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Page 1: Please find our Research on Bloomberg BRYG … · Please find our Research on Bloomberg BRYG ) ... CAPGEMINI BUY EUR42 ... Revenues from Oracle’s “engineered systems”

Please find our Research on Bloomberg BRYG <GO>)

19th December 2012 BG’s Wake Up Call

Last

close Daily chg

(%)

Chg YTD

(%) Indices

Dow Jones 13350.96 +0.87% +9.28%

S&P 500 1446.79 +1.15% +15.04%

Nasdaq 3054.53 +1.46% +17.25%

Nikkei 10160.4 +2.39% +17.36%

Stoxx 600 280.463 +0.46% +14.69%

CAC 40 3648.63 +0.29% +15.47%

Oil /Gold

Crude WTI 87.97 +0.73% -11.17%

Gold (once) 1692.34 -0.26% +7.48%

Currencies/Rates

EUR/USD 1.3213 +0.39% +1.78%

EUR/CHF 1.20665 -0.12% -0.60%

German 10 years 1.397 +1.92% -23.58%

French 10 years 2.04 +1.50% -35.56%

Euribor 0.184 0.00 -86.43%

Economic releases :

Date

19-Dec JPY - Bank of Japan Rate Decision (0,10% exp.)

DE - German IFO Business Climate Dec. (102 exp. 101.4

prev.)

DE - German IFO Expectations Fec. (96.4 exp. 95.2

prev)

US - Housing building permits Nov. (875K exp)

US - Housing starts Nov. (871K exp)

US - Housing starts MoM (-2.5% exp.)

Upcoming BG events :

Recent reports :

Date

12-Dec Luxury Goods Better news from China!

11-Dec Bureau Veritas Visibility and growth (coverage

initiated BUY, FV EUR95)

4-Dec Consumer Durables : Time to take a closer look at

emerging markets (Essilor, Luxottica)

29-Nov HEINEKEN (BUY, FV EUR60 vs. EUR48) Earning its

stripes

28-Nov Diagnostic : Transition achieved! Now It’s all about

growth

15-Nov Materials : US: an ongoing recovery in housing but

don't expect too much from infrastructures…

IT SOFTWARE & SERVICES

Oracle's Q2 FY13 results: positive read-across for European Software vendors

Yesterday evening Oracle reported Q2 FY13 earnings (FYE 31st May) slightly above

consensus average and company guidance, and announced an encouraging guidance for

Q3 FY13. We view these numbers as a positive read-across for European Software

companies, so we expect positive share price reactions – even though we need to

monitor more closely Oracle’s claimed market share gains against SAP in Europe.

In brief...

AXA, Rating downgraded 1 notch to A+ by S&P, stable outlook

S&P has downgraded AXA’s rating from AA- to A+, with a stable outlook.

GLAXOSMITHKLINE, Anoro Ellipta filed in the US

Unlike dolugretavir, which was filed yesterday in the US, Europe and Canada but we did not

comment upon although it is a clear opportunity for ViiV Healthcare (cf. our Daily after the R&D

update), the filing of Anoro Ellipta announced yesterday for the US is more relevant than it may look.

HOLCIM, Good performance potential in 2013!

In 2012, Holcim’s share price lagged behind both Lafarge and Heidelbergcement. Holcim is up 15%

relative to the DJSTOXX Construction Materials whereas it is +51% for Lafarge and +19% for

Heidelbergcement. We believe Holcim should post a decent performance in 2013 driven not only by

its cost-cutting programme, “leadership journey”, but also given its superior geographical mix.

LVMH, Illness forces LV CEO to quit and Michael Burke steps into new CEO role at Louis

Vuitton

LVMH announced yesterday that Jordi Constans is leaving Louis Vuitton where he had been CEO

since November 2012. He joined LV in February 2012 having been Executive-VP of Danone’s fresh

dairy products. His departure is due to ill health which prevents him from carrying out this

demanding job.

MERCK KGAA, Stimuvax did not meet its primary endpoint in START

Merck KGaA announced this morning that the phase III START trial studying Stimuvax in patients with

unresectable, locally advanced stage IIIA or IIIB non small cell lung cancer (NSCLC) did not meet its

primary endpoint to demonstrate a statistically significant improvement in overall survival. The

complete results of the study will be presented during a future scientific congress.

SHIRE PLC, Positive outcome from the European Decentralised Procedure for Elvanse

Yesterday, Shire announced a “positive outcome” from the European Decentralised Procedure for

Elvanse known as Vyvanse in the US in the Attention Deficit Hyperactivity Disorder indication.

Technical Analysis :

BG Hotels chart #6 : Business Confidence Index Consolidation that sounds better for Revpar

prospects?

19/12/12

D J F M A M J J A S O N D

230

235

240

245

250

255

260

265

270

275

280

285

STOXX EUROPE 600 E - PRICE INDEX

MAV 50D MAV 200D Source: Thomson Reuters Datastream

Page 2: Please find our Research on Bloomberg BRYG … · Please find our Research on Bloomberg BRYG ) ... CAPGEMINI BUY EUR42 ... Revenues from Oracle’s “engineered systems”

BG’s Wake Up Call

19 December 2012 2

Sector View

IT Software & Services Oracle's Q2 FY13 results: positive read-across for European Software vendors

1 M 3 M 6 M 31/12/11

Softw.& Comp. SVS 8.2% 7.8% 26.5% 41.4%

DJ Stoxx 600 6.2% 1.5% 14.3% 14.2%

*Stoxx Sector Indices

Companies covered

ALTEN BUY EUR29

Last Price EUR26.62 Market Cap. EUR862m

ALTRAN TECHNOLOGIES BUY EUR5.9

Last Price EUR5.3 Market Cap. EUR767m

ATOS NEUTRAL EUR56

Last Price EUR53.57 Market Cap. EUR4,562m

CAPGEMINI BUY EUR42

Last Price EUR33.625 Market Cap. EUR5,440m

DASSAULT SYSTEMES NEUTRAL EUR83

Last Price EUR84.21 Market Cap. EUR10,488m

GROUPE STERIA BUY EUR14

Last Price EUR14.395 Market Cap. EUR445m

INDRA SISTEMAS SELL EUR8.2

Last Price EUR9.401 Market Cap. EUR1,543m

SAGE GROUP NEUTRAL 320p

Last Price 290.9p Market Cap. GBP3,508m

SAP BUY EUR62

Last Price EUR61 Market Cap. EUR74,929m

SOFTWARE AG SELL EUR28

Last Price EUR32.635 Market Cap. EUR2,834m

SOPRA GROUP BUY EUR48

Last Price EUR44.005 Market Cap. EUR523m

SWORD GROUP CORPORATE EUR17

Last Price EUR12.59 Market Cap. EUR117m

TEMENOS GROUP SELL CHF12

Last Price CHF15.55 Market Cap. CHF1,120m

Yesterday evening Oracle reported Q2 FY13 earnings (FYE 31st

May) slightly above consensus

average and company guidance, and announced an encouraging guidance for Q3 FY13. We view

these numbers as a positive read-across for European Software companies, so we expect positive

share price reactions – even though we need to monitor more closely Oracle’s claimed market

share gains against SAP in Europe.

ANALYSIS

• Oracle earnings slightly above consensus and company guidance. For its quarter ended

30th

November 2012, Oracle reported non-GAAP EPS up 18% to USD0.64 or slightly above

company guidance (USD0.59-0.63) and 5% ahead of the consensus average (USD0.61). Sales

were up 5% at cc to USD9.09bn, at the top-end of the guidance range (+1%/+5% at cc) and 1%

above the consensus average (USD9.01bn). New licence sales and cloud subscriptions grew by

18% at cc (vs. a +6%/+16% guidance range), with Applications, Middleware and Database up

double-digit (more than +30% on Applications). New licence sales and cloud subscriptions were

up 22% at cc (vs. +16% in Q1 FY13) in the Americas, up 12% at cc (vs. +1% in Q1 FY13) in EMEA,

and up 13% at cc (vs. +12% in Q1 FY13) in Asia Pacific, with positive impacts from the RightNow

and Taleo acquisitions, and market share gains in Europe against SAP. On its side, Hardware

sales fell 16% at cc (guidance: -18%/-8% at cc). Q3 FY13 guidance (February 2013 quarter) looks

encouraging, with Oracle expecting total sales up 2-6% at cc, with new licence sales up 4-14% at

cc, hardware sales at -10%/0% at cc, and non-GAAP EPS at USD0.64-0.68.

• Good execution. Oracle continues to execute well, although market conditions remained

difficult. The wave of new product launches (engineered systems, Oracle Fusion Applications,

new databases, Oracle Cloud) offers new opportunities for customers to buy Oracle software to

improve their performance. Revenues from Oracle’s “engineered systems” (Exadata, Exalogic,

Exalytics, Big Data Appliance…) continued to grow significantly (+70% quarter-over-quarter on

unit bookings, Exadata units doubling quarter-over-quarter). Oracle’s Cloud SaaS business is

approaching the USD1bn annual revenue run rate, essentially driven by ERP, HCM and CRM

applications, while Oracle looks to regain positive momentum in Europe thanks to Fusion

applications despite strong pressure on deal conversion rates.

• Positive short-term read-across, market share gains have to be monitored closely. Oracle is

once again performing well despite the tough environment in Europe. As such, we consider this

publication is a positive for the sector as a whole and share price reactions are likely to be

positive for SAP, Dassault Systèmes, Sage, Software AG and Temenos. That said, Oracle’s better

momentum in Europe has to be monitored closely for SAP.

VALUATION

European Software companies are trading at est. 11.6x 2012 and 9.6x 2013 EV/EBIT multiples.

NEXT CATALYSTS

• Accenture’s Q2 FY13 results today after markets close.

• Tibco Software’s final FY12 results on 20th

December after markets close.

• SAP and Software AG may pre-announce FY12 results on 10th

or 11th

January 2013.

Analyst :

Gregory Ramirez

33(0) 1 56 68 75 91

[email protected]

Page 3: Please find our Research on Bloomberg BRYG … · Please find our Research on Bloomberg BRYG ) ... CAPGEMINI BUY EUR42 ... Revenues from Oracle’s “engineered systems”

BG’s Wake Up Call

19 December 2012 3

Insurance

AXA Rating downgraded 1 notch to A+ by S&P, stable outlook

Price EUR13.05 Fair Value EUR15.5 (+19%) BUY

Bloomberg CS FP

Reuters AXAF.PA

12-month High / Low (EUR) 13.2 / 8.8

Market Cap (EURm) 30,768

Avg. 6m daily volume (000) 8,587

1 M 3 M 6 M 31/12/11

Absolute perf. 13.5% 4.9% 34.3% 29.9%

Insurance 8.7% 6.4% 30.7% 32.3%

DJ Stoxx 600 6.7% 2.4% 14.8% 14.7%

2011 2012e 2013e 2014e

P/E 8.5x 6.9x 6.7x 6.3x

Div yield (%) 5.3% 5.8% 6.0% 6.3%

ANALYSIS

• S&P has downgraded AXA’s rating from AA- to A+, with a stable outlook.

• S&P highlighted AXA’s sensitivity to the economic and financial environment in the Eurozone

(no shit!), but it also recognised that the company has made strategic progress (plan “Ambition

AXA”) and reduced investment risks.

• This is not a total surprise, as the outlook had been negative since January 2012. The question

is: is S&P 1 year late? Other rating agencies may follow suit, as AXA is rated Aa3 with a negative

outlook by Moody’s and AA- with negative outlook by Fitch.

• The downgrade should have a minimum impact on AXA’s business, especially as it is mainly

retail-oriented.

• The good news is that the outlook is now stable, which means S&P does not plan any further

move in the foreseeable future.

• Allianz (AA) and CNP (A+) could be at risk as they have negative outlooks with S&P.

VALUATION

• Based on our current 2013 estimates, our SOTP valuation is EUR15.5.

• The stock is currently trading at a 13% discount on our 2012e P/NAV average.

NEXT CATALYSTS

• FY 2012 numbers on 21st February 2013.

Olivier Pauchaut, [email protected]

Healthcare

GlaxoSmithKline Anoro Ellipta filed in the US

Price 1,361p Fair Value 1530p (+12%) NEUTRAL

Bloomberg GSK LN

Reuters GSK.L

12-month High / Low (p) 1,508 / 1,318

Market Cap (GBP) 66,743

Avg. 6m daily volume (000) 8,367

1 M 3 M 6 M 31/12/11

Absolute perf. 3.3% -5.7% -6.4% -7.5%

Healthcare 5.0% 2.8% 10.4% 13.1%

DJ Stoxx 600 6.7% 2.4% 14.8% 14.7%

2011 2012e 2013e 2014e

P/E 11.8x 12.3x 11.1x 10.2x

Div yield (%) 5.5% 5.5% 5.9% 6.2%

ANALYSIS

• Unlike dolugretavir, which was filed yesterday in the US, Europe and Canada but we did not

comment upon although it is a clear opportunity for ViiV Healthcare (cf. our Daily after the R&D

update), the filing of Anoro Ellipta announced yesterday for the US is more relevant than it may

look.

• Anoro Ellipta is the brand name for the LABA/LAMA fixed-dose combination in the US and it has

long been a debate among the investment community as to whether GSK would be in a position

to file shortly with the FDA considering that Novartis suffered a delay of 2 years (additional trial

needed) until 2014. Although Andrew Witty reiterated several times his confidence in the product

and pointed out the differences to Novartis’s drug, it was never clearly said that the regulatory

process due to begin in December included the US in a first round. Now it is clear and GSK is

delivering on promises as the group has always stated that it had a true once-daily product. Filing

does not mean approval but GSK is now more than likely to have a head start with this

combination in the US, which is a key market historically for its Respiratory franchise (47% in 2012

estimated). Together with Relvar and the monotherapies, it will help the transition from an

Advair-dependent situation into a more diversified franchise, moreover considering that Advair is

not so quickly at-risk there.

• The situation in Europe will probably be significantly different. On one hand competition from

generics on Advair is likely to emerge sooner, and as soon as 2013; on the other hand, Novartis

will be a stronger competitor as it can build on its Xolair expertise but also may have a slight

calendar advantage with its LABA/LAMA combination by a few months.

• GSK’s respiratory franchise is strategic to the group (34% of ex-CH revenues and likely an even

greater part of the profits) and nervousness around it is logical. Nevertheless we are

considering that GSK is not in so bad a shape globally and that it should at least maintain its

positions although at the price of a lower profitability (wider range, profit-sharing with

partners, competition).

Eric Le Berrigaud, [email protected]

Page 4: Please find our Research on Bloomberg BRYG … · Please find our Research on Bloomberg BRYG ) ... CAPGEMINI BUY EUR42 ... Revenues from Oracle’s “engineered systems”

BG’s Wake Up Call

19 December 2012 4

Construction & Building Materials

Holcim Good performance potential in 2013!

Price CHF65.15 Fair Value CHF70 (+7%) BUY

Bloomberg HOLN VX

Reuters HOLZn.VX

12-month High / Low (CHF) 65.8 / 49.4

Market Cap (CHFm) 21,310

Avg. 6m daily volume (000) 741.0

1 M 3 M 6 M 31/12/11

Absolute perf. 7.0% 3.0% 30.4% 29.7%

Cons & Mat 10.2% 2.2% 17.2% 12.8%

DJ Stoxx 600 6.2% 1.5% 14.3% 14.2%

2011 2012e 2013e 2014e

P/E 20.0x 18.5x 14.6x 11.2x

Div yield (%) 1.5% 1.5% 1.8% 2.3%

ANALYSIS

• In 2012, Holcim’s share price lagged behind both Lafarge and Heidelbergcement. Holcim is up

15% relative to the DJSTOXX Construction Materials whereas it is +51% for Lafarge and +19%

for Heidelbergcement. We believe Holcim should post a decent performance in 2013 driven not

only by its cost-cutting programme, “leadership journey”, but also given its superior

geographical mix.

• The “leadership journey” savings should deliver in 2013. In 2012, Holcim’s “leadership

journey” was disappointing, in our view. We believe this was linked to implementation issues as

well as the late arrival of Bernard Fontana (who obviously needed time before making

decisions). Therefore, we are confident the group will deliver in 2013. As a matter of

comparison, in 2012 Lafarge delivered about 30% of its expected plan over 2012-15 (EUR400m

out of EUR1.3bn) whereas Holcim will only have delivered 12% (CHF120m out of CHF1.0bn).

• Holcim has the better mix of the sector as well as the status of best in class. The group’s

EBITDA exposure to Europe is limited to 22% compared to 31% and 40% for Lafarge and

Heidelbergcement respectively (incl. Eastern Europe). Emerging market exposure is also the

largest with 70% of group’s EBITDA compared to 66% and 52% for Heidelbergcement.

• Finally, the group has already announced the bad news related to asset depreciation on 17th

December. Holcim has already announced an asset depreciation of CHF410m whereas we still

don’t know how much the asset depreciation will be for Lafarge and Heidelbergcement…

VALUATION

• FV unchanged at CHF70. Holcim is trading at a 2013e EV/EBITDA multiple of 7.2x, i.e. a

7%discount relative to its 2007 historic average. Our DCF assumes a WACC of 9.2%, a growth

rate to perpetuity of 3.0% and a normalised EBIT margin of 14.5%.

Sven Edelfelt, [email protected]

Luxury & Consumer Goods

LVMH Illness forces LV CEO to quit and Michael Burke steps into new CEO role at Louis Vuitton

Price EUR138.05 Fair Value EUR155 (+12%) BUY

Bloomberg MC FP

Reuters LVMH.PA

12-month High / Low (EUR) 140.0 / 104.5

Market Cap (EURm) 70,091

Avg. 6m daily volume (000) 828.8

1 M 3 M 6 M 31/12/11

Absolute perf. 11.6% 11.0% 16.6% 26.2%

Pers& H/H Gds 5.3% 5.3% 11.5% 21.4%

DJ Stoxx 600 6.7% 2.4% 14.8% 14.7%

2011 2012e 2013e 2014e

P/E 22.6x 19.9x 17.9x 16.6x

Div yield (%) 1.9% 2.1% 2.2% 2.5%

ANALYSIS

• LVMH announced yesterday that Jordi Constans is leaving Louis Vuitton where he had been

CEO since November 2012. He joined LV in February 2012 having been Executive-VP of

Danone’s fresh dairy products. His departure is due to ill health which prevents him from

carrying out this demanding job.

• Meanwhile, Bernard Arnault has appointed Michael Burke as the new Louis Vuitton Chairman

and CEO and is also joining LVMH group’s Executive Committee. He has worked with Bernard

Arnault since 1986 when he became CEO of Christian Dior USA until 1993. From 1993 to 1997,

he joined the Louis Vuitton brand as CEO ofLV USA and he was appointed at the head of Dior

Couture from 1997 to 2003, and then he became Fendi’s CEO. In February 2012, he became

CEO of the Bulgari brand.

• In our view, Michael Burke is the best choice to stand in for Jordi Constans. Indeed, he

successfully turned around the Italian brand Fendi, which was loss-making in 2003 and has now

reached an operating margin close to 20% on our estimates. It is worth saying that Fendi has

sales of around EUR1bn. Consequently, he has been working for many years with Bernard

Arnault and he has a clear legitimacy to manage LV that has sales over EUR7bn (~26% of total

LVMH sales) and accounts for c.50% of the group’s recurring EBIT.

VALUATION

• At 11.0x EV/EBIT 2013e, the share is trading globally in line with sector average but has a 13%

discount vs. the 2003-2012 historical average.

NEXT CATALYSTS

• LVMH should release its FY12 sales and results by early February 2013.

Cédric Rossi, [email protected]

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BG’s Wake Up Call

19 December 2012 5

Healthcare

Merck KGaA Stimuvax did not meet its primary endpoint in START

Price EUR101.55 Fair Value EUR96 (-5%) NEUTRAL

Bloomberg MRK GY

Reuters MRCG.DE

12-month High / Low (EUR) 106.6 / 72.4

Market Cap (EURm) 22,078

Avg. 6m daily volume (000) 250.1

1 M 3 M 6 M 31/12/11

Absolute perf. 4.5% 8.2% 31.0% 31.8%

Healthcare 5.0% 2.8% 10.4% 13.1%

DJ Stoxx 600 6.7% 2.4% 14.8% 14.7%

2011 2012e 2013e 2014e

P/E 14.9x 13.6x 12.1x 11.2x

Div yield (%) 1.5% 1.8% 1.9% 2.1%

ANALYSIS

• Merck KGaA announced this morning that the phase III START trial studying Stimuvax in

patients with unresectable, locally advanced stage IIIA or IIIB non small cell lung cancer (NSCLC)

did not meet its primary endpoint to demonstrate a statistically significant improvement in

overall survival. The complete results of the study will be presented during a future scientific

congress.

• Stimuvax targeted the MUC1 protein antigen which is over expressed in the cytoplasmic

membrane of tumour cells. Although its function remains unknown, MUC 1 in tumour tissue is

associated with reduced apoptosis, immunosuppression and resistance to chemotherapy.

• Although Merck had underlined during the first quarter that an Independent Committee had

confirmed that the trial could proceed to its conclusion, we preferred not to factor any

forecasts for this vaccine in our model in light of the relatively low number of patients enrolled

in the phase II trial, the design of the phase III and the previous results.

VALUATION

• At this point, the current share price would suggest a part of the R&D pipeline of the company

is already factored in. Even if consensus expectations for Stimuvax were low (only USD168m in

2018), we think that the share price is likely to suffer today.

• We maintain our Neutral recommendation with a fair value at EUR96.

NEXT CATALYSTS

• Atacicept phase II in SLE in the next few weeks.

Martial Descoutures, [email protected]

Healthcare

Shire PLC Positive outcome from the European Decentralised Procedure for Elvanse

Price 1,923p Fair Value 2200p (+14%) BUY

Bloomberg SHP LN

Reuters SHP.L

12-month High / Low (p) 2,300 / 1,727

Market Cap (GBPm) 10,754

Avg. 6m daily volume (000) 1,788

1 M 3 M 6 M 31/12/11

Absolute perf. 11.2% 1.2% 1.5% -14.3%

Healthcare 4.8% 3.0% 11.2% 12.8%

DJ Stoxx 600 6.2% 1.5% 14.3% 14.2%

2011 2012e 2013e 2014e

P/E 17.5x 14.8x 14.6x 12.8x

Div yield (%) 0.4% 0.4% 0.4% 0.5%

ANALYSIS

• Yesterday, Shire announced a “positive outcome” from the European Decentralised Procedure

for Elvanse known as Vyvanse in the US in the Attention Deficit Hyperactivity Disorder

indication. The UK Medicines and Healthcare products Regulatory Agency is the reference

authority of seven other European countries participating in the procedure including Denmark,

Finland, Germany, Ireland, Norway, Spain and Sweden. This decentralised procedure is less

common than the centralised procedure but it is explained by the company as an opportunity

to accelerate the European approval in the target markets of Northern Europe where the

market is already developed. In this unusual procedure, each individual country will then

determine the final conditions for access to the market which will happen in the coming

months.

• The European market is clearly less attractive than the US market (European practitioners do

not favour CNS stimulant treatments, for instance the sales of Ritalin correspond to 2/3rds US

and 1/3rd ROW market) and the sales of the drug will not achieve USD1bn as is the case in the

US this year. However we consider that the market represents an opportunity for the company.

Indeed, the European ADHD market represents around USD500m and the growth rate is in

double digits.

VALUATION

• At this point, we expect a “global” launch of the drug in the European markets during the

second quarter of 2013 (previously expected during the first quarter). We factor a peak sales of

Elvanse of USD200m in 2020 vs USD300m expected by the consensus.

NEXT CATALYSTS

• Clinical results of HGT Intrathecal Programs (phase I/II) in the next few weeks.

Martial Descoutures, [email protected]

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BG’s Wake Up Call

19 December 2012 6

Technical Research – BG Derivatives Team

Index Sectors LAST % change Index Sectors LAST % change

EUROSTOXX50 2643.5 0.59 Automobiles 350.3 0.38 Insurance 176.25 0.24

STOXX600 280.46 0.46 Banks 163.01 0.97 Media 189.08 0.58

Stoxx 200 LARGE 294.77 0.4 Basics resources 464.98 1.28 Oil & gas 324.14 0.17

Stoxx 200 MID 281.35 0.78 Chemicals 669.43 0.27 Personal & household 513.55 -0.06

Stoxx 200 SMALL 181.49 0.68 Construction & mat. 258.48 0.86 Retail 273.96 0.69

Euro Stoxx 50 TREND Reverse Level Financial services 250.68 0.58 Technology 231.02 0.96

Short Term -1 Month BULL 2530 Food & beverage 459.49 0.03 Telecom 226.82 -0.3

Medium Term - 3 Months BULL 2430 Health & care 491.82 0.22 Travel & leisure 146.93 0.53

Long Term -10 Months BULL 2260 Industrial goods & serv. 338.55 0.8 Utilities 259.68 0.72

ES50 resistances 2690/2710, 2780, 2810, 2850, 2880, 2910

ES50 supports 2590, 2560, 2530, 2490, 2440, 2410/2390, 2360, 2330/10, 2260/40

Good morning,

Increase of 0.6% to 2643 for the ES50 still mainly led by cyclicals and banks. The next target is bullish at 2680/2710.

We note again our invalidation threshold of the upward trend on the 1 month horizon as being 2560 against 2530 before.

The Eurodollar is free of resistance between MT 1.3140/70 to target 1.3490 as first goal.

Thierry Huteau

+33 1 70 91 12 94

[email protected]

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BG’s Wake Up Call

19 December 2012

Bryan Garnier stock rating system For the purposes of this Report, the Bryan Garnier stock rating system is defined as follows:

Stock rating

BUY Positive opinion for a stock where we expect a favourable performance in absolute terms over a period of 6 months from the publication of a

recommendation. This opinion is based not only on the FV (the potential upside based on valuation), but also takes into account a number of

elements including a SWOT analysis, positive momentum, technical aspects and the sector backdrop. Every subsequent published update on the stock

will feature an introduction outlining the key reasons behind the opinion.

NEUTRAL Opinion recommending not to trade in a stock short-term, neither as a BUYER or a SELLER, due to a specific set of factors. This view is intended to

be temporary. It may reflect different situations, but in particular those where a fair value shows no significant potential or where an upcoming binary

event constitutes a high-risk that is difficult to quantify. Every subsequent published update on the stock will feature an introduction outlining the key

reasons behind the opinion.

SELL Negative opinion for a stock where we expect an unfavourable performance in absolute terms over a period of 6 months from the publication of a

recommendation. This opinion is based not only on the FV (the potential downside based on valuation), but also takes into account a number of

elements including a SWOT analysis, positive momentum, technical aspects and the sector backdrop. Every subsequent published update on the stock

will feature an introduction outlining the key reasons behind the opinion.

Distribution of stock ratings

BUY ratings 49.5% NEUTRAL ratings 30.3% SELL ratings 20.2%

Bryan Garnier Research Team

HealthcareTeam Eric Le Berrigaud 33 (0) 1 56 68 75 33 [email protected]

Mathieu Chabert 33 (0) 1 70 36 57 45 [email protected]

Martial Descoutures 33 (0) 1 56 68 75 18 [email protected]

Consumer Goods Peter Farren 33 (0) 1 56 68 75 72 [email protected]

Loïc Morvan 33 (0) 1 70 36 57 24 [email protected]

Cedric Rossi 33 (0) 1 70 36 57 25 [email protected]

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A copy of the Bryan Garnier & Co Limited conflicts policy in relation to the production of research is available at www.bryangarnier.com

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