BOE's Greene Hire Adds Slightly More Hawkish Tilt -2-

1218 GMT - Diversified Energy is facing a tougher U.S. gas-price outlook despite a solid track record, Jefferies says, downgrading the U.S.-focused gas & oil producer to hold from buy. Diversified's strategy of U.S. onshore gas-weighted production growth via mergers and acquisitions, sound balance-sheet management and consistent shareholder returns has proved differentiated and accretive since the FTSE 250-listed company's initial public offer in 2017, Jefferies says. "However, our valuation is impacted by recent equity-raise dilution and softer U.S. gas-price expectations," the brokerage's analysts say in a note, cutting their price target on the stock to 110 pence from 145p. Shares fall 2.4% to 97p. ([e-mail])

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UK 21-To-23-Year Index-Linked Gilts Outperform Ahead of Syndication Event

1126 GMT - The 21-to-23-year maturity U.K. index-linked gilts have began to outperform ahead of the Debt Management Office's plans to syndicate a new inflation-linked March 2045 gilt in the week commencing April 24, RBC Capital Markets analysts say in a note. "With two more weeks to go until the syndication event, we see a higher probability of the [21-23 year] sector outperforming into the event," the analysts say, "In fact, the sector has started to outperform over the past two sessions," they say. ([e-mail])

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Sosandar's FY 2024 Revenue Expectations Look Reassuring

1055 GMT - Although Sosandar will report a swing to fiscal 2023 pretax profit of at least GBP1.6 million, it will miss consensus of GBP1.9 million, analysts at Davy Research say in a note. Strategic growth initiatives for Sosandar are coming thick and fast and gathered pace through fiscal 2023 with Sainsbury's joining its third-party partners portfolio and headcount additions in operations, technology and eCommerce, among others, the analysts say. For fiscal 2024, the online women's fashion brand expects revenue of GBP58.0 million and pretax profit of GBP3.1 million, Davy says. "The revenue figure assumes an acceleration of growth once more of over 36% year-on-year; despite the modest pretax profit miss today, the ambition expressed around those expectations is reassuring," the Irish research firm says. ([e-mail])

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EnQuest Shares Lack Attractions of UK Rivals

1029 GMT - EnQuest looks less attractive than U.K. rivals, Jefferies says, downgrading the U.K. North Sea oil & gas producer and explorer to hold from buy. EnQuest's strong cash generation and continued debt reduction have allowed it to successfully reduce re-financing risks, Jefferies says. However, other U.K. exploration and production players offer better potential, the brokerage says. "We downgrade to hold, seeing accretive M&A as more likely to drive stock outperformance than asset/balance-sheet value," Jefferies analysts say in a note, cutting their price target on the stock to 20 pence from 27p. Shares fall 2% to 18p. ([e-mail])

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Energean's Shares Look More in Line With Valuation

1023 GMT - Energean shares look fairer value after a rally, Jefferies says, cutting its recommendation on the Mediterranean Sea-focused oil & gas company to hold from buy. The downgrade recognizes the recovery in the stock following Energean's annual results in March, which confirmed all existing guidance, Jefferies says. Energean has achieved sector-leading organic production gains from successfully developing the Karish gas field off the coast of Israel, the brokerage says. "We apply sector-leading multiples within our valuation, which sees our valuation converge with share price and we downgrade to hold," Jefferies analysts say in a note. Still, they raise their price target on the stock to 1460 pence from 1400p. Shares fall 3% to 1288p. ([e-mail])

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Ithaca Energy's Shares Don't Reflect Project Potential

1016 GMT - Ithaca Energy's shares aren't pricing in the possible benefits of new oil & gas schemes, Jefferies says, keeping its buy recommendation on the FTSE 250-listed North Sea operator and producer. "We retain our buy recommendation for Ithaca in light of recent share-price weakness and upside potential for green-field development projects," Jefferies analysts say in a note, though they cut their price target on the stock to 195 pence from 245p. Shares rise 1% to 159p.([e-mail])

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LBG Media Shares Seen With Scope for Outperformance as Year Progresses

1004 GMT - LBG Media's shares continue to look cheap, down 40% year to date, and there is scope for outperformance as the year progresses given the traction in short form, Peel Hunt's Jessica Pok and Melanie Yang say in a research note. The London-listed digital media publisher's 2022 results were broadly in line with the December trading update, containing no surprises, and it is on track to meet 2023 market expectations, they say. Peel Hunt has a buy rating on the stock with a 135 pence price target. ([e-mail])

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Harbour Energy Makes Progress Despite UK Tax Hurdle

1002 GMT - Harbour Energy is making progress despite production pressure from the U.K.'s energy-industry windfall tax, Jefferies says, maintaining its buy recommendation on the FTSE 100-listed North Sea oil producer. Harbour's expected 2023 production looks set to ease due to reduced capital spending following changes to the U.K.'s Energy Profit Levy, Jefferies says. Still, the company's strategic discipline is encouraging and organic-growth assets are slowly emerging, the brokerage says. "Harbour management has demonstrated a track record of operational stability, balance-sheet improvement and shareholder-returns commitment rare to see in E&P," Jefferies analysts write. "Accretive M&A as a listed stock remains the part of the strategic plan still to be achieved." Jefferies cuts its price target on the shares, which rise 1% to 291p, to 360p from 435p. ([e-mail])

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Hikma Pharmaceuticals Won't Make Big Changes After CEO Appointment

0944 GMT - After Hikma Pharmaceuticals' appointment of Riad Mishlawi as CEO no significant strategic changes are expected, analysts at Jefferies say in a note. "HIK had been sourcing for both internal and external candidates; investor feedback had been Riad was the market's preferred internal candidate," the analysts say. Jefferies rates the stock buy and has a 2,080 pence target price. Shares are up 0.5% at 1,782 pence. ([e-mail])

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LBG Media Offers Access to Difficult-To-Reach Demographic, But May Have to Adapt to Survive

0935 GMT - LBG Media offers advertisers access to the hard-to-reach 18-34 demographic, but the LADbible publisher may have to adapt to survive, AJ Bell's investment director Russ Mould says in a research note. The digital media company has an agreement with Facebook to share revenue from in-video adverts, but it is still waiting for other platforms--like TikTok, Instagram and Snapchat--to develop monetization models for third parties, says Bell. "Opportunities for the business include building out the brand in the U.S. and growing its LADnation research panel to offer advertisers more data and deeper insight," Bell says. Shares trade down 3.9% at 74.00 pence after earnings fell in 2022 as advertising spend dropped. ([e-mail])

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Sterling's Recent Strength May Have Run Its Course

0858 GMT - Sterling's strong performance in recent weeks reflects a series of better-than-expected U.K. economic data but this move has probably run its course, Rabobank says. "While the economic outlook for the U.K. in 2023 is better than it was, it is far from strong and the recent adjustment in positioning means that GBP may now be more vulnerable to disappointments," Rabobank forex strategist Jane Foley says in a note. Sterling is likely to slowly grind lower versus the euro, although Rabobank recently pushed out its EUR/GBP 0.90 forecast to nine months reflecting the less bad U.K. economic backdrop, she says. EUR/GBP rises 0.2% to 0.8799. ([e-mail])

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De La Rue Must Take Note of Tumbling Share Price and Come up With Change

0857 GMT - De La Rue needs to make changes as it struggles with the post-Brexit loss of its U.K. passport contract, increased costs, supply-chain woes and demand for banknotes hitting a 20-year low, Interactive Investor says. The U.K. banknote printer has issued a profit warning with fiscal 2023 adjusted operating profit expected to miss market estimates by a mid-single digit, with demand for physical cash falling away as contactless payments and digital banking increase, Interactive head of investment Victoria Scholar says in a research note. "Shares in De La Rue plunged by over 30% today, bringing its one-year loss to around 68% and its five-year share price decline to more than 92%. Drastic change is needed in order to convince shareholders of a rosier outlook," Scholar says. Shares are down 24% at 38 pence. ([e-mail])

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Marks Electrical Consolidating Status as Best-In-Class

0850 GMT - Marks Electrical Group's fiscal 2023 trading update was excellent, cementing its status as the best-in-class electrical retailer, Shore Capital research analysts Bradley Hughes and Clive Black say in a research note. On its current share price, the online electrical retailer looks to be trading on an unjustified discount to core online pure-play peers given its strong cashflow and growth credentials, they say. "Marks Electrical has a focused management team who have demonstrated they are pulling the right levers to deliver strong top line, bottom line and FCF growth," Hughes and Black say. Shore Capital has a buy rating on the stock. Shares trade up 7.2% at 89.50 pence. ([e-mail])

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04-12-23 0943ET