FTSE 100 movers: Travis Perkins builds gains; Hikma slumps on generics business

London’s FTSE 100 was down 0.1% to 6,355.80 at 1445 GMT, as investors weighed up mixed Chinese manufacturing data against better-than-expected UK factory data, with broker notes providing much of the action.

Hikma Pharmaceuticals slumped after lowering its guidance for the generics business to revenues of around $150m, down from a previous range of $175m to $200m. It said the need to shift towards a hybrid brand and generic strategy for its gout medicine, colchicine, has led to a more gradual growth rate in sales of the drug.

Shares in Compass Group slid after Credit Suisse cut the catering company’s stock to ‘underperform’ from ‘neutral’ and trimmed its target price to 1,050p from 1,100p. The bank said it saw further risks to the group’s fast growing and emerging (FG&E) market and lower growth since Compass issued a cautious outlook for its commodity exposed business on 29 July.

EasyJet hit turbulence after HSBC downgraded the stock to ‘reduce’ from ‘hold’ and cut the price target to 1,600p from 1,800p. The bank said EasyJet is an excellent business and has traded very well this summer. However, it expects increasing unit revenue pressure from accelerating capacity growth into winter 2015.

“We also see EasyJet’s market position under threat from Ryanair’s repositioning up-market. Ryanair is rebranding its business, changing the booking and travel experience for the better, entering major airports and launching business traveller friendly routes and schedules. These moves bring the two major carriers into tougher competition.”

Housebuilder Persimmon was also under the cosh after JPMorgan Cazenove cut its stance on the shares to ‘underweight’ from ‘neutral’ as it took a look at UK housebuilders. Still, the bank said this was a valuation call and the outlook for the stock remains positive.

On the upside, Travis Perkins was the standout gainer after Deutsche Bank upgraded the stock to ‘buy’ from ‘hold' and lifted the price target to 2,234p from 1,991p. “With the underlying market facing tough comparables in FY 15 and disruptions from the strategy concentrated in the near term, we believe most benefits from the ongoing initiatives are yet to come.”

DB added that as a building materials supplier with pure UK exposure, Travis Perkins is leveraged to a resilient economy against a backdrop of global growth concerns.

Royal Bank of Scotland was a high riser after Exane BNP Paribas upgraded the stock to ‘outperform’ from ‘neutral’ and lifted the price target to 370p from 360p. Over the last year, the bank has maintained a relatively cautious investment stance on RBS. It said that despite the appeal of the restructuring story and potential excess capital, its concern was that the eventual earnings power of the bank was likely lower than many thought.

However, with the share price down 20% since the start of 2015, a greater appreciation of the medium-term prospects for earnings, and substantial improvements in the balance sheet over the last 10 months, Exane turned more positive on the stock.

Media behemoth WPP was on the front foot after it strengthened its creative video offering with the acquisition of London design studio ManvsMachine. The company’s Landor brand consulting and design agency made the purchase of a majority stake in the business as part of a strategy to broaden its creative capabilities, in this instance in screen-based and multi-channel branding.

Risers

Travis Perkins (TPK) 1,953.00p 1.93%
Ashtead Group (AHT) 1,017.00p 1.70%
Royal Bank of Scotland Group (RBS) 322.50p 1.54%
Lloyds Banking Group (LLOY) 74.85p 1.52%
WPP (WPP) 1,478.00p 1.37%
Marks & Spencer Group (MKS) 520.00p 1.36%
Barclays (BARC) 234.95p 1.27%
BAE Systems (BA.) 444.80p 1.02%
GKN (GKN) 290.00p 0.97%
CRH (CRH) 1,798.00p 0.95%

Fallers

Hikma Pharmaceuticals (HIK) 2,053.00p -5.13%
Compass Group (CPG) 1,082.00p -3.31%
easyJet (EZJ) 1,711.00p -2.23%
Associated British Foods (ABF) 3,395.00p -1.74%
Rio Tinto (RIO) 2,321.00p -1.59%
Randgold Resources Ltd. (RRS) 4,301.00p -1.53%
BHP Billiton (BLT) 1,025.00p -1.49%
Whitbread (WTB) 4,901.00p -1.31%
Persimmon (PSN) 1,969.00p -1.25%
TUI AG Reg Shs (DI) (TUI) 1,195.00p -1.16%