FTSE 250 movers: Aggreko leads mid-caps retreat
Along with their larger peers London's mid-cap stocks were on the back foot on Monday, with the FTSE 250 index down 0.6%, led by Aggreko and Booker.
Aggreko shares were down after Deutsche Bank cut its rating even though the supplier of temporary power generation equipment is expected to see trading profit return to growth in 2018 after a 40% decline across 2012 to 2016.
However, analysts cut their stance on the stock to ‘hold’ from ‘buy’ and lowered the target price to 1,000p from 1,050p as the current share price already takes account of the expected recovery.
For Aggreko’s full year results on 7 March, Deutsche has forecast adjusted pre-tax profit of £221m, slightly below the consensus of £222m and management’s guidance of £225m.
Booker shares were down following plenty of weekend coverage about how the competition regulators are likely to get their teeth into the company's proposed takeover by Tesco.
Since Friday's announcement, a clamour of industry voices has called for the Competition and Markets Authority to look at the deal over fears that it could give the UK’s number 1 food retailer an unfair advantage in terms of competition in the smaller local retailer space.
Broker Shore Capital, for instance, highlighted the unpredictability of the likely and said they "really struggle with any confidence to see how the CMA will broach the Tesco-Booker merger". Analysts said they believed that Booker shareholders "should realise the cash on offer now from the market and move onto the next beautiful story", downgrading their recommendation on "much admired" Booker shares to 'sell' on hearing the deal.
Drax shares were lower even though there were reports in the Times that coal, gas and nuclear power stations will receive subsidy contracts worth hundreds of millions of pounds under government plans to ensure the lights stay on next winter.
Leading the risers was WS Atkins after reports, also in the Times, that the engineer has been approached by US peer CH2M Hill over a possible $4bn merger.
CH2M was said to have held talks with Atkins at a senior level, although it was unclear what stage the discussions had reached.
Even though Atkins refused to comment, implying the rumours were untrue or that talks were no longer continuing, shares continued to climb over the day.
Hill & Smith shares were lifted as Numis upgraded the shares to 'add' from 'hold' after they drifted lower in recent months.
"The performance has diverged from other 'Trump stocks' since the Presidential election," the broker said, with its 9.5% rise pale in comparison to Ashtead's 33%, Vesuvius' 34% and the wider engineering sector up 18% and Hill & Smith's p/e rating is now a discount to the sector, if high by historic levels.
"With Brexit also looking less of an issue and currency benefits we see upside risk to numbers (with further potential from bolt-ons as usual)."
FTSE 250 - Risers
Atkins (WS) (ATK) 1,496.00p 6.86%
Hill & Smith Holdings (HILS) 1,169.00p 3.00%
IP Group (IPO) 197.00p 2.23%
Zoopla Property Group (ZPLA) 371.70p 2.12%
Rank Group (RNK) 197.90p 1.96%
Sophos Group (SOPH) 270.50p 1.84%
Shawbrook Group (SHAW) 245.40p 1.74%
Dechra Pharmaceuticals (DPH) 1,467.00p 1.66%
Dunelm Group (DNLM) 677.50p 1.50%
Debenhams (DEB) 53.10p 1.34%
FTSE 250 - Fallers
Aggreko (AGK) 1,011.00p -4.53%
Evraz (EVR) 221.80p -3.69%
Booker Group (BOK) 205.30p -3.30%
Amec Foster Wheeler (AMFW) 448.70p -3.13%
Drax Group (DRX) 370.50p -2.99%
Cairn Energy (CNE) 230.90p -2.98%
Henderson Group (HGG) 216.20p -2.83%
Meggitt (MGGT) 417.90p -2.68%
Aberdeen Asset Management (ADN) 263.90p -2.66%
SIG (SHI) 102.80p -2.56%