FTSE 250 movers: Sports Direct up but retailers slump on Jefferies downgrade

London’s FTSE 250 was up 1.2% to 16,953.35 at 1345 BST, with sentiment underpinned by Federal Reserve Chair Janet Yellen’s dovish speech on Tuesday.

Sports Direct was higher after it raised its stake in Findel to nearly 30%.

The company has acquired contracts for difference relating to 12.57% of Findel’s shares, bringing its stake to 29.79%. This is just below the 30% level at which it is likely to launch a full acquisition bid.

Retailers were under the cosh after Jefferies reviewed its ratings on several names as it took a look at the UK general retail sector.

Dunelm and Debenhams were both downgraded to ‘hold’ from ‘buy’.

Jefferies said it was a buyer of Dunelm as the company’s track record for gaining market share through the recession was impressive yet there was still an opportunity to double market share under the new management team .

Although it still reckons Dunelm is in a good place, it said changes will take time to come into effect, with the company launching a new format in September, and survey results showed room for improvement.

On Debenhams, it said after an unexpectedly strong Christmas trading performance, the stock has been relatively resilient in 2016, down only 1%, though its PER struggles to break 10x, which is low by sector standards.

The bank has been bullish on Debenhams as it reckoned the stock was inexpensive and under-appreciated and the company was making improvements to its omni-channel offer.

However, its survey results show that while Debenhams is broadly keeping pace with the competition for omni-channel improvements, it’s not doing much more in the eyes of customers.

William Hill was in the red after Morgan Stanley downgraded it to ‘underweight’ from ‘equalweight’ and cut the price target to 290p following the company’s profit warning last week.

The bank also cut its earnings per share forecasts for 2016 and 2017 by 16% and 18% to 22p and 24p, respectively.

“Trading on 15x price-to-earnings in 2016, the shares are towards the high end of their own long-term range, and with elevated risks in Retail and a lack of visibility in Online, we think risks to forecasts remain on the downside,” MS said.

It said the cash generation, strong balance sheet, dividends and share buybacks provide some support, but a significant re-rating is unlikely until the growth outlook improves significantly in Online, which is unlikely until the second half of next year.

Risers

Evraz (EVR) 91.20p 10.41%
Aberdeen Asset Management (ADN) 277.00p 7.95%
Petrofac Ltd. (PFC) 927.50p 6.61%
Euromoney Institutional Investor (ERM) 995.00p 6.02%
Allied Minds (ALM) 483.00p 5.21%
Amec Foster Wheeler (AMFW) 450.50p 5.06%
Ashmore Group (ASHM) 291.60p 5.01%
Wood Group (John) (WG.) 624.50p 4.96%
Weir Group (WEIR) 1,123.00p 4.56%
Sports Direct International (SPD) 380.50p 4.53%

Fallers

Dunelm Group (DNLM) 907.00p -2.10%
William Hill (WMH) 329.00p -1.64%
Circassia Pharmaceuticals (CIR) 262.00p -1.47%
Daejan Holdings (DJAN) 5,660.00p -1.22%
NMC Health (NMC) 1,045.00p -1.14%
Lancashire Holdings Limited (LRE) 538.00p -1.10%
Aldermore Group (ALD) 217.60p -1.09%
Debenhams (DEB) 73.45p -1.01%
Ted Baker (TED) 2,778.00p -0.93%
Domino's Pizza Group (DOM) 1,010.00p -0.88%