JP Morgan Cazenove has taken a more cautious view of the EU Hotels sector including a rating downgrade for InterContinental Hotels Group PLC.
The broker lowered its rating on IHG to neutral from overweight with a reduced price target of 5,900p from 6,100p with Whitbread the only remaining stock in the sector on which JPM has an overweight rating.
"We reassess our convictions within EU hotels, taking a more cautious view on the sector following very supportive post-Covid leisure trends, with Whitbread our only remaining OW now" JPM said.
The broker said whilst their estimates remain ahead of consensus across the board, based on continued strong momentum, there is clear uncertainty around the direction of revenue per available room heading into the winter and growing concerns around the consumer.
But the US broker is more positive on Whitbread PLC (LSE:WTB) (Whitbread PLC (LSE:WTB)), keeping its overweight rating, focusing on the structural opportunity in the UK and Germany although it cut its price target to 4,100p from 4,150p., .
Shares in IHG fell 2.24% to 4,854.50p.
Alumasc takes charge after selling loss-making unit
Shares in Alumasc dipped 3.30% after the group said it would have to take an impairment charge of £14.9mln before tax for the year to June 2022 as a result of the disposal of its loss-making unit, Levolux.
The group has sold its solar shading business for £1mln with a potential deferred consideration of £1mln if the business is sold in the future for more than £1.0mln.
The business unit made a loss of £2mln in the year to June 30th.
Alumasc also said it expects to announce full year results in line with expectations adding trading in the core activities of the group remained strong in the second half.
Micro Focus surges after agreeing takeover
Shares in Micro Focus International PLC (LSE:MCRO) surged more than 91% on Friday after Canadian software company, OpenText announced an all cash deal to buy the business for £5.1bn.
Victoria Scholar, head of investment, interactive investor says, “This is a loss for London’s listed technology market as one of its key players, Micro Focus prepares to shift overseas under Canadian ownership.”
“However it is most certainly a win for the software company itself, which is subject to an unrefusable offer at a drastic premium to its previous share price. Since going public in 2005, investors enjoyed a stratospheric rally with the stock gaining more than 1800% to the peak around the end of 2017.”
“However in 2018, the departure of Micro Focus’ CEO at the time combined with disappointing sales and an unsuccessful merger with HP’s software division saw its share price plunge, and resulted in the company dropping out of the FTSE 100 the following year.”
“The pound’s weakness, nervousness in the public markets, low valuations and significant dry power have bought about M&A possibilities for opportunistic overseas investors lately, with OpenText clearly making the most of the current environment.”