Sterling Seen Extending Gains Vs Dollar -2-

0940 GMT - Tortilla Mexican Grill's update was overall positive despite the challenging backdrop, showing optimism for its near-term performance, Shore Capital analysts Bradley Hughes and Greg Johnson say in a note. The U.K. fast-casual Mexican restaurant group reported strong 4Q like-for-like sales, which rose 16.4%, ahead of Shore's expectations of 16%, the analysts say. In addition, the group seems confident to deliver FY 2023 adjusted Ebitda in line with market expectations of around GBP5 million, above Shore's forecast, they add. "At first glance we expect our numbers to be tweaked up slightly for FY22 and will revert on FY23 following a conversation with management," they add. ([e-mail])

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JD Sports Fashion Shares Look Cheap Ahead of Update

0950 GMT - JD Sports Fashion shares look cheap, Shore Capital says ahead of the U.K. retailer's post-Christmas trading update on Wednesday Jan. 11. JD looks likely to report a solid performance following an upbeat trading update from U.S. sportswear giant Nike in December, Shore says, adding that the sports-footwear market is likely to show resilience against the macro-economic backdrop in 2023. "JD is one of the best players in the U.K. retail sector, trading at an unjustifiable discount," Shore analyst Eleonora Dani writes, reiterating the brokerage's buy rating. Shares drop 1% to 141 pence.([e-mail])

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Pound Rises on Improved Sentiment as Speech From BOE's Pill Eyed

0956 GMT - Sterling rises on improved global risk sentiment while a key focus for the currency Monday will be a speech from Bank of England chief economist Huw Pill, ING says. Recent job and wage data has yet to assuage the BOE's concerns over a tight U.K. labor market so Pill is unlikely to sound very cautious in his speech at 1530 GMT, ING analyst Chris Turner says in a note. "With the dollar at risk of falling further, GBP/USD looks biased towards the 1.2350 area this week, while EUR/GBP should find support in the 0.8780 area." GBP/USD rises 0.7% to 1.2170 after hitting a near three-week high of 1.2188 earlier, according to FactSet. EUR/GBP falls 0.3% to 0.8774. ([e-mail])

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N. Brown's Legal Settlement With Allianz Removes Distractions

1018 GMT - N. Brown Group's legal settlement with Allianz removed a significant element of uncertainty and therefore will let the company to focus on developing its brands, Shore Capital analysts Clive Black and Darren Shirley say in a note, as shares rise 10%. "Whilst N. Brown's shareholders will not be blind to the magnitude at a GBP49.5 million settlement, this brings to an end a long chapter of legacy costs that the business has had to face into for some years," they say. With a more focused product and credit offer, the group is expected to improve its modernization and development, they add. ([e-mail])

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Hollywood Bowl's FY 2022 Preliminaries Prompt FY 2023 Estimate Upgrades

1025 GMT - Hollywood Bowl's preliminary results for fiscal 2022 beat expectations with revenue of GBP187.9 million, ahead of guidance of GBP184.9 million, Liberum analysts Anna Barnfather and Nishant Dahad say in a note. Although management guided for a 3.5% rise to the cost base next year, the bowling operator's cost structure should insulate profitability from inflationary pressures, they say. Furthermore, net cash of GBP56 million--excluding leases--will support continuing investment, expansion and dividend growth, the analysts say. The U.K. brokerage raises its revenue estimates for fiscal 2023 to GBP185.3 million from GBP180.4 million, and adjusted Ebitda to GBP52.8 million from GBP52 million. Liberum rates the stock buy and has a 340 pence target price. Shares are flat at 250 pence. ([e-mail])

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JD Sports Looks Set to Deliver Solid Christmas Trading Update

1026 GMT - JD Sports Fashion looks likely to show a solid performance when it publishes its Christmas trading statement on Wednesday, Shore Capital research analysts Eleonora Dani and Clive Black say in a research note. Following positive updates from Nike and U.K. retailers such as a Next, JD should follow suit as it is one of the best players in the U.K. retail sector that is trading at an unjustifiable discount, they say. "Looking ahead, sports footwear remains a staple in consumers' wardrobe, so the category will likely show resilience against the macro backdrop in 2023," they say. Shore Capital has a buy rating on the stock.([e-mail])

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Boohoo's Christmas Likely to Have Been Hurt by Postal Strikes

1028 GMT - Boohoo is expected to report a better-than-feared performance during Christmas in light of Next's trading update last week, but still behind due to its online business model, Shore Capital analysts Eleonora Dani and Clive Black say in a note. "Multichannel businesses might have been favored over online pure plays due to postal strikes during peak trading," they add. The London-listed online fashion retailer's higher return rates will likely constitute a drag on profitability, prompting a cautious outlook for 2023, they add. "We see value in Boohoo and expect the business to recover in the future, but we reiterate our hold rating," they add. ([e-mail])

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Keller's Improved Performance Seen as Overshadowed by Financial Reporting Fraud at Unit

1034 GMT - Keller Group being hit by financial-reporting fraud at its Austral business was unexpected, but underlying trading was better, Liberum says in a note. Analysts Joe Brent and Alex O'Hanlon estimate the fraud's impact at GBP14 million for 2022. "It will undoubtedly be seen as disappointing by investors, given management's strong track record and ongoing concerns about accounting in the sector," they say. Keeping a buy rating on the geotechnical specialist contractor's stock, they flag a strong second-half performance and balance sheet despite the hit to full-year operating profit from the fraud. After the group said it now sees the metric coming in slightly below GBP109 million, Liberum lowers its operating profit estimate to GBP106 million and reduces its EPS estimate by 3% given strength of trading elsewhere. Shares fall 8.9% to 766.0 pence. ([e-mail])

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Anpario Stock Seen as Attractive After Tough 4Q Hits Share Price

1050 GMT - Anpario has strong long-term prospects despite flagging a tough fourth-quarter, Shore Capital says in a note. Analysts Akhil Patel and Clive Black lower their estimates on the back of management's forecasts, but note that the animal-feed additives manufacturer remains in a strong financial position. The group should resume its prior growth trajectory as trading conditions normalize in 2023, which could even lead to better-than-expected growth, they say. "We do expect to see a negative reaction to shares following the results, however we believe this will provide an attractive entry point for investors looking for a high margin, well managed business," they say, keeping a buy rating on the stock. Shares fall 11.6% to 420.0 pence. ([e-mail])

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(END) Dow Jones Newswires

01-09-23 0632ET