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4-Traders Homepage  >  Equities  >  Euronext Amsterdam  >  Altice    ATC   NL0011333752

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European shares mope at seven-week low as disappointing earnings weigh

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11/14/2017 | 06:17pm CET
The German share price index, DAX board, is seen at the stock exchange in Frankfurt

European shares remained stuck at seven-week lows on Tuesday as a fall among commodities-related sectors and telecoms firm Altice (>> Altice) outweighed a buoyant tech sector.

European shares remained stuck at seven-week lows on Tuesday as a fall among commodities-related sectors and telecoms firm Altice (>> Altice) outweighed a buoyant tech sector.

The pan-European STOXX 600 <.STOXX> erased earlier gains to end the session 0.6 percent lower. This was the sixth day of straight losses for the benchmark.

"Markets have moved quite a long way and a pause is probably warranted, but we don't think it's a big turning point," said Ronan Carr, European equity strategist at Bank of America Merrill-Lynch (BAML).

"Underlying fundamentals are still pretty constructive in terms of global growth, and we would be a buyer of any material dip in markets," he added.

While materials stocks <.SXPP> and oil firms <.SXEP> were the biggest sectoral fallers due to a pullback in oil and copper prices, the biggest individual faller was Altice (>> Altice).

Altice plummeted more than 13 percent after Morgan Stanley cut its price target on the stock by 34 percent, adding to pressure on the shares which are already down 46 percent this year.

Italy's Saipem (>> Saipem SpA) was another big faller, down more than 7 percent after it was removed from the MSCI Italy Index, while utility RWE (>> RWE) dropped 5.6 percent after an earnings update.

Stocks have had violent reactions to results this quarter, Goldman Sachs strategists said. Earnings-day price moves have been more than 3.5 times the average daily move – the most extreme results reactions the bank had data for.

"The companies that are missing … are then getting clobbered 10 percent, probably because the markets were too optimistic of where we were economically," Neil Dwane, global strategist at AllianzGI, said.

"There’s been probably more disappointments than we would expect with European economic growth trundling along in good fashion."

However, results from tech companies gave investors something to smile about. Software maker Simcorp (>> SimCorp) jumped 10 percent after earnings beat forecasts, while internet services provider United Internet (>> United Internet) gained 3.5 percent after its acquisition of mobile firm Drillisch (>> Drillisch) boosted its profits.

Peer Scout24 (>> Scout24 AG) also jumped 6.1 percent.

Chipmaker Infineon (>> Infineon Technologies) gained 2.7 percent despite reporting weaker dollar-dented sales.

"While slightly disappointing, we continue to expect Infineon's margins to resume their upward trajectory," wrote Liberum analysts, saying the main headwind to sales and profitability was the stronger euro.

"Underlying growth trends in the tech sector are quite strong," said BAML's Carr. "Tech sector revisions momentum has not definitively bottomed out but it looks like it's finding a floor, much like the broader market."

As the earnings season nears its end, MSCI euro zone companies are tracking 9.9 percent year-on-year earnings growth in U.S. dollar terms, and 62 percent of companies in the euro zone index have beaten or met earnings estimates.

Analysts have revised down earnings estimates for the broader MSCI Europe, but downgrades seem to have stabilised as the results season developed.

(Reporting by Helen Reid and Kit Rees; Editing by Janet Lawrence)

By Helen Reid and Kit Rees

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Financials (€)
Sales 2017 23 659 M
EBIT 2017 2 757 M
Net income 2017 -655 M
Debt 2017 50 330 M
Yield 2017 0,47%
P/E ratio 2017 -
P/E ratio 2018 18,44
EV / Sales 2017 2,68x
EV / Sales 2018 2,62x
Capitalization 13 008 M
Duration : Period :
Altice Technical Analysis Chart | ATC | NL0011333752 | 4-Traders
Technical analysis trends ALTICE
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 16
Average target price 20,2 €
Spread / Average Target 150%
EPS Revisions
Michel Combes Chief Executive Officer & Director
Dexter G. Goei President & Executive Director
Jurgen van Breukelen Chairman
Dennis Okhuijsen Chief Financial Officer & Executive Director
Bruno Zerbib Chief Technology Officer
Sector and Competitors
1st jan.Capitalization (M$)
ALTICE-56.98%15 333
TELEFONICA-2.87%52 519
ORANGE-2.53%44 190