The latest Market Talks covering Equities. Published exclusively on Dow Jones Newswires throughout the day.
1108 GMT - Bellway is in a strong position and well-prepared to manage the housing market storm, RBC Europe analysts Anthony Codling and Oliver Dyson write. The FTSE 250-listed house builder said it sold 11% more homes in fiscal 2026 but the near-term outlook is uncertain. It called on the government to help the industry with an immediate cut to stamp duty--a home-buying tax--and a support program for first-time buyers. "Bellway is managing what it can...but until underlying market conditions improve (with or without help from the government), it will be hard work to see returns take a meaningful step-up," the analysts say. Shares are up 0.7% at 21.14 pounds. (ian.walker@wsj.com)
1105 GMT - On Holding missed top-line expectations, hurt by a much wider-than-expected foreign exchange impact and soft wholesale trends, William Blair analysts say in a research note. Gross margin was a bright spot, they add, but the sales miss flowed through to the bottom line as expenses grew. "Management in effect talked down sales guidance (now low 20% constant currency from 23%), raised gross margin expectations by 50 basis points, but kept the overall adjusted EBITDA margin outlook," the analysts say, adding that On's quarterly results are hard to call ahead of time given the limited visibility into the company. "On continues to prove that it is a hard stock to own around earnings," they say. On Holding tumbles 16% premarket. (connor.hart@wsj.com)
1059 GMT - Hugo Boss's strategic revamp and brand refresh are a huge success, Berenberg's Michael Heider says. The German premium-fashion company started a rebound strategy in 2021 under an experienced new leadership team, the analyst says in a research note. From 2021 to 2025, the group was able to increase sales by attracting younger customers and establishing its brands, Hugo and Boss, as strong lifestyle labels, Heider says. Now, the company is focused on creating value over volume, providing margin potential and valuation upside, he adds. Berenberg initiates coverage of the stock with a buy rating. Shares are 0.3% higher at 37.94 euros. (andrea.figueras@wsj.com)
1057 GMT - M&G has a high valuation compared with its own history and peers, with distributable earnings in the insurance business constrained, UBS analysts say. The Swiss bank cuts its recommendation for M&G stock to sell from neutral, but raises its target price to 330 pence from 300 pence. After the asset manager's actions to increase distributable earnings in the insurance business, it has around 1.8 billion pounds of reserves, UBS estimates. This could cover dividends for three years, but higher interest rates could further reduce buffers, the analysts say. M&G's fund performance has fallen out of the top two position in UBS's European asset-manager coverage for the first time in five years, they add. Shares are down 3.5% in London to 349.70 pence, but are up 20% year to date. (michael.hennessey@wsj.com)
1038 GMT - Investors are likely to look beyond legacy issues of Chinese developers' upcoming 1H results, according to HSBC analysts in a research note. "We think the market is already well aware of the legacy landbank drag, and the incremental negative surprise is limited," they note. The margin outlook embedded in unbooked sales and presold projects should provide better visibility on the pace and magnitude of margin recovery, they note. Management confidence in luxury sales strength and pricing upside is also worth watching, they say. (tracy.qu@wsj.com)
1027 GMT - Traders increase their bets on the probability of the Bank of England increasing interest rates in the coming months due to rising oil prices. Brent crude climbs 2.15% to $89.60 a barrel after the U.S. on Monday unveiled a new strategy of piling economic pressure on Iran in an attempt to force it to end the Middle East conflict. The ongoing U.S.-Iran tensions raise inflation concerns, leading investors to increase their expectations of central banks' rate rises. Markets currently price in a total of 29 basis points of BOE rate rises by year end, up from 25 bps priced in last week, LSEG data show. (miriam.mukuru@wsj.com)
0935 GMT - While InterContinental Hotels' hike in dividend and large share buyback program indicate confidence in the long term, the short-term outlook remains cloudy on geopolitical worries, AJ Bell's Dan Coatsworth says in a comment. The Holiday Inn owner has managed to stand tall on a combination of enthusiasm for the FIFA World Cup and resilient demand from affluent customers during a challenging period for the hospitality sector, Coatsworth says. However, second-quarter revenue fell short of expectations and the group warned of continuing impact from the Middle East conflict, he says. "Some investors checked out of the shares in the wake of its results," he adds. Shares trade 1.7% lower at $152.85.(nina.kienle@wsj.com)
0851 GMT - Investors are encouraged by improving flow and margin trends at traditional European asset managers, Citi analysts say. Traditional manager fund flows were robust in July, tracking at a 4% run-rate, excluding money market, the analysts write. Man Group remains the strongest outperformer, Citi adds, while Aberdeen Group continues to lag peers. Asset class trends were mostly unchanged in July, with passive continuing as the main driver of inflows, Citi says. Retail demand seems to have recovered, the analysts note. Amid improved investor sentiment, valuation has also shifted, with traditional asset managers only at a modest discount to private market peers, which are growing faster but have a more uncertain growth outlook. Man Group and Aberdeen shares are up 35% and 21%, respectively, over the year to date. (michael.hennessey@wsj.com)
0850 GMT - Rising Japanese stock prices could continue to weigh on the yen in the near term, Commerzbank's Volkmar Baur says in a note. A Japan Exchange Group survey shows about 35% of Japanese stocks are now held by foreign investors and these stocks are largely held in currency-hedged positions, he says. As stocks rise, investors adjust their currency hedges to increase their protection against a weaker yen. "While this is likely not the main reason, it could also contribute to the yen coming under pressure again in the coming weeks until the Bank of Japan clarifies its plans more clearly." The dollar trades steady at 159.28 yen after reaching an 11-day high of 159.37 earlier. (renae.dyer@wsj.com)
0814 GMT - The humanoid-robot industry is moving toward initial commercialization, Daiwa analysts write. They note that Schaeffler has secured a humanoid-robot order book of 350 million euros as of June from three global original equipment manufacturers across seven products. That includes the order from XPeng IRON, for which production will start from 4Q, they add. Schaeffler has also held discussions with more than 45 global manufacturers of humanoid robots. Daiwa views that as strong evidence the industry is moving from sample testing toward nominated production programs. The 350 million-euro order could translate to around 20,000 humanoid robots, assuming an average selling price of $75,000 per robot with a 45% gross margin, and that Schaeffler supplies 50% of the cost value, the analysts add. (jiahui.huang@wsj.com; @ivy_jiahuihuang)
0801 GMT - China's property sector is likely in a "gradual fundamental recovery even without substantial incremental stimulus," according to HSBC analysts in a research note. Beijing rolled out relaxations on home-purchase restrictions earlier this month, they point out. This is in line with HSBC's expectations that local governments are likely to deploy "modest easing measures to sustain sales momentum," they say. "Policy, in our view, is increasingly serving as a safeguarding rather than a stimulus role, stabilizing price expectations and anchoring homebuyer sentiment," they say. HSBC prefers China Resources Land and C&D International Investment for their leading position in high-end projects and stronger earnings visibility. (tracy.qu@wsj.com)
0753 GMT - Elite UK REIT's higher occupancy and longer leases are likely to boost the real-estate investment trust's income visibility, says Maybank Securities' Liu Miaomiao in a note. The U.K.-focused REIT's 1H DPU rose 3.3% on year thanks to interest-cost savings and lower vacancy-related expenses, the analyst says. Portfolio occupancy for 1H improved to 99.9% after recent portfolio constitution initiatives, she adds. She maintains her forecasts given Elite UK REIT's in-line 1H results and progressing redevelopment works. Maybank Securities retains its buy rating and target price of 0.44 pound. Units are flat at 0.315 pound.
Comments