EasyJet Shares Jump After Upbeat 1Q, Strong -2-

Forterra Expects 2022 Earnings to Beat Management Views After Price Increases

Forterra PLC said Wednesday that it expects its 2022 earnings to be slightly ahead of management views as it increased prices to offset inflation costs, but that it saw a softening in demand toward the end of the year.

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Broadcom's $61 Bln Acquisition of VMware Faces UK Regulator Probe

The U.K. Competition and Markets Authority said Wednesday that it has begun a review into chip maker Broadcom Inc.'s planned $61 billion acquisition of VMware Inc. and has set a deadline of March 22 for its initial decision.

 
Market Talk: 

EasyJet's Offering Is Bearing Fruit Despite Economic Headwinds

0913 GMT - Although easyJet's 1Q key metrics showed a marked improvement from the prior-year quarter--such as a 47% rise in passenger numbers--headwinds remain on its recovery path, Interactive Investor analyst Richard Hunter says in a note. The budget airline saw costs per seat rise by 76% driven by higher fuel costs and a strong dollar, and one-off costs related to leased aircraft resulting in an, albeit narrowed, adjusted pretax loss of GBP133 million, Hunter says. "Despite the inevitable economic clouds, such as a cost of living crisis which could threaten the consumer's propensity to spend and rising costs, the easyJet offering is currently bearing fruit," Hunter says. Shares are up 9.7% at 513.60 pence. ([e-mail])

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Quilter's Independent Financial Advisor Flows at Risk From Consolidation

1050 GMT - Quilter's independent financial advisor flows could be dented by market consolidation, RBC Capital Markets says. The wealth-management company has said that while its fourth-quarter IFA channel gross flows were resilient, net flows were hit by heightened adviser consolidation. The company said it continued to grow its IFA base during the quarter using its platform and expects incremental flows over time. "Given consolidation trends in the market, we see a risk that this will continue to impact flows going forwards," analyst Ben Bathurst says. RBC has a neutral rating on the stock. ([e-mail])

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Ascential's Intended WGSN Disposal Looks Surprising

1111 GMT - Ascential's intention to sell its WGSN trend forecasting business is surprising but its plan to return proceeds to shareholders is encouraging, says Citi in a note. "The pandemic provided some support to the contention that having subscription-based recurring revenue from intelligence assets alongside events businesses is useful," say analysts Thomas Singlehurst and Ella Walker-Hunt. They add WGSN is a best-in-class asset and its anticipated valuation could be such that it doesn't make sense for Ascential to keep it in its portfolio. Citi has a buy rating on the stock. Shares are up 22% at 254.0 pence. ([e-mail])

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Fresnillo Slightly Misses Expectations in Production Update

1114 GMT - Fresnillo's production results for the fourth quarter came in slightly below expectations, with weakness in silver while gold production was strong, Citi says. The Mexican miner's silver production fell on quarter with lower ore processing and grades, but sequentially improving operational metrics at its flagship Fresnillo and Saucito mines are encouraging data points, Citi analysts say in a research note. The cost guidance for the second half of 2022 is worse than expected, though 2023 guidance implies a double-digit increase in silver production, the U.S. bank says. Citi retains its buy rating and 1,200 pence price target on Fresnillo's stock. Shares are down 2.6% at 855.8 pence. ([e-mail])

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Fresnillo Shares Look Fairly Priced Given Neutral 2022 Update

1115 GMT - Fresnillo's 2022 update is unlikely to shift market perceptions as though the company saw a beat to gold production estimates and encouraging raised guidance, this was offset by lower silver volumes and higher-than-expected second-half costs, RBC Capital Markets says. This year will be pivotal for the Mexico-focused miner with the commission of Juanicipio and the restaffing of operations supporting production growth, RBC analysts say in a research note. "However, we see operational momentum as widely priced in and see limited growth after the ramp up of Juanicipio," the Canadian bank says. RBC retains its sector perform and 920 pence price target on Fresnillo's stock. Shares are down 2.4% at 857.4 pence. ([e-mail])

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Next Fifteen's Stock Looks Attractive Given Growth Momentum, Berenberg Says

1122 GMT - Next Fifteen Communications Group offers very good value given its growth momentum, Berenberg says in a note, adding shares are trading at 11 times forward earnings. "We believe that Next15 will continue to deliver EPS upgrades due to its strong organic growth momentum, upwards pressure on margins and solid balance sheet allowing for accretive acquisitions," analysts at the brokerage say. The analysts expect tech and data-driven growth consultancy to target bolt-on acquisitions that further develop its media services as the current market backdrop means big transformational deals are off the table. Berenberg rates the stock buy. ([e-mail])

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Fresnillo's Surprising Cost Inflation Spurs Caution

1124 GMT - Fresnillo's fourth-quarter and 2022 production update was a mixed bag, but it has also flagged cost inflation in the second half of the year, Peel Hunt says. The Mexican miner's gold and zinc production beat expectations though silver and lead both missed, and it guided for higher costs reflecting haulage volumes and distances, maintenance costs and personnel costs due to a labor settlement, Peel Hunt analysts say in a research note. "While all companies are experiencing cost inflation this year, the breadth of cost rises seen in [the second half] was once again above our expectations and a key factor behind our cautious stance on Fresnillo, the brokerage says. Peel Hunt retains its hold rating and 800 pence price target. Shares are down 2.5% at 856.8 pence. ([e-mail])

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