BUZZ-Top of the Street: Dialog Semi, Lufthansa, Lloyds, Barclays
A round-up of notable broker activity this morning from Europe's top-ranked* analysts:
** Credit Suisse (IOB: 0QP5.IL - news) cuts Dialog Semiconductor (LSE: 0OLN.L - news) to neutral on concerns around losing either some or all of Apple (Swiss: AAPL-EUR.SW - news) power management integrated circuits biz over time. CS sees revenue growth slowing to mid-single digits for 2018/2019 compared to 2017
** Credit Suisse raises Deutsche Lufthansa (IOB: 0H4A.IL - news) to "outperform", citing pricing opportunities in 2018
** Morgan Stanley (Xetra: 885836 - news) downgrades UK banks Lloyds and Barclays (LSE: BARC.L - news) to "equal-weight". For Lloyds, MS is more optimistic on its margin outlook than consensus but trading at 1.3x tangible book value for 2018E gives less room for a re-rating
** Deutsche Bank (IOB: 0H7D.IL - news) upgrades Capgemini to "buy", "sees previous headwinds abating" in 2018 while demand for Digital transformation remains high
** 4-star analyst Goldman Sachs (NYSE: GS-PB - news) raises Relx (Frankfurt: RDEB.F - news) to "buy" believing market underestimates company's ability to continually innovate. Brokerage forecasts improving organic revenue growth of 5% in FY17-20
** 5-star analyst Citigroup (NYSE: C - news) upgrades Lukoil to "buy", says almost invisible rouble devaluation of 4Q17 materially boosted oil company profitability
** 4-star analyst UBS (LSE: 0QNR.L - news) raises Micro Focus International (Frankfurt: M7Q4.F - news) to "buy" seeing a better risk-reward
INITIATIONS AND REINSTATEMENTS
** Kepler Cheuvreux initiates coverage on Beneteau (EUREX: 133019.EX - news) the world’s second-largest recreational boat maker, with a "buy" rating, saying group is expected to see a 7% sales compound annual growth rate over 2017-20, outpacing competitors
** Societe Generale (Swiss: 519928.SW - news) initiates Suez Waste SA with a "Hold" rating, saying that despite structural growth they see limited future value and expect further downside to consensus earnings estimates
(*Analyst rankings from Thomson Reuters StarMine. Scale is from 1-star to 5-star with 5 being best. Analysts ranked on earnings accuracy as well as relative performance of recommendations over trailing 12-month & 24-month periods.)