Top of the Street: Zurich Insurance, Munich Re, Glencore, Galp, IAG

Tieto Oyj

17/01/2024 14:06

A round-up of notable broker activity this morning from Europe's
top-ranked* analysts:
        
    ** UBS holds a balanced view on the European insurance
sector in a possibly falling key rates environment in 2024,
recognising some favourable operational dynamics, but also
top-down macro pressures. It upgrades Munich Re  MUVGn.DE  on
strong buffer appreciation and cuts Zurich Insurance Group
 ZURN.S  and Admiral  ADML.L  
    ** Deutsche Bank downgrades UK mining giant Glencore
 GLEN.L  to "hold" from "buy" as it expects guidance production
to be lowered materially for metals, reflecting a combination of
asset sales, mine closures and operational headwinds and a
possible copper output drop in 2024/25, as well as continuing
pricing headwinds, and shareholder returns in 2024 likely being
limited to the base dividend 
    ** UBS downgrades Galp Energia  GALP.LS  to "sell" from
"neutral" citing an unjustified large premium valuation as the
Portuguese oil company trades at an already priced-in 58%
premium to its peers, while it faces production risks and capex
burden [nL8N3E72FA}
    ** Goldman Sachs raises British Airways owner IAG  ICAG.L 
to "buy" from "neutral" saying that BA can continue to grow
earnings from its relatively low 2023 level, the firm's Spanish
brands will be structurally more profitable and adding that IAG
should be better able to sustain higher margins
    ** "Over-earning vs peers, the end of cost-push energy
inflation and tougher competition likely limits Rockwool's
ability to hold its pricing gains of the past two years," says  
   Morgan Stanley and downgrades Danish stone-wool manufacturer
Rockwool  ROCKb.CO  to "underweight" 
    ** Goldman Sachs upgrades IMI  IMI.L  to "buy" from
"neutral" seeing the UK engineering company as beneficiary of
both a sustained capex super-cycle as well as potential recovery
in short-cycle industrial production    
    ** Exane BNP Paribas downgrades Spanish real estate Colonial
 COL.MC  to "underperform" from "neutral" citing worsening
like-for-like KPIs and limited growth levers, and cutting funds
from operations (FFO) estimates for the company by 18% on
average for 2024-26           
    ** Inderes cuts Finnish IT firm TietoEvry  TIETO.HE  to
"accumulate" from "buy" as it sees a slight risk of a profit
warning for Q4 due to uncertainty with project starts and delays
in the Create segment (consulting) and "additional" sales
suffering from the uncertain market in the Tech Services
division
    
 
    INITIATIONS AND REINSTATEMENTS
    ** Goldman Sachs initiates Dutch company BE Semiconductors
 BESI.AS  with "buy" citing its more positive view in comparison
to consensus on key growth drivers, such as chiplet adoption and
proliferation of high bandwidth memory to support Gen-AI
applications
 
    
(*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 Michal Aleksandrowicz and Joao Manuel Mauricio in
Gdansk)
 ((gdansk.newsroom@thomsonreuters.com; +48 58 769 66 00;))