Sterling Considered Overbought, Could Move Lower -3-

1048 GMT - Quilter's first-quarter net flows show a sequential improvement in its asset-gathering performance, helped by the tax year-end seasonality, though organic growth lags behind its targeted rate, RBC Capital Markets says in a note after the wealth-management company said its assets under management and administration rose modestly over the first quarter. "We see the flow result as a step in the right direction for QLT, and note optimistic commentary, however organic growth of 1.3% is still below the 2% rate the company is targeting for FY and materially below the longer term target of 4-5%," analyst Ben Bathurst says. Shares are up 1.9% at 83.6 pence. ([e-mail])

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AB Dynamics' Strong 1H Highlights Its Long-Term Prospects

1041 GMT - AB Dynamics' first-half results highlight the structural growth and long-term prospects of the company's core markets, Peel Hunt analysts write in a research note. The strong 1H results of the company--which provides testing systems and measurement products to the automotive market--also highlight opportunities in new markets outside automotive, as well as the company's impressive operational progress and scope for adding to the growth through acquisitions, the analysts say. "Strong growth and scarcity value justify a premium in our view," they add. Peel Hunt has a buy rating on the stock. Shares are up 2.4%. ([e-mail])

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Hammerson Still Has More to Deliver

1037 GMT - Hammerson posted some positive operating trends but has more to deliver as the group still faces restructuring challenges, RBC Capital Markets says in note after the shopping-center operator reported higher rental income, footfall and sales for its first quarter. "We believe challenging market conditions are likely to hamper Hammerson's progress with its ongoing restructuring. A combination of a relatively high level of variable revenues, high financial gearing, complicated ownership structures for most of its properties and its potential shift in business mix (to mixed-use urban development) amplifies the uncertainty over Hammerson's future level of earnings," says analyst Julian Livingston-Booth. RBC rates the stock underperform. ([e-mail])

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Travis Perkins's 1Q Was in Line But Doubts Remain

1026 GMT - Travis Perkins booked 1Q in line with expectation, but a number of doubts still persists, Shore Capital analyst Graeme Kyle writes in a research note. "We have concerns over growing on-line competition in general merchanting and cannibalization between the merchanting and toolstation segments," Kyle says. In addition, the building-materials retailer's free cash flow margins are well below sector average, he says. Moreover, despite several actions to enhance shareholder value, the company's expected adjusted EPS for 2024 is still 13% lower than six years ago, the analyst says. Shore Capital has a sell rating on the stock and a price target of 959 pence. Shares are down 2.4% at 939.00 pence. ([e-mail])

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Speculators No Longer Betting Against Pound

1004 GMT - Speculators are no longer betting against sterling, Societe Generale says. The latest CFTC positioning data show the speculative market is no longer short GBP, SocGen forex strategist Kit Juckes says in a note. "The sterling bears who feasted on sterling's woes from the second half of 2022 onwards, have found the last six months hard going," he says. However, he doesn't expect the currency will strengthen much against the euro. "The rates market already prices 70 basis points of hikes in the next five months, and I can't see anything that is likely to drive EUR/GBP any lower from here." EUR/GBP trades flat at 0.8847. ([e-mail])

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AB Foods' Primark Likely to Benefit From Expansion Plans, Easing Costs

1002 GMT - AB Foods' Primark business remains the group main profit driver, being responsible for 44% of group revenues, as it remains an obvious destination to cash-conscious consumers, Interactive Investor head of markets Richard Hunter says in a note. Primark's impact of a weaker sterling was somewhat offset by profits in the U.S., where the British conglomerate has plans of further expansion, Hunter adds. The group should also benefit from further tailwinds as the brand is gains traction in the areas where it trades amid normalizing sea freight costs and declining energy costs, Hunter says. ([e-mail])

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AB Foods Drops After Primark Falls Short of Hopes

0957 GMT - Associated British Foods drops 5% to 1968 pence after the food producer and owner of clothing retailer Primark reported lower first-half adjusted operating profit and forecast full-year profit similar to a year earlier. Group adjusted operating profit in the 24 weeks to Mar. 4 broadly matched consensus forecasts, though Primark's earnings and margin fell short of expectations, Citigroup says. "All told, we view the shares as up with events, albeit we think the 1H Primark margin and the lack of 2H progression leaves some scope for disappointment," Citi analysts say in a note, reiterating their neutral rating and 2000p target price. ([e-mail])

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(END) Dow Jones Newswires

04-25-23 1015ET