1054 GMT – A sale by Playtech of Italian betting company Snai would make strategic sense and transform it into a pure B2B business while providing for a material capital return to shareholders, Peel Hunt analysts say in a research note. In the event of a sale, the gambling-technology company would become a key, more digestible acquisition target in a sector that continues to consolidate, the analysts say. Elsewhere, taking Caliente to the U.S. has the potential for greater long-term value, they add. Peel Hunt reiterates its buy rating on the stock with a target price of 800 pence. ([email protected])
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Joules Shares Soar Amid News of Talks With Next
1054 GMT – Shares in Joules Group surge 45% after the fashion and homeware brand confirmed media speculation that it was in talks with Next about selling a stake to the FTSE 100-listed fashion retailer and using the latter’s online services. Joules might follow in the footsteps of other brands that use Next’s ‘Total Platform’ system to increase their sales without large capital costs, operational risks or time developing sophisticated infrastructure, AJ Bell says. “Next doesn’t typically buy companies outright, so it seems unlikely that an initial investment in Joules will lead to a full takeover,” AJ Bell financial analyst Danni Hewson writes. “Instead, expect to see it become an influential shareholder and for more of Joules’s products to appear on Next’s website.” ([email protected])
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PageGroup Looks Able to Face Short-Term Slowdown
1018 GMT – PageGroup reported a strong 1H performance on Monday, but management remains aware of the worsening macroeconomic backdrop following a slowdown in July, Davy Research analyst David Greenall says in a research note. Although the market expects a slowdown in 2H, this should only be temporary, Greenall says, adding that the recruitment company already proved its ability to cope with a severe short-term dip during the pandemic. The Irish research firm has an outperform recommendation on the stock. ([email protected])
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Lok ‘n Store Update Shows Strong Performance, Positive Outlook
1017 GMT – Lok ‘n Store’s year-end statement for fiscal 2022 describes continued strong trading and a positive outlook, FinnCap says. The self-storage company’s revenue rose, high occupancy levels were maintained and early performance from new stores has been strong, FinnCap analyst Guy Hewett says in a research note. “We reiterate our view that the current portfolio and development pipeline will support a share price of 1,550 pence–with 50% upside–with further upside to come from future additions to the pipeline,” the U.K. investment bank says. ([email protected])
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Playtech Might Benefit From Restructuring
0901 GMT – Playtech could benefit from a wholesale restructuring of the business by either its own management or a third party, Deutsche Bank analyst Simon Davies says in a research note. The gambling-technology company is trading 30% below the October 680 pence cash offer from Aristocrat, which failed to pass a shareholder vote for approval, Davies says. The German bank sees a favorable valuation gap between the company’s stock and that of other gambling-technology peers. Deutsche upgrades its rating on the stock to buy from hold, but lowers the target price to 602 pence from 693 pence. Shares trade down 0.8% at 466 pence. ([email protected])
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Clarkson’s Outlook Looks Bright Despite Choppy Waters
0912 GMT – Clarkson drops 2% after the FTSE 250-listed shipbroker reported higher first-half profit, revenue and dividends and said the outlook was strong despite geo-political uncertainty, inflation and supply-chain disruption. Shipping demand far outstrips supply, creating conditions allowing firms like Clarkson to increase their prices, financial-services firm eToro says. “As a result, Clarkson has had a very strong first half, reporting record revenue and profit, a strong cash position and an increasing dividend, something it has done for the past 19 years,” eToro analyst Mark Crouch says in a note. “There are continued risks for the firm–both macro-economic and geo-political–but it will confront them from a very strong financial position and an unrivaled market position.” ([email protected])
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Pound’s Fall on UK Recession Fears Capped by Rate-Rise Bets
0834 GMT – The prospect of the Bank of England delivering another large interest rate rise likely limited sterling’s declines after the central bank forecast a U.K. recession at its last meeting, ING says. “Sterling probably has not sold off more since investors do not quite know what to do with a reserve currency that will be backed by rates at 2.25% if we are correct with our BOE call for the September meeting,” ING analyst Chris Turner says in a note. The BOE raised its key rate 50 basis points to 1.75% last week. Since the euro should remain soft, EUR/GBP may struggle to rise above 0.8450 this week, Turner says. EUR/GBP falls 0.1% to 0.8427 and GBP/USD rises 0.2% to 1.2093. ([email protected])
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Oil Ticks After Chinese Trade Data
0754 GMT – Oil prices tick higher, supported by economic data from China. Brent crude oil rises 0.7% to $95.53 a barrel while WTI adds 0.6% to $89.55 a barrel. China’s exports grew at a faster-than-expected pace last month, suggesting the major economy isn’t yet feeling the impact of a slowdown in Western economies. Meanwhile, Russia-related supply risks will put a floor under prices, Capital Economics says in a note. A limited supply increase from OPEC+ means the oil market is likely to remain tight and prices should remain close to $100 a barrel, the firm says. ([email protected])
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Next Might Have Miscalculated Investment Plans
0751 GMT – Fashion retailer Next might have overshot its investment plans in the online channel in relation to the acquisition of a minority stake in fashion brand Joules Group, Jefferies analyst Eleonora Dani says in a research note. The potential investment in Joules marks another client for Next’s total platform, but the U.K.’s Revenue and Customs investigation into whether Next paid below the minimum wage indicates that the business has undertaken more than it can deal with, the bank says. Jefferies has a hold recommendation on the stock and a target price of 6,444 pence a share. Shares at 0739 GMT were up 24.00 pence, or 0.4%, at 6,468.00 pence a share. ([email protected]; @sabelaojeaguix)
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AstraZeneca’s Enhertu U.S. Approval Was Faster Than Expected
0739 GMT – AstraZeneca’s Enhertu breast cancer treatment has been approved for use in the U.S. earlier than expected, Shore Capital says. The pharmaceutical major’s approval, while expected based on overwhelmingly positive trial data, comes much faster than anticipated, highlighting the FDA’s recognition of Enhertu’s remarkable efficacy, Shore analysts Susie Jana and Sean Conroy say in a research note. “Enhertu has the potential to become best-in-class and we believe it can garner a significant share of the HER2+ metastatic breast cancer market,” the investment group says. Shore reiterates its buy recommendation, which it said is based upon its “industry-leading earnings growth and pipeline prospects.” Shares are down 0.9% at 10,774 pence. ([email protected])
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Metals Inch Higher Amid Positive China Trade Data
0717 GMT – Metals prices are inching higher after China saw better than expected export figures for July. Three-month copper is up 0.5% to $7,928 a metric ton while aluminum is up 0.6% to $7,435.50 a ton. Gold meanwhile is flat at $1,790.60 a troy ounce. China’s exports and trade surplus both beat expectations with the former 18% higher in dollar terms and the trade surplus hitting $101.3 billion in July. Stephen Innes, managing partner at SPI Asset Management says in an email that China’s trade figures eases some concerns over falling global demand, weighed down by rising prices and higher interest rates. However, Innes adds that manufacturing data still remains weak, weighing on commodity prices for now. ([email protected])
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(END) Dow Jones Newswires
August 08, 2022 12:40 ET (16:40 GMT)
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