FRANKFURT (AFX) - Shares were slightly higher in midday trade as US stock futures pointed to gains on Wall Street this afternoon and as Continental AG gained sharply on the back of its full-year results yesterday, which today prompted a raft of brokers to hike their price targets on the issue, dealers said.
At 11.45 am, the DAX 30 index was 11.10 points or 0.19 pct higher at 5,868.98, having moved between 5,847.62-5,872.31 so far this session.
The MDAX was at 8,341.86, up 31.77 points or 0.38 pct, while the TecDAX was at 737.24, up 1.88 points or 0.26 pct.
The DAX futures contract was at 5,879.00, up 17.50 points or 0.30 pct, while bund futures were at 120.43, down 0.01 point.
The euro last traded at 1.1898, against 1.1910 usd in morning London trade.
Continental added 1.75 eur or 2.01 pct to 88.80, on the back of upbeat broker comments on its full-year 2005 results and 2006 outlook, which prompted Morgan Stanley and WestLB to hike their price targets on the stock to 95 eur from 75 and to 100 eur from 85 respectively.
'Fourth-quarter results were 16 pct ahead of our above-consensus expectations at the clean operating level,' the broker said in a note to clients.
It added that in its view, Continental's management provided a confident outlook for higher sales and profits in 2006, while continuing to place acquisitions as the top priority for deployment of its strong balance sheet.
'Continental is still a cheap stock, particularly when considering its massively under-geared balance sheet. Sizeable acquisitions and/or share buybacks have the potential to produce an EPS level which, in our opinion, could justify a fair valuation well in excess of 100 eur,' it concluded.
However, it was Schering that was the best performer, up 1.29 eur or 2.21 pct at 59.69.
Metro rose 0.75 to 44.55, extending yesterday's gains on the back of solid consumer climate data from the GfK market research institute.
BASF climbed 0.46 to 63.45, as WestLB hiked its price target on the stock to 76 eur from 70 and reiterated its 'buy' rating.
'The upgrade is based mainly on (a) re-appraisal of (our) 2007 numbers, which we think were looking too conservative, given the company's view that 2006 should not see the end of the chemicals industry upturn,' WestLB said.
At the other end of the market, Deutsche Post fell 0.26 eur to 1.17 pct to 22.05.
E.ON lost 0.15 to 95.15, amid fears it will raise its bid for Spain's Endesa, following a report in the Financial Times quoting Endesa chairman Manuel Pizzaro as saying that he believes the German utility giant will increase its offer, according to dealers.
'While the takeover makes strategic sense, the possibility of a possible higher bid and a possible capital increase at E.ON should burden share price in the next few days,' one trader said, adding that while Pizarro's comments were his own opinion, the market believes him.
Meanwhile, peer RWE was up 0.36 at 72.96, as Citigroup hiked its price target on the stock to 85 eur from 72.
'We are raising our RWE price target despite a fairly downbeat FY05 results statement (yesterday as) the big picture remains very much intact with the German forward power price curve up some 16 pct year-to-date,' the broker said in a note to clients.
On the MDAX, Lanxess jumped 1.23 eur or 4.41 pct to 29.13.
The specialty chemicals company is planning to bundle its European, American and Asian ABS plastics operations as part of its ongoing efforts to boost its ability to compete with large competitors, Handelsblatt newspaper reported, citing chief executive Axel Heitmann.
Meanwhile, Hochtief dropped 0.85 eur or 1.87 pct to 44.65.
Over on the TecDAX, GPC Biotech soared 0.70 eur or 5.36 pct to 13.76, while MorphoSys slid 2.00 eur or 3.62 pct to 53.20. niklas.magnusson@afxnews.com nm/cmr COPYRIGHT Copyright AFX News Limited 2005. All rights reserved. The copying, republication or redistribution of AFX News Content,inculding by framing or similar means, is expressly prohibited without the prior written consent of AFX News. AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited
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