Save from as low as €40 per month
Change modify pause
Markets are called to open flat this morning. This is what's happening today:
2013 big picture view remains that we are in a secular bull market and we recommend that investors overweight equities. JP Morgan came up with 5 notable factors have incrementally supported further gains in stocks:
More information on companies reporting results today:
Heidelbergcement (Deutsche Bank research) – Price E55, Price Target E81 – After the strong stock performance of the last months, HeidelbergCement’s earnings multiples have re-rated to levels comfortably above their historical averages (see page 9). We believe, however, that the stock has further upside potential as the favorable geographical footprint and above-average operating leverage should allow the company to outpace the sector in an upside risk scenario for volumes. Our subdued price growth assumptions (+2.2% pa) leave additional room for outperformance particularly if the company’s pricing initiatives end up being successful.
Lufthansa (Deutsche Bank research) – Price E15, Price Target E19 – Profitability in Lufthansa's passenger business is currently unsatisfying, while profit contribution from the other segments is good. Lufthansa has taken care of several problems over the last quarter: it closed down loss-making Lufthansa Italia and sold bmi to IAG. Now it is tackling the major challenge: improving the profitability in its major business segment, Passenger Airline. The program behind it (which is also meant to improve profits in other segments) targets an operating result of EUR2.3bn in FY15, which would be an all-time high. While we do not yet give Lufthansa the benefit of the doubt that it can reach that target, we still see significant earnings improvement potential. Lufthansa's home market Germany remains a robust base, the competition for new slots at Lufthansa's home base Frankfurt is less intense than initially feared (i.e. fewer defensive steps necessary) and the earnings enhancement efforts are more serious than in previous years in our view. We expect significantly more details about the restructuring program to be provided over the upcoming months, which should further support confidence in Lufthansa's ability to sustainably improve earnings. Based on this assessment, we rate Lufthansa a Buy.
Gemalto (Deutsche Bank research) – Price E72, Price Target E85 – We view Gemalto as a quality growth stock which benefits from several mobile & payment security trends: 1) Mobile payments/NFC, 2) global 4G/LTE mobile network migration, 3) US migration to high-security chip-based (EMV) payment cards. Its market leading position in smartcards, security software and services should enable it to drive an expected 11% 2012-15e revenue & 20% EPS CAGR, amongst the highest in European Technology. We rate Gemalto Buy.
For further information on these stocks or other stocks we follow, contact our offices on 25688688.
Good day and happy trading!
You are signing up to receive news, updates, general market announcement, articles and product or service marketing. By signing up you are consenting