|
Retail, financials, AIG, Cadbury, Constellation, PepsiCo
By MarketWatch
Last Update: 9:08 AM ET Nov 30, 2009
TEL AVIV (MarketWatch) -- Retail and financial shares are expected to take center stage in Monday's trading, with Black Friday and Dubai's financial woes likely to dominate the market's attention. Other companies in focus include AIG, Cadbury, Constellation Brands, PepsiCo, and UnitedHealth.
American International Group, AIG the New York insurer, may get a bid as soon as this week for half its aviation-leasing business from an investment group including private-equity firms and the chief executive of the business, the Financial Times reported. The group includes Steven Udvar-Hazy, CEO of International Lease Finance Corp.; Onex, Greenbriar and Canada Pension Plan, the FT reported. Credit Suisse is arranging financing of more than $2 billion for the purchase of the stake in the unit, which provides planes for many airlines and is a key customer for Boeing BA and Airbus, EADSY respectively the Chicago and France aircraft producers, the FT reported.
Bank of America Corp. BAC altered the salaries of two top executives, including cutting their base pay by more than a third, with approval from the White House special master overseeing bank pay, Kenneth Feinberg. Read the full report on Bank of America.
Cadbury Plc's CBY chief executive, Todd Stitzer, says Hershey HSY would be a better cultural fit for his company than Kraft Foods KFT would be, the Financial Times reported on Saturday. Hershey has licensed the Cadbury brand in the U.S. since 1988. Kraft has a 10-billion-pound bid for Cadbury on the table. Read the report on Cadbury.
Constellation Brands Inc., STZ the Victor, N.Y., alcoholic-beverages producer, agreed to sell its Gaymer Cider Co. business to C&C Group Plc, the Dublin alcoholic-beverages producer, for 45 million pounds ($70 million). The move is part of Constellation's strategy to focus on premium wine, beer and liquor brands with higher growth potential and wider profit margins, said Rob Sands, president and chief executive, in a Monday statement. Constellation will use the proceeds of the sale to pay down borrowings; it expects "a nominal gain" on the deal.
Deere & Co. DE was upgraded to neutral from underweight at J.P. Morgan on Monday, following the manufacturer's "realistic" fiscal 2010 outlook. "The company's outlook is consistent with our thesis that agriculture equipment sales are likely to remain under pressure in 2010, and the implied EPS of $2.12 is in-line with our low-end $2.10 estimate, but well below prior consensus of $2.70," the broker said in a note to investors. The outlook "sets realistic expectations for investors for FY'10, and as such we expect the stock to perform inline with the machinery space over the near-term."
HSBC Holdings: HBC Bank of America's Merrill Lynch unit upgraded the bank to buy from neutral on Monday. The broker said that it expects a sustained period of earnings revisions, that the lender's defensive qualities should rise to the fore and that the lender has an attractive risk/reward profile and a "quite attractive" dividend. It added that the market's concerns over the possible impact on HSBC from Dubai are overblown.
PepsiCo PEP shares have been hurt as cash-strapped consumers drink cheaper private-label soda or plain water from the tap. But Pepsi's shares now look cheap, given its powerful snack-food franchise and the potential cost savings it could reap from its plan to buy two of its key bottlers, Barron's magazine reports. Read the full Barron's report on Pepsi.
Retail: Abercrombie & Fitch Co. ANF and American Eagle Outfitters Inc. AEO were upgraded. American Eagle was raised to buy from hold by Lazard Capital Markets as accelerated sales trends in the first three weeks of November have continued to improve in the last week of the month and turned positive over the last few days, said analyst Todd Slater. FBR Capital Markets analyst Adrienne Tennant upgraded Abercrombie to outperform from market perform. She said the company's three brands showed "material improvement" in both traffic and conversion over the Black Friday weekend.
Retalix Ltd., RTLX the Ra'anana, Israel, producer of management systems for retailers and distributors, said the board approved the appointment of Joshua Sheffer as chief executive. Sheffer will take office on Jan. 1, when Retalix's founder and current CEO, Barry Shaked, retires.
Sanofi-Aventis SNY said Monday that the European Commission granted marketing authorization for Multaq in all 27 European member states. Multaq is indicated in clinically stable adult patients with a history of, or current non-permanent, atrial fibrillation to prevent recurrence of AF or to lower ventricular rate.
Steelmakers-U.S.: Goldman Sachs lifted its rating on the group to attractive from neutral, citing the sector's underperformance as well as the emergence of incrementally positive data points. Steel and scrap prices in the U.S. have bottomed in our view, Chinese prices are rising, inventories remain low, a weak dollar has brought the U.S. close to being a net exporter, and we expect better industrial and auto demand in 2010," the broker said. It added U.S. Steel X to its conviction buy list and said its favorite stocks are Steel Dynamics,STLD AK Steel AKS and Nucor NUE while it removed Freeport-McMoran Copper & Gold FCX from its conviction buy list.
UnitedHealth Group Inc. UNH will affirm its previous forecast for 2009 net earnings of about $3.15 a share during its annual investor conference in New York on Tuesday. The Minneapolis health-care giant also said it expects 2010 revenue of $88.5 billion to $89.5 billion and earnings of $2.90 to $3.10 a share. On average, analysts polled by FactSet Research were looking for earnings of $3.16 a share for 2009 and $3.09 a share for 2010.
WNS Holdings Ltd., WNS the Mumbai provider of outsourced business-process services, received a multiyear contract to provide finance and accounting services to Chiquita Brands International Inc., CQB the Cincinnati provider of bananas and packaged salads. Terms weren't disclosed. For WNS, the move marks its entry into Latin America, where it plans "to significantly expand" its business.
|