6%, JST +10.1%, SAEX +8.5%, IMNP+8.1%, STRZA +7%, BUD +7%, ADEP +4.8%, MO +4.4%, SOHU +3.5%, ELMD +3.1%, DEO +2.8%,VIPS +2.5%, CMCM +2.3%, NVAX +2%, QIHU +2%, YNDX +1.8%, TEDU +1.4%, HSBC +1.3%, ABX+1.3%, UNFI +1.3%, BIDU +1.1%, BABA +1.1%, WBAI +1.1%, JD +0.9%
Gapping down: PCYG -7.6%, PAYC -6.4%, SIRO -4.3%, XRAY -3.8%, RIO -1.3%, DB -1.3%, RAI-1.1%, MT -1.1%, ING -1.1%, SDRL -1%
• Total consideration – USD 122bn as per the WSJ article on 15 September 2014. We assume that this amount refers to SABMiller’s enterprise value, not equity value. This would imply a take-out price of GBP 44 per share. On the assumption that the USD 122bn consideration related to an equity value, this would imply a value per share of GBP 48.
• Disposals – US and China for 10x and 16x EBITDA, respectively.
• Synergies – USD 2bn by F19, with equal phasing over four years. This equates to approximately 10.5% of net sales after disposals (on net sales of approximately USD 19bn) vs BUD deal 12% and Modelo deal 20%.
• Tax rate 25% – assume some synergy vs SABMiller tax rate 27%.
• Interest coupon 5% – for a fully loaded debt transaction.
• ABI net debt – we assume that the buy-back programme that we have factored into our model does not happen.
• WACC hurdle rate of 7.9%.
Accretive deal, but struggles to cover its cost of capital On our calculations, the deal would be c17% accretive by year 3, assuming no issuance of shares, however the return on invested capital evolution would look less attractive, with the company struggling to become EVA® positive by year 8 (7.3% vs WACC 7.9%). We believe the company’s internal target is to meet the cost of capital by year 3; however, for certain acquisitions (eg, China) we believe that the company would be more flexible.