Just tracking with a view to bottom fishing at the right time


CSFB downgraded glassmaker Pilkington to 'underperform' from 'neutral', dropping its price target to 45p from 68p. 'Pilkington's near term prospects have deteriorated markedly over the last several months and the trading update at the end of this month is likely to be a profit warning,' it said.


ains


Currently 45.75/46p

The newsflow is not good - asbestos claims - falling sales/demand - pensions but always a need for glass and windscreens etc and there is the possibility of a bid from their biggest shareholder.

Today is probably not the best time - down 8% but I am sure there is value there before too long - pay divs which is no bad thing in this market

H2 in about 2 months


ains

those bid rumours surrounding this stock have been doing the rounds for as long as I can remember.

Not convinced they will be able to maintain the divi for too much longer without eating up too much of the cash reserves

I am not looking to talk them up at this point but divs are important to the company and their shareholders and although they may shave them a little I would have thought they will continue at a relatively high rate


Indy

The S&P report last month warned that Pilkington's debt could be downgraded to within a whisker of junk status. As well as the UK pension fund at issue, the company also has a US fund in deficit and unfunded healthcare liabilities.

Pilkington shares fell to a new low on Friday as analysts began to anticipate the trading update.



March 08, 2003

Nick Hasell

Pilkington dips after broker's forecast fears



THE glassmaker Pilkington fell to a 21-year low ahead of its year-end trading statement as a leading stockbroker claimed its profit forecasts for next year were too optimistic.
The company has faced a two-way pull between weak industrial markets and long-held hopes that Nippon Sheet Glass, its 21.6 per cent Japanese shareholder, will finally table a bid. But it was the bears who gained the upper hand yesterday after Dresdner Kleinwort Wasserstein repeated its sell advice and cut its 2004 earnings forecast, which was already below the consensus, by 16 per cent.

The German broker believes that cost pressures and a weak US market for construction glass will put a further squeeze on margins. It is also worried by Pilkingtons low free cashflow and the sustainability of its dividend yield, currently 9.7 per cent. With Dresdner trimming its price target to 41p ahead of a trading update in late March, the shares lost 2p to 49p, with the FTSE 250 off 62.6 points at 3,924.4.




ains

still heading south on high volume - must admit I am now interested


ains


LONDON, March 10 (Reuters) - Shares in Pilkington Plc plunged to a multi-year low on Monday after investment bank Credit Suisse First Boston cut its rating on the British glass maker amid a deterioration in its markets.

"We believe Pilkington's near term prospects have deteriorated markedly over the last few months and that the trading update at the end of this month, will in our view, likely be a profit warning," Roger Collison, analyst at Credit Suisse First Boston, said in a research note.

But Pilkington said it was comfortable with current forecasts ahead of a trading update on March 27.

"Pilkington is happy with analysts' consensus estimates for this year (ending March 31)," a spokeswoman said.

At 1247 GMT, Pilkington shares were down four pence, or eight percent, at 45-3/4p, below their January 1999 low of 47p. It was the weakest UK midcap stock.

CSFB cut its rating on the company to "underperform" from "neutral" and slashed its share price target to 45p from 68p.

It said fundamentals in the European and North American glass industries had deteriorated in the last three months.

"Specific weakenings include: decreasing demand from the auto and construction sectors in both markets, falling flat-glass prices in both markets, rising natural gas costs... and a deteriorating net debt position due to increasing pension liabilities," Collison said.

On Friday, investment bank Dresdner Kleinwort Wasserstein cut its share price on Pilkington to 41p from 44p.

Nearly bought a few @ 43.7p but switched into something else .....


CSFB sets a new downside target and adopts a much more cautious stance amid real concerns about fundamentals in its key European and US markets, dealers said. In a note published today, CSFB slashed its price aim for the glass-making giant to just 45 pence -- below its current trading price and significantly under its previous price target of 68 pence. And the broker also cut its rating on Pilkington to 'underperform' from the previous 'neutral'.

Market watchers said the downgrade reflects CSFB's growing concerns about deteriorating fundamentals in Pilkington's core European and US markets over the past three months. CSFB also warned that Pilkington's trading update due end-March could be very disappointing.

The downbeat note from CSFB follows hard on the heels of a very negative report from Dresdner Kleinwort Wasserstein only last Friday. In the note, the broker downgraded its rating on Pilkington to an outright 'sell' and set a downside price target of just 41 pence. And DrKW slashed its already-below consensus 2004 EPS estimate for Pilkington by a further 16%. DrKW said the downgrades reflect its growing belief that Building Materials companies are unlikely to see significant earnings growth in 2003. It warned that Pilkington could suffer from further downside pressure on margins, particularly in the US where demand is falling and input cost pressures rising.

The broker was also nervous about Pilkington's free cash flow yield -- which is massively below the sector average. And DrKW fears that the management could consider a dividend cut sooner rather than later to conserve cash.



ains

keep selling as this will fall to 35p in the next few weeks according to the charts.

By Yvette Essen (Filed: 11/03/2003) telegraph




Cracks widen for Pilkington as brokers throw stones

Glass maker Pilkington was looking fragile yesterday as it became the main FTSE 250 casualty, slumping to a 26-year low.

Credit Suisse First Boston was the latest broker to turn negative on the stock, downgrading it from neutral to underperform and causing it to tumble 5.25 to 44.5p. It also slashed its target price from 68 to 45p, stating that fundamentals in its core markets in Europe and North America have been deteriorating over the past three months.

The downgrade followed Dresdner Kleinwort Wasserstein reducing its target price on the stock from 44p to 41p on Friday as it repeated its sell recommendation ahead of its trading update later this month. It believes margins will be squeezed by the weak US market and cost pressures.

Earlier this year, Pilkington was buoyed by hopes that Nippon Sheet Glass, the Japanese group which owns 21.6pc of the company, would make a bid. However, an offer has failed to emerge and last month credit rating agency Standard & Poor's put it on credit watch on pension fear worries.

In the wider market, only 2 billion shares changed hands. Volumes are expected to remain subdued for the rest of the week as traders enjoy the racing at Cheltenham. Those who spent the day in the office remarked that Warren Buffett's recent pessimistic statements on the market are earning him the title of Buffett the Stock Market Slayer.

Wall Street, which was slammed by Mr Buffett over the weekend, continued to be unsettled by war. As the FTSE 100 retreated for the fifth consecutive day, down 55.6 to 3,436, the Dow Jones had slid 101 points.

If Pilks are for ainsy they are for everybody, so cockroaches into them quickly now.

Pilks are up over 25% from their lows earlier this week :-))

LONDON (AFX) - Pilkington PLC said conditions remain challenging in most of its major markets, however trading is in line with expectations thanks to the improved competitiveness of its manufacturing base.
Stuart Chambers, group chief executive, said: "Trading has been in line with expectations and our headline profitability is set to see a continuation of the consistent level reported in each of the last two financial half-years.

"In addition our renewed emphasis on free cash flow generation will enable us to report our strongest cash performance since 1994," he said.

newsdesk@afxnews.com

Stock appears fairly well priced at 52p... I'd not buy now, and I'd not sell now !

agreed .... as it happens I am out but looking to return .... not today though

From the Indy

Pilkington's prospects remain too opaque

Is there going to be a dividend cut at Pilkington, the renowned glass maker?

This was the question we last asked in September, when the stock had a prospective yield of 8 per cent that signalled the market clearly thought it would have to slash the payout. It was not an unreasonable assumption from investors, who noted, ruefully, Pilkington's appalling record in generating cash and the dire trading conditions in the glass market.

But Stuart Chambers, the chief executive, promised to move heaven and earth to maintain the payout and, as time goes on, confidence is growing that he can succeed. A trading update yesterday surprised the sceptics, showing that Mr Chambers has been able to wring more cash than expected out of Pilkington's businesses and make inroads into the group's 900m debt mountain. Years of painful restructuring are starting to pay off but that size of debt will continue to limit its room for manoeuvre for years to come. There are also worries that the group may have to top up pension funds in the US and Germany.

Mr Chambers is not getting any help from the global economy either. Commercial construction activity is still sluggish in the US and Continental Europe, and that means less demand for glass. Only the UK, where regulation is forcing customers to use Pilkington's energy efficient glass, has so far remained buoyant.

There was better news in automotive glass, with Pilkington being designed into some new models and a robust market for replacement windscreens. But car manufacturing could come under pressure if consumer confidence falters.

So it is too early to feel confident about Pilkington's recovery, though the shares rose 6 per cent to 52.75p yesterday. Even at best, profits will be flat in the coming year. Investors need not rush while the economic future is seen only through a glass darkly.

Any further thoughts on this company. I am considering including it my portfolio. The news in the last two months do not appear bad and the figures yesterday were realistic to say the least yet the price has fallen at the time of writting by one point. I appreciate the uncertainty of a rate rise in the market, however I think this has been over done. Have I missed something. Many thanks in advance.

These are yummy a quality brand and the divi can be reinvested!

Okay I have put my money wher my mouth is and invested 12 thou.
I peg you for right.

Although Pilk has gone up this morning, there has been some searious sales. Does anybody have any clues to why or is this just the normal way of things? I personally am happy with this company and I feel if their market picks up this shares will move further upwards. If I am wrong please feel free to enlighten me :-)

I have just read this BB for the first time. Fascinating stuff. So on 10 March, DrKW lowered price target to 41p. CSFB lowered target to 45p. Both brokers forecast poor trading conditions and a dividend cut. Rocamar wrote here "this will fall to 35p in the next few weeks according to the charts". The previous trading day Pilkington had closed at around 49p.

In fact the 52 week low for Pilkington occurred the following day, at 43.3p. The trading update at the end of March was positive, news flow has continued to improve and today Pilkington is at 99p, with a maintained dividend.

Its nice that this confirms my suspicion that broker forecasts are as wrong as much as they are right, and charts may as well be drawn upside-down for the good they do.