MARKET REPORT: RS Group Rocked After Price Target Cut
Shares of electronics distributor RS Group fell as analysts warned of tough times ahead.
In a blow to the FTSE 100 industrial company, formerly known as Electrocomponents, UBS cut the rating on the shares to ‘neutral’ from ‘buy’ and cut the price target to 800 pence from 1,250 pence.
The downgrade came as the investment bank said it expected the group’s profits to decline and its market share to fall in line with weaker economic conditions.
The shares fell 3.5 percent, or 25.4 pence, to 696.6 pence, taking losses for the year to more than a fifth.
The London stock market ended the week in negative territory as the FTSE 100 fell 0.7 percent, or 47.78 points, to 7,262.43 and the FTSE 250 lost 1.4 percent, or 259, 47 points, at 18096.6.
Tough times ahead: In a blow to the FTSE 100 industrial firm, UBS downgraded the stock to ‘neutral’ from ‘buy’
Asia-focused stocks bore the brunt of a sell-off amid ongoing concerns about the health of China’s real estate sector and economy.
Burberry, which makes most of its sales in China, fell 1.7 percent, or 36 pence, to 2,149 pence, and insurer Prudential sank 3.2 percent, or 31.2 pence, to 947 pence. . Miners were also under pressure, as Antofagasta lost 3.3 percent, or 47 pence, to 1,375.5 pence, Glencore fell 1.8 percent, or 7.5 pence, to 416.05 pence and Rio Red lost 0.8 percent, or 35.5 pence, to 4,600.5 pence.
Wet weather took its toll on the High Street, as retail sales fell 1.2 percent in July.
Official data hit major retailers as Frasers Group fell 2.4 percent, or 19.5 pence, to 792 pence, JD Sports fell 2.4 percent, or 3.7 pence, to 149, 7 pence and B&M fell 0.8 per cent, or 4.8 pence, to 566 pence.
BAE Systems, Britain’s largest defense contractor, received a vote of confidence from the city a day after it announced its £4.4bn deal to buy America’s Ball Aerospace.
Bank of America analysts reiterated a ‘buy’ rating on the shares and set a 1,175 pence price target. They said the BAE takeover is “clearly a unique high-growth asset.” The shares rose 0.8 percent, or 7.6 pence, to 963.4 pence after falling 4.6 percent on Thursday when the acquisition was announced.
Britain’s largest supermarket was among the top tier ups following a broker upgrade.
Tesco added 1.3 percent, or 3.2 pence, to 249.7 pence after Jefferies raised its price target from 310 pence to 320 pence.
Investors bid farewell to Kingspan when the building insulation specialist left the London stock exchange.
The Irish firm, which announced the decision in April, will now have a primary listing on the Euronext Dublin stock exchange. It came as group revenue fell 2 per cent to £3.55bn in the first six months of the year. Profits amounted to 281 million pounds sterling, compared to 277 million pounds sterling (319.9 million euros).
A Canadian bid to take Lookers private suffered a blow as the level of shareholder support for the London-listed car dealer waned. Global Auto Holdings increased its original offer of 120 pence per share by 10 pence to 130 pence at the end of July.
At the time, Lookers, which recommended the deal, said more than 40 percent of shareholders also supported the offer. But this has fallen to less than 23 percent after Artemis Investment Management sold its stake this week, while JO Hambro cut its stake from 8 percent to almost 1 percent. The shares fell 0.2 percent, or 0.2 pence, to 129 pence.
Telecom company Airtel Africa took a hit after one of its local companies in Chad was fined £6.52m for failing to meet investment commitments. An audit by the country’s regulator found that the quality of its network had declined. The shares sank 4.4 percent, or 5 pence, to 108.7 pence.
Cybersecurity firm Smarttech247 has won approval for its flagship AI-enabled VisionX program to be listed on the Amazon Web Services (AWS) Marketplace.
“AWS’s well-established and trusted platform allows us to showcase VisionX to a broader range of customers,” said CEO Raluca Saceanu. The shares rose 3.2 percent, or 1 pence, to 32.5 pence.