The company said it expects to generate like-for-like (LFL) revenue growth of around 4% in the first half of the year to 31 July 2016, which is not to be sniffed at, but is disappointing given previous guidance.
“The UK heating market continues to prove challenging, while a previously announced impairment charge taken in relation to its Nordics business adds to the negativity,” notes Keith Bowman, an equity analyst at Hargreaves Lansdown.
“In all, Wolseley appears to remain something of an economic barometer. Exposure to the US economy provides attraction, whilst the company’s push to increase e-commerce sales and management’s emphasis on shareholder returns add further attraction. For now, and despite a 30% plus out-performance of the broader FTSE-100 index over the last year, analyst consensus opinion currently points towards a buy,” Bowman notes.
Does the Bud(dy) want a Coke, is the question being posed by Deutsche Bank, as it speculates whether SABMiller (LON:SAB), once it has consummated its relationship with Anheuser Busch, will take a run at The Coca-Cola Company a few years down the road.
Coca-Cola represents around one-fifth of SABMiller's volumes, directly and indirectly, in 38 markets, and three-fifths of the volumes in Africa.
“An ABI/SAB deal will take an extensive time to pass regulatory requirements, especially in African markets where governments tend to work a bit slower, giving Coca Cola plenty of time to find other partners such as Heineken who already bottle in Central Africa. If ABI/SAB happens, Coke needs to be on board in our view,” Deutsche said.
The emerging markets-focused bank sees its price target slashed to 795p from 1,055p, though Nomura sticks with the neutral rating.
“If oil prices continue to decline, we see a further potential risk of dilution (asset divestment/equity/debt) as Tullow may need to recapitalise to support significant investment in its existing West African projects,” the broker said, leaving its forecasts unchanged.