The latest Market Talks covering Equities. Published exclusively on Dow Jones Newswires throughout the day.
1106 ET - Major Gulf stocks fall Thursday as heavyweight financial stocks decline across the region. Saudi Arabia's Tadawul All Share Index falls 0.8%, Qatar's QE Index loses 0.7%, Abu Dhabi's benchmark index declines 0.6% and the Dubai Financial Market General Index drops 0.4%. Al Rajhi Bank falls 2.0%, Emirates NBD loses 2.5%, First Abu Dhabi Bank declines 1.4%, and Qatar National Bank drops 1.0%. Financials account for just over half of the S&P GCC Composite Domestic Index, giving the sector an outsized influence on regional equity performance. The broader S&P GCC Investable Total Return Index is down 1.4% so far this month. (farhan.rafid@wsj.com)
1032 ET - UCB's portfolio offers growth potential into the next decade after the acquisitions of Candid Therapeutics and Neurona, so the Belgian drugmaker's next deals might target early-stage assets, Bank of America analysts say. Data due next year from a midstage trial of its galvokimig eczema drug candidate will likely inform UCB's decision on whether it needs to add further late-stage medicines to its pipeline over time, the analysts say. UCB executives seemed confident at a Bank of America event that the company's top-selling product Bimzelx can withstand competition from new drugs, the analysts say in a research note. Shares rise 0.6%. (adria.calatayud@wsj.com)
0955 ET - Novartis CEO Vas Narasimhan is confident in the midterm outlook for the company, with drug launches set to lift top-line growth next year, Bank of America analysts say. Speaking at a Bank of America conference, Narasimhan struck a bullish tone on the Swiss drugmaker's prospects for the 2026-31 period and signaled previous guidance of sales growth of 5% to 6% in the five years through 2030 would be extended to 2031 at an update scheduled for November, the analysts say. Sales growth looks set to accelerate next year relative to the second half of 2026, when the company expects to post a mid single-digit percentage increase, and its performance at the end of the fourth quarter will be the best proxy, the analysts add. Shares rise 1.5%. (adria.calatayud@wsj.com)
0940 ET - The World Cup was a net negative for Darden Restaurants, CFO Raj Vennam says on a call with analysts. The company's Olive Garden and LongHorn Steakhouse brands aren't really restaurants that people go to watch sporting events, and as a result, traffic trends took a hit. There was one bright spot, though. Darden's Yard House banner--which serves classic American fare and has over a hundred beers on tap--is a natural gathering place for sporting events, CEO Rick Cardenas says. Yard House's same-restaurant sales climbed 10% during the recent quarter. Darden is off 2.3% in early trading.. (connor.hart@wsj.com)
0932 ET - Trade tensions between the U.S. and Canada are weighing on BlackBerry's Secure Communications segment. In a call with investors, CFO Tim Foote defines the trade tensions between the two neighbors as "already dynamic" and that its substantial footprint with the U.S. government is being "further complicated by recent geopolitical developments." BlackBerry is revising the full year revenue forecast for Secure Communications segment to $260 million to $270 million and adjusted Ebitda outlook to be between $50 million and $58 million, down from $270 million to $280 million, and $57 million to $65 million, respectively. "We consider it appropriate to be cautious as we head into the second half," he says. Still, the company raised its full full-year targets on the back of strength in its embedded software unit, QNX. (adriano.marchese@wsj.com)
0931 ET - The healthcare and life-sciences sector is increasingly turning to AI, but the technology's impact on drug discovery remains in the second or third inning, analysts at Citi say in a research note. "AI's initial impact is likely to be on productivity, speed, and cost avoidance vs. an improvement in [research-and-development] success rates," Citi says. Still, AI is starting to seep into the clinical setting and reshaping biopharma, the analysts say. Big pharma companies increasingly view AI as a tool to enable identification of targets for new drugs, design new medicines and develop them, they add. (adria.calatayud@wsj.com)
0905 ET - WPP executives appear confident that bringing work in house can help the U.K. advertising group's production division deliver growth against a declining market, Citi analysts say in a research note. The company is looking to internalize a pool of previously externalized third-party spending estimated at between $1 billion and $2 billion to eliminate inefficiencies, the analysts say. "This shifts job economics toward higher net sales and improved operating margins while reducing gross client expenditures," they add. Shares fall 0.3%. (adria.calatayud@wsj.com)
0819 ET - AB InBev looks to be focusing on profitable growth rather than chasing sales volumes at all costs, Bank of America says. The Brussels-listed brewer of Bud Light and Stella Artois changed its medium-term earnings target to 5%-9% growth in EBIT a year on average, from a previous goal of 4%-8% growth in Ebitda. "As we focus on consistent, compounding growth and better asset utilization, EBIT more clearly reflects business performance and long-term shareholder value creation," Chief Financial Officer Fernando Tennenbaum told an investor event this week. BofA points to a more balanced portfolio that should allow price-mix to boost AB InBev's earnings, and to the group's successful business-to-business platform."The focus is on growth that is profitable, translates into cash, and is sustainable over the long term," the bank's analysts say.((joshua.kirby@wsj.com; @joshualeokirby))
0813 ET - BlackBerry's embedded software division leads a beat-and-raise F2Q. The QNX division sees revenue grow 27% to $80.3 million, while adjusted gross margin rose 4 percentage points to 87%. CEO John Giamatteo calls it a record performance, and cites "strength in our core automotive business." And QNX still has more to give. He notes its first win for Alloy Kore in the quarter, its middleware software for commercial vehicle fleet hardware, "the largest design win in QNX history marks an important commercial milestone," and adds over $100 million to the QNX royalty backlog. The segment's performance drove total growth above expectations in 2Q, and anchors a full-year guidance raise. (adriano.marchese@wsj.com)
0801 ET - Starbucks is looking to trim more underperforming locations from its footprint under CEO Brian Niccol. The coffee chain plans to close around 250 cafes across North America this week, after it said around the same time last year it would shutter hundreds of stores. Niccol joined Starbucks two years ago and has been looking to streamline its operations and boost profitability.(kelly.cloonan@wsj.com)
0732 ET - EssilorLuxottica's new smart eyewear launches with Meta are a sign of confidence in growth opportunities and the group's ability to maintain leadership in the category, Equita SIM's Domenico Ghilotti says. The companies will launch new lines and models featuring artificial intelligence and intend to expand the category into other markets. "[EssilorLuxottica's] commercial response to the market's fears related to the growth opportunities of the category and the growing competition seems very clear and strong," the analyst writes in a research note. Shares in EssilorLuxottica are down 2%. (andrea.figueras@wsj.com)
0730 ET - AO World is a winning proposition with a clear long-term growth runway, Jefferies analyst Andrew Wade writes. The online retailer's impressive first-half performance likely reflects discipline--with AO no longer chasing marginal sales--together with the reported improvements in Mobile and musicMagpie, he adds. "AO has the opportunity to leverage its scale and customer relationships to deliver premium growth for the foreseeable future," Wade says. Jefferies cuts its target price on the stock to 155 pence from 160 pence, and holds its buy rating. Shares are down 5.8% at 87.60 pence after AO warned of a challenging comparative environment in the second half,and are 21% lower over the year-to-date.
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