The latest Market Talks covering the Auto and Transport sector. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.
0754 ET - UBS raised its oil-price forecast as the market continues to face tight supply and declining inventories. Brent crude is now expected to reach $95 a barrel by year-end, up from the previous forecast of $85 a barrel. Prices are supported by lower global exports, falling oil inventories and geopolitical risks in the Middle East, analysts at the bank say. Chinese crude imports have also recovered from their June lows, suggesting stronger demand in the coming months. Overall, UBS expects crude prices to remain elevated, with Brent forecast at $90 a barrel in March 2027. The global oil benchmark currently trades 1.7% higher at $98.68 a barrel. (giulia.petroni@wsj.com)
0407 ET - European energy stocks trade higher Tuesday morning as oil continues to gain on fears of prolonged supply disruptions in the Middle East. Brent, the global oil benchmark, rises 1.8% to $98.74 a barrel, while WTI futures are up 3.1% to $94.32 a barrel. This pushes Britain's BP up 1.4% and Shell 0.9% higher. Norway's Equinor gains 1.3% and Italy's Eni rises 1.1%. Spain's Repsol climbs 1%.(adam.whittaker@wsj.com)
0348 ET - Mobico's second-quarter performance update shows a continuation of the key trends seen in its 15-month results. with revenue growth accelerating to 5% and reiterated adjusted operating guidance of 215 million to 230 million pounds, Berenberg analysts Jack Cummings and Luka Trnovsek say. Strength at its ALSA division more than offset a deceleration in the U.K. Coach business, which continues to see revenue declines. Closing the UK Bus sale by November should derisk the business and provide a clear structural catalyst, Berenberg says. "This was an encouraging 2Q update, although we remain at Hold with a 35 pence price target as we await evidence of a sustained turnaround in the UK Coach business and a clear path to deleveraging," the analysts say. Shares are up 1.9% at 23.82 pence. (anthony.orunagoriainoff@dowjones.com)
0339 ET - HD Korea Shipbuilding & Offshore Engineering is set to benefit from strong growth at its subsidiaries, says Lee Jae-hyuk at LS Securities. The analyst expects the share of higher-end LNG and LPG carriers in the total shipbuilding lineup to expand through 2029 at the South Korean holding company's unlisted local subsidiary HD Hyundai Samho, which posted an industry-leading operating profit margin of 22.5% in 2Q. Lee is also positive about brisk contract wins by the holding company's affiliated overseas shipyards in the Philippines and Vietnam to build tankers. LS maintains a buy rating and 440,000-won target price on the stock. Shares closed 1.4% lower at 346,500 won. (kwanwoo.jun@wsj.com)
0337 ET - Mobico's second-quarter revenue growth isn't expected to be a major share driver given that operating profit guidance remains unchanged, RBC Capital Markets analysts Ruairi Cullinane and Jakub Glinkowski say in a note. The London-listed transport operator's overall top-line trends are strong and driven by growth at ALSA and German Rail. Still, it continues to face challenges in the U.K., where passenger numbers are down in both Bus and Coach, the analysts say. "We see elevated upside potential in some scenarios, although we think other stocks in the sector offer more attractive risk-reward and trade on larger discounts to long-term average enterprise value valuation multiples," RBC says. Shares are up 2.7% at 24.02 pence. (anthony.orunagoriainoff@dowjones.com)
0248 ET - Volkswagen's future is far more secure following the unanimous agreement on management's restructuring plans, Citi analysts write. Although not all the plans have been detailed, the agreement highlights a number of important ideas, the bank says. The German automaker has formulated a cost plan, taking account of future downside earnings risks, and has the management and liquidity to achieve this existential restructuring. Eventual execution and EU trading conditions will determine whether there is any upside to group EBIT, the bank adds. "Whilst the operating conditions remain very tough, at least VW has a plan." Citi rates Volkswagen at buy and lifts its target price to 100 euros from 94 euros. Shares closed at 81.25 euros. (dominic.chopping@wsj.com)
0106 ET - Hyundai Steel could stage an earnings recovery on rising steel prices in the South Korean market, says NH Investment & Securities' Y.K. Choi. Anti-dumping duties on low-cost Chinese imports have led to gradual rises in domestic steel prices, with hot-rolled and cold-rolled products up 26% and 15%, respectively, this year, the analyst writes in a note. Choi expects Hyundai's operating profit to jump 53% in 2026 and 72% in 2027. Stable iron-ore and coal prices could also help the company sustain earnings growth, he adds. NH initiates coverage of the stock with a buy rating and 400,000-won target price. Shares are last 2.9% higher at 33,350 won. (kwanwoo.jun@wsj.com)
2126 ET - Malaysia oil and gas sector is trading below their historical valuation levels, at 10X forward price-to-earnings, Affin Hwang IB analyst Ong Tze Hern says in a note. However, scope for a broad-based re-rating could remain limited until domestic job flows improve, he says. Near-term oil prices should stay supported by prolonged Middle East disruptions, prompting him to raise 2026 Brent forecast to $85/bbl from $81/bbl. But current oil price strength is unlikely to mark a structural upcycle, with Brent expected at $70/bbl in 2027 as Middle East supply normalizes. Resolving the Petronas-Petros issue and recovering Petronas capital expenditure could be more meaningful catalysts for domestic oil and gas services. Affin Hwang maintains a neutral sector's rating, pegging Dialog and Bumi Armada as top picks. (yingxian.wong@wsj.com)
1819 ET - Citi is somewhat surprised by Wildcat Infrastructure's engagement with military shipbuilder Austal, which has been weighing a bid by South Korea's Hanwha for its U.S. operations. "From a transaction perspective, Hanwha's effective 19.9% stake (including swap) may represent a significant hurdle to any competing proposal," says analyst Sam Teeger. Still, it's unclear whether Hanwha can vote on a possible Wildcat-led transaction, he adds. Austal yesterday said it held a preliminary discussion with Wildcat, but hasn't received a proposal. Citi expects Hanwha to be the more logical buyer. "If the U.S. administration's objective is to accelerate naval shipbuilding capacity, Hanwha's extensive shipbuilding expertise appears an advantage, albeit with the caveat that its defense experience has largely been in Korea rather than U.S.," Citi says. It has a buy call on Austal.
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