FTSE 100 movers: Intertek boosted by Kepler note; Micro Focus slumps
London’s FTSE 100 was up 0.4% to 7,500.38 in afternoon trade, with brokers notes providing much of the action on Monday.
Intertek got a boost as Kepler Cheuvreux lifted the stock to ‘buy’ from ‘hold’ and raised the price target to 4,600p from 3,935p ahead of the first-quarter results on 26 May. “We are bullish on the testing, inspection and certification sector’s cyclical inflection, which Intertek’s management is poised to leverage via acquisitions and gradual productivity improvements from its 5x5 strategic initiatives.”
Luxury fashion house Burberry was on the front foot as Deutsche Bank lifted its price target to 1,615p from 1,600p, while Paddy Power was supported by an upgrade to ‘neutral’ from ‘underperform’ at Credit Suisse, which pointed to the material de-rating of the stock.
Retailer Marks & Spencer was among the risers after Barclays added the stock to its European recommended portfolio.
Miner Rio Tinto gained ground as it announced a new bond buyback of up to $2.5bn to further reduce gross debt. The company has issued a redemption notice for around $1.72bn of its 2019 and 2020 US dollar-denominated notes and commenced cash tender offers to purchase up to approximately $781m of its five 2021, 2022 and 2025 US dollar-denominated notes.
On the downside, Micro Focus was hit by a downgrade to ‘underperform’ from ‘neutral’ from Credit Suisse, while payments processor Worldpay was dented by a downgrade at Bryan Garnier to ‘sell’ from ‘neutral’, as it said the stock has run too far and it sees no short-term catalysts.
It pointed out that the stock has risen more than 20% since 17 February, and is now trading on 2017 EV/EBITDA of 14.8x, which is “above the level it deserves”. BG said Worldpay’s fundamentals are not impressive for the payment sector, the company is still struggling in the US, and the migration of its customers to its new platform will take time.
Bunzl was weaker as Jefferies downgraded its recommendation on the stock to ‘underperform’ from ‘hold’ and cut the price target to 1,950pfrom 2,230p due to concerns about momentum in the company's core margins and declining returns.
Risers
Intertek Group (ITRK) 4,272.00p 2.52%
Burberry Group (BRBY) 1,753.00p 2.28%
Convatec Group (CTEC) 305.80p 1.93%
Paddy Power Betfair (PPB) 8,540.00p 1.91%
Vodafone Group (VOD) 224.40p 1.86%
Marks & Spencer Group (MKS) 392.00p 1.84%
Centrica (CNA) 204.80p 1.74%
TUI AG Reg Shs (DI) (TUI) 1,150.00p 1.68%
Rio Tinto (RIO) 3,220.50p 1.67%
Merlin Entertainments (MERL) 522.50p 1.65%
Fallers
Micro Focus International (MCRO) 2,394.00p -3.16%
Worldpay Group (WPG) 313.10p -2.73%
Hikma Pharmaceuticals (HIK) 1,698.00p -2.19%
Royal Mail (RMG) 423.10p -1.24%
Bunzl (BNZL) 2,437.00p -0.85%
Smiths Group (SMIN) 1,574.00p -0.63%
Direct Line Insurance Group (DLG) 349.50p -0.63%
GKN (GKN) 351.30p -0.62%
Prudential (PRU) 1,746.50p -0.54%
DCC (DCC) 7,420.00p -0.40%