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Good morning,
Markets are called to open flat this morning. This is what's happening today:
Companies reporting results in Europe today: Barclays, Michelin, Faurecia, Thysesenkrupp, Rexel, Yara, TomTom, Glencore, Xstrata, United Drug, Lottomatica
Companies reporting results in the US today: Coca-Cola, Goodyear, Fossil, Avon Products Inc
The Nikkei 225 halted a two-day drop and is trading within 1% of its highest close since September 2008. The gauge has advanced 32% since Nov. 14 as Shinzo Abe, before and after his election as prime minister, pushed the central bank to loosen policy.
The yen held yesterday’s drop after Kuroda said monetary stimulus by the central bank could be justified for 2013. The current head of the Asian Development Bank has been cited by JPMorgan Chase & Co. and Credit Suisse Group AG as the top candidate for BOJ governor.
Today I'd like to talk about L'Oreal, Michelin and Barclays. L’Oreal SA, the world’s largest cosmetics maker, reported a 12% increase in full-year earnings and said it is “well prepared” to outperform the growth of the beauty market in 2013. Revenue growth outpaced the industry last year as the company met its goal for so-called new markets such as China to become its largest source of revenue.
L’Oreal said it will increase the dividend by 15% to 2.3 euros a share, payable on May 10. The company will also propose at its next shareholder meeting buying back 500 million euros of shares in the first half of the year.
JP Morgan which are overweight on L'Oreal with a price target of E120/share. They came out with the following comments after the results – 'L’Oréal delivered a solid and balanced performance in FY12. Share gains across the board (particularly in WE & NA and Consumer & Luxury) show the company is on the right track, while margin acceleration in H2 of +30bps shows L’Oréal’s focus on profitable growth. We also welcome the increase in cash return with a 15% DPS rise and a €500m share buyback (for H113), which along the operational delivery should support the shares.'
Michelin, Europe’s largest tiremaker, said full-year earnings rose 25% because of increased sales outside the region and higher profit on specialty tires. Michelin, which makes more than half of revenue selling passenger car and light-truck tires, is seeking to increase sales beyond Europe amid an automotive-market contraction. It’s also expanding in the more profitable segment of tires for planes and mining equipment. Profitability at that division was 26% of sales. The company plans to invest 1.6 billion euros to 2.2 billion euros a year through 2015 to fuel the expansion and to reach an operating income of around 2.5 billion euros in the same year. Michelin said it’s sticking to objectives for 2015.
Barclays reports results later on today. Deutsche bank are overweight on Barclays with a price target of 360p. This is what they have to say about the stock – 'Barclays offers exposure to long-term growth and market share gains in capital markets within the investment bank and turnaround leverage in international retail and corporate banking. We think the stock looks extremely cheap on current earnings and given the potential for further upside from cost cuts and business rationalisation under new CEO Antony Jenkins: Buy.'
For more information on L'Oreal, Michelin and Barclays, or other stocks and bonds we follow, contact our offices on 25688688.
Good day and happy trading!
Kristian Camenzuli
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