The latest Market Talks covering Equities. Published exclusively on Dow Jones Newswires throughout the day.
0617 GMT - The next phase of China's artificial-intelligence development is likely to depend less on benchmark gains and more on deployment efficiency across the wider stack, says Fitch Ratings in a note. It notes recent developments involving DeepSeek, Huawei and data-centre networking suggest China is making progress across multiple layers of the AI stack as it focuses on software and deployment infrastructure rather than model capability alone. China's efforts to achieve self-sufficiency are also extending beyond models and processors, and the local ecosystem is developing across software, processors, networking and infrastructure, says Fitch. Progress across the wider China AI stack could support adoption in some emerging markets where affordability matters more, Fitch adds.(megan.cheah@wsj.com)
0606 GMT - Li Ning's 3Q retail sales excluding its youth athletic brand likely declined by a low-single-digit percentage on year, say Citi analysts in a note. That is likely due to unfavorable weather in July and August and a generally weak retail environment in China, they add. Still, Nike's likely massive inventory take-back in China could alleviate some concerns around industry-wide discounting, they say. Chinese sportswear brands are likely to gain market share from Nike from 2027, the analysts add. Citi expects Li Ning to maintain its 2026 guidance and prefers Anta Sports Products in the Chinese sportswear sector. It maintains a buy rating and a target price of 18.10 Hong Kong dollars on Li Ning. Shares fall 0.9% to HK$12.29. (megan.cheah@wsj.com)
0601 GMT - Investors looking at Singapore's aviation sector should position for activity, not fuel sensitivity, DBS Group Research says. Analyst Jason Sum notes that global passenger traffic is stabilizing, citing improving bookings and scheduled capacity growth. Meanwhile, the cargo segment's outperformance will likely extend into 2027. "Aviation activity is holding up better than airline-sector earnings and, in several cases, better than valuations imply," Sum writes in a note. SATS leads DBS's industry pecking order because of its compelling risk-reward profile, followed by SIA Engineering, ST Engineering, China Aviation Oil and Singapore Airlines. DBS has a buy rating and target price of 5.00 Singapore dollars on the stock, which is last at S$3.70. (farah.elias@wsj.com)
0556 GMT - Porsche used its investor event to establish credible targets, Citi analysts write. The bank says that Porsche has confirmed all previous recovery targets, set high cash goals, and has released long-term "dream targets." It has done so using credible conservative assumptions, while the automaker also faces much fewer structural threats than the EU sector more generally. "This is how you build an investment dream." Citi rates Porsche stock at buy with a 56 euro target price. Shares closed at 42.67 euros. (dominic.chopping@wsj.com)
0540 GMT - Mercedes-Benz's third-quarter unit sales were in line with expectations, but headwinds keep Citi cautious. Mercedes's sales of 491,700 units were down 6% on year and 4% on quarter. Car sales were driven by strong growth in Europe and North America, offset by continued weakness in China. It was a record quarter for electric vehicles, with car battery-electric vehicle sales rising 61% on year to 68,400 units, with share of BEVs at 17%, and BEVs plus plug-in hybrids at 25%. "Given the 2H severe earnings challenges, investors are likely to remain cautious on Mercedes-Benz Group (and the overall sector), unless they have more visibility on cost actions." Citi rates Mercedes stock at neutral with a 42 euro target price. Shares closed at 39.83 euros. (dominic.chopping@wsj.com)
0522 GMT - Gland Pharma is likely benefiting from deepening ties with China's Shanghai Fosun Pharmaceutical, which center around four priorities, Nomura analysts say in a research report. One is contract development and manufacturing organization contracts that use Gland Pharma's large injectable capacity, the analysts say. Others are: joint business development between Gland Pharma and subsidiary Cenexi; the Indian pharmaceutical company's entry into biologics drug substances and products; and its sourcing innovation assets. Nomura raises the stock's target price to 3,750.00 rupees from 3,330.00 rupees to reflect a valuation roll-forward, with an unchanged buy rating. Shares are 0.7% lower at 3,130.55 rupees.(ronnie.harui@wsj.com)
0506 GMT - LG Electronics could continue to grow earnings despite challenges from sluggish demand, higher raw-material and logistics costs amid geopolitical tensions, Nomura analysts Eon Hwang and YJ Kim say. The analysts expect the South Korean consumer-electronics giant to remain profitable, supported by restructuring efforts and the expansion of new businesses, including AI data-center chillers. They expect the company's standalone operating profit to jump 90% to 3.4 trillion won in 2026 and rise 6.3% to 3.6 trillion won in 2027. Citi downgrades the stock to neutral from buy, saying growth in the new AI data-center chiller business has been largely priced into its recent rally, but raises its target price to 200,000 won from 160,000 won. Shares are last 3.1% lower at 201,500 won.
Comments