FTSE 100 movers: Analysts escalate Easyjet, whip WPP
The FTSE 100 was inching further into positive territory on Friday, led by takeover rumours and overseas focused companies seen benefiting from the lower pound.
Top of the list was Easyjet was flying higher after being upgraded by Credit Suisse to 'outperform' from 'neutral', telling clients that a recovery in profitability to the levels seen in 2013 and 2014 was on the cards. With analysts marking up revenue per seat forecasts due to improved summer trends, driving a 7% increase in their estimate for the airline's 2017 profit before tax and 17% for 2018, those revisions saw the analysts bump up their target price on the shares by 24% to 1,583p. The shares bounced back from a small fall the previous day over the rumoured departure of CEO Carolyn McCall for ITV, which the Swiss bank noted as a possible risk factor.
Likewise, Severn Trent was lifted as HSBC upped it to 'hold' from 'reduce' but cut its target price to 2,160p from 2,200p after the stock fell 11% over a month against the FTSE All-share, because of a change of sentiment towards the sector amid the Labour Party’s manifesto setting out the possibility of the renationalisation of the water companies and the recent increase in gilt yields having "reminded investors that these stocks tend to perform in inverse correlation to bond yield". But the bank has no dividend cut in its estimates and thinks the shares are oversold.
Centrica, whose shares were cooking on gas sparked by whispers of a takeover. The British Gas owner has been flagged as a potential target, attracting the attention of a couple of different bidding parties, according to the Wallstreetwires website. Scottish rival SSE was also lifted. Analyst Jasper Lawler at London Capital Group said the rumour was a lot of "hot air", with the rather paltry 4% jump suggesting the market "has open ears but isn’t fully convinced a takeover of the British Gas-owner is likely"...and with energy supply such heavily politicised at the moment "getting a deal through regulators could be tough".
Media players were among the main fallers following a negative note from JP Morgan on the European ad market the day before, alongside a late downgrade on WPP from Exane BNP to 'underperform' due to broadcasters cutting ad guidance. This is weighing on the whole media sector in Europe, seeing ITV and Informa also in the red.
Kingfisher was down after smaller rival Howden Joinery poached the boss of its key Screwfix growth-driving unit. As the group restructures, Screwfix has recently been the sole driving force at Kingfisher, last year growing sales 23% to £1.3bn thanks to strong growth from the specialist trade desks, digital growth and the opening a load of outlets in the UK and Germany.
FTSE 100 - Risers
easyJet (EZJ) 1,408.00p 4.53%
Centrica (CNA) 209.50p 3.76%
Rolls-Royce Holdings (RR.) 932.00p 1.80%
Standard Chartered (STAN) 805.50p 1.47%
SSE (SSE) 1,474.00p 1.45%
International Consolidated Airlines Group SA (CDI) (IAG) 624.00p 1.38%
Shire Plc (SHP) 4,315.00p 1.36%
Severn Trent (SVT) 2,194.00p 1.29%
Unilever (ULVR) 4,175.50p 1.16%
Reckitt Benckiser Group (RB.) 7,664.00p 1.07%
FTSE 100 - Fallers
WPP (WPP) 1,561.00p -3.04%
ITV (ITV) 177.00p -2.69%
Royal Mail (RMG) 413.90p -2.50%
Informa (INF) 654.50p -1.87%
Kingfisher (KGF) 304.40p -1.71%
Taylor Wimpey (TW.) 177.70p -1.55%
Sainsbury (J) (SBRY) 245.00p -1.29%
Mediclinic International (MDC) 730.50p -1.08%
GKN (GKN) 325.10p -0.85%
Fresnillo (FRES) 1,424.00p -0.84%