Broker action was having only a small effect on London shares on Wednesday, with one of the biggest movers being Diageo plc (LON:DGE), which hit a new all-time high in early afternoon trading as Deutsche Bank upped its target.
The Guinness and Smirnoff maker’s shares were up 1.4% to 3,480p as the German bank nudged up its target price to 3,550p from 3,450p.
Ahead of full year results on July 25, DB analysts pencilled in 6.5% organic sales growth and 9% underlying earnings expansion, slightly ahead of the consensus.
Standard Chartered PLC (LON:STAN) was up 0.4% to 725p, a 12-month high, as Societe Generale upgraded its recommendation for the emerging markets focused bank to ‘buy’ from ‘hold’ and upped its target price to 840p from 715p.
While oil prices were in the news amid the Opec meeting, several oil services engineers were also moving after a note from Morgan Stanley.
While “the worst is behind” the sector, Morgan Stanley analysts predicted that unlike the previous upcycles, “we think this recovery will be bumpy, below-par and brittle”, with a sector view taking in a softer outlook for oil prices and upstream capex, leading to reduced estimates and price targets.
READ: Morgan Stanley mixed on oil services firms
Notably, Petrofac Ltd (LON:PFC) was downgraded to ‘equal weight’ from ‘overweight’ and its target slashed to 530p from 720p. Shares in the FTSE 250 group were down 2.4% on the day to 418p.
“While we think the company remains well positioned to grow its backlog and acknowledge management's delivery on asset sales and de-gearing, we believe the stock's performance remains strongly anchored around the SFO investigation,” analysts said in the note to clients.
On the upside, John Wood Group PLC (LON:WG.) was up almost 2% to 468.3p on Wednesday afternoon as MS added it as a "top pick", upgrading to ‘overweight’ from ‘equal weight’ but trimming its price target to 700p from 770p.
“We recognise the company is still a 'show-me' story. However, we see it making progress towards delivering on synergy and degearing targets,” analysts wrote, adding that the recent de-rating makes valuation “attractive” at 5.4 times forward earnings.
11.40pm: Sosandar meanders lower
Shares in Sosandar PLC (LON:SOS) were down on Wednesday morning as the online retailer of women’s clothing reported a worse than expected full-year loss and “tougher” market conditions.
Revenue for the year to 31 March was up more than threefold to £4.4mln in line with consensus, though the EBITDA loss of £3.49mln is below expectations of £3.3mln, even though it was cut from £6mln last time.
Management said the new financial year has “started strongly” in line with our expectations, with June setting a new record for the number of units sold and 23% growth in first-quarter revenues.
But less investment was made in new customer acquisition “as external factors resulted in a tougher acquisition environment”.
Further up the retail charts, J Sainsbury PLC (LON:SBRY) shares were also struggling as the gorcer reported weaker first-quarter sales and warning that the wider market remains challenging.
The FTSE 100 group, which was forced to abandon its proposed £7bn with Asda after the UK Competition and Markets Authority blocked the deal, said like-for-like sales dropped 1.6% in the 16 weeks to June 29.
Others blue chips in the sector were having a better time of it, with JD Sports Fashion PLC (LON:JD.) jumping on the back of a strong trading update, including plans for more growth in its store estate.
Topps Tiles PLC (LON:TPT) also reported improved quarterly sales as its turnaround strategy starts to pay off, with LFL sales up 3.8% after a 1.8% rise in the second quarter and a 1.4% drop in the first.
10.40am: Redde in the pink on contract news
Redde Plc (LON:REDD) was a strong gainer in mid-morning trading, up 5.4% to 112.80p after the accident management and legal services company said trading in its second half has been in line with its expectations and announced good news regarding its hire and repair contract.
In March, Redde disclosed that it had been unsuccessful in renewing its hire and repair contract with and undisclosed "large insurer". The original contract was set to run out at the end of July, but a new agreement has been reached, the group said today.
In addition to the contract negotiation, the AIM-listed firm also said it has won a number of new contracts and secured a renewal from a "major insurer" so that the company is now confident in its financial expectations for 2020.
Diurnal Group PLC (LON:DNL) was also in demand, up 5.1% to 31p after the specialty pharmaceutical company said it has submitted an application for market authorisation for its Alkindi hydrocortisone granules product to the Australian Therapeutic Good Administration (TGA).
Martin Whitaker, Diurnal’s chief executive officer commented: “This builds on the grant of orphan drug designation for Alkindi in Australia received earlier in 2019, which highlights the importance of this product as the first specifically developed and licensed replacement therapy of paediatric adrenal insufficiency designed to address the unmet need in these young patients.
9.20am: Filtronic signal weakens amid 'lack of clarity' for antenna orders
Telecoms equipment maker Filtronic PLC (LON:FTC) lost signal in early trading on Wednesday, falling 16% to 7.65p as it confirmed that losses had continued in the second half of its financial year.
The maker of antennas and other products for the critical communications and wireless telecoms markets said it expects to swing to a £1.7mln operating loss in the year to 31 May, against a profit last year, as revenue fell by 14% to around £20.6mln.
Sales of the new Massive MIMO antennas were disappointing and there has been “a continued lack of clarity” regarding future demand, while Filtronic has also been notified of a performance issue for other legacy products that are still under warranty, with the full extent of the issue still under review.
On the upside manufacturing facilities are being expanded due to “very encouraging” sales of 5G products and customer forecasts showing further growth for the new financial year.
Elsewhere, shares in Rainbow Rare Earths Ltd (LON:RBW) were down just over half a penny from its previous closing price of 3.8p to 3.18p because the miner is looking to raise at least US$5mln at 3p to bump up production growth at its Gakara rare earth project in Burundi.
Capitalising on end-market demand for these metals from electronics and battery industries, the company wants US$1.6mln of the cash to further develop the current mine and potentially add further areas, with US$1.8mln to purchase a new mining fleet and US$1.6mln of working capital for operational and corporate purposes during the development period of two new pits.
If more than the minimum amount is raised it will be used for additional drilling campaign focused on the larger-scale, lower grade Kiyenzi area and strengthening the balance sheet, Rainbow Rare Earths said.
Other Proactive news headlines:
Film insurance group FFI Holdings PLC (LON:FFI) has received a mandatory takeover offer from Lumiere following its acquisition of chief executive Steve Ransohoff ‘s 30.1% stake. The offer price is 25p per share, a 28% premium to the close on 1 July.
Thor Mining PLC (LON:THR) (ASX:THR) has outlined the next steps for the development of the Jervois Vanadium Project in Australia’s Northern Territory. These include resource drilling at the Casper, RD, and Coco deposits; the drill testing of new targets; and the assessment of the gold, and platinum group element (PGE) potential of property.
Anglo African Oil & Gas PLC (LON:AAOG) has drummed up £8.25mln of new funding as it looks to extend one well at its Tilapia project in the Republic of Congo into a potentially prolific deeper layer.
OptiBiotix Health PLC (LON:OPTI) continues to gain commercial traction for its healthcare products focused on the human microbiome. Its latest deal is with the Japanese group Tenshindo, a manufacturer of functional foods and cosmetics, which has signed a licence deal for the UK group’s Lactobacillus plantarum (LPLDL) bacteria strain.
LoopUp Group PLC (LON:LOOP) has said that it continues to see “strong demand” for its conference call services despite a tricky first half afflicted by macro-economic headwinds.
Landore Resources Limited (LON:LNDO) has raised gross proceeds of £250,000 through a share subscription by James Hudleston, an existing investor in the company. The junior gold explorer said the subscription is for 35,714,286 new ordinary shares at a price of 0.7p each. Landore shares closed trading on Tuesday at 0.69p.
US Oil & Gas PLC has raised US$577,295 in a share placing with private investors to fund its drilling operations.
Mineral and Financial Investments Limited (LON:MAFL) announced late afternoon on Tuesday that it has increased its investment in Ascendant Resources Ltd by acquiring 190,000 shares, and now owns 2,242,000 shares, or 2.91% of Ascendant's shares outstanding. Ascendant is a Toronto-based mining company focused on its 100%-owned producing El Mochito zinc, lead and silver mine in west-central Honduras and its high-grade polymetallic Lagoa Salgada VMS Project located in the prolific Iberian Pyrite Belt in Portugal.