The latest Market Talks covering Energy markets. Published exclusively on Dow Jones Newswires throughout the day.
0730 GMT - Repsol, Neste and OMV will be the main beneficiaries of sustained high refining margins, but all integrated oil companies should continue to deliver above-average profits in their downstream units, Barclays analyst Lydia Rainforth writes. Refining margins remain exceptionally tight and margins on diesel continue to accelerate, she says. Damage to refining infrastructure in the Middle East and Russia, and constrained feedstock availability for Asian and European refiners mean the backdrop remains supportive, she says. (adam.whittaker@wsj.com)
0726 GMT - Doosan Fuel Cell could return to profit next year as new contract wins boost production and ease its fixed-cost burden, says NH Investment & Securities' Y.S. Jung. The analyst expects the South Korean firm's order backlog to exceed 250 megawatts of fuel cells following its recent 501-billion-won contract with HyAxiom to supply products to U.S. data centers. Doosan could win more contracts in the U.S., with its annual production capacity expected to rise to 350 megawatts in 2027, he adds. NH upgrades its rating on the stock to buy from hold and raises its target price by 71% to 58,000 won. Shares rose 14% to close at 49,900 won. (kwanwoo.jun@wsj.com)
0721 GMT - European indexes are mixed in quiet early trade. Healthcare and consumer-facing stocks struggle, though AI-related stocks gain as the release of OpenAI's latest model boosts sentiment. The Stoxx 600 loses 0.15%. London's FTSE 100 slips 0.2% as miners fall, while drinks group Diageo falls 1.75%. The German Dax is flat. Chip maker Infineon jumps 2.6%, but pharmaceutical technology group Qiagen loses 2%. In Paris, the CAC 40 also trades flat, as gains for AI-related stocks counter further falls for luxuries. LVMH loses 0.9%. Italy's FTSE MIB adds 0.4%, while the Spanish IBEX 35 trades flat. The semiconductor-heavy AEX is flat. ASML gains 1.7%, but sliding software stocks weigh on the index. (josephmichael.stonor@wsj.com)
0718 GMT - European energy majors start the week higher as attacks on vessels in the Strait of Hormuz escalate. Brent crude is up 1.1% to $97.37 a barrel and WTI rises 1% to $86.29 a barrel after the U.S. hit three Iranian oil tankers over the weekend. "With tanker traffic increasingly exposed to direct military action and restrictions around the strait potentially widening, risks to Gulf energy exports remain elevated, keeping a substantial geopolitical premium embedded in oil prices," MUFG's Soojin Kim writes. Spain's Repsol and Italy's Eni both rise around 1.2%. In London, BP gains 0.9% and Shell rises 0.45%. (adam.whittaker@wsj.com)
0643 GMT - Share prices of Japanese energy suppliers are likely to reflect high shipping rates, Nomura's Masaharu Hirokane says in a research report. The market hasn't priced in structural change in energy suppliers, namely ships having to travel longer distances, caused by deterioration in the Middle East situation, the analyst says. Nippon Yusen K.K. will likely see profit growth in its energy business this fiscal year, as some of its crude oil tankers are poised to reflect higher contract rates for the Middle East to Far East route. Contract rates on this route have risen the most in crude oil tanker transport contracts, the analyst notes. Nomura raises the stock's target price to 8,800 yen from Y7,100 with an unchanged buy rating. Shares closed 3.7% higher at Y7,420. (ronnie.harui@wsj.com)
0637 GMT - The U.S. dollar edges lower, shrugging off rising oil prices. Brent crude is up 1.6% to $97.782, extending last week's move, amid further escalation in the Middle East. "Renewed U.S.-Iran strikes on commercial shipping around the Strait of Hormuz raise concerns over prolonged disruptions to Middle East energy flows," Danske Bank's Emilie Herbo says in a note. U.S. Treasury markets are closed due to Labor Day, thus not giving any input into dollar trading. The DXY dollar index declines 0.1% to 99.085. (emese.bartha@wsj.com)
0545 GMT - Energean's risk and reward profile is more attractive after share-price weakness over the year to date, Jefferies analyst Mark Wilson writes as he upgrades the rating on the stock to hold from underperform, and lifts its target price to 800 pence from 680 pence. Shares in the London-listed energy firm haven't risen as much as peers this year given the majority of its production is fixed-price gas for domestic use in Israel, he says. However, the company will benefit from revised tax assumptions and the development of the Katlan project in the Karish gas field offshore Israel, he adds. Shares closed Friday at 778.50 pence and are down 12% since the start of the year. (adam.whittaker@wsj.com)
0507 GMT - Luxshare Precision Industry's leading exposure to iPhone maker Apple likely makes its core business more resilient than other generic Android phone original design manufacturers, say DBS Group Research analysts in a note. The electronic-components maker is facing lower build volumes and weaker factory utilization amid a memory shortage and slower recovery in low- and mid-tier Android smart phones and tablets, they say. However, the company's premium customers, including Apple, should support its electronic-components business, with new product wins, customer-share gains and growing participation in artificial-intelligence-enabled wearables likely to offset some drag, they add. DBS retains its hold rating and 64.0 yuan target price. Shares rise 2.6% to 55.73 yuan.
Comments