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DJ Global Equities Roundup: Market Talk

· 02/05/2021 10:56

The latest Market Talks covering Equities. Published exclusively on Dow Jones Newswires throughout the day.

1056 ET - Barratt Developments remains well placed for volume growth in the medium term as it continues to close its margin gap compared with competitors, according to Peel Hunt. The housebuilder delivered a good set of half-year results, with record completions and recovering margins. "Although volume growth in the second half of the year will be muted, we expect to see further growth in the medium-term as the group expands towards 20,000 completions," says the brokerage. Peel Hunt maintains a hold rating on the stock but increases its target price to 720 pence from 705 pence. (adriano.marchese@wsj.com)

1055 ET - Electronics distributor Electrocomponents may report better revenue in a third-quarter trading update Monday Feb. 8, though increased costs could limit gains, says Numis Securities. Numis expects revenue to have continued improving in the four months to January after underlying revenues recovered in the first half to September and the company confirmed continued momentum across the business in the first 10 weeks of the second half. "We therefore believe there is a good chance our revenue expectation could be beaten, though recent inventory stocking cycles--such as ahead of the Brexit transition in the U.K.--strengthened sterling and sustained high freight costs will likely temper any upside," says analyst David Brockton. (philip.waller@wsj.com)

1052 ET - Although the resurgence of Covid-19 has delayed the recovery in holiday bookings, On the Beach is as well placed as ever to meet the surge in demand when the time comes, Peel Hunt says. For the travel retailer, a 73% fall in U.K. search traffic implies a sharp decrease in overall holiday searching and proves consumer's wish to risk booking summer holidays well in advance has mostly disappeared, the U.K. brokerage says. Although it has invested in keeping its brand position and technology platform, greater clarity won't emerge until well into fiscal 2021's second half, the broker says. "We expect any surge in bookings for this summer to start only once the summer has begun and close to the date of departure," Peel Hunt says. (anthony.orunagoriainoff@dowjones.com)Signature Aviation has reached an agreement in terms of a recommended cash offer with a consortium. "More Signature Aviation Bids May Come Despite It Agreeing to Carlyle Offer -- Market Talk," at 1039 GMT, incorrectly said in the headline that Signature Aviation had agreed to an offer by Carlyle Investment Management.

1042 ET - Boeing 777X landing gear supplier Héroux-Devtek says the jet's delayed delivery shouldn't have a material impact since it's also equipping the 777 freighter, and Boeing's two-a-month build rate for the 777 family still includes some of the new jets. The Canadian company's CEO, Martin Brassard, also sheds light on Boeing's new Premier Bidder supplier program, which he says focuses on "best value" rather than lowest price and provided a route for expanded work, including actuators and parts for military jets. Shares up 7% after fiscal 3Q results are lifted by defense work. (doug.cameron@wsj.com; @dougcameron)

1037 ET - Rheinmetall has laid out a new corporate structure consisting of five divisions that marks the end of its two-pillar strategy, and could also mean the company is considering becoming a defense pure-player, Warburg Research says. Until now, the German technology group has been structured around two pillars: its defense division, which is the most profitable, and its automotive one. "During the conference call Q&A, we gained the impression that management is no longer committed to its automotive engagement and would be open for talks with potential buyers," Warburg says. "We therefore believe the formation of a defence pure-play could be on the cards," the bank says. (olivia.bugault@wsj.com)

1022 ET - While Intesa Sanpaolo swung to a net loss in the fourth quarter on higher-than-expected restructuring and impairment charges related to the acquisition of UBI Banca, underlying earnings trends came in above projections, KBW says. This was due to a strong fee income, which beat market consensus by 12%, KBW says. The Italian bank's capital ratio is also strong, KBW says, and notes that the bank reported a consensus-beating CET1 ratio of 15.9%. "The CET1 ratio increased quarter-on-quarter despite the capital hit from the usage of the UBI badwill and a slight increase in risk-weighted assets, so the beat seems to be explained by lower deductions," the investment bank says. KBW has an outperform rating on the stock. Intesa Sanpaolo trades 3% higher at EUR2.07. (cecilia.butini@wsj.com)

1021 ET - JPMorgan called GoPro's 4Q results "mixed" and said shares are falling because the company missed on revenue estimates. JPMorgan also called the company's guidance for this fiscal year "mostly in line" but "quite conservative." JPMorgan, however, still lifted its December 2021 price target on the company by $1 to $10. "We expect a lull in catalysts for the next couple of months and remain sidelined," JPMorgan said. GoPro reported 4Q revenue of $357.8M and adjusted earnings of 39 cents a share after the market closed yesterday. According to FactSet, analysts were expecting revenue of $373.6M and adjusted earnings of 38 cents a share. Shares fall 13% Friday. (allison.prang@wsj.com; @AllisonPrang)

1012 ET - Nathan's Famous 3Q results still show a pandemic-induced shift to more home consumption, but the hot-dog company's numbers look a bit more balanced than they did months earlier. 3Q restaurant-operations revenue declined 36% year over year, a more modest trend compared with the 52% decline in the full fiscal year to date. Meanwhile, product licensing, which includes home sales to consumers, made up 33% of Nathan's 3Q revenue, compared with 43% in the full year to date. Total year-to-date revenue is down 29% year over year, but 3Q revenue declined only 16%. Net income improves to 33 cents a share, from 29 cents a share in 3Q 2019. (matt.grossman@wsj.com, @mattgrossman)

1012 ET - Boeing's orders and deliveries update on Feb. 9 should clean up the changes in the 777X backlog flagged in its recent 10K. Emirates and Qatar Airways are the likely the main source of the decline in firm deals to 191, Jefferies says. That duo and neighbor Etihad collectively account for 200 of the 309 orders listed on the Boeing website, the legacy of a joint deal from 2013 that envisaged the first planes arriving in 2020 rather than 2023. Lufthansa, SIA and ANA had 20 orders apiece, while Cathay Pacific and British Airways had 21 and 18, respectively. (doug.cameron@wsj.com; @dougcameron)

1004 ET - Ziopharm Oncology adds WaterMill Asset Management founder Robert Postma to its board as part of a settlement agreement with the activist investor. Watermill won two board seats, along with the ouster of then chairman Scott Tarriff, in a consent solicitation in December, but a cap on board membership at eight kept Postma from a third WaterMill seat. Ziopharm says it's expanding the board to nine and adding Postma as part of the standstill deal, and that it will reimburse WaterMill for up to $400,000 in costs related to its efforts. (colin.kellaher@wsj.com)

0959 ET - Regeneron continues to see barriers to patients getting its Covid-19 antibody drug, both in doctors prescribing it and in allowing people to easily get it when it is prescribed, says CEO Leonard Schleifer on 4Q earnings call. "We need to do work at all ends of the funnel," he says, but things are starting to get better. In some cases, medical-record algorithms are alerting doctors that their patients are eligible to take the drug after testing positive and meeting certain-risk factor requirements, says Dr. Schleifer. But some doctors who are aware of the drugs remain skeptical that there isn't yet enough data to support its use, he says. Regeneron shares gain 0.7% on the day, but are 19% lower over the past six months. (joseph.walker@wsj.com)

(END) Dow Jones Newswires

February 05, 2021 10:56 ET (15:56 GMT)

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