Drax Gains, Zalando Slides, Bayer Rises

0:02 Bloomberg Audio Studios, podcasts, radio, news. The Stock Movers Report, your roundup of companies making moves in the stock market, harnessing the power of Bloomberg data.

0:16 Thank you very much, Stephen. Well, let's take a look at some of the stocks on the move today in Europe. I'm Tiwa Adebayo with Stephen Carroll, and we are joined by Bloomberg reporter Josh Gorm Warner. Josh, let's start with Drax. We're seeing shares rise this morning.

0:31 Yeah, the company is known for operating the UK's largest power station up in North Yorkshire. And it's rising today after Brookfield Asset Management and the Qatar Investment Authority agreed to invest £ 2. 5 billion in a data centre project alongside the company. Those two are hoping to tap into an existing grid connection at the power station in order to get the initial phase up and running pretty quickly, hopefully by early 2028. And ultimately, this might be the first proposed data center to bypass the UK's lengthy grid connection queue. So, we've seen Drax in the past rely on government subsidies for its biomass generation, but that support is starting to decline.

1:11 And so, Drax, like other utility firms, is now looking at new revenue streams and data centers seem to be like a good place to start. Analysts are awaiting more details on the deal, but they like the fact that it's got credible partners and it shows that it's got new opportunities to chase So, shares are having their best day in over a year, up as much as 9%.

1:29 And they're trading at their highest level since May.

1:33 Okay. So, that's in terms of Drax. Let's go to the online fashion retailer Zalando next. What's the news from them? Yeah.

1:40 The stock is sliding this morning after reporting third quarter results. They were broadly in line with expectations. And some analysts at Metzeler highlighted that investors might be booking some profits considering the stock was up about 20% in the month leading up to today's print. So, earnings were as expected.

1:58 But some analysts did flag that the gross margin was a bit softer than hoped. Jeffrey said that was a surprise considering some of the positive messaging from the company. And it's also raising questions about the sustainability of its growth in gross merchandise volume. You know, growth with margin dilution is often quite a hard sell. So, concerns around the margin, a lack of sort of really any good news today is snapping the recent strong run in the shares.

2:23 They were down as much as 8% in early trade. They've pared back a bit, but they are pulling back from a three-month high nonetheless.

2:29 I know we've got a story that we put out in advance of those results from Zalando on the terminal saying that they might be a victim of sneaker weakness. So, we could demand for sportswear brands leading to an inventory build-up. And it does remind me of something that our opinion columnist, Andrew Felstead, wrote recently about people wanting to wear more formal shoes to the office. So, perhaps that's having a bearing in terms of their share price this morning. But lastly, let's move to a drug maker buyer raising its annual profit outlook. Yeah.

2:58 So, the company beat expectations and upped its outlook. That improvement is being driven by increased demand for some of its newer drugs. That includes one that treats prostate cancer and another that provides kidney therapy. So, the demand for these new drugs like Nubeca and Corendia actually prompted the CEO, Bill Anderson, to say that the pharma division has finally reached a turning point in terms of growth. And that's important because, you know, the demand for these newer drugs is helping to offset the generic competition that faces some of its other medicines, such as a blood thinner drug and its eye medicine. And also, other parts of the business are also struggling. We saw a big stumping earnings

3:38 at its crop science division. So, a much needed boost from newer drugs there. Analysts said that, you know, the lengthy overhang from the ongoing Roundup litigation, which is a weed killer, has also eased compared to a couple of years ago. We've seen sentiment around that really boost the stock recently. And buyer up over 5% today and at a four-month high.

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