Speaker 1: Bloomberg Audio Studios, podcasts, radio News.
Speaker 2: The Stock Movers Report, your roundup of companies making moves
Speaker 2: in the stock market, harnessing the power of Bloomberg Data.
Speaker 3: Let's take a look at some stocks on the move
Speaker 3: today in Europe. I'm Stephen Carroll with Lizzie Burton, and
Speaker 3: we're joined by Bloomberg's Breaking News editor Louise Moon. Louise,
Speaker 3: good morning. Let's start with defense shares then in Europe
Speaker 3: lower after Deutsche Bank down grade. How are the likes
Speaker 3: of BA Systems faring?
Speaker 1: Yeah, exactly. So this is a note from Deutsche Bank
Speaker 1: targeting three main defense stocks. We've got BA Systems, Tallis
Speaker 1: and Leonardo. So they've this analysis cut the ratings across
Speaker 1: the board from a buy to a hold. Now this
Speaker 1: isn't necessarily saying that, you know, the defense sector as
Speaker 1: a whole isn't fairing as well. It's given kind of
Speaker 1: individual reasons for the different stocks. So for BAE, they
Speaker 1: say they're likely to beat their for your expectations, that
Speaker 1: they're noting what they call disappointing time margins, and they've
Speaker 1: also noted affordability concerns in the UK and the US markets.
Speaker 1: For Leonardo, for example, they say there's not much upside
Speaker 1: the stock, they're saying doesn't deserve a premium compared to
Speaker 1: other defense stocks just yet. And fora Taala's, they say
Speaker 1: there's an absence of imminent catalysts, so more uncertainties, particularly
Speaker 1: around the French defense budget. They say they're lagging in
Speaker 1: their cyber unit. So some individual reasons that they're pulling
Speaker 1: down these ratings for the different for the different defense stocks.
Speaker 1: If you look at them on a more kind of
Speaker 1: a wider basis, if you look at the analyst ratings,
Speaker 1: most of them are still they do still have a
Speaker 1: majority of buy ratings. But interestingly, there have been a
Speaker 1: couple of downngrades across the board over the past few
Speaker 1: months or so. We'll be keeping an eye on those.
Speaker 1: But obviously this is coming after defense has enjoyed a
Speaker 1: huge rally on the back of this rise in spending.
Speaker 1: So yeah, an interesting note there from deutsch Bank.
Speaker 4: And yet still perhaps surprising given the geopolitical cubult with
Speaker 4: which we've started twenty twenty six. I want to turn
Speaker 4: to a very different sector, and that is because Diagio,
Speaker 4: I'm going to say the script says could be thirsty
Speaker 4: for an asset sale. I'll tell us Rollery.
Speaker 2: Yeah.
Speaker 1: So Diagio obviously the drinks giant in the UK, reviewing
Speaker 1: options for their China assets and potentially that could include
Speaker 1: a sale. So this is a Boomberg exclusive this morning.
Speaker 1: They're working with Goldman and Ubs. They're essentially kind of
Speaker 1: sounding out local buyers and private excy firms and obviously
Speaker 1: no certainty a deal or any deal will come about,
Speaker 1: but this is what's being spoken about. One of their
Speaker 1: biggest assets over in China is a company called Suchuan
Speaker 1: Swell Fung. They're known that they're listed already in Shanghai.
Speaker 1: They're known in particular for bai Joh, which is a
Speaker 1: Chinese liquor and one of the kind of drinks big
Speaker 1: drinks companies in China. They've got a current market valuation
Speaker 1: of about two point seven billion, so a big company.
Speaker 1: You know, if this resulted in a sale, potentially some
Speaker 1: big sums. They're for Yagio, And it kind of comes
Speaker 1: in the context of two main reasons. So you know, firstly,
Speaker 1: a lot of international brands are pulling out or reviewing
Speaker 1: their portfolios in China. There's a lot more domestic and
Speaker 1: growing domestic competition there. So, for example, Starbucks sold their
Speaker 1: majority stake in their business relatively recently, and then on
Speaker 1: theago's side, they've also globally been trimming down their portfolios.
Speaker 1: So for example, they recently sold their arm, their East
Speaker 1: African brewery arm that as there. You know, drinking habits
Speaker 1: are changing. They're also struggling to get consumers to buy
Speaker 1: more expensive drinks, so trading up and so their strategy
Speaker 1: is to trim down and focus on their call. They've
Speaker 1: got a new CEO that started this month and he's
Speaker 1: known for having in the past turn Tesco around, so
Speaker 1: he's kind of been tasked. We're turning the Iago around.
Speaker 1: So yeah, the latest news is that they're reviewing options
Speaker 1: for their China assets. We'll be keeping an eye to
Speaker 1: see if and when this results in any sort of sale.
Speaker 3: Okay, and news too from Raspberry Pie and the UK
Speaker 3: shares hitting a record low earlier.
Speaker 1: What's yeah, so shares slumping below the IPO price. So
Speaker 1: Rasbery probably became known for listing in twenty twenty four
Speaker 1: as at the time one of the few companies that
Speaker 1: was listing in London's they're obviously the computer maker so
Speaker 1: they had strong results, but this is being kind of
Speaker 1: overshadowed by, at the same time, a warning saying that
Speaker 1: the rapid increase in costs of a certain type of
Speaker 1: memory chip is well, costs are increasing, this could potentially
Speaker 1: weigh on the company. More supplies obviously being funneled into
Speaker 1: other things as demand increases, like AI data centers. So
Speaker 1: they're saying they have enough to meet demand in the
Speaker 1: first half, but visibility in the second half is limited.
Speaker 1: So yeah, as I say, record record low for them.
Speaker 1: Shares slumped around ten percent this morning.
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