Top of the Street: UK real estate, European utilities, Covestro, SEB

Fortum Oyj

02/10/2024 14:23

A round-up of notable broker activity this morning from Europe's
top-ranked* analysts:
     
    ** Deutsche Bank raises three UK real estate companies to
"buy" from "hold" citing cautious optimism as Britain moves into
a rate cutting cycle
    ** It upgrades LondonMetric Property  LMPL.L  as its "roll
up & recycle" model continues to plough on, and ups British Land
 BLND.L  and Landsec  LAND.L  on improving office and retail
fundamentals
    ** However, it downgrades Segro  SGRO.L  to "hold" from
"buy" due to softer near-term ERV (estimated rental value)
growth expectations and continued yield expansion in continental
Europe
** Jefferies and Kepler Cheuvreux cut Covestro  1COV.DE  to
"hold" from "buy" after ADNOC's offer to buy the German
chemicals maker for 62 euro per share; Jefferies says it sees
limited regulatory risk to the deal and Kepler flags "limited
chances" of a better offer
** Exane BNP Paribas downgrades SEB  SEBa.ST  to "neutral" from
"outperform" citing uncertainties ahead in some of the Swedish
bank's markets
     
    INITIATIONS AND REINSTATEMENTS
** Deutsche Bank says a recovery in European utility stocks has
narrowed their 15% underperformance vs wider market to just 2%,
leaving the broker neutral on the sector as it resumes coverage
of 13 stocks
    ** DB sets a "hold" rating on Fortum  FORTUM.HE , Enel
 ENEI.MI , Terna  TRN.MI , Enagas  ENAG.MC , Iberdrola  IBE.MC ,
Redeia  REDE.MC , Pennon Group  PNN.L , SSE  SSE.L  and Severn
Trent  SVT.L , and "buy" on Engie  ENGIE.PA , Italgas  IG.MI ,
Snam  SRG.MI  and National Grid PLC  NG.L  with "buy"
** DB initiates Denmark's Zealand Pharma  ZELA.CO  with "hold"
and says the valuation already reflects optimism about its early
pipeline obesity drug, a long-acting amylin analog
** The broker also initiates Italy's Buzzi  BZU.MI  with "buy"
saying it expects the cement maker's balance sheet to remain
strong, with significant scope for expansion
    ** Berenberg starts coverage of Computacenter  CCC.L  with
"hold" warning the implied expectations to meet FY24 operation
profit consensus are too optimistic, considering the slowdown in
corporate hardware, tough comps and FX headwind
    ** Berenberg also starts coverage of Softcat  SCTS.L  with
"hold" saying that while there is significant room for growth in
the UK and Ireland and potential for a fully-fledged expansion
to the U.S. in the medium term, these qualities are already
reflected in the valuation
    ** KBC Securities initiates Italian Agnelli family's holding
company Exor  EXOR.AS  with "buy" after a recent decline in
Stellantis' shares dragged down its valuation; it notes Exor's
portfolio consists of sector-leading names and those operating
in sectors entering a new growth phase
     
    (*Analyst rankings from Thomson Reuters StarMine. The scale
is from 1-star to 5-star with 5 being the best. Analysts are
ranked on earnings accuracy as well as relative performance of
recommendations over trailing 12-month & 24-month periods.)
     

(Reporting by Jakub Olesiuk and Agata Rybska)
((mailto:jakub.olesiuk@tr.com ; mailto:agata.rybska@tr.com))