WEBVTT - BAE Systems Slides, Diageo Up, Raspberry Pi Slumps

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio 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 stocks on the move

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<v Speaker 3>today in Europe. I'm Stephen Carroll with Lizzie Burton, and

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<v Speaker 3>we're joined by Bloomberg's Breaking News editor Louise Moon. Louise,

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<v Speaker 3>good morning. Let's start with defense shares then in Europe

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<v Speaker 3>lower after Deutsche Bank down grade. How are the likes

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<v Speaker 3>of BA Systems faring?

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<v Speaker 1>Yeah, exactly. So this is a note from Deutsche Bank

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<v Speaker 1>targeting three main defense stocks. We've got BA Systems, Tallis

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<v Speaker 1>and Leonardo. So they've this analysis cut the ratings across

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<v Speaker 1>the board from a buy to a hold. Now this

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<v Speaker 1>isn't necessarily saying that, you know, the defense sector as

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<v Speaker 1>a whole isn't fairing as well. It's given kind of

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<v Speaker 1>individual reasons for the different stocks. So for BAE, they

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<v Speaker 1>say they're likely to beat their for your expectations, that

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<v Speaker 1>they're noting what they call disappointing time margins, and they've

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<v Speaker 1>also noted affordability concerns in the UK and the US markets.

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<v Speaker 1>For Leonardo, for example, they say there's not much upside

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<v Speaker 1>the stock, they're saying doesn't deserve a premium compared to

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<v Speaker 1>other defense stocks just yet. And fora Taala's, they say

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<v Speaker 1>there's an absence of imminent catalysts, so more uncertainties, particularly

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<v Speaker 1>around the French defense budget. They say they're lagging in

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<v Speaker 1>their cyber unit. So some individual reasons that they're pulling

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<v Speaker 1>down these ratings for the different for the different defense stocks.

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<v Speaker 1>If you look at them on a more kind of

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<v Speaker 1>a wider basis, if you look at the analyst ratings,

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<v Speaker 1>most of them are still they do still have a

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<v Speaker 1>majority of buy ratings. But interestingly, there have been a

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<v Speaker 1>couple of downngrades across the board over the past few

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<v Speaker 1>months or so. We'll be keeping an eye on those.

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<v Speaker 1>But obviously this is coming after defense has enjoyed a

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<v Speaker 1>huge rally on the back of this rise in spending.

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<v Speaker 1>So yeah, an interesting note there from deutsch Bank.

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<v Speaker 4>And yet still perhaps surprising given the geopolitical cubult with

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<v Speaker 4>which we've started twenty twenty six. I want to turn

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<v Speaker 4>to a very different sector, and that is because Diagio,

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<v Speaker 4>I'm going to say the script says could be thirsty

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<v Speaker 4>for an asset sale. I'll tell us Rollery.

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<v Speaker 2>Yeah.

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<v Speaker 1>So Diagio obviously the drinks giant in the UK, reviewing

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<v Speaker 1>options for their China assets and potentially that could include

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<v Speaker 1>a sale. So this is a Boomberg exclusive this morning.

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<v Speaker 1>They're working with Goldman and Ubs. They're essentially kind of

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<v Speaker 1>sounding out local buyers and private excy firms and obviously

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<v Speaker 1>no certainty a deal or any deal will come about,

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<v Speaker 1>but this is what's being spoken about. One of their

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<v Speaker 1>biggest assets over in China is a company called Suchuan

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<v Speaker 1>Swell Fung. They're known that they're listed already in Shanghai.

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<v Speaker 1>They're known in particular for bai Joh, which is a

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<v Speaker 1>Chinese liquor and one of the kind of drinks big

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<v Speaker 1>drinks companies in China. They've got a current market valuation

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<v Speaker 1>of about two point seven billion, so a big company.

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<v Speaker 1>You know, if this resulted in a sale, potentially some

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<v Speaker 1>big sums. They're for Yagio, And it kind of comes

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<v Speaker 1>in the context of two main reasons. So you know, firstly,

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<v Speaker 1>a lot of international brands are pulling out or reviewing

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<v Speaker 1>their portfolios in China. There's a lot more domestic and

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<v Speaker 1>growing domestic competition there. So, for example, Starbucks sold their

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<v Speaker 1>majority stake in their business relatively recently, and then on

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<v Speaker 1>theago's side, they've also globally been trimming down their portfolios.

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<v Speaker 1>So for example, they recently sold their arm, their East

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<v Speaker 1>African brewery arm that as there. You know, drinking habits

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<v Speaker 1>are changing. They're also struggling to get consumers to buy

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<v Speaker 1>more expensive drinks, so trading up and so their strategy

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<v Speaker 1>is to trim down and focus on their call. They've

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<v Speaker 1>got a new CEO that started this month and he's

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<v Speaker 1>known for having in the past turn Tesco around, so

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<v Speaker 1>he's kind of been tasked. We're turning the Iago around.

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<v Speaker 1>So yeah, the latest news is that they're reviewing options

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<v Speaker 1>for their China assets. We'll be keeping an eye to

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<v Speaker 1>see if and when this results in any sort of sale.

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<v Speaker 3>Okay, and news too from Raspberry Pie and the UK

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<v Speaker 3>shares hitting a record low earlier.

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<v Speaker 1>What's yeah, so shares slumping below the IPO price. So

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<v Speaker 1>Rasbery probably became known for listing in twenty twenty four

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<v Speaker 1>as at the time one of the few companies that

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<v Speaker 1>was listing in London's they're obviously the computer maker so

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<v Speaker 1>they had strong results, but this is being kind of

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<v Speaker 1>overshadowed by, at the same time, a warning saying that

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<v Speaker 1>the rapid increase in costs of a certain type of

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<v Speaker 1>memory chip is well, costs are increasing, this could potentially

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<v Speaker 1>weigh on the company. More supplies obviously being funneled into

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<v Speaker 1>other things as demand increases, like AI data centers. So

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<v Speaker 1>they're saying they have enough to meet demand in the

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<v Speaker 1>first half, but visibility in the second half is limited.

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<v Speaker 1>So yeah, as I say, record record low for them.

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<v Speaker 1>Shares slumped around ten percent this morning.

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<v Speaker 2>The Stock Mover's report from Bloomberg Radio. Check back with

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<v Speaker 1>Mm HM