NEWS nd MONTH2015 2014 200th February We see the potential for European equities to continue to outperform this week, given the continued fund flows into Europe, following the ECB’s QE announcement. That said, we believe positive sentiment toward Europe will likely be tempered by comments from the new Greek Finance Minister over the weekend, stating that Greece would not seek to renew Troika loans upon maturity at the end of next month. Earnings season continues with a greater European focus this week, with GlaxoSmithKline and Vodafone reporting from the core portfolio, in addition to Ryanair which we highlight below. Economic data will also act as a potential catalyst to market movements with a number of important releases including Eurozone Composite PMI’s, ISM Manufacturing, Bank of England rate announcement, Eurozone Retail PMI and US Non-Farm Payrolls to conclude the week. We continue to see lower bond yields as positive for equity flows, but reiterate the importance of specific stock selection. Equities Commentary This week’s market events Ryanair – Report substantial earnings beat for Q3 M Ryanair (Previous Close €10.40) reported solid Q3/15 results this morning. Top line revenues were €1.13bn (4.8% beat vs. our forecasts). Profit after tax of €49m was 22.5% above our expectations, and 63% ahead of consensus of €30m. Earnings were driven by stronger passenger numbers (+14% YoY, to 20.8m for Q3), improved load factor (up 6pts to 88%) and higher average fares (+2%). Ryanair also increased its FY15 guidance by 3%, to a range of €840m - €850m, due to higher passenger growth. The airline also confirmed its special dividend of €0.375c to be paid on the 27th February. Strong passenger growth and improving margins lead us to re-iterate our BUY recommendation. The shares are trading on a 23% premium to peers at 16x FY15e earnings, however we view this as justifiable given the growth dynamics of the airline. Our €10 Target Price is currently under review. T W CORPORATE ECONOMICS BG Group – FY14 EZ – PPI YoY BP – FY14 US – ISM New York CORPORATE ECONOMICS ECB Non Monetary Policy Meeting Hibernia REIT –IMS CH – Comp PMI BSkyB – H1/15 FR – Comp PMI IAG – Traffic Stats GE – Comp PMI EZ – Comp PMI EZ – Retail Sales YoY T CORPORATE Vodafone – IMS Astra Zeneca – FY14 easyJet – Traffic Stats Twitter – Q4 GoPro – Q4 Daimler – FY14 F CORPORATE n/a Bank of Ireland – Raising Price Target to €0.39 from €0.35 On the 21st January, Bank of Ireland (Previous Close €0.268) announced it was delisting its ADR (an investment vehicle primarily for US retail investors) from the NYSE, effective from the 12th February, which accounts for 5% of outstanding shares. Its share price has fallen 9% since this announcement, underperforming the wider banking sector over the same period. We view this pull back as an opportunity to add to existing holdings, as we remain confident in its ongoing capital generating ability, its ability to write back loan loss provisions as asset prices improve, and its potential to re-instate its dividend in 2017. From current levels, BOI offers a 43% upside to our new Target Price of €0.39c SPDR S&P Euro Dividend Aristocrat – General play on European Equities We see the potential for European equities to outperform this week, given the continued flows into Europe following the QE announcement by the ECB. Indices have seen strong gains to date; however we believe the attractiveness of dividend yielding stocks in Europe should remain high given the prevailing low yield environment. As such, we highlight the SPDR S&P Euro Dividend Aristocrat ETF (SPYW GY, N/C, Previous Close €20.50) as an alternative play on this view. The ETF’s objective is to track the performance of the 40 highest yielding Eurozone stocks from the S&P Europe BMI index and offers a dividend yield of 3.3%. The ETF has seen gains of 9% YTD, against 7% in the wider Eurostoxx50 index. Equities Portfolio Management Research ECONOMICS CH- Manuf. PMI US – PCE Core YoY US – ISM Manuf. GSK – Q4 Apple – Strong earnings, raising Price Target to $160 from $143 Apple (Previous Close $117.16) has started 2015 strongly, with an exceptional December driven by much stronger-than-expected iPhone shipments and healthy margins. Apple reported Q1/15 sales of $74.6 billion which comfortably beat our recently increased revenue estimate of $68.2 billion. Equally, pro forma EPS of $3.06 (up 48% YoY) was much better than our $2.61 projection. We are boosting our Q2/15 revenue estimate 4.65% to $56.2 billion, while increasing our EPS projection to $2.13 from $1.97. For FY15, we are boosting our EPS projection to $8.68 (+12.4%) to reflect the addition of Apple Watch and continued iPhone momentum, while increasing our FY16 EPS projection 15.5% to $9.62. We are raising our 12-month price target to $160.00 from $143.00, which is based on 14x our CY16 pro forma EPS estimate (adjusted for interest income/expense), plus Apple’s $24.07 net cash per share. CORPORATE Ryanair – Q3 Exxon Mobil – Q4 ECONOMICS GE – Factory Orders GE- Retail PMI EZ – Retail PMI BoE Bank Rate ECONOMICS GE – Industrial Prod YoY US – Change in Nonfarm Payrolls Upcoming Events 10/02/15 Coca-Cola – Q4 11/02/15 11/02/15 11/02/15 11/02/15 Smurfit Kappa – FY14 Tullow Oil – FY14 Arm – FY14 Cisco – Q2 12/02/15 12/02/15 12/02/15 12/02/15 AIG – Q4 DCC – IMS Rio Tinto – FY14 Total – FY14 13/02/15 Rolls-Royce – FY14 Prelim Bonds Regulatory Information This material is approved for distribution in Ireland by Cantor Fitzgerald Ireland Ltd. 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