The latest Market Talks covering Equities. Published exclusively on Dow Jones Newswires throughout the day.

0812 ET - Babcock International is set up with strong prospects for success on an attractive pipeline of opportunities in the U.K and abroad, RBC Capital Markets analyst Ben Pfannes-Varrow says in a research note. The British defense company is a significantly better-quality business more than four years into a turnaround, the analyst says. Its relationship with the U.K's defense department, military operational asset engineering know-how and infrastructure ownership underpins high visibility, he adds. Combined with a strong management team and execution, Babcock has upside to growth, he says. RBC starts its coverage of the company with an outperform rating on the stock and a price target of 1,200 pence. Shares trade 4.9% higher at 1,044 pence. (nina.kienle@wsj.com)

0800 ET - WPP faces risk of more dividend cuts after it halved its interim payout earlier this month, UBS analysts say in a research note. First-half results from the U.K. advertising group were as expected after the company gave an update in early July, but they prompt UBS to cut its estimate on 2026 free cash flow by 18%, the analysts say. UBS now expects WPP to pay dividends of 22.5 pence for 2025, which would represent a 43% decline on year. "We remain concerned that we will see further earnings downgrades under WPP's new CEO if she decides investments are needed to bring WPP back to growth. There is also a risk of further dividend cuts," the analysts say. Shares fall 0.85% to 372.90 pence. (adria.calatayud@wsj.com)

0757 ET - Gold futures rise after Friday's Alaska summit between President Trump and Russia's Vladimir Putin ended without a ceasefire in Ukraine. Futures are up 0.3% at $3,392.30 a troy ounce. The precious metal is attracting safe-haven demand on persistent geopolitical uncertainty, Tradu.com's Nikos Tzabouras says in a note. Moderating inflation and a weakening labor market have also increased expectations for the U.S. Federal Reserve to lower interest rates, Tzabouras says. This has weighed on the U.S. dollar and makes non-interest bearing bullion more attractive, Tzabouras writes. Still, any progress in talks between Trump and Putin alongside potential U.S. security guarantees to Ukraine could temper safe-haven demand and there is no guarantee of aggressive monetary policy easing, Tzabouras adds. (joseph.hoppe@wsj.com)

0751 ET - The Pro Farmer Midwest Crop Tour is underway on Monday, and traders and analysts alike are expecting to see strong crops with only minimal development and disease issues. For corn, one reason for that is because the ever-improving genetics of corn seeds--which are designed to create corn plants that can withstand excessive heat and dryness, neither of which have been observed in much of the Corn Belt. "It's hard to see what weather event could derail a crop," says Oliver Sloup of Blue Line Futures, who is also a crop scout on the eastern leg of this year's tour. The eastern leg travels through Ohio and Indiana today. (kirk.maltais@wsj.com)

0750 ET - Vestas Wind Systems will get a boost from better-than-expected U.S. government guidelines on which projects will qualify for wind and solar tax credits, J.P. Morgan analysts write. The Danish wind-turbine manufacturer had previously warned about the risk of the U.S. Treasury increasing the 5% capital expenditure requirement or reducing the construction period timeline, they add. Against these initial fears, Friday's updated guidance is materially positive and should give the sector better visibility through to 2030, they add. The 'physical work test' and 'continuity requirements' are favorable for manufacturers like Vestas, they add. Shares trade up 16% at 133.35 Danish kroner. (adam.whittaker@wsj.com)

0747 ET - Large language models could steal users from Duolingo through cheap, AI-driven learning content. But these competitors will struggle to match Duolingo's reach, engagement and monetization, KeyBanc analysts say. Duolingo's gamification draws and retains users while self-teaching on an AI platform "lacks an engagement hook and requires more motivation," the analysts say. AI tools make building a learning platform much cheaper, but monetizing that platform with the effectiveness that Duolingo does is far more difficult. "With user acquisition costs high and in-app ad monetization often counterproductive to engagement, we believe it is difficult for new competitors to scale profitably," the analysts say. (nicholas.miller@wsj.com)

0744 ET - Duolingo's embrace of AI provoked users' ire and damped its second-quarter growth, but the company has a strong plan to bounce back, KeyBanc analysts write. Duolingo is replacing hearts, which penalize users for mistakes, with energy, which reward correct answers. Initial results have already shown an increase in daily active users, median time spent learning well and subscriber conversion. The company is also leaning into edgy marketing content, which could help its content go viral and increase its user numbers, the analysts say. KeyBanc upgrades its rating on the stock to overweight, with a$460 price target. Shares rise 2.8% to $336.07. (nicholas.miller@wsj.com)

0742 ET - All eyes are on Netflix's performance in the back half of the year, J.P. Morgan analysts say in a research note. The streaming giant expects faster engagement growth in the second half thanks to its strong slate of upcoming content, such as "Stranger Things," "Wednesday" and "Wake Up Dead Man: A Knives Out Mystery." These high-profile releases should provide upside to Netflix's second-half guidance, the analysts say. Still, they note that the company's total viewing comparisons have faced pressure from paid-account sharing, content delays stemming from strikes and its back-half weighted slate. At the same time, "Netflix's ad business is still catching up to its user scale," the analysts say. (connor.hart@wsj.com)

0738 ET - Updated tax credit guidance from the U.S government for wind and solar projects is close to the best possible outcome for the sector compared to initial fears, Jefferies analysts write. The new guidance removes uncertainty for developers and means projects starting in 2026 can claim tax credits until 2030, they add. Admittedly, the "physical work of a significant nature" test is less straightforward than the current 5% cost rule, they add. The addition of interconnection and permitting challenges as reasons to break the new four-year continuity requirement is an underappreciated element of the new rules, they say. (adam.whittaker@wsj.com)

0735 ET - European defense stocks look set for volatility ahead in a week of intense diplomacy about the Russia-Ukraine war, but the drivers for an upturn in European defense spending over the long run remain intact, analysts at JPMorgan say in a research note. "Regardless of how the next few days play out, we strongly believe that Europe will increase its defence spending over the next decade. Our top near-term picks are the three German defence stocks [Rheinmetall, Hensoldt, Renk] and Babcock," JPMorgan says. The three German companies are likely to set 2030 guidance above consensus expectations at events in November, while Britain's Babcock is expected to highlight growth opportunities in the marine division at a September event, according to JPMorgan. Babcock is up 4.7%, Rheinmetall climbs 2.9%, Renk rises 2.5% and Hensoldt moves 2.2% higher. (adria.calatayud@wsj.com)

0734 ET - TAG Immobilien's acquisition in Poland is a good fit for its to-rent portfolio, as geographies overlap in all cities except Warsaw, Warburg Research analyst Simon Stippig says in a research note. The German real-estate company bears no development risk with the acquisition, Stippig says. The company also updated its dividend payout policy of 50% of funds from operations, effective from fiscal 2026. It previously amounted to 40%. Warburg raises its recommendation to buy from hold on both the acquisition and updated dividend policy, and increases the price target to 19.70 euros from 16.30 euros. Shares trade 0.9% lower at 15.37 euros. (nina.kienle@wsj.com)

0718 ET - Shares in most European arms makers trade higher, defying broader losses across stock markets, after European leaders vowed to support Ukraine following President Trump's Alaska summit with Russia's Vladimir Putin on Friday. Shares in Germany's Rheinmetall jump 3%, while smaller local peers Renk and Hensoldt are up 2.6% and 2.2%, respectively. Sweden's Saab trades 3.8% higher, Italy's Leonardo is up 3.2%, and the U.K.'s BAE Systems gains 1.6%. "Europe will have to spend a lot more for its own defence. Trump seems inclined to reduce or even end U.S. support for Ukraine," Berenberg's Holger Schmieding says in a research note. (adria.calatayud@wsj.com)

(END) Dow Jones Newswires

August 18, 2025 08:12 ET (12:12 GMT)

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