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18 April 2013 Europe Equity Research Product Marketing Week at a Glance Research Analysts WEEKLY ANALYSIS Product Marketing, Europe 44 20 7888 0099 [email protected] 22 - 26 April 2013 Key events to watch out for next week: ■ Upcoming economics events include: 22 Apr: US Chicago Fed National Activity Index, US Existing Home Sales; 23 Apr: US House Price Index, US New Home Sales, US Richmond Fed Manufacturing Index, Euro Area PMI Manufacturing; 24 Apr: German IFO Business Climate; 26 Apr:US GDP, US University of Michigan Confidence. ■ Upcoming company events include (Q1 results unless otherwise stated): 22 Apr: Genel Energy, Hermes; 23 Apr: ARM Holdings, Associated British Foods Trading Update, Imtech, Orion, Premier Foods Trading Update, Safran, Sandvik, Segro Trading Update; 24 Apr: ABB, Air Liquide, Assa Abloy, Barcays IMS, Computacenter IMS, Iberdrola, Novartis, UBM IMS; 25 Apr: AstraZeneca, Atos, Bayer, Electrolux, Ipsen, Kazakhmys Trading Update, Novozymes, Senior IMS, Taylor Wimpey IMS, Telenet, Volvo; 26 Apr: Akzo Nobel, BASF, Rotork IMS, Telenor, Total. ■ Recently published: GLOBAL EQUITY STRATEGY Andrew Garthwaite - JAPAN: ADD TO OVERWEIGHT AND IMPLICATIONS- We raise weightings further (from 6% to 16% overweight) for various reasons: Policy: to get 2% inflation, we estimate that yen needs to fall to Y110. BoJ is set to expand its balance sheet at double Fed’s current rate. Growth: Japan now scores top of our macro scorecard. Asset allocation shift: if pension funds/retail start to anticipate inflation, a sharp asset allocation could occur. Significant restructuring potential: Published on 16 April 2013 Chart of the Week (contributed by the Global Equity Strategy team): The recent drop in the gold price is in line with the contraction in developed markets central banks seen this year. However we would note that the momentum in the contraction has recently slowed and we expect an expansion of balance sheets over the next 12 months led by the BoJ. Source: the BLOOMBERG PROFESSIONAL™ service DISCLOSURE APPENDIX CONTAINS ANALYST CERTIFICATIONS AND THE STATUS OF NON US ANALYSTS. US Disclosure: Credit Suisse does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. CREDIT SUISSE SECURITIES RESEARCH & ANALYTICS BEYOND INFORMATION™ Client-Driven Solutions, Insights, and Access Week at a Glance Research Changes Rating & TP changes Figure 1: Rating & TP changes details Company Bloom Ticker Country Rating Current ▲/▼ Rating Previous TP Current ▲/▼ TP Previous Change Curr Link MTN Group MTN SJ Equity MTNJ.J sa O ▲ N 185 ▼ 190 -3% R Full Note Vodacom Group VOD SJ Equity VODJ.J sa N ▲ U 115.00 ▲ 90.00 28% R Full Note Associated British Foods ABF LN Equity ABF.L uk N ▼ O 1,850.00 ▲ 1,650.00 12% p Full Note Accor AC FP Equity ACCP.PA fra U ▼ O 26.90 ▼ 28.60 -6% Eu Full Note Elisa Corp. ELI1V FH Equity ELI1V.HE fin U ▼ N 14.00 ▼ 16.00 -13% Eu Full Note BP BP/ LN Equity BP.L uk N 485.00 ▲ 475.00 2% US$ Full Note Royal Dutch Shell RDSA LN Equity RDSa.L net O 2,500.00 ▼ 2,525.00 -1% US$ Full Note ENI ENI IM Equity ENI.MI ita O 21.50 ▲ 21.20 1% Eu Full Note Repsol REP SM Equity REP.MC spa O 19.60 ▼ 20.10 -2% Eu Full Note Tate & Lyle TATE LN Equity TATE.L uk O 930.00 ▲ 845.00 10% p Full Note Hays HAS LN Equity HAYS.L uk N 99.00 ▲ 95.00 4% p Full Note Helvetia HELN SW Equity HELN.S swi U 390.00 ▲ 371.00 5% SFr Full Note Michael Page MPI LN Equity MPI.L uk U 360.00 ▼ 400.00 -10% p Full Note Actelion ATLN VX Equity ATLN.VX swi O 60.00 ▲ 50.00 20% SFr Full Note LVMH MC FP Equity LVMH.PA fra N 142.00 ▼ 148.00 -4% Eu Full Note Hargreaves Lansdown HL/ LN Equity HRGV.L uk U 800.00 ▲ 655.00 22% p Full Note Tele2 AB TEL2B SS Equity TEL2b.ST swe U 72.00 ▼ 100.00 -28% SKr Full Note Georg Fischer FI/N SW Equity FIN.S swi O 490.00 ▼ 510.00 -4% SFr Full Note Telkom SA Ltd. TKG SJ Equity TKGJ.J sa N 13.60 ▼ 20.00 -32% R Full Note PGNIG PGN PW Equity PGN.WA pol U - O 4.60 ▼ 4.70 -2% PLN Full Note Source: Company data, Credit Suisse estimates Initiation, Reinstatement & Assuming coverage Figure 2: Initiations, Reinstatement & Assuming coverage details Company Bloom Ticker Country Current Rating Currency Target price (Upside/downside) Link Zon Multimedia Services ZON PL Equity ZON.LS por N Eu 3 (-7%) Full Note Source: Company data, Credit Suisse estimates Note: Rating abbreviations are: U = Underperform; N = Neutral; O = Outperform 18 April18 2013 2 18 April 2013 Key research released Strategy, Economics & Theme GLOBAL EQUITY STRATEGY Andrew Garthwaite - JAPAN: ADD TO OVERWEIGHT AND IMPLICATIONS- We raise weightings further (from 6% to 16% overweight) for these reasons: Policy: to get 2% inflation, we estimate that the yen needs to fall to Y110. The BoJ is set to expand its balance sheet at double the Fed’s current rate. Growth: Japan now scores top of our macro scorecard. Asset allocation shift: if pension funds/retail start to anticipate inflation, a sharp asset allocation could occur. Significant restructuring potential: RoE/RoIC are half of US levels and productivity per hour worked is 30% less than France. We are cautious on this aspect but there are some positive signs: buybacks are at post-04 highs; the EPA and TPP; lowering the threshold to appoint outside directors. Valuation not a constraint: P/Es are the same as the US. Asset/sales-based measures look cheap. Still a ‘one- to two- year trade’ until there are clearer signs that restructuring is addressed. Full Note Published on 16 April 2013 EUROPEAN ECONOMICS Yiagos Alexopoulos - FINANCIAL RESILIENCE, ECONOMIC WEAKNESS - The resilience of the euro area financial system over recent months has been remarkable. Various shocks, political and economic, have hit but symptoms of financial fragility are not in evidence. There looks to have been a continued steady inflow of private sector capital into Italy and Spain during March. Although the ECB’s OMT programme has made the euro area financial system more resilient than it was a year ago, we think there are other supportive factors at play as well, not least the fact that most of the periphery has moved into trade and current account surplus, negating the need of these economies to solicit external finance. Full Note Published on 15 April 2013 EUROPEAN ECONOMICS Yiagos Alexopoulos - ITALY: TRUCE OR CONSEQUENCES - Six weeks after the elections, there is still no political clarity in Italy. Things should, however, accelerate towards some form of resolution soon. The coming days are indeed key for the formation of a government and for the credibility of the institutional framework in Italy. On April 18, the parliament will start voting on the new president of the Republic. This vote is important as it will provide a first real test on the intentions of the different parties. If the center-left (PD) and the center-right (PDL) do find an agreement in the coming days – as seems to be the intention, supported by recent meetings between M. Bersani and M. Berlusconi – then a president will be likely elected on the first day of the voting procedure. Such an agreement should also provide the base for an agreement on a coalition government of some sort – either a grand coalition or a center-left government with external “acceptance” from the center-right. Full Note Published on 11 April 2013 Week at a Glance 3 18 April 2013 Industry Updates & Stock Research NORDIC TELECOMS Jakob Bluestone - NORDIC MOBILE COULD SEE PRESSURE IN Q1; ESTIMATES & TP CHANGES - We expect challenging Q1 13 results for all the Nordics, due to a combination of seasonality, MTR cuts in Dec/Jan and competition remaining an issue. TDC: We expect underlying mobile growth to improve, although we expect headline growth similar to Q4 12. We expect fixed to be more resilient given a price hike in broadband. Tele2: We see operating results in line with consensus. Mobile Sweden was more competitive in the corporate segment but consumer was stable. We expect Norway to be hit by MTR and the Netherlands to show first signs of mobile build out. We revise our TP to SEK 72 from SEK 100 to reflect the SEK 28 special dividend. Full Note Published on 17 April 2013 EUROPEAN UTILITIES Vincent Gilles – UTILITIES BIG BOOK; KEY MESSAGES FOR Q2 2013 - Recent rise due to multiple expansion not earnings recovery. We see no significant change in fundamentals of the sector compared with early 2013. Earnings growth remains negative with EPS and DPS 2012-15E CAGR at -1.4% and - 2.4% (vs. global utils 9% and 3%, respectively or the MSCI Europe with 5.4% and 5.2%, respectively). No rebound in free cash flow before 2014 at best. Dividends still at risk in Central Europe. Debt holders may be better off than shareholders. After recent recovery, even optical multiples attraction has gone. We believe sector is going through a long-term de-rating process. Full Note Published on 17 April 2013 ACCOR Tim Ramskill – CUT TO UNDERPERFORM FROM OUTPERFORM; TP CUT TO €26.9 FROM €28.6 - Ahead of Q1 results, we see an increasing risk of disappointment for Accor – with French market data weak, real RevPAR slowing in all its major European markets and LFL profits having declined in H2 2012.