Sector movers: Aerospace names lead gains, grocers wanted ahead of Tesco results
(ShareCast News) - Aerospace & Defence flew to the top following a US missile strike against the Syrian-government controlled airfield from which American officials suspected a sarin gas attack against the town of Khan Sheikhun in Idlib province was launched on Tuesday.
Providing some additional lift for commercial aerospace names, after the close of trading on Thursday Goldman Sachs sounded a confident note on the back of data showing strong growth in global revenues per kilometre of 8.8% year-on-year thus far in 2017.
"Strong air traffic growth is a positive for the commercial aerospace stocks in our coverage, Rolls Royce (CL-Buy, last close 778.5p), Airbus (Buy, last close €71.93), MTU Aero Engines (Neutral, last close €124.65), Meggitt (Neutral, last close 444p) and Safran (Not Rated, last close €71.51)," the broker said.
Positive broker commentary on the three main listed grocers helped boost Food and Drug Retailers to second place on the leaderboard.
Analysts at UBS upped their target price on shares of Sainsbury from 330p to 360 and reiterated a 'Buy' stance, while revising their target for Morrison from 207p to 240p.
Sainsbury was set to surprise positively on its like-for-like growth in 2017, UBS said, while Morrison had already done so for five consecutive quarters and was now "fairly" priced.
UBS on the other hand executed a multi-notch downgrade on stock in Ocado, dropping it straight from 'Buy' to 'Sell' while taking an axe to its target price, which fell from 425p to 200p.
On a related note, HSBC weighed in on Tesco ahead of the grocer's results which are scheduled for release on 12 April.
HSBC said: "Tesco progress is being underestimated by investors in our view: This has not mattered too much to Tesco until recently, but with the proposed merger with Booker it must convince Booker shareholders that swapping shares in the cash-generative Booker for shares in Tesco, whose recovery is still unproven, is a good deal."
Big Oil was higher for another day as events in Syria stoked concern of possible disruptions to supplies from the Middle East.
Top performing sectors so far today
Aerospace and Defence 5,085.67 +2.12%
Food & Drug Retailers 2,996.65 +1.65%
Personal Goods 35,442.97 +1.58%
Oil & Gas Producers 8,014.18 +1.48%
Software & Computer Services 1,989.21 +1.37%
Bottom performing sectors so far today
Industrial Metals & Mining 2,505.21 -1.04%
Fixed Line Telecommunications 3,596.93 -0.91%
Mobile Telecommunications 4,616.64 -0.53%
Beverages 18,215.54 -0.46%
Food Producers & Processors 7,762.10 -0.31%