>>> Lafarge : Fitch upgrades ratings one notch to BBB- from BB+; outlook positiv

Fitch upgrades ratings one notch to BBB- from BB+; outlook positive 

Reflects Lafarge's strong strategic ties and pending operational integration with Holcim Ltd (BBB/Stable), following the completion of the merger between the two companies to create LafargeHolcim .

Fitch maintains a one-notch differential between the two companies, because Holcim does not currently guarantee Lafarge's substantial debts that have no recourse to Holcim assets and also due to a lack of cross-default to Holcim

>>> US Gapping Up

Gapping up
In reaction to strong earnings/guidance: SYNC +8.4%, MUX +5.3%, CSX +3.5%, ASML +3.2%, BAC +2.6%, SN +2.4%, PPHM +2.2%, AEHR +1.9%, (also announced that Gary Larson VP of Finance/CFO plans to retire effective September 8; intends to name Corporate Controller Ken Spink to serve as interim CFO), SAR +1.7%, ADTN +1.2%, PNC +0.5%

M&A news: RCPT +10.5% (to be acquired by Celgene (CELG) for $232/share in cash, or ~$7.2 bln), CELG +7%

Select financial related names showing strength: GS +1.1%, C +1%, MS +0.8%.

Select bio/pharma stocks trading higher: PTCT +12.5% (also, upgraded to Overweight from Neutral at JP Morgan), ARNA +4%, ICPT +2.7%, ZIOP +2.4%, GILD +1.4%, NVO +0.8%


Other news: PETX +7.3% ( announces positive results from its pivotal field effectiveness study of AT-003 for treating post-surgical pain in dogs), MUX +5.3% (reports quarterly production at its El Gallo Mine of 17,325 gold equivalent ounces, above guidance for the quarter), REX +3.7% ( to replace SYNA in the S&P SmallCap 600), SYT +3.5% (Paulson & Co building a stake in the company to back takeover attempt by Monsanto (MON), according to Bloomberg Report), NBG +3.5% (cont vol surrounding Greece Parliament vote today), OCAT +2.5% (receives US patent for its retinal pigment epithelium transplant technology for macular degeneration), FNBC +2.2% (to replace RTI in the S&P SmallCAp 600), SIXD +2.1% (provides business updates),NSC +1.8% (following CSX earnings), FIT +1.8% (cont vol post IPO), GPRO +1.7% (still checking), EYES +1.6% (announces expansion of Argus II availability in Europe), AMD +1% (ASML peer)

Analyst comments: CLSN +12.9% (initiated with a Buy at Maxim Group; tgt $12), GES +6.1% (upgraded to Market Perform from Underperform at Telsey Advisory Group), LNKD +2.6% (upgraded to Overweight from Equal Weight at Barclays), QRVO +2.4% (initiated with a Buy at Mizuho), FCAU +1.6% (initiated with a Outperform at Credit Suisse), PNRA +1.4% (upgraded to Overweight from Underweight at Piper Jaffray
)

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance: ATI -7.8%, MRTN -5.9%, MJN -4.9%, DAL -1.5%, YUM -1.4%

Select China related names showing weakness with Shanghai down 3% overnight: JMEI -4.9%, CMCM -4.5%, SOHU -2.3%, SFUN -2.1%, LFC -1.3%, JD -1.2%

Other news: CPPL -6.6% (attributed to secondary pricing), DBVT -4.3% (prices offering of 3,600,000 ordinary shares in the form of 7,200,000 ADSs, at $34.00 per ADS), CBAY -3.9% (announces proposed public offering of common stock), RDHL -3.9% ( announces public offering of its ADRs), RARE -3% (announces a $250 mln offering of common stock), SFY -1.6% (to be removed from the S&P SmallCap 600)

Analyst comments: ABB -1.3% (downgraded to Sell at Baader Helvea), LLY -1% (downgraded to Equal-Weight from Overweight at Morgan Stanley), TI -0.9% (removed from Conviction Buy list at Goldman), YHOO -0.6% (target lowered to $50 from $59 at Sun Trust Rbsn Humphrey)

(GS) Liberty Global : upgraded to Conv. Buy List

‘Liberty 3.0’ to accelerate growth, high M&A optionality: Buy; onto CL

Source of opportunity
We believe that LBTY’s rebased OCF growth rate will accelerate into the
high-single digits in 2016-17, as a new ‘Liberty 3.0’ investment program
adds a further boost, on top of the announced ‘Project Lightning’ network
expansion in the UK. Assuming c.$30 bn of share buybacks in the absence
of further M&A, we estimate FCF/share will reach $8 by 2021 (when these
investments end), justifying our ‘base-case’ valuation of c.$60/share. Also,
LBTY has multiple options to make accretive in-market mobile acquisitions,
allowing it to capture a share of c.$20-30 bn of potential synergy value. We
reiterate our Buy rating and add LBTY to our European Conviction List.


Catalyst
We expect a strong 2H acceleration in both KPIs and rebased OCF growth
after a seasonally weaker 2Q (revs +3%/OCF +4% yoy, c.150k RGU adds). We
expect an inflection in the Netherlands, where a 2Q drag from restructuring
charges becomes a 2H tailwind from synergy capture, while early Lightning
sub gains should drive a strong 4Q RGU recovery. We believe ‘Liberty 3.0’
can add further momentum from 2016: we expect management to recycle
restructuring savings from integrating the OpCo’s into investment in
footprint expansion (notably in German broadband) and product quality
improvements, which should drive revenue and OCF growth. We estimate
‘Liberty 3.0’ will add c.10-15% to long-term FCF and >100 bp to OCF CAGR.
Along with lower interest costs, we lift our FCF/shr estimates by 1-19%.

Valuation
Our 12m, ROIC-based price target increases to $70, from $69, on higher
forecasts. We take no view on the outcome of negotiations with Vodafone,
but include $10/shr for LT M&A optionality; at our $60/shr base-case
valuation, LBTY would trade on a 6% 2016 FCF yield ex-Lightning/3.0 capex.

Key risks
Downside risks include competitive or regulatory pressure in all markets;
execution of mobile acquisitions; capital discipline in acquiring content; FX.

(BFW) IMF’s Greece Stance May Mean Increase in Europe’s Bill: JPM

IMF’s Greece Stance May Mean Increase in Europe’s Bill: JPM
2015-07-15 11:31:23.692 GMT


By Deborah L Hyde
(Bloomberg) -- The IMF’s report on Greece suggests the fund
will no longer tolerate a fudge of the nation’s debt
sustainability analysis and could mean the entire funding of the
third program comes from euro zone, JPMorgan analyst Malcolm
Barr writes in client note.

* A possible solution would be to lay out changes in the
maturity and interest rates on lending to Greece which are
contingent on nominal GDP growth and progress on structural
reform
* Would require terms that imply a lot of NPV debt relief
compared to the debt’s current terms
* If the euro zone isn’t prepared to do that, the IMF may
decide it can no longer put funds into the Greek program
and the the euro zone would have to foot the bill
* That could include the EU16b that has been penciled in
for the IMF to provide and either buying the IMF’s EU22b
of existing loans to Greece or at least indemnifying the
IMF against losses on those loans
* NOTE: Valdis Dombrovskis, EC vice president for euro policy,
says there’s no prospect for bilateral aid to Greece


For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>

To contact the reporter on this story:
Deborah L Hyde in London at +44-20-3525-4829 or
dhyde10@bloomberg.net
To contact the editors responsible for this story:
Deborah L Hyde at +44-20-3525-4829 or
dhyde10@bloomberg.net
V. Ramakrishnan

>>> US Early premarket gappers

Early premarket gappers
Gapping up: RCPT +10.2%, SYNC +8.4%, PETX +7.3%, CELG +5.9%, ARNA +4%, REX +3.7%, NBG +3.5%, CSX +3.4%, ASML +3.2%, BAC +2.7%, SYT +2.6%, QRVO +2.6%, FNBC +2.2%, AMD +2%, LNKD +1.9%, AEHR +1.9%, NSC +1.8%, SAR +1.7%, FIT +1.6%, BHP +1.4%, GILD +1.4%, RIO +1.4%, GPRO +1.4%, PNRA +1.3%, SYNA +1.2%, NVO +1.2%, C+1%, ARMH +0.8%, GS +0.8%, CMI +0.7%, SN +0.7%, NFLX +0.6%

Gapping down: ATI -7.7%, MRTN -5.9%, JMEI -4.9%, MJN -4.7%, CMCM -4.5%, LEI -4.5%, CBAY -4.3%, RDHL -3.9%, DBVT -3.2%, DBVT -3.2%, RARE -3%, JD -2.4%, SOHU -2.3%, MGNX -2%, SFY -1.6%, YHOO -1%, YUM -0.8%, PPHM -0.7%, MIC -0.5%

>>> Bank of America beats by $0.09, beats on revs

BAC -->+2.57% pre open

Bank of America beats by $0.09, beats on revs

Reports Q2 (Jun) earnings of $0.45 per share, excluding non-recurring items, $0.09 better than the Capital IQ Consensus Estimate of $0.36; revenues rose 1.8% year/year to $22.34 bln vs the $21.72 bln consensus. BAC reported Q2 net income of $5.3 billion compared to $2.3 billion in the year-ago period.
  • Q2 Net interest income included $669 million ($0.04 per share) in positive market-related adjustments, primarily from the company's debt securities portfolio, due to the impact of higher long-term interest rates. This compares with $175 million in negative market-related adjustments in the year-ago quarter.
  • Global Wealth and Investment Management reported net income of $690 million, compared to $726 million in 2Q14. Revenue was relatively stable at $4.6 billion, as a 9% increase in asset management fees and higher net interest income from loan growth were offset by the impact of the company's allocation of ALM activities on net interest income, and lower transactional revenue.
  • Global Markets reported net income of $993 million, compared to $1.1 billion in prior year, reflecting lower gains on an equity investment and, to a lesser degree, lower sales and trading revenue. This was offset in part by reduced noninterest expense.
  • Fixed Income, Currencies and Commodities sales and trading revenue, excluding net DVA, decreased 9% y/y, due to declines in credit-related businesses, offset in part by an improvement in macro products on increased client activity.
  • Equities sales and trading revenue, excluding net DVA, increased 13% from the year-ago quarter, reflecting increased client activity in the Asia-Pacific region and strong performance in derivatives..
  • Legacy Assets and Servicing reported net income of $45 million, compared to a loss of $2.7 billion for 2Q14, driven by lower expenses, primarily litigation expense, and a benefit in the provision for representations and warranties.
Capital Levels
  • The Common equity tier 1 capital was 10.3% (Fully phased in Basel 3)
  • Estimated supplementary leverage ratio for the Bank Holding Company was approximately 6.3% and the estimated SLR for the company's primary banking entity was approximately 7.0%.
  • Tangible book value per share was $15.02; Book value per share was $21.91.

(GS) Vodafone Down to Neutral : Remove from Pan Europe Buy List

Down to Neutral as risk-reward becomes more binary, FX weighs

* What happened
We downgrade Vodafone/VOD to Neutral from Buy. Post recent outperformance
around the announcement that it is in talks with Liberty
Global about a potential asset swap, we believe risk-reward appears more
binary. On our updated forecasts (which fall due to FX/German spectrum),
our base-case valuation excluding potential M&A is c.220p/share. While
we do not take a view on potential outcomes from talks with LBTY, our
revised illustrative scenario analysis suggests upside above 280p/share is
unlikely. Since adding VOD.L to the Buy List on Dec 4, 2014 the stock is
+5.8% vs. the FTSE World Europe +2.1%; VOD is +4.2% vs. S&P 500 +1.3%.

* Current view
We continue to view Vodafone as a leading beneficiary of ongoing
‘double’ consolidation of both mobile and fixed-mobile operators, which
supports a gradual return to top-line growth in Europe (although the
upcoming regulatory ruling on Danish consolidation is a risk). We see
attractive operational gearing to this growth recovery given its low
margins. We also believe VOD enjoys substantial M&A optionality – recent
acquisitions of mobile operators by BT/Liberty Global suggest that the
strategic value of mobile network ownership in a converging market is
material, balancing the structural risk Vodafone currently faces as a
mobile-centric fixed-line wholesaler. Additionally, if management is willing
to reconsider the structure of the group, we believe a number of other
potential acquirers could take interest in its remaining assets.

Our revised 12-month SOTP-based price target of 250p (down from 275p,
largely due to 5%-7% lower FCF forecasts) implies only modest upside.
Excluding potential M&A, our 220p/share base-case valuation implies
target multiples broadly in line with peers on EV/NOPAT/equity FCF yield;
we add 30p/share to reflect the potential for Vodafone to capture a share of
large available cost and possible tax synergies in an M&A scenario. Key
up/downside risks include execution on potential M&A, EC regulatory
support for consolidation, and competitive outcomes in all markets.