Kier Share News (KIE)

* European turn negative after hitting July 25 high
* Defensive stocks under pressure; autos, banks gain
* STOXX 600 and FTSE down 0.3%; SMI down 0.4%, DAX down 0.1
* BAML starts coverage of airlines: IAG, Wizz, RyanAir, Air France top picks
* Ferguson top gainer on FTSE 100 after profit beat

Welcome to the home for real-time coverage of European equity markets brought to you by Reuters
stocks reporters and anchored today by Thyagaraju Adinarayan. Reach him on Messenger to share
your thoughts on market moves: rm://thyagaraju.adinarayan.thomsonreuters.com@reuters.net

LADIES AND GENTLEMEN, FASTEN YOUR SEAT BELTS (1001 GMT)
It's clear skies for airline shares to take off as cloudy macro economic conditions are seen
bottoming out in Europe, according to Bank of America Merrill Lynch.
BAML analysts turn "overweight" on the sector saying the sector has been priced for an
outright Euro area recession, which we think is unlikely.
The bank sees 18% outperformance for airlines by year-end, driven by positive Euro area PMI
momentum and mildly positive oil price momentum. European airlines trade at a significant
discount to other sectors and are sharply in negative territory this year. (see chart below)
Inline with the recent growth/value rotation theme, BAML is positive on all the battered
European sectors: airlines, mining and banks.
In individual airline stocks, BAML has a "buy" rating on easyJet, IAG,
Ryanair and Wizz Air as it believes Brexit should not disrupt air traffic
rights.
The bank has an "underperform" rating on Lufthansa citing a tough domestic market
and high pensions.


(Thyagaraju Adinarayan)
*****

HOT AUTUMN: A WAVE OF 2020 PROFIT DOWNGRADES IN STORE? (0939 GMT)
The macro in Europe has been very bad and while 2019 profit forecasts have been downgraded
aggressively, 2020 forecasts are largely untouched - pointing to growth of more than 9%.
Is that a realistic number?
Probably not and a string of warnings from the likes of IAG, Pearson,
Imperial Brands, Salzgitter, Dixons, Pendragon and Kier
over the last few weeks may be a sign of what's in store.
It may be that before taking the axe, analysts are waiting for companies to change their
guidance during the upcoming Q3 reporting season.
"Analysts are usually slow to adapt forecasts to macroecomic data. They wait for clear
signals from management, hence they have barely touched FY20 estimates," says Stephane Ekolo,
strategist at Tradition in London.
"For the EU space, I believe that the cut should be material. Soft data (PMIs) momentum
keeps deteriorating and ... plenty of profit warnings across sectors underline how trading
environment is getting more difficult," he adds.
In the chart you can see the stark contast between the steadily downgraded 2019 earnings
forecasts and 2020's for the STOXX 600 pan-European index.

(Danilo Masoni)
*****

OPENING SNAPSHOT: RISK ON! (0735 GMT)
There are solid gains across indices driven by trade-sensitive autos and tech as investors
hope for progress in U.S.-China trade deal when the two countries meet for talks next week.
The pan-European STOXX 600 is up 0.4% and is just shy of hitting its highest levels
in nearly 1-1/2 years.
Tech stocks are mainly boosted by Apple component suppliers after Apple's Tim Cook
told a German newspaper that sales of the company's newest iPhones were off to a strong start.
STMicro, Dialog Semi, Infineon, AMS and ASML
all up 1%-2%.
AMS is under particular scrutiny as its near $5 billion takeover offer for German lighting
company Osram Licht that trumped one from private equity investors expires today.
Airlines are gaining altitude after BAML initiated coverage with a bullish view on British
Airways owner IAG, Ryanair, Wizz Air and Air France, saying
"Brexit should not disrupt air traffic rights", according to traders. The brokerage started
Lufthansa and Norwegian Air with an "underperform" rating.
BAML says: "Good time to gain exposure to high-quality airlines with strong balance sheets."
In single stocks, Ferguson is the top gainer on the FTSE 100 and STOXX 600
indices after the plumbing parts distributor reported better-than-expected profits.



(Thyagaraju Adinarayan)
*****

ON OUR RADAR: TECH, GREGGS, DEUTSCHE POST, CREDIT SUISSE (0653 GMT)
Stock futures indicate a higher open for Europe as investors back risky assets underpinned
by hopes that there would be no further escalation in U.S.-China trade tensions. The world's top
two economies will be back at the negotiating table next week to restart talks.
European markets are seen up 0.2% to 0.4% buoyed by strong gains in Wall Street and Asia,
driven by the tech sector.
Shares of European iPhone component suppliers STMicro, Dialog Semi,
Infineon, AMS could get a nice boost from Apple's overnight rally
after report sales of the company's newest iPhones were off to a strong start.
In other company news, British baker and takeaway food group Greggs is seen rising
1%-3% after it reported another strong quarter with company-managed shop like-for-like sales
rising 7.4% in the 13 weeks to Sept. 28.
Credit Suisse shares are rising 0.4% in premarket trade after CEO Tidjane Thiam
gets a clean chit in an internal investigation into the botched surveillance of the bank's
former wealth management head Iqbal Khan in a probe that cost Chief Operating Officer
Pierre-Olivier Bouee??????? his job.
DHL owner Deutsche Post set new profit targets and said it would invest heavily
in areas like warehouse automation and analytics as it seeks to keep up with fast-growing
ecommerce. One dealer says the targets are in-line, "but would have hoped for more ambition".
Dealers see the shares coming under a bit of pressure.
UK plumbing parts distributor Ferguson seen up 1%-2% after reporting profits
slightly ahead and boosting dividend, while shares of upholstery and flooring provider SCS Group
are seen down 5% after it said it had a challenging start to the year. The statement
may kindle worries about Brexit uncertainty on consumer spending.
Swiss chemical company Clariant is likely to move on its updated financial outlook.
In broker research, British Airways owner IAG, Air France and Wizz Air
could fly higher after Bank of America Merrill Lynch start coverage with a "buy"
rating. The bank is bearish on Lufthansa, starting with "underperform".

Key headlines:
Credit Suisse clears CEO in spying probe, COO Bouee to go
Deutsche Post plans new investment as ecommerce booms
Thyssenkrupp appoints new CEO in bid to rebuild confidence
Mediaset debt rises as pan-European growth kicks in
Italy's Generali pulls out from race for bancassurance partnership BBVA - press???????

British baker Greggs sees sales growth slow in latest quarter
AstraZeneca's combo lung disease therapy falls short of FDA approval

(Thyagaraju Adinarayan)
*****

MORE GAINS, TECH IN FOCUS (0535 GMT)
European stocks are seen opening higher as worries over further escalation in U.S.-China
trade tensions abate as the world's top economies are scheduled to restart trade negotiations.
Positive vibes from Wall Street's rally overnight is set to fuel gains in the pan-European
STOXX 600 index, which ended Monday at its highest closing level since May 2018.
U.S. tech sector drove Wall Street higher with record highs now within striking distance.
Apple shares were in spotlight after CEO Tim Cook told a German daily that sales of the
company's newest iPhones were off to a strong start.
Apple suppliers in Europe could potentially rally on the strong iPhone sales report.
Financial spreadbetters IG expect London's FTSE to open 19 points higher at 7,427,
Frankfurt's DAX to open 55 points higher at 12,483, and Paris' CAC to open 13 points higher at
5,691.
Our wrap-up on Q3: Global stocks stalled in Q3 as bonds boom and dollar zooms

(Thyagaraju Adinarayan)
*****


(Reporting by Danilo Masoni, Joice Alves, Josephine Mason, Julien Ponthus and Thyagaraju
Adinarayan)