WEBVTT - Schneider Down, Hermès Dips, Telefonica Up 

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<v Speaker 1>Bloomberg Audio Studios.

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<v Speaker 3>News.

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<v Speaker 2>The Stock Movers Report. Your roundup of companies making moves

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<v Speaker 2>in the stock market. Harnessing the power of Bloomberg data.

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<v Speaker 3>Let's take a look at some of the stocks on

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<v Speaker 3>the move today in Europe. I'm Tiwa Adebayo with Stephen Carroll,

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<v Speaker 3>and we're joined by Bloomberg reporter Louise Moon. Louise, first

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<v Speaker 3>up is Schneider Electric. It's down today. What is driving

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<v Speaker 3>that move?

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<v Speaker 4>So, it's the latest M &amp; A deal from Schneider. So,

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<v Speaker 4>shares down over 8%, almost 9% this morning. They're buying PTC,

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<v Speaker 4>which is a US-based engineering software developer. The deal is

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<v Speaker 4>for more than $ 20 billion, and that's a 40% premium

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<v Speaker 4>to PTC's previous closing price. So, quite a big jump there.

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<v Speaker 4>Expected to close later this year in the third quarter.

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<v Speaker 4>And it's the latest acquisition for Shida. It's been growing

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<v Speaker 4>via M &amp; A, particularly with tech firms. But as

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<v Speaker 4>I say, shares down. It's a big price tag, one factor.

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<v Speaker 4>There was also a note from Bloomberg Intelligence saying that

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<v Speaker 4>there's a big hurdle of execution of the deal and integration.

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<v Speaker 1>So, shares down, being pulled down on those two factors. Okay.

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<v Speaker 2>So, that's Schneider Electric and that's weighing on the whole

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<v Speaker 2>French market this morning.

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<v Speaker 1>Next, Louise, we're looking at Hermes shares.

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<v Speaker 4>Yes, also down, but less so, down about 2%. They've

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<v Speaker 4>been hit with their first sell ratings in over a year. So,

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<v Speaker 4>that's from Goldman and from UBS. So, it now has

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<v Speaker 4>two sell ratings, those ones, and it compares to 16 buys.

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<v Speaker 1>So, quite an outlier there.

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<v Speaker 4>They're saying that they expect it to continue to underperform. So,

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<v Speaker 4>to continue to have more muted top-line growth than investors

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<v Speaker 4>have currently expected.

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<v Speaker 1>Priced in. The analysts are saying.

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<v Speaker 4>That they're saying it's clearly that their historical double-digit year-on-year

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<v Speaker 4>growth has clearly come to a halt. This is on

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<v Speaker 4>the back of kind of wider weakness in luxury, also

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<v Speaker 4>in non-leather categories. Hermes is also very exposed to aspirational customers.

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<v Speaker 4>There's the cost of living aspect there. So, first sale

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<v Speaker 4>ratings in over a year and that's weighing on their shares.

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<v Speaker 3>I wonder if it's got anything to do with the

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<v Speaker 3>perceived overexposure of the Birkin bag. A really interesting column

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<v Speaker 3>from Bloomberg's Andrea Felstead recently saying that Hermes should make

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<v Speaker 3>it even harder to get a Birkin. So, that's the

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<v Speaker 3>latest with Hermes. But lastly, Telefonica is up so far

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<v Speaker 3>in this session.

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<v Speaker 1>Give us an idea of what's driving those moves.

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<v Speaker 4>Yes.

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<v Speaker 1>Up just over 1%. It It's an interesting one. It's

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<v Speaker 1>very exposed to Brazil.

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<v Speaker 4>So, Telefonica, as well as Santander, Carrefour, all rising up

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<v Speaker 4>over about 1%. They all generate more than about 20%

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<v Speaker 4>of their revenue in Brazil. Now, this is on the

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<v Speaker 4>back of news that Bolsonaro surged to a surprise lead

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<v Speaker 4>in the first round of Brazil's presidential election. And he

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<v Speaker 4>would obviously take things more to the right. He's seen

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<v Speaker 4>as more market-friendly, likely to address Brazil's deteriorating fiscal situation.

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<v Speaker 1>So, Brazil assets are also expected to jump when they

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<v Speaker 1>open later today.

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<v Speaker 4>And it's feeding through into European-listed assets that are exposed

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<v Speaker 4>to Brazil. So, Telefónica, Santander, Carrefour being three of the

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<v Speaker 4>main ones. There are others as well. But all of those,

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<v Speaker 4>they're exposed to Brazil. And that is boosting their shares

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<v Speaker 4>in more interest.

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