FTSE 100 movers: Ashtead boosted by broker note; M&S hit by downgrade

London’s FTSE 100 was down 0.1% to 7,365.82 in afternoon trade as investors mulled the implications of Brexit.

Equipment rental company Ashtead was higher after Liberum initiated coverage of the stock at ‘buy’ with a 1,940p price target, saying the upside potential from increased rental penetration in the US market is yet to be fully reflected in the share price.

The brokerage said its detailed analysis of management’s medium-term growth plan, ‘Project 2021’, suggests that it is well placed to deliver 9% per annum underlying revenue growth and further improve its sector leading margin.

Supermarket retailer Morrison was lifted by a double upgrade to ‘buy’ at Bank of America Merrill Lynch, which hiked its price target on the stock to 275p from 220p.

The bank pointed out that Morrison has one of the strongest balance sheets in the sector, a capital light growth plan, self-help opportunities, is close to net cash and has one of the most attractive cash flow valuations in the sector.

“We believe that its strong balance sheet position and resultant cash optionality deserves a premium,” it said, adding that it looks as if the stock is trading on a 20% discount versus the sector.

Direct Line was higher as RBC Capital Markets maintained its ‘outperform’ rating on the insurer and upped its price target.

On the downside, retailer Marks & Spencer was under the cosh after UBS downgraded it to ‘neutral’ from ‘buy’ and cut the price target to 340p from 390p.

“Despite a respectable free cash flow yield and an invigorated management team, it seems premature to expect either a rerating or positive earnings momentum in the foreseeable future,” the bank said.

Energy provider SSE retreated after saying it expects operating profit in its networks division to be around £100m lower in 2017/18 than the current year on a like-for-like basis.

SSE said it now expects its dividend cover for 2017/18 to be within, but towards the bottom of the expected range of around 1.2 times to 1.4 times what it set out in its annual report 2016 for the three years to 2018/19.

Schroders, British Land, Old Mutual, and Smith & Nephew declined as their stock went ex-dividend.

Risers

Ashtead Group (AHT) 1,690.00p 3.17%
Morrison (Wm) Supermarkets (MRW) 241.40p 1.77%
InterContinental Hotels Group (IHG) 3,913.00p 1.72%
Smurfit Kappa Group (SKG) 2,163.00p 1.55%
Antofagasta (ANTO) 827.50p 1.41%
Coca-Cola HBC AG (CDI) (CCH) 2,060.00p 1.33%
Pearson (PSON) 669.00p 1.21%
Direct Line Insurance Group (DLG) 339.80p 1.16%
Mondi (MNDI) 1,969.00p 1.03%
Anglo American (AAL) 1,247.00p 1.01%

Fallers

Mediclinic International (MDC) 762.00p -2.62%
Schroders (SDR) 3,017.00p -2.49%
BT Group (BT.A) 315.55p -2.11%
Smith & Nephew (SN.) 1,213.00p -2.02%
British Land Company (BLND) 590.00p -1.99%
Old Mutual (OML) 215.40p -1.91%
Intu Properties (INTU) 271.40p -1.70%
Marks & Spencer Group (MKS) 330.00p -1.64%
Vodafone Group (VOD) 207.30p -1.61%
SSE (SSE) 1,464.00p -1.61%