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Let's take a look at some stocks on the move today in Europe. I'm Stephen Carroll with Lizzie Burton, and we're joined by Bloomberg's Breaking News editor Louise Moon. Louise, good morning. Let's start with defense shares then in Europe lower after Deutsche Bank down grade. How are the likes of BA Systems faring?
Yeah, exactly. So this is a note from Deutsche Bank targeting three main defense stocks. We've got BA Systems, Tallis and Leonardo. So they've this analysis cut the ratings across the board from a buy to a hold. Now this isn't necessarily saying that, you know, the defense sector as a whole isn't fairing as well. It's given kind of
individual reasons for the different stocks. So for BAE, they say they're likely to beat their for your expectations, that they're noting what they call disappointing time margins, and they've also noted affordability concerns in the UK and the US markets. For Leonardo, for example, they say there's not much upside the stock, they're saying doesn't deserve a premium compared to
other defense stocks just yet. And fora Taala's, they say there's an absence of imminent catalysts, so more uncertainties, particularly around the French defense budget. They say they're lagging in their cyber unit. So some individual reasons that they're pulling down these ratings for the different for the different defense stocks. If you look at them on a more kind of a wider basis, if you look at the analyst ratings, most of them are still they do still have a
majority of buy ratings. But interestingly, there have been a couple of downngrades across the board over the past few months or so. We'll be keeping an eye on those. But obviously this is coming after defense has enjoyed a huge rally on the back of this rise in spending. So yeah, an interesting note there from deutsch Bank.
And yet still perhaps surprising given the geopolitical cubult with which we've started twenty twenty six. I want to turn to a very different sector, and that is because Diagio, I'm going to say the script says could be thirsty for an asset sale. I'll tell us Rollery.
Yeah.
So Diagio obviously the drinks giant in the UK, reviewing options for their China assets and potentially that could include a sale. So this is a Boomberg exclusive this morning. They're working with Goldman and Ubs. They're essentially kind of sounding out local buyers and private excy firms and obviously no certainty a deal or any deal will come about, but this is what's being spoken about. One of their biggest assets over in China is a company called Suchuan
Swell Fung. They're known that they're listed already in Shanghai. They're known in particular for bai Joh, which is a Chinese liquor and one of the kind of drinks big drinks companies in China. They've got a current market valuation of about two point seven billion, so a big company. You know, if this resulted in a sale, potentially some big sums. They're for Yagio, And it kind of comes
in the context of two main reasons. So you know, firstly, a lot of international brands are pulling out or reviewing their portfolios in China. There's a lot more domestic and growing domestic competition there. So, for example, Starbucks sold their majority stake in their business relatively recently, and then on theago's side, they've also globally been trimming down their portfolios. So for example, they recently sold their arm, their East
African brewery arm that as there. You know, drinking habits are changing. They're also struggling to get consumers to buy more expensive drinks, so trading up and so their strategy is to trim down and focus on their call. They've got a new CEO that started this month and he's known for having in the past turn Tesco around, so he's kind of been tasked. We're turning the Iago around. So yeah, the latest news is that they're reviewing options
for their China assets. We'll be keeping an eye to see if and when this results in any sort of sale.
Okay, and news too from Raspberry Pie and the UK shares hitting a record low earlier.
What's yeah, so shares slumping below the IPO price. So Rasbery probably became known for listing in twenty twenty four as at the time one of the few companies that was listing in London's they're obviously the computer maker so they had strong results, but this is being kind of overshadowed by, at the same time, a warning saying that the rapid increase in costs of a certain type of memory chip is well, costs are increasing, this could potentially
weigh on the company. More supplies obviously being funneled into other things as demand increases, like AI data centers. So they're saying they have enough to meet demand in the first half, but visibility in the second half is limited. So yeah, as I say, record record low for them. Shares slumped around ten percent this morning.
The Stock Mover's report from Bloomberg Radio. Check back with us throughout the day for the latest roundup of companies making news on Wall Street and for the latest market moving headlines. Listen to Bloomberg Radio Live, catch us on YouTube, Bloomberg dot com, and on Applecarplay and Android Auto with the Bloomberg Business app.
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