FTSE 100 movers: Admiral boosted by upgrade; Melrose, Rolls-Royce slump

London’s FTSE 100 was down 0.3% at 8,258.89 in afternoon trade on Tuesday.

Admiral rallied to the top of the index after Berenberg upgraded shares of the insurer to ‘buy’ from ‘hold’ and lifted the price target to 3,127p from 2,973p, citing an attractive valuation.

"Investor Warren Buffett once said: ‘It is far better to buy a wonderful company at a fair price than a fair company at a wonderful price.’ Fortunately, today investors can buy Admiral, a wonderful company, also at a wonderful price," it said.

It noted that since it downgraded the shares in December, they have gone sideways. The stock has de-rated and underperformed the sector by around 10%. However, in Berenberg’s view, the shares now look cheap again.

The bank pointed out that Admiral is trading towards the bottom end of its price-to-earnings range and said it thinks there is scope for further earnings per share upgrades, in particular because it feels the price increases are still not appropriately reflected in consensus estimates for 2024. Berenberg is now 20% ahead of consensus EPS for FY24E.

Rolls-Royce and Melrose Industries were both weaker after Airbus cut earnings guidance and delivery targets late on Monday.

FTSE 100 - Risers

Admiral Group (ADM) 2,625.00p 2.18%
Flutter Entertainment (DI) (FLTR) 14,830.00p 1.58%
Smurfit Kappa Group (CDI) (SKG) 3,658.00p 1.05%
Sage Group (SGE) 1,076.50p 0.94%
Shell (SHEL) 2,818.00p 0.84%
National Grid (NG.) 896.00p 0.81%
Beazley (BEZ) 704.00p 0.57%
AstraZeneca (AZN) 12,542.00p 0.51%
Relx plc (REL) 3,630.00p 0.50%
Rio Tinto (RIO) 5,248.00p 0.38%

FTSE 100 - Fallers

Burberry Group (BRBY) 978.00p -3.93%
Rolls-Royce Holdings (RR.) 452.90p -3.90%
Convatec Group (CTEC) 232.40p -3.73%
BT Group (BT.A) 140.60p -3.07%
Melrose Industries (MRO) 565.60p -2.75%
IMI (IMI) 1,770.00p -2.75%
Weir Group (WEIR) 2,000.00p -2.34%
Rightmove (RMV) 554.40p -2.26%
Marks & Spencer Group (MKS) 289.50p -2.20%
Entain (ENT) 655.80p -2.12%