STOCKS NEWS EUROPE-DSG higher; Nomura ups to "buy"
STOCKS NEWS Reuters Results diary
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09:39GMT 10Dec2008-DSG higher; Nomura ups to "buy"
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Shares in electricals retailer DSG International (DSGI.L) gain 9.8 percent to 14 pence as Nomura raises its rating to "buy" albeit with a lowered 38 pence price target reflecting cuts to estimates.
The broker says the retailer which owns Currys and PC World is "priced to fail", but it believes the probability of this is over-stated, and sees significant upside potential for the share price.
Nomura says DSG has a number of strategic options, including disposals which could help to raise cash, pay down debt and increase headroom versus covenants.
The broker thinks this will see DSG trade through the cycle and allow it to execute its transformation plan, which will be key as the market continues to deteriorate.
Nomura says failure to execute this plan effectively could see further downside risk but it believes DSG management is well positioned to see the retailer through the cycle.
Reuters Messaging rm://jon.hopkins.reuters.com@reuters.net
09:39GMT 10Dec2008-Porvair gains after trading update
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Shares in Porvair (PORV.L) gain 2.8 percent after the filtration and environmental technologies group says it trades well in 2008 and will report double digit organic growth in both sales and profits, in line with management's expectations.
"We believe 2008 has been a successful year for Porvair," says Altium Securities in a note.
The broker says it is making slight changes to sales and net debt forecasts to accommodate changes in the exchange rate, but reaffirms its pretax profit/EPS forecasts for 2008 and 2009.
"Looking into 2009, there are areas of risk - but also some opportunities," says the broker, keeping its "buy" recommendation.
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09:30GMT 10Dec2008-Banks face more profit, bad debt pain -analysts
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Europe's banks could see profits wiped out next year and in 2010 and may need to raise another 42 billion euros as a recent deterioration in economic conditions shows no sign of improving soon, analysts at Credit Suisse say.
"We continue to advise investors to avoid the sector into 2009," Credit Suisse analyst Jonathan Pierce says in a note.
European unemployment could rise 20 percent next year and it's possible bad debts will approach levels of the early 1990s, he says. That could result in "a broad, complete removal of profits in 2009 and 2010", a big drop in new asset value forecasts and more capital raising, leaving valuations "not cheap". His least favourite banks are Banco Popular (POP.MC), Bank of Ireland (BKIR.I) and Lloyds TSB (LLOY.L).
The DJ Stoxx European bank index .SX7P is down 1.3 percent at 168.2 points. It has crashed 60 percent this year.
Sandy Chen, analyst at Panmure Gordon, also says UK banks face a gloomy outlook. "The mutually reinforcing combination of deflation and deleveraging will lead to a deadly spiral of falling prices, bad debts, credit contraction and bankruptcies that will take years to play out. Banks' shareholders will bear the brunt of the pain," Chen says in a note.
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09:38GMT 10Dec2008-Ideal Shopping tumbles on trading losses
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Shares in Ideal Shopping Direct (IDLS.L) slump 65.4 percent as the company warns of trading losses of around 4 million pounds for the full year, prompting Numis to cut its forecasts and place its recommendations and target price under review.
Numis says this another disappointing update from Ideal, leading it to cut its forecasts again, with 2009 pretax profit estimate now reduced to a 2.3 million pound loss from breakeven.
The broker says: "The business is firmly in a cash-burn situation, we are concerned that funding may become an issue going forwards."
Altium Securities also places its recommendation and target price under review and says it will be cutting its forecasts on the back of today's news.
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09:26GMT 10Dec2008-China Shoto up on strong trading
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China Shoto's (CHNS.L) shares rise 13 percent to 98.5 pence after the battery supplier says it expects year results to be ahead of market expectations, boosted by the Chinese government's fiscal stimuli in the face of the economic crisis.
"The domestic telecoms market is going well, principally on the back of demand for back up batteries in the mobile market," says Ian Robertson at Seymour Pierce, pointing out that international sales have also grown rapidly.
The broker maintains its "buy" recommendation on the stock.
To see China Shoto's statement click on [ID:Cu501890a]
Reuters messaging rm://rosalba.obrien.reuters.com@reuters.net
09:22GMT 10Dec2008-Carillion up after 2008 EPS guidance hike
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Shares in Carillion (CLLN.L) are up 13.9 percent after the building and support services group lifts guidance for 2008 earnings in a full year trading update, prompting Numis Securities to raise estimates and repeats its "buy" stance.
Carillion, which makes two thirds of its operating profit from investments in Public Private Partnership (PPP) projects and support services, says it expects underlying earnings per share to rise by 15 percent, 5 percent ahead of previous expectations.
In reaction, Numis says Carillion must be one of the few companies which can point to double digit earnings growth next year.
"It is not all plain sailing, UK construction and the Middle East could be more difficult, but with the majority of earnings coming from UK facility management and boosted by McAlpine cost savings, Carillion still has a much lower risk profile than many", Numis adds.
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09:00GMT 10Dec2008-Belvedere shares fall after company says may miss goal
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Shares in Belvedere (BEVD.PA) fall as much as 4.2 percent after the alcoholic beverage group says it may miss its full-year target for earnings before interest, tax, depreciation and amortisation of 60 million euros as it expects a slowdown in consumption in the year-end holiday period.
The stock is 1.7 percent lower at 28.25 euros after earlier touching 27.55 euros. The shares have lost 79 percent of their value so far this year.
"The EBITDA goal won't be achieved, the debt is rising, the financing costs are exploding. All that is not going in the right direction," says Oddo Securities analyst Camille Damois-Gignoux.
Reuters messaging rm://james.regan.reuters.com@reuters.net
08:57GMT 10Dec2008-Galiform higher; UBS resumes coverage
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Shares in Galiform (GFRM.L) gain 5.1 percent to 15.8 pence as UBS resumes coverage on the owner of Howden Joinery with a "neutral" rating and a 17 pence price target.
The broker says that despite its view that Galiform is well run and a good business, it sees three factors that prevent it from being more positive on the investment case despite a significant decline in the firm's share price in the year to date.
UBS says the weak retail environment is unlikely to improve in the near term; Galiform's pension deficit is likely to get worse rather than better; and considerable uncertainty remains on the extent of the group's ultimate liability on the leases it holds of stores occupied by collapsed retailer MFI.
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