UK Housing Market's August Decline Suggests More -2-

1234 GMT - Energean's initial challenges at its Karish gas site in Israel, which caused a cut to full-year guidance, should be a thing of the past, Berenberg analysts write in a research note. The oil-and-gas company recently backed its medium-term production targets of above 200,000 daily oil-equivalent barrels in 2H 2024, which illustrates confidence that the initial hick-ups at Karish have been rectified, the analysts say. Additionally, they highlight Energean's long-term cash flow visibility, a sector-leading dividend outlook--forecasted to double from 30 cents over the next 18 months--and an expected spud in 4Q of the Orion-1X well, which could provide meaningful upside, they say. Berenberg cut its price target on the stock to 1,555 pence from 1,570 pence, while keeping a buy rating. ([e-mail])

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Keystone Law Shares Jump On 'Impressive' 1H Growth

1133 GMT - Keystone Law showed impressive growth across all metrics in its first-half results, Shore Capital says in a note after the London-listed law firm posted an "excellent" set of earnings and declared a special dividend, sending shares 18% higher. "Recent share price weakness is likely a symptom of weakened investor sentiment towards the legal sector," analyst Jamie Murray writes, adding that the stock is the best option--given its robust and cash generative business model--for investors looking for exposure to the sector. Shore rates the stock buy. Shares trade at 482.5 pence, having reversed losses to date to trade up 9.7% since the start of the year. ([e-mail])

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IG Group's 1Q Was Soft But Resilient

1115 GMT - IG Group Holdings had a soft start to fiscal 2024 but showed resilience despite lower market volatility, Numis says in a note after the online-trading company posted first-quarter results. "Our adjusted estimates reflect the current very soft trading environment, suggesting the estimate risk is on the upside with 1Q likely ending better than it started," analysts write. They point to the regulatory capital requirement's 42% reduction under the Investment Firm Prudential Regime between May 31 and Aug. 31, which they see highlighting confidence in its strength and risk management as well as supporting further capital distributions. Numis keeps its buy rating on the stock but trims its target price by 5% to 1,080 pence. Shares in London rise 1.4% at 677.5 pence. ([e-mail])

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John Lewis 1H Shows Consumer Behavior Change Due to Inflation

1022 GMT - John Lewis reported a narrowed 1H loss amid a change in consumer behavior while full-year results are expected to improve as overall focus will be on the festive period ahead, when the group typically benefits from a seasonal boost, Interactive Investor Head of Investment Victoria Scholar says in a note. The cost-of-living crisis is making John Lewis's consumers avoid spending on expensive big-ticket items, such as white goods and technology, while they are still purchasing cheaper items like fashion and beauty, Scholar notes. Added to that, the group's grocer Waitrose sales increase of 9% was mainly driven by inflation, while volume of goods sold fell by 5%, she highlights. ([e-mail])

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Anglo American Could See Investor Sentiment on Woodsmith Project Turn Soon

1003 GMT - Anglo American can expect the debate around the Woodsmith project's merit to run on for a while, but the news flow looks incrementally positive from here, RBC Capital Markets analyst Tyler Broda writes in a research note. Investors in the diversified miner have been expressing concerns about spending such a high level of capital on the Woodsmith polyhalite project without certainty on end product for a while. However, the value from the organic nature of polyhalite, the low chloride content, a 3%-5% increase in yield and a burgeoningpartnership with ADM should give the market greater confidence in price formation, Broda says. "Depending on price achieved, Woodsmith could potentially be a generational asset," he says. "Mining companies necessarily must operate on decade-long time horizons and Anglo American is embracing this," he adds. ([e-mail])

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Brooks Macdonald's Future Earnings Seen In Focus

1003 GMT - Brooks Macdonald's future performance is likely to be what investors focus on, Numis says in a note after the U.K. asset manager reported results for fiscal 2023 and warned it might post outflows in its first quarter of fiscal 2024 due to short-term headwinds. "We expect relatively modest changes on the back of the FY23 result, but believe focus is likely to be on Consumer Duty rules and any potential impact on future earnings," analysts write, referring to the U.K.'s new standards for financial services firms. Numis raises its rating on the stock to buy from add on the back of share weakness but keeps its target price unchanged at 2,450 pence. Shares--which are down 11.6% year to date--fall 2.9% at 1,875 pence in morning trade. ([e-mail])

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UK House Price Index Hits Lowest Level in 14 Years

0948 GMT - The U.K. RICS August house price balance fell to minus 68%, below market estimates for minus 56%--the country's biggest fall in house prices in 14 years--Interactive Investor says, citing a new Royal Institution of Chartered Surveyors survey. The report measures the difference between the percentage of surveyors seeing rises and falls in house prices. Following similarly gloomy figures from Nationwide and Halifax, the data highlights the dampening effect 14 consecutive rate hikes from the Bank of England is having on prices, Interactive Investor's Head of Investment Victoria Scholar says in a market comment. "Sellers are less willing to list their properties since asking prices are coming down, and buyers are struggling with mortgage affordability. Both factors are contributing to rising rents and falling real estate prices," Scholar says. ([e-mail])

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THG's 1H Margin Increase Shows Improving Governance

0945 GMT - THG's 1H performance was in line with expectations, with a fall in core sales while the group focuses on profit and generating free-cash-flow, Liberum analysts Wayne Brown and Anubhav Malhotra say in a note. The U.K. e-commerce company--known as the Hut Group-- reported an increase in 1H adjusted Ebitda of GBP47.1 million from GBP32.3 million, reflecting a margin improvement of 4.9% from 3.0% through its cost-reduction program and the exit of loss-making segments and markets, they highlight. "We note the much-improved governance and better disclosure and still believe a separation of the three businesses is the best way to deliver significant shareholder value," they add. Shares are down 15%. ([e-mail])

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Arm Holdings Has Been Priced to Pop on Debut

0939 GMT - Arm Holdings' IPO price of $51 suggest it is set for a boost on its stock exchange debut later Thursday, AJ Bell investment director Russ Mould says in a market comment. The U.K. chip designer's market valuation is still a long way short of the $64 billion implied by internal dealmaking at current owner Softbank last month, Mould says. "But if the bankers advising the company called it right, then the chip designer could be approaching those levels sooner rather than later," he says. ([e-mail])

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Trainline to Continue Benefiting From Ticket Digitalization

0848 GMT - Despite Trainline's growth being slightly hurt by labor strikes in the U.K., this is seen as just a near-term issue, Shore Capital analysts Katie Cousins and Greg Johnson say in a note. The online tickets operator's value lies within its extensive coverage of the U.K. rail network, with the industry's increased digitalization for consumer tickets likely to continue benefiting it over the medium and long term, the analysts say. "Following the positive update this morning, we retain our buy recommendation and fair value of 320 pence, but see scope to outperform if market share opportunities are realized," the analysts say. Shares are up 12% at 278 pence. ([e-mail])

Contact: London NewsPlus, Dow Jones Newswires;

(END) Dow Jones Newswires

09-14-23 1005ET