IN THE NEWS / Research Coments
Merrill Lynch - Elf (ELFP.PA) /Sanofi Seen Mispriced
PARIS, Nov 17 - Merrill Lynch said in a note dated November 17 recent divergence between the share prices of French energy group Elf Aquitaine and its pharma unit Sanofi <SOFP.PA> underlined Elf's current low valuation.
"Divergent share price performances between Elf and Sanofi since June have left the market either undervaluing Elf's stake in Sanofi or being unduly pessimistic on Elf's oil activities," the note said.
Merrill also said it had cut its 1999 earnings per share estimate for Elf to 36.50 francs from 40.0 to reflect a weaker U.S. dollar and chemicals.
Sanofi, in which Elf held about 54 percent at end-June, moved sharply ahead of Elf in early September, its stock fired to new highs by merger speculation in the pharma sector, while Elf, hit by weak oil prices, has recently barely matched the blue-chip CAC-40 index.
"Elf's investment thesis remains its major revaluation potential," Merrill said, repeating that it expects Elf's share price to double over a two to three year period.
For 2000 it said Elf's earnings multiple was 11 times while the stock was trading at 3.3 times cash flow, or 4.0 times if adjusted for debt.
Paine webber Cuts Forcenergy Inc (FEN.N)
NEW YORK, Nov 16 - PaineWebber said Monday it cut Forcenergy Inc. to a neutral from an attractive rating.
-- Further details were not immediately available.
-- Shares closed at 6-3/16 on Monday.
11/16 Morgan Stanley Says Starts Conoco (COC.N) AT STRONG BUY
-- Headline Only |
