EarlyCall Merrll Lynch
 

Man beachte die Aufstufung für die Software AG

Merrill Lynch

> Subject: Earlycall >>
>
> "This information has been compiled from and is based upon publicly
> available sources"
>
> US Market Wrap
> DJIA -0.9% (-81.6pts = EK -34pts, CAT -10.8pts, HPQ -4.9%, DD -4.6pts, DIS
> +3.5pts, MMM +3.2pts, WMT +1.9pts)
> nasdaq -1.44% (-26.5pts) S&P -0.6% (-6.1pts) SOX -0.6% (-2.5pts)
> Volume 1.52bn on NYSE and 2.02bn on nasdaq
>
> US Market Sector Highlights
> After a volatile session, Wall Street ended with broad losses as the major
> indices were dragged lower by the release of weak economic data and bad
> news from Eastman Kodak. Blue chip averages were unable to hold above key
> technical support levels, another day of relative weakness for tech
> proxies, and a failed breakout by gold saw accelerated selling into the
> close.
> Photography: Eastman Kodak -18% cut its dividend by 50c to ramp up
> investment in digital technology
>
> Hardware: Gateway -5.9% after Dell +0.06% announced it would ramp up the
> competition in consumer electronics and services. IBM +0.01%, Hewlett
> Packard -3.5%, SunMicro -3%, Apple -4.2%
>
> Electronic Components: Flextronics -7.3% after a US court ordered it to
> pay $934m to Beckmann Coulter -3.7% for breach of contract. Solectron
> -4.2%, Sanmina -2.2%
>
> Computer Services: Bisys -22% after warning 1Q profit will be 15c vs
> previous forecast of 22c. Electronic Data -0.6%, Unisys -3.1%
>
> Media: Walt Disney +2.5% following a Goldman Sachs upgrade on valuation.
> Viacom +0.6%, Time Warner -1.5%
>
> Gold: Newmont Mining -4.4%, Barrick Gold -3.9%, Royal Gold -5.5% a failed
> breakout by gold after an early 7yr high of $394/ounce before surrendering
> to a wave of profit taking.
>
> US After Hrs
>
> Medical-Biomedical - Human Genome Sciences -11% after it said it would
> stop studying an experimental treatment.
> Enterprise Software - Manugistics +5.5% aft saying will break even in Q3.
> Mkt (e) a loss of 1c
> Computers - Research in Motion +5.4% aft saying Q3 EPS will be 14-20c. The
> mkt (e) 8c
> Electronic Components - Solectron +3.4% said results in the qtr ending
> November may exceed analysts ests.
>
> US Economics
>
> 1330 GDP (Q2 F) Mkt (e) 3.1% v 3.1%
> 1330 Personal Consumption (Q2 F) Mkt (e) 3.9% v 3.8%
> 1330 GDP Price Deflator (Q2 F) Mkt (e) 0.9% v 0.9%
> 1450 U. Of Michigan Conf (SEP F) Mkt (e) 88.5 v 88.2
>
> Asia
> NIkkei +0.8%, Hang Seng -0.3%, Kopsi -1.7% (worst week since April)
> Earthquake hits Japan north mailand island, centered out to sea, minor
> injuries and some power outages, Japan pharmas weak Takeda Chem -5% stops
> diabetes drug development & Taisho Pharm -6% cut H2 profit forecasts.
> Nissan +ve afterYen falls to 112, Nissan +2.5%, Toyota +2%. Bonds fall for
> third day on (e) recovery and 10 year bond auction demand next week will
> be poor. Korea Banks drive down on (e) increasing bad loans to impact
> credit card units Kookmin -6%, oil refiners SK Corp +3% & Taiwan petro +4%
> contnue rise on back strong oil price.
>
> European Earnings Due
>
> Minerva 1H NAV ML(e) 314p vs 354p; Pre-Tax Loss ML(e) £1.6m vs prof £6.3m;
> Divi total ML(e) 3.1p vs 3.1p
>
> European News
>
> Lex: Fortis appears to be keen to shift its exposure away from insurance
> and combined with the flotation of its US business (proceeds of which will
> be invested in banking-related deals), will make Fortis more tempting
> should another European bank look for a cross-border merge.
> Lex: Canary Wharf's bankruptcy concerns have faded and the group estimates
> that £1bln of its securitiesd debt can be unwound relatively easily.
> While it's still too early for a re-rating based on fundamentals, a return
> to £2 does not look far-fetched, if bid hopes are not fulfilled with an
> offer in the next few weeks.
>
> Germany Today - Import Price Index (MoM/YoY) at 8:00 Local Time
> Beiersdorf: Ex-Tchibo owner Herz is offering 105EUR per share for the
> 43.6% Allianz stake (FTD)
> Daimler Chrysler: co will start a truck manufacturing joint venture with
> Hyundai Motor. (BBG)
> Deutsche Telekom: co may be threatened in its purchase of PTC after
> Elektrim SA, a stakeholder in PTC, asked for more money (BBG)
> Jenoptik: co plans to raise about 175 mln EUR new capital through the sale
> of new shares (BBG)
> Schering: co wins backing of EU Panel for cancer drug Zevalin (BBG)
>
> Rieter: to buy back as much as CHF 50 mio shares from 29th Sept. on. Buy
> back was already announced in July (BB)
>
> EDP has sold 1% of Iberdrola (owned 3%) via derivative product one month
> ago, and crossed in market yesterday (10m shares at 15.39). Expansion
> Sacyr Vallehermoso plans to cancel EUR276m of debt ahead of its maturity
> in Jan 2007. BBG
> Telefónica's monthly fee to be fixed by Government after 2005. BBG. Also,
> 2004 price cap approved yesterday by Government, with some changes,
> leaving out rental fees. La Gaceta.
> Red Eléctrica to invest e500m to improve grid in North East Spain until
> 2006. Cinco Dias.
>
> Bnl coppola group is ready to announce that it owns 4.95% of Bnl.Thay are
> seeking to increase their stake to 10% after Bank of Italy approval.
> Enel decided to sell its real estate sector through exclusive talks with
> one of the three bidders instead of the scheduled auction.
> Ras to unveil new 3 years plan to be presented on october the 7th
> Pirelli to supply 400km of submarine fiber optic cables to link kuwait and
> Iran
> Ducati reports cfo said aims to double sales in Us
> Fiat auto ceo Bochetti will step down by end oct.
>
> Galeries Lafayette: H1 before mkt opens, mkt(e) net EU21.6m
> EADS: Airbus, which is 80 percent owned by EADS, plans to deliver 315
> planes this year, 15 more than its publicly stated target,assuring it
> passes Boeing...BBG
> Pechiney: CMF says Deutsche Banks holds 4.86% of Co.
> Atos - KPMG placed their 1.87m shr stake aft the close last night
>
> Fortis proceeds of the flotation of the US insurance arm will be invested
> in banking related deals, which will do no harm in making Fortis more
> tempting for a cross boarder merger. (FT)
> Gucci ex dividend EUR 13.50
> KLM/Air France Will wrap up an agreement on uniting the two carriers by
> next week, a French minister said. (BN)
>
> Nokia press meeting 8am (London time)
>
> ML Roadshow today includes:
>
> Alcon in Paris, Comcast Corp in Holland, Cognos in London, MFI in London,
> Spectris in London, Syngenta in Stockholm & Cologne, TAR02 in Copenhagen &
> Paris, Unicredito in Singapore , WellPoint Health Networks in Zurich
>
> ML Research
>
> Ericsson - Peter Dionisio - Reiterate Neutral - For 2003, our Systems
> revenue estimate changes only slightly by 2% to SEK 106.1bn (-20% y/y)
> from SEK 103.9bn (-21% y/y). Our Group revenues change to SEK 114.9bn
> (-21% y/y) from SEK 112.7bn (-23% y/y). Our (unadjusted) EPS number
> changes to (SEK 0.76) from (SEK 0.7. For 2004, we are increasing our
> Systems revenue forecast by 9.8% to SEK 102.4bn (-4% y/y) from SEK 93.3bn
> (-10% y/y). Our Group sales estimate changes to SEK 111.2bn (-3% y/y) from
> SEK 101.6bn (-10% y/y). Our EPS estimate changes to SEK 0.38 from SEK
> 0.28. We are introducing our 2005 forecast with Systems revenues of SEK
> 104.4bn (+2% y/y). Our Group sales and EPS estimates are SEK 113.2bn (+2%
> y/y) and SEK 0.54, respectively. We note that our wireless infrastructure
> sales forecast for Ericsson for '05 assumes that the operators in China
> will start investing in 3G that year.
> Johnson Matthey - Robyn Coombs - Reiterate Neutral - Neutral. In our view
> JM deserves its premium valuation - P/E 15x, EV/EBITDA 8.6 '04E. We
> believe it has the most sustainable medium term business model in the
> chemical sector - it has strong underlying demand growth drivers, a high
> post tax ROCE of 9%, solid free cash flow and is investing to meet its
> growth opportunities (capex c. 1.6x depreciation). Small upgrade to
> forecasts despite weak $. We've added £3m to '04E pre-tax, £2m to '05 post
> positive trading update on company trip. Upgrade comes from Autocatalysts
> and Pharma. Slight downgrade in Colours.
> Imeprial Tobacco - Martin Feldman - Reiterate Buy - Price target - 1250 -
> "overall trading for the current year remains in line with the group's
> expectations." He also indicated that the group's UK market share rose to
> 44.1% in August. In Germany Davis remarked that margins have improved and
> the group's market share YTD through August stood at 19.6%. In fiscal
> 2003, we estimate EPS growth of 26% to 86.0p. Our estimate for fiscal 2004
> of 98.1p, represents growth of 14%. The consensus estimate for fiscal 2004
> is presently at 97pence. EBITA in 2004 is forecast to rise by 8.8% to
> £1.20 bill. On the basis of our 2003 estimates, Imperial is trading at a
> P/E of 10.6x & an EV to EBITDA ratio of 11.7x. Our twelve month price
> target of £12.50 on the basis of fiscal 2004 estimates, implies modest
> multiple expansion to a P/E of 12.7x and an EV to EBITDA multiple of
> 12.2x.
> Duncan Goodwin - Dana Petroleum - Reiterate Neutral - Lowering FY03
> earnings: We are revising down our FY03 and FY04 clean net profit forecast
> by 20% and 16% respectively for two reasons. Firstly to reflect the lower
> than previously forecast realisations in Russia (as highlighted above).
> Secondly we are factoring a higher than previously forecast tax charge to
> reflect the unwinding of deferred tax among UK assets.
> P&O - Marcus Curley - Reiterate Neutral - P&O trading in line with our
> sum-of-parts of 253p per share. P&O's desire to reduce its 50% holding in
> P&O Nedlloyd coupled with the recent improvement in container shipping
> profitability makes P&O Nedlloyd the key variable in our P&O sum-of-parts.
> The window for any IPO of P&O Nedlloyd is probably restricted to FY2004
> given the demand-supply outlook for container shipping. Our analysis
> suggests that Nedlloyd's current market value implies a valuation for P&O
> Nedlloyd of £654m.
> Yule Catto - Robyn Coombs - Upgrade from Sell to Neutral - Valuation for
> next year on our lower than consensus numbers now looks fair to us. P/E
> 13x '04E in line with sector average. Dividend yield 4.6% supported by
> good cash generation. Shares have fallen from 380p high on back of
> increased generic competition to Losec. Yule Catto is sole supplier to
> SchwarzPharma who until recently was the only US generic Losec player.
> Mylan & Novartis have now entered. Finances solid. Net debt of £181m June
> '03 forecast to fall to £170m Dec '05 despite the profit setback Capex
> under control - 1.0x depreciation. EBIT interest cover 5x '04E.
> Hochtief - Marcos Hernandez - Reiterate Buy - Price Target 22 EUR -
> cutting our EPS estimates from EUR 0.87 to 0.21 p.s. for 2003, from EUR
> 2.24 to 1.41 in 2004E and from EUR 2.50 to 2.00 for 2005E. Weak
> construction markets across the board, led by Europe and the US, together
> with tough trading conditions for the development area are the main
> reasons behind the cut. If Hochtief reaches >8% ROE by 2005, the stock
> should trade at/around book value by 2004 i.e. EUR 22 ps, our price
> objective. However, we have undertaken a SOTP analysis, on a value
> approach and assuming that the company is back to improved profitability
> levels, which gives a theoretical fair value of EUR 36 ps for the stock.
> Metso - Mark Troman - Reiterate Neutral - Metso has announced that the CEO
> Tor Bergman is to leave the company and that it will write off Eur200m of
> goodwill relating to its Svedala minerals processing acquisition (original
> purchased goodwill was c.Eur900m). The replacement CEO is Oli Vaartimo
> (current CFO) whom we rate very highly. Overall therefore, we believe the
> change should be positive for the company over the longer-term.
> London Stock Exchange - Manus Cotello - Reitertae Neutral - We have
> changed our estimates for the LSE following the trading update this
> morning. For FY04 we have cut revenue assumptions, but tight cost control
> means earnings remain broadly unchanged raising eps from 20.0p to 20.2p.
> We have cut FY05 EPS from 23.7 to 22.4p.
> Natexis - Jacques Henri-Gaulard - Reiterate Sell - Raise fair value from
> 87 to EUR 89 - We have increased our cash adjusted EPS forecasts from EUR
> 5.42 and EUR 6.01 to EUR 5.58 and EUR 6.46 for 2003 and 2004 respectively.
> This represents a 3.0% increase for 2003 and a 7.5% increase in 2004. Our
> forecast changes vary by division - in general the high P/E businesses
> received upgrades while the low P/E divisions received downgrades. The
> effect of this phenomenon is that our increases by more than our forecast
> increase. Our new price objective is EUR 89 per share.
> Software AG - Raimo Lenschow - Upgrade from Neutral to Buy - Our price
> target is EUR19. Software AG has been trading on a significant discount
> (54% on 2004E PE) to the European Software & Services Index based on
> doubts about management quality, profitability in the recession,
> maintenance renewal for Adabas, the balance sheet and level of cash burn.
> However, we believe the company has addressed most of the issues and we
> feel much more confident about its long-term future.
> Autonomy - Raimo Lenschow - Downgrade from Neutral to Sell - Autonomy's
> share price has appreciated significantly since the beginning of Q3
> (+30%). This rally is mainly fuelled by the hope that an economic recovery
> will significantly improve Autonomy's earnings. However, as we have argued
> before, we believe Autonomy will experience an improved business climate
> only late in the cycle (see our note from 11 July 2003). Although Autonomy
> has a significant operating leverage in case of additional revenue, we
> believe there are European software companies like Software AG (STWGF,
> C-1-8, EUR15.66) that trade on more favourable multiples and would be a
> better recovery play.
>
>
> Andrew Hart - Director of Merrill Lynch European Equity Salestrading
> Tel - ++ 44 (0)207 996 1417
> Fax - ++ 44 (0)207 995 2378
> Mob--07967 134 810
> E-Mail- andrew_hart@ml.com