The latest Market Talks covering Equities. Published exclusively on Dow Jones Newswires throughout the day.
0828 GMT - NatWest still has sector-leading fundamentals despite warning of a flatter net interest margin in 2027, Barclays analyst Aman Rakkar writes. The lower net interest margin outlook for the British bank is disappointing, but Friday's 8.8% share price fall was overdone, especially given likely underlying estimate revisions, Rakkar says. The bank has strong fundamentals, including delivery of around 20% return on tangible equity, strong revenue growth and a double-digit cash return yield. The bank trading at an around 20% discount to European peers is "hard to justify," especially as the U.K.'s bank tax will now be lower than feared. Shares are up 0.3%. (michael.hennessey@wsj.com)
0822 GMT - European stock indexes are mostly lower at the open, as investors recalibrate after a strong week for the continent last week. Healthcare stocks lead fallers as the continent-wide Stoxx 600 drops 0.3%. London's FTSE 100 is 0.4% lower, dragged by falling oil majors and a 1.2% drop for AstraZeneca. The German DAX drops 0.2%, dragged by 1.8% fall for Bayer. In Paris, the CAC 40 loses 0.3% as luxuries weaken, with Gucci-owner Kering falling 1.9%. A positive open for banks help indexes in Italy and Spain, with the FTSE MIB and IBEX 35 up 0.15% and 0.5%, respectively. The Dutch AEX edges 0.1% lower. (josephmichael.stonor@wsj.com)
0821 GMT - Cnooc's H shares remain undervalued and offer a 2026 dividend yield above 6%, Morningstar's Chokwai Lee says in a note. The Chinese oil and gas producer recorded strong results for the first nine months of the year, supported by high oil prices, while its expansion strategy remains intact with a disciplined approach to overseas growth, Lee says. Net production was in line with expectations, and Cnooc remains cost competitive, Lee adds. Supply disruptions to energy is expected to continue into 2027, supporting elevated oil and gas prices in the near term, Lee says. Morningstar retains its fair-value estimate for A shares at 28.00 yuan but raises it to HK$33.00 from HK$32.00 for H shares, reflecting the Chinese yuan's appreciation. The H shares close at HK$24.52. (kimberley.kao@wsj.com)
0819 GMT - China Life Insurance's new business value growth in the nine months ended September remains a key bright spot despite the insurer's net profit missing estimates, says DBS Group Research's Ken Shih in a note. The insurer's new business value managed to maintain solid growth of around 13% on year despite the overall industry's decline, the analyst notes. The company is confident in its 2027 new business value growth outlook, citing the bancassurance channel's potential mid-to-long-term growth, he adds. Still, DBS cuts its 2026-2027 earnings projections by 20%-34% after the lower-than-expected net profit. The bank therefore trims its target price to 36.50 Hong Kong dollars from HK$38.00 but maintains a buy rating. Shares closed 3.85% higher at HK$24.80. (megan.cheah@wsj.com)
0815 GMT - European energy majors start the week lower after oil prices drop nearly 3%. Renewed diplomatic efforts to end the conflict between the U.S. and Iran have helped ease supply concerns. Brent crude futures for January delivery fall 2.85% to $110.23 a barrel, while U.S. West Texas Intermediate futures for December delivery drop 3.3% to $100.72 a barrel. This pulls BP down 2.4% and Shell 1.3% lower. Spain's Repsol falls 1.5% while France's TotalEnergies slides 1%. (adam.whittaker@wsj.com)
0810 GMT - Singapore investors have more riding on this week's U.S. midterms than most, with eToro data showing that at 60%, their U.S. stock holdings are well above the 43% global average, says analyst Zavier Wong. It's no surprise that more than half have already adjusted or plan to adjust their portfolios based on what they expect from the election, he adds. Buying more stocks is the most common move at 35%, while 32% are adding to cash. "The vote will mostly reach them through Treasury yields," Wong says. The Fed hiked in September and held last week, and the 10-year yield has been above 5%, so the market will read the result for what it means for spending and deficits. (fabiana.negrinochoa@wsj.com)
0808 GMT - Ryanair Holdings will take a margin hit from an increase in jet fuel prices, but the company can continue to prosper over the medium term thanks to its low cost base and strong balance sheet, Davy Research's Stephen Furlong and Ava Costello say in a research note. While its outlook is clouded by fuel, the Irish budget-carrier group could endure some short-term pain for the long-term gain, the analysts say. "If anything, the current dislocation in the market could make medium-term targets more achievable," they add. Shares rise 1.8%. (adria.calatayud@wsj.com)
0806 GMT - Spain's Repsol will get a boost from elevated refining margins into 2027 that will likely drive consensus estimates higher, Berenberg analysts write. This could then drive another strong year for shareholder distributions, they say. The analysts raise their 2027 refining indicator margin estimate to $15 a barrel from $12, which drives an 11% increase in the bank's adjusted net income estimate. Shares fall 1.2% to 30.35 euros.(adam.whittaker@wsj.com)
0802 GMT - Boohoo looks set to deliver growth following a period of restructuring and deleveraging, analysts at RBC Capital Markets say. "The competitive advantages of the Debenhams marketplace are underappreciated," Richard Chamberlain and Manjari Dhar write in a note. The company has potential to deliver strong pretax profit growth and cash generation in the coming years, they add. "We think the shares have become more investable," the analysts say. RBC upgrades the stock to outperform from underperform. Shares closed at 25.5 pence on Friday. (andrea.figueras@wsj.com)
0754 GMT - Ryanair Holdings is set to face headwinds from fuel costs in fiscal 2028, but its plans for stock buybacks of 800 million euros could outweigh them, RBC Capital Markets' Ruairi Cullinane says in a research note. The Irish airline group is reviewing all costs given that current forward prices point to a 2 billion-euro increase in fuel costs in fiscal 2028, ahead of consensus expectations of 1 billion euros, according to RBC. While fuel prices are a risk to consensus expectations, the market probably anticipated this risk, the analyst says. Meanwhile, quarterly results that were broadly as expected and a new buyback that represents 3%-4% of Ryanair's market value should be well-received, he adds. (adria.calatayud@wsj.com)
0753 GMT - Ryanair's better pricing outlook for winter combined with a new buyback should give shares a lift despite the challenge of fuel prices, J.P. Morgan says in a research note. JPM expects the Irish airline group to raise fares by at least a mid-teen percentage to offset the additional 2 billion-euro fuel bill, but near-term pricing should soothe the market since it indicates that underlying demand is strong enough to allow Ryanair to at least partially offset the current outlook on forward pricing. Ryanair could get some additional pricing power into next year if other airlines need to reduce capacity further, the analysts say. (sarah.sloat@wsj.com)
0749 GMT - NatWest Group's share price decline is overdone, but the bank's net interest margin expansion will be muted, Berenberg's Michael Christodoulou writes. The British bank's new guidance forecasts a broadly stable net interest margin for both the fourth quarter and for 2027. This seems to reflect the bank's plan to increase business volumes, coupled with lower margins, Berenberg writes. As a result, net interest income will continue to grow but margin expansion will be limited, the analyst says. Berenberg cuts its outer-year earnings per share estimates by between 5% and 7% to reflect NatWest's margin outlook and the higher U.K. surcharge tax rate. Despite this, Berenberg says the stock is still cheap. Shares closed 8.8% lower at 579.60 pence on Friday.
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