Top of the Street: Naturgy, Accor, BAE Systems, Next
A round-up of notable broker activity this morning from Europe's top-ranked* analysts:
** J.P.Morgan raises Spanish utility Naturgy NTGY.MC to "neutral" from "underweight", citing strong earnings momentum thanks to buoyant gas prices, tight global LNG supply & demand as well as resilient power prices
** It also ups Accor ACCP.PA to "overweight" from "neutral", saying it stands out with improved execution and potential value from disposal of AccorInvest
** * The brokerage upgrades Elior ELIOR.PA to "overweight" from "neutral", seeing it as an attractive recovery play with favourable risk-reward post recent pullback
** BofA Global Research cuts BAE Systems BAES.L and QinetiQ QQ.L to "underperform" from "neutral", pointing to their weakest margin expansion outlook in the sector in the next two years, U.S. concerns weighing on any multiple re-rating and a lack of catalysts
** Jefferies raises miner Anglo American AAL.L to "buy" from "hold", saying there is still risk related to its breakup strategy but progress has been encouraging so far, also pointing to the de-merger of American Platinum AMSJ.J as a positive catalyst
** Kepler Cheuvreux upgrades Warehouses de Pauw WDPP.BR to "buy" from "hold", as it sees the Belgian logistics company as well positioned to lead the sector's recovery
INITIATIONS AND REINSTATEMENTS
** Berenberg starts Next NXT.L at "buy", saying it finds the company fundamentally attractive, and notes the commitment to returning surplus to shareholders and careful risk-taking, allowing the business to adapt to change and develop new growth angles
** It also initiates coverage of British food retailer Marks & Spencer MKS.L with "hold", pointing to a major self-help recovery with management now increasing appeal of its customer offer, mainly in womenswear
** The brokerage starts Kingfisher KGF.L with "hold" rating, saying the prospects for macro-driven recovery look mixed across the group at present due to the difficult market in France, but notes marketplace online rollout adds to potential growth
(*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
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