FTSE 100 movers: Whitbread rallies on Credit Suisse note but Ashtead slumps

Broker notes were firmly in play on Thursday.

Shares in Costa Coffee and Premier Inn owner Whitbread were higher after Credit Suisse added the stock to its ‘Global and Europe Focus Lists’, lifting the price target to 5,800p from 5,500p.

“Being ‘outperform’ rated on Whitbread for the last three years, we have frequently encountered those who feel they missed the stock. With broader value support than at most stages for 10 years, we see now as the time to revisit this quality growth story,” said CS.

Meggitt was in the black, bouncing back from recent losses as it emerged the aerospace and defence firm has been relegated to the FTSE 250 following the latest FTSE quarterly review. Meggitt shares tumbled 20% in October after it said full year profit would be well below forecasts due to softer trading in the third quarter and a “marked deterioration” in its end markets.

Glencore was in the black after RBC Capital Markets initiated coverage of the stock at ‘sector perform’, saying it expects the shares to rally on asset sales/further operational improvements, with the 10 December update a potential catalyst.

Royal Bank of Scotland also benefited from a broker upgrade, as Macquarie lifted the stock to ‘neutral’ from ‘underperform’. It said there are still considerable risks around RBS, particularly material outstanding litigation and conduct liabilities that are virtually unquantifiable. However, having underperformed the European bank sector and the UK market by over 20% year to date, the shares are trading at a discount of around 30% to European banks

Equipment rentals company Ashtead was on the back foot after Exane BNP Paribas cut the stock to 'neutral' from 'outperform', saying the risk/reward was increasingly skewed to the downside. “We think the shares could enter a phase similar to that of 2006-2007, during which consensus earnings rise but this is offset by a de-rating: absolute upside becomes capped, whilst the prospect of absolute downside becomes ever-closer,” the bank said.

Associated British Foods was also knocked lower by a downgrade, as Goldman Sachs cut its rating on the stock to ‘sell’ from ‘buy’. “While we recognise the international success of ABF’s Primark division, several themes have emerged over the last few quarters to dampen our enthusiasm for the shares,” said GS.

Goldman noted that Primark’s full year 2016 earnings before interest and taxes margin forecast is now down 170 basis points year-on-year, having been down 80 bps in FY15.

Risers

Randgold Resources Ltd. (RRS) 4,255.00p 1.33%
Meggitt (MGGT) 379.50p 1.20%
Berkeley Group Holdings (The) (BKG) 3,346.00p 1.06%
Whitbread (WTB) 4,742.00p 0.96%
Royal Bank of Scotland Group (RBS) 312.00p 0.94%
Glencore (GLEN) 94.05p 0.59%
BG Group (BG.) 1,050.50p 0.38%
Wolseley (WOS) 3,931.00p 0.36%
Merlin Entertainments (MERL) 426.30p 0.31%
Standard Chartered (STAN) 543.30p 0.28%

Fallers

Sports Direct International (SPD) 698.00p -5.29%
Ashtead Group (AHT) 1,066.00p -3.62%
Johnson Matthey (JMAT) 2,746.00p -3.34%
Royal Mail (RMG) 471.40p -3.08%
Severn Trent (SVT) 2,213.00p -2.94%
Old Mutual (OML) 203.30p -2.54%
Associated British Foods (ABF) 3,509.00p -2.50%
Shire Plc (SHP) 4,629.00p -2.44%
3i Group (III) 485.00p -2.41%
Aberdeen Asset Management (ADN) 305.00p -2.21%