The FTSE 100 hit another two-year high on Thursday before a sharp pullback in the afternoon session after U.S. CPI surged to a new 40-year high of 7.5%, says Michael Hewson, chief market analyst at CMC Markets U.K. The index closed down "The U.K. benchmark continues to look resilient despite the early weakness in the U.S., with the DAX also managing to hold up reasonably well, against a backdrop of increasing inflation risk," Hewson says. Vodafone shares continue to hold up amid reports it may want more for its Italian business than the around EUR11 billion being offered by Iliad, while AstraZeneca shares are up after 4Q numbers and the pressure remains on Unilever CEO Alan Jope after its full-year result, Hewson says.
Companies News:
Ben & Jerry's Owner Says Soaring Costs Will Take a Bite Out of Profit -- WSJ
Unilever PLC reported higher quarterly sales growth but warned its profit margin would fall sharply this year as the owner of Dove soap and Ben & Jerry's ice cream grapples with the impact of surging costs around the world.
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Informa Expects to Post Higher Earnings for 2021; Sells Pharma Intelligence for GBP1.9 Bln
Informa PLC said Thursday that it expects to post a rise in revenue and adjusted operating profit for 2021 and that its performance for the current year has been strong.
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AstraZeneca Swung to 4Q Loss Despite Revenue Rise; Expects $2.1 Bln Restructuring Charge
AstraZeneca PLC said Thursday that it swung to a fourth-quarter loss despite posting higher revenue as charges related to its acquisition of Alexion Pharmaceuticals weighed on earnings, and said it expects to incur in a $2.1 billion post-acquisition restructuring charge.
Nanosynth Targets CEO, COO to Make Significant Acquisition; Shares Rise
Shares of Nanosynth Group PLC rose as much as 43% in early trade Thursday as the company set out remuneration plans to incentivize its chief executive officer and chief operating officer to complete a significant acquisition as part of the company's growth strategy.
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Syncona 3Q Net Asset Value Rose; Portfolio Companies Continued to Attract Capital
Syncona Ltd. said on Thursday that its net asset value rose 16% in the third quarter compared with the previous quarter, and that its portfolio companies continued to attract substantial capital in the period.
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Marlowe Increases Committed Debt to GBP180 Mln With New Facility
Marlowe PLC said Thursday that it has entered into a new debt facility, increasing total committed debt to 180 million pounds ($243.6 million) from GBP130 million.
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Feedback 1H Pretax Loss Widened; Sees FY 2022 Ahead of Views
Feedback PLC said Tuesday that its pretax loss for the first half of fiscal 2022 widened after booking higher costs, and that it expects its performance for the full-year period to beat expectations.
Market Talk:
Unilever's 2022 Margin Guidance Should be Investor's Main Focus
1128 GMT - Unilever's margin guidance, a result of higher inflation costs in 2022, was shocking and therefore its margin and the lack of pricing power that it implies should become the main focus of investors, RBC Capital Markets says. The Canadian bank says it expected margin guidance from -30bps to -40bps, while Unilever's forecast was from -140bps to -240bps. RBC has an underperform rating on the stock. Unilever shares are down 1.2% at 3,783.5 pence.
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Unilever's Future Priorities Seen an Issue
1106 GMT - Unilever's logic about where it wants to focus in the future seems confusing, AJ Bell says. The Anglo-Dutch consumer-goods major could be making a big mistake by focusing more on health, beauty and hygiene rather than food and drink. "The food and drink division is the strongest growing part of the business so why would the company lose interest in its best player?" AJ Bell says. CEO Alan Jope is under pressure to decide on a long-term strategy, "otherwise he will be out of a job very soon," the brokerage says.
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Informa's Proceeds From Intelligence Sale Could Surpass Expectations by GBP1 Bln
1100 GMT - Informa's sale of Pharma Intelligence for GBP1.9 billion delivers essentially almost all of what Citi had expected from the entire Intelligence sale, and in its more conservative scenario for the remaining assets, total proceeds could be GBP1 billion ahead of expectations. Elsewhere, the U.S. bank says the company's trading update should give comfort on revenue trends for the remaining businesses and that it is particularly excited that 1Q events look to be performing in line or ahead of plan. Citi has a buy rating on the events and academic-publishing group with a target price of 725 pence. Shares trade up 6.8% at 612.40.
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AstraZeneca's 2022 Guidance Seen as Reassuring
1059 GMT - AstraZeneca's fourth-quarter results were better than expected at EPS and revenue level, and its 2022 guidance appears reassuring after the company missed expectations in the third quarter, Bryan Garnier says. Operating expenses are probably the most important topic for this quarter and next year, Bryan Garnier says. Analysts at the European investment bank say how last quarter's significant increase in expenses generated anxiety in the stock market, and--while the metric is still higher than expected--they note that it didn't prevent the company from turning in a higher-than-expected operating profit. Overall, though the company might have been cautious with its guidance since we are at the beginning of the year, it should still reassure investors around AstraZeneca's prospects, Bryan Garnier says.
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Redrow's Homes Are in More Demand Than Before the Coronavirus
1037 GMT - Redrow's 1H statement was solid, with its premium quality product more in demand and more attractive than ever before after the coronavirus pandemic, Goodbody says. The London-listed house builder's upgraded fiscal 2024 guidance--now targeting revenue of GBP2.3 billion-GBP2.4 billion, up from previous guidance of GBP2.2 billion--implies a 4% upgrade to consensus, and Goodbody says it will adjust its numbers accordingly. "Redrow's product is in a sweet spot in a post-Covid-19 world and coupling this with the fact the stock is only trading on book value, justifies why it is our top pick in the sector," Goodbody says, retaining its buy recommendation. Shares are up 1.2% at 632.6 pence.
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Redrow's 1H was Strong and Shares Look Good Value
1030 GMT - Redrow's first-half results were better than expected, with a higher margin performance bringing a pretax profit of GBP203 million, higher than Citi's estimate of GBP184 million. The U.K. house builder also raised its fiscal 2024 guidance, now targeting revenue of GBP2.3 billion-GBP2.4 billion, up from previous guidance of GBP2.2 billion, Citi says. "We expect consensus estimates to edge up around 2%-3% on the back of the revised guidance with bottom-end estimates moving higher," the U.S. bank says, adding that its shares continue to look good value. Citi retains a buy rating and target price of 848 pence on the stock. Shares are up 1.3% at 633.2 pence.
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Informa Gets Great Price With GBP1.9 Bln Pharma Intelligence Sale, Peel Hunt Says
1023 GMT - Informa has secured a great price with its agreement to sell Pharma Intelligence for GBP1.9 billion, Peel Hunt says, and the remaining businesses could yield a further GBP700 million. "This looks like a great multiple for the Pharma asset, although arguably it is the jewel in the division's crown. Overall, it is clear the sale process will deliver more cash than we had forecast," the U.K. brokerage says, noting that its one-year target price could be achieved sooner rather than later thanks to the company's confident expectations for 2022 and a forecast rise in adjusted operating profit for 2021. Shares trade up 7.1% at 614 pence.
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Sterling Corporate Bonds Likely to Underperform Euro Counterparts
1018 GMT - Sterling-denominated corporate bonds are set to underperform their euro counterparts as the Bank of England embarks on quantitative tightening, says JPMorgan. "Following the announcement that the Bank of England will sell down their Corporate Bond Purchase Scheme holdings, we reiterate our underweight to sterling credit versus euros," the bank says. The central bank said last week that it will cease all reinvestments of maturing bonds in its GBP895 bond holdings and will sell down its entire GBP20bn corporate bond portfolio no earlier than by end of 2023. "This strengthens the case for sterling underperformance this year," it says.
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Ashmore Expects Emerging Markets to Outperform on Tighter Fiscal Policies
0957 GMT - Fund manager Ashmore Group's 1H adjusted results were slightly better than expected as lower profits reflected a difficult environment, Peel Hunt says. Adjusted Ebitda of GBP92 million and pretax profit of GBP116 million beat consensus of GBP89 million and GBP88 million respectively, the U.K. brokerage says. Market conditions in the period were challenging and reflective a general risk aversion given a number of macro concerns and the expectation of higher rates in the U.S. Still, the company noted that emerging-markets assets tend to outperform once fiscal policy tightens, and this should be positive for 2022 flows, the broker says. Peel Hunt rates the stock at a buy and has a 420 pence target price. Shares are down 0.4% at 278.60 pence.
Contact: London NewsPlus, Dow Jones Newswires; Write to Sarka Halas at sarka.halas@wsj.com
(END) Dow Jones Newswires
02-10-22 1259ET
