FTSE 100 Rises Despite Inflation Surprise; Fed -2-

0741 GMT - The pound rises after data showed annual U.K. inflation reached 2.1% in May, above a Wall Street Journal poll forecast of 1.9% and exceeding the Bank of England's 2.0% target for the first time in almost two years. Gains are limited, however, ahead of a U.S. Federal Reserve decision later Wednesday, which has the potential to boost the dollar and weigh on risk appetite, sending the pound lower. The U.K. data "remains supportive for the pound" but the dollar's reaction to the Fed "will of course be key as will any deterioration in the EU-U.K. relationship in regard to the Northern Ireland protocol," says Derek Halpenny, head of research for global markets for EMEA at MUFG. GBP/USD rises 0.2% to 1.4115. EUR/GBP falls 0.2% to 0.8593. ([e-mail])

Motorpoint's Growth Targets Seen as Ambitious

0806 GMT - Vehicle retailer Motorpoint delivered "a bold statement of intent" as it set a target to double sales to GBP2 billion by fiscal 2024, Liberum's Sanjay Vidyarthi says. This is to be achieved with GBP1 billion of online sales, improved margins and strong free cash flow generation. "Targets are ambitious, but the track record is strong and we have confidence in the management team to deal with the threat from online disruptors," Vidyarthi says. The analyst now forecasts Motorpoint's EPS will grow at a 58% compound annual rate in 2021-2024 and raises the target price on the stock to 435 pence from 290 pence. ([e-mail])

ScS Group Rises on Outlook, Still Looks Undervalued, Shore Says

0806 GMT - ScS Group's shares don't seem to reflect the strength of the flooring-and-furniture retailer's business, according to Shore Capital. ScS can leverage a strong balance sheet with no non-lease debt and considerable balance, the investment group says. Management has outlined a positive outlook for this year and next year and the declaration of a dividend feeds hopes for more payouts, Shore says. Shares are up 11% at 322 pence. ([e-mail])

N. Brown's Lawsuit Scope Is Disappointing But Likely to Be Smaller Than Expected

0806 GMT - It is disappointing that N. Brown is still dealing with legacy issues, particularly of the magnitude it faces as Allianz tries to increase the scope of its litigation claim, but the final amount will likely be smaller than claimed, Jefferies says. The U.K. clothing and footwear-retailer says Allianz has applied to increased the scope of the claim as part of a further customer redress exercise. "However, we think the eventual outcome of the Allianz case will be considerably smaller than the headline claims and see N. Brown as far better capitalized to deal with any potential outflows," the U.S. bank says. Jefferies retains its buy rating and 95.0 pence price target. Shares are down 5.2% at 60.0 pence. ([e-mail])

Pets at Home Seen Set for Further Growth

0814 GMT - Pets at Home's impressive growth seems bound to continue as the company can leverage both self-help and external tailwinds, according to Berenberg. The pet-care company ended fiscal 2021 with two-year like-for-like sales growth of circa 20% and if that momentum continues it should generate 9% to 10% like-for-like sales growth in fiscal 2022, Berenberg says. Meanwhile, the company continues to benefit from the increasing pet population in the U.K. and has plans to expand its store chain this year, the German brokerage says. Berenberg has a buy rating on the stock and a target price of 540.0 pence. Shares are up 0.4% at 458.4 pence. ([e-mail])

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06-16-21 0435ET