MARKET REPORT: RS Group rattled after target price is slashed
Shares in the electronics distributor RS Group fell as analysts warned of tough times ahead.
In a blow to the FTSE 100 industrial firm, formerly known as Electrocomponents, UBS lowered its rating on the stock to ‘neutral’ from ‘buy’ and slashed the target price to 800p from 1250p.
The downgrade came as the investment bank said it expected the group’s profits to decline and for its market share to fall in line with weaker economic conditions.
Shares dropped 3.5 per cent, or 25.4p, to 696.6p, 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 per cent, or 47.78 points, to 7262.43 and the FTSE 250 lost 1.4 per cent, or 259.47 points, to 18096.6.
Tough times ahead: In a blow to the FTSE 100 industrial firm, UBS lowered its rating on 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 property sector and economy.
Burberry, which makes most of its sales in China, fell 1.7 per cent, or 36p, to 2149p, and the insurer Prudential sank 3.2 per cent, or 31.2p, to 947p. Miners also came under pressure as Antofagasta shed 3.3 per cent, or 47p, to 1375.5p, Glencore slipped 1.8 per cent, or 7.5p, to 416.05p and Rio Tinto lost 0.8 per cernt, or 35.5p, to 4600.5p.
Wet weather took its toll on the High Street as retail sales fell 1.2 per cent in July.
The official data hit major retailers as Frasers Group slid 2.4 per cent, or 19.5p, to 792p, JD Sports retreated 2.4 per cent, or 3.7p, to 149.7p and B&M dropped 0.8 per cent, or 4.8p, to 566p.
BAE Systems – Britain’s biggest defence contractor – received a vote of confidence from the City a day after it announced its £4.4billion deal to buy America’s Ball Aerospace.
Analysts at the Bank of America reiterated a ‘buy’ rating on the stock and set a price target of 1175p. They said BAE’s acquisition is ‘clearly a unique high growth asset’. Shares rose 0.8 per cent, or 7.6p, to 963.4p having fallen 4.6 per cent on Thursday when the takeover was announced.
Britain’s biggest supermarket was among the top blue-chip risers following a broker upgrade.
Tesco added 1.3 per cent, or 3.2p, to 249.7p after Jefferies upgraded its target price to 320p from 310p.
Investors waved goodbye to Kingspan as the building insulation specialist quit the London stock market.
The Irish firm, which announced the decision in April, will now have a primary listing on the Euronext Dublin exchange. It came as the group’s revenues fell 2 per cent to £3.55billion in the first six months of the year. Profits came in at £281m, up from £277m (€319.9m).
A Canadian bid to take Lookers private suffered a blow as the level of support from the London-listed car dealer’s shareholders dwindled. Global Auto Holdings increased its original offer of 120p a share by 10p to 130p at the end of July.
At the time, Lookers, which has recommended the deal, said more than 40 per cent of shareholders also supported the bid. But this has tumbled to less than 23 per cent after Artemis Investment Management sold its stake this week while JO Hambro lowered its holding from 8 per cent to nearly 1 per cent. Shares slid 0.2 per cent, or 0.2p, to 129p.
Telecoms firm Airtel Africa took a hit after one of its local businesses in Chad was fined £6.52m for breaking investment commitments. An audit by the country’s regulator found that its network quality had declined. Shares sank 4.4 per cent, or 5p, to 108.7p.
Cybersecurity firm Smarttech247 gained approval for its flagship AI-enabled programme VisionX to be listed on the Amazon Web Services (AWS) Marketplace.
‘AWS’s well-established, trusted platform allows us to showcase VisionX to a wider range of customers,’ said chief executive Raluca Saceanu. Shares rose 3.2 per cent, or 1p, to 32.5p.