BP Likely to Launch Lower Buybacks in 3Q Versus 2Q -2-

1420 GMT - Softcat's shares could do better than the market thinks, Citigroup says, increasing its recommendation on the IT infrastructure and services provider to buy from neutral. The company's customer-orientated strategy and sales/delivery-driven culture has historically produced consistent market-share and earnings gains, Citi says, adding that it also has superior margins, a net cash position and strong cash conversion. "Consensus continues to under-estimate share-gain potential while we see acceleration in investments--headcount growth highest in five years--as indicative of confidence in continued outperformance," Citi analysts say in a note, increasing their price target to 1600p. Shares rise 6% to 1473p. ([e-mail])

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Computacenter's Earnings Prospects Look Muted

1419 GMT - Computacenter's earnings outlook appears limited, Citigroup says, cutting its recommendation on the computer-services supplier to neutral from buy and its target price to 2350 pence. While the group's positioning and strong customer relationships are positive, post-pandemic growth is slowing and future earnings gains look likely to be muted, given higher wage inflation, Citi says. Meanwhile, market expectations and the company's share price already reflect capital options offered by its balance sheet and cash flow, Citi analysts say in a note. Shares drop 1% to 2168p. ([e-mail])

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UK-EU Export Slump Sparks Calls For Brexit Shake-Up, BCC Says

1418 GMT - U.K. goods exports to the EU slumped in May, prompting business chiefs to call for a shake-up of the country's post-Brexit trading arrangements with the bloc. U.K.-EU goods export values fell by 6.8% versus April, the Office for National Statistics said. The British Chambers of Commerce, which has previously said the U.K.'s EU exit has made trade with the bloc more difficult and costly, said a new export approach was needed. "It's disappointing to see April's improved goods export performance was not sustained into May," BCC head of trade policy William Bain writes. "While exports of financial, IT and business services are holding up well and are finally above pre-pandemic levels, the picture for goods exports has so far been poor in 2023." ([e-mail])

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DCC Looks Resilient Enough to Offset Foreign-Exchange Headwinds

1252 GMT - DCC should be able to offset potentially rising foreign-exchange headwinds and meet its FY 2024 target, after posting in-line 1Q results, Davy Research analyst Colin Grant writes in a research note. The recent strength of the sterling against the dollar and the euro may have caused a 2% increase to foreign-exchange costs, but the U.K. sales, marketing and support-services should still see 3% adjusted Ebitda grow to GBP675 million, Grant says. "We see significant value in the stock and the potential for a major re-rating," he adds. DCC has an outperform rating and a 9,000-pence price target on the stock. ([e-mail])

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Dr. Martens 1Q Update Gives Reassurance for FY 2024 Targets

1212 GMT - Dr. Martens's 1Q performance update should provide some reassurance is on track to deliver its FY 2024 revenue growth target despite the uncertain outlook, RBC Capital Markets analyst Piral Dadhania says in a note. The British footwear and clothing brand reported that 1Q trading is in line with board's expectations and guidance, Dadhania says. However, the mixed demand outlook in U.K. and U.S. prompts caution, the analyst adds. "Whilst we still believe in the longer-term growth prospects for the business..., we believe the near-term outlook is less attractive," Dadhania adds. RBC has a perform rating on the stock. ([e-mail])

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Brooks Macdonald Looks Well-Placed Despite Uncertainty

1211 GMT - Brooks Macdonald shares fall 4% to 2150 pence after the asset manager said it expected investor sentiment to remain subdued amid continued short-term market uncertainty. While the firm's fourth-quarter trading update was weaker than anticipated, that reflected industry-wide issues and it still looks well-placed in terms of growth and M&A, Investec says. "As a result, we continue to believe the shares represent an attractive investment for investors looking to take advantage of a number of structural growth opportunities within the U.K. wealth market," Investec analyst Rahim Karim says in a note, reiterating the brokerage's buy recommendation and 2530p price target. ([e-mail])

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musicMagpie Seen Supporting Growth Levers, Discipline to Keep Financial Flexibility

1133 GMT - Online retailer musicMagpie's 1H shows a focus on driving higher margins and reflects how it continues to benefit from the evolving rental model, Shore Capital analysts Clive Black and Katie Cousins say in a note. Management remains confident about meeting full-year views and there are expectations around the continuation of a cost-saving measures focus driving higher-margin sales and the evolving nature of the rental model to optimize potential, the analysts say. "We see good efforts by the group in supporting its growth levers whilst maintaining discipline to provide for balance sheet flexibility," analysts say. Shore Capital has musicMagpie as a house stock. Shares are down 17% at 15.50 pence. ([e-mail])

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Carnival's Debt a Concern on Rising Cost of Capital

1133 GMT - Cruise giant Carnival's recent 2Q update and the introduction of medium-term targets imply the normalization of profitability and returns by fiscal 2026, Shore Capital analyst Greg Johnson says in a note. Current booking trends are positive, although a significant proportion of profit recovery only reflects a return to historic occupancy levels, he says. Meanwhile, debt levels have ballooned and are forecast to remain elevated, industry capacity continues to build, and the economic outlook is uncertain, Johnson says. With tranches of debt yielding more than 8% to maturity, it is the rise in the cost of capital that is concerning, Johnson says. Shore rates the stock sell. ([e-mail])

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07-13-23 1055ET