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

1110 GMT - Pearson should be able to deliver sustained growth and achieve its medium-term targets, but near-term growth triggers appear constrained, UBS analysts write. "While operational momentum remains solid, we see a less certain catalyst path from here and believe the current valuation fairly reflects the growth outlook," they say. UBS cuts its rating on the educational materials company's stock to neutral from buy, but keeps its target price at 13 pounds. Shares are down 0.4% at 12.72 pounds and 21% higher over the year to date. (ian.walker@wsj.com)

1104 GMT - European telecoms aren't significantly threatened by agentic artificial intelligence, JPMorgan's Akhil Dattani and Ankur Baheti write. Some investors worry that AI agents will prompt consumers to move providers more often and to negotiate down bills. Though the AI landscape is nascent and mustn't be dismissed, "we see numerous reasons why the impact on European telecoms should be contained," the analysts say. AI agents currently on the European market rarely prompt users to look to discount providers, they note. Incumbents should look to consolidate to crowd out the risk, they say. European telecoms shares fall sharply Friday after SpaceX moved to enter the mobile network market. Deutsche Telekom shares fall 6.3%, while Vodafone and Telefonica drop 4.1% and 3.9%, respectively. Orange shares fall 2.5%.(josephmichael.stonor@wsj.com)

1040 GMT - Italian, Spanish and Portuguese banks should report another solid quarter, Keefe, Bruyette & Woods' Hugo Cruz and Ben Maher write. The banks will report net interest income growth quarter-on-quarter due to positive average volumes and interest rates staying higher-for-longer, KBW says. Operating costs and asset quality for the banks will also remain under control, the analysts note. Mergers and acquisitions will continue to be a major topic, particularly in Italy due to progressing live deals. KBW keeps its price targets, annual estimates and recommendations for Iberian and Italian banks unchanged. (michael.hennessey@wsj.com)

1026 GMT - European equities are set to perform in line with global peers after a period of underperformance, Bank of America strategists Sebastian Raedler and Thomas Pearce say. European stocks have underperformed global peers by 4% over the past month they say, amid pressure from higher 10-year Treasury yields and slower European growth. The continent's stocks should now keep pace with peers from a low starting point, they say. However, risks remain. The risk premium investors demand for holding European stocks has remained at historically low levels, leaving stocks vulnerable to any wobble in the dominant AI market narrative, the strategists say. The Stoxx 600 could fall as much as 7% into the second quarter of 2027, they say. The index rises 1% Friday, after falling 3.7% over the past month. (josephmichael.stonor@wsj.com)

1025 GMT - French stocks will outperform global peers after their recent sharp underperformance, Bank of America strategists Sebastian Raedler and Thomas Pearce say. French stocks have lagged the wider European market by 3% over the past month, bringing their underperformance to over 20% since spring 2024, the strategists say. Moreover, the risk premium attached to French government bonds is unlikely to increase significantly further, they say. The strategists raise their outlook for French equities from market weight to overweight. The CAC 40 gains 0.8% Friday after falling 7% over the past month. The index is down 4.4% so far this year. (josephmichael.stonor@wsj.com)

1004 GMT - IG Group's acquisition of U.S. sports-gambling and prediction-market company Underdog has longer-term upside, Panmure Liberum's Barun Singh writes. In July, the U.K. online trading platform agreed to buy Underdog for up to $1.3 billion. Panmure Liberum is now more positive on the acquisition, following a seminar from IG on Thursday. Net revenue for Underdog more than doubled in the third quarter--its seasonally slowest quarter--the analyst says. "We do not expect a big swing from Underdog in the near term, but we think its upside is a longer-term story." However, IG Group's core over-the-counter business is still less stable than assumed, so shares will trade on the core business rather than on Underdog, the analyst notes. Shares are up 1.35%. (michael.hennessey@wsj.com)

0949 GMT - Soitec's gross margin should expand significantly over the coming years due to a contribution from photonics, Bank of America analysts write in a note to clients. The French semiconductor-materials maker generates revenue from Photonics-SOI--a platform to integrate photonic components on a silicon-on-insulator substrate that are widely used in data centers. Soitec reported a gross margin of 16.3% for the fiscal year that closed at the end of March. Analysts say that should grow to 29% in fiscal 2027, 39% in fiscal 2028 and 44% in fiscal 2029. "We think consensus underappreciates the margin accretion effect of the increasing mix of Photonics-SOI," they say as they upgrade their rating on the stock to buy from neutral. Soitec shares trade 6.3% higher at 162.00 euros. (mauro.orru@wsj.com)

0939 GMT - Investor concern following a report that OpenAI's annual revenue could be lower than signaled have eased, but the sharp market reaction shows the AI narrative is fragile, Tickmill Group's Patrick Munnelly says. A Financial Times report said OpenAI's annualized revenue would be $50 billion--$20 billion below market expectations--prompting a tech selloff Thursday, before Bloomberg reported that the frontier AI model remains on track to hit $70 billion. "Markets have been given another AI relief impulse, but the underlying structure remains fragile," Munnelly says. Nasdaq futures rise 0.8% after the index fell 1.25% Thursday. (josephmichael.stonor@wsj.com)

0936 GMT - Kering's creative transition at its Saint Laurent brand appears well-planned, Barclays analysts write in a research note. The French luxury-goods company said that Saint Laurent's creative director Anthony Vaccarello will depart after a decade at the brand's top creative job. The company said that it would announce a new creative chief soon. "According to the company, the decision was driven by the longer-term prospects for Saint Laurent, and is unrelated to any recent financial performance of the brand," they say. The focus of the incoming designer will be on women's daywear and menswear and high-end leather goods, as well as on regions where presence remains low such as China and the wider Asia region, Barclays says. The stock trades 2.3% higher. (andrea.figueras@wsj.com)

0932 GMT - Allianz's realization of fixed income losses is "proactive and prudent" and causes a small increase to outer year forecasts, Jefferies' Philip Kett and Derald Goh write. The German insurer is reinvesting gains from the sale of its stakes in Indian joint ventures back into "strategic growth and productivity initiatives" and into the realization of fixed income losses. "One secondary implication is that this smooths the group's earnings, neutralizing an unsustainable gain," Jefferies says. The change lifts Jefferies' forward forecasts by 1% a year, and Jefferies raises the target price to 440 euros from 420 euros. "In light of the ongoing bond market volatility, we would not be surprised if peers also proactively recognized fixed income losses," the analysts add. Shares are up 1.2% at 418.20 euros. (michael.hennessey@wsj.com)

0925 GMT - Porsche delivered a credible midterm plan at its capital markets day--a rather rare feature in an automotive sector lacking visibility, Berenberg analysts Romain Gourvil and Tommy Whitfield write. The company reiterated its 10%-15% medium-term margin target, alongside a new 9%-12% net cash flow margin target, while its liquidity and stricter cash flow focus also support a more generous earnings payout policy, the bank says. Porsche's base case is centered on the lower end of these target ranges, based on relatively conservative assumptions, it adds. "The current valuation leaves Porsche trading on demanding near-term multiples, perhaps capping re-rating potential until we get closer to the 2028 margin inflection." Bereneberg rates Porsche at hold with a 46 euro price target. Shares rise 0.9% to 41.34 euros. (dominic.chopping@wsj.com)

0914 GMT - Space X's accelerated efforts to build a mobile network won't pose a near-term risk to U.S. incumbents, JPMorgan's Sebastiano Petti writes. The Elon Musk-run company agreed to buy cellular spectrum licenses from investment firm Grain Management, a significant move into the wireless service market. However, risk to established players is limited given the time and capital expenditure SpaceX needs to become more competitive, the analysts says. However, sentiment could turn against incumbents as investors adjust to the presence of a new entrant, Petti adds. Telecoms shares fall sharply in the U.S. premarket and Europe. T-Mobile shares drop 6.9% premarket, while Verizon and AT&T drop 5.8% and 6.5%, respectively. In Europe, Deutsche Telekom shares drop 7.6%.