FTSE 100 movers: Anglo tanks again but Ashtead surges on results

London’s FTSE 100 index was trading flat at 6,136.07 at 1400 GMT, with Anglo American under pressure again.

Anglo American tanked for the second day in a row as analysts assessed the implications of the “radical” portfolio restructuring and scrapping of the dividend announced on Tuesday.

Jefferies downgraded its stance on the stock to ‘underperform’ from ‘hold’ and took an axe to the target price, cutting it to 275p from 635p, saying an equity issuance may still be needed.

It said aggressive portfolio management, opex and capex reductions and the suspension of the dividend were all steps in the right direction.

“However, the downside risk to commodity prices is still significant, and further action, including an equity issuance, may still be necessary in 2016. Despite the recent selloff, we downgrade.”

Pearson was also under the cosh after Deutsche Bank cut its price target on the stock to 770p from 950p.

It said Pearson is trading on 13x price-to-earnings 2016E and 15x price to free cash flow, which could appear low compared to peers, but Pearson is experiencing organic revenue decline and has not grown more than 1% since 2010.

“With risk of further weak trading in college, low adoption year in school books and the possibility of a significant round of restructuring in 2016, we retain our sell,” said DB.

A downgrade to full year guidance by US peer John Wiley & Sons also weighed on the stock.

John Wiley fell more than 10% after its second-quarter results. The publisher said revenue dropped 9%, pushing net income down by 19%.

Ashtead put in a stellar performance after the equipment rental company reported a positive start to the year, with first half revenue growth of 18% driven by a strong second quarter.

Underlying revenue for the second quarter grew 17% at constant exchange rates from £477.9m to £589.0m, boosting first half revenues to £1.13bn. That led to a first half pre-tax profit of £342.7m, up 21% on 2014’s £265.5m and will pay a 4p per share interim dividend.

FTSE 100 - Risers

Ashtead Group (AHT) 1,106.00p 7.27%
Rio Tinto (RIO) 1,960.50p 3.57%
BHP Billiton (BLT) 739.10p 2.26%
Dixons Carphone (DC.) 487.40p 1.69%
Royal Mail (RMG) 461.10p 1.30%
ARM Holdings (ARM) 1,109.00p 1.28%
3i Group (III) 488.50p 1.12%
National Grid (NG.) 920.00p 1.10%
Hargreaves Lansdown (HL.) 1,458.00p 0.83%
SSE (SSE) 1,436.00p 0.77%

FTSE 100 - Fallers

Anglo American (AAL) 300.00p -7.31%
Fresnillo (FRES) 642.00p -3.96%
G4S (GFS) 216.30p -3.13%
Morrison (Wm) Supermarkets (MRW) 140.60p -2.63%
Pearson (PSON) 744.00p -2.62%
Tesco (TSCO) 153.35p -2.04%
Mondi (MNDI) 1,350.00p -1.89%
Rolls-Royce Holdings (RR.) 579.00p -1.86%
Standard Chartered (STAN) 510.10p -1.83%
Burberry Group (BRBY) 1,178.00p -1.75%