Tuesday's biggest risers and fallers
With a flurry of price-moving announcements, Tuesday's rush of trading updates probably should have come with an investor health warning. It's one of those days where it is hard to know where to look first, with a number of statements followed by the sound of analysts ripping up forecasts.
In the FTSE 100 index (UKX), those to get the red pen treatment included Compass (CPG) and Johnson Matthey (JMAT), whereas shares in easyJet (EZJ) were riding high on hopes of a better trading performance in the coming year.
There were also positive surprises outside the top flight, particularly in the building sector after share price gains of 8% and 12% respectively for insulation and roofing firm SIG (SHI) and structural steel business Severfield (SFR).
The latter's improvement came as it said that full-year results will now be comfortably ahead of expectations. It is benefiting from government infrastructure spending and ongoing projects such as Tottenham Hotspur's new stadium and the retractable roof for Wimbledon's No 1 court.
SIG also reassured investors by reporting a 4.6% rise in underlying sales for the period since July. Price rises and signs of improvement in mainland European construction markets helped SIG offset a weaker performance in the UK.
In contrast, shares in temporary power supplier Aggreko (AGK) were more than 9% lower amid continued pressure in Argentina, where its Power Solutions Utility division has been impacted by the renegotiation of contracts.
The 15% decline in power solutions revenues was offset by a 9% rise in rental solutions as demand for generators increased in the wake of hurricanes in the US and Caribbean.
Panmure Gordon analyst Michael Donnelly retained his 'sell' stance on Aggreko, with a warning about "minimal growth, falling margins and returns metrics that still suggest material downside". He has a target of 715p, which compares with a current price of 881p after the shares slumped by 88p today.
Panmure is more upbeat about Compass (CPG), even though its shares just dropped 47p to 1,544p after the catering giant said results for the current financial year will again be weighted towards the second half.
Mark Irvine-Fortescue has a hold recommendation as Compass shares have been trading close to his 1,560p target price. This is based on an 13x EV/EBITDA multiple for full-year 2018, which is towards the top of the historic range.
Having just seen Compass report an improved operating margin of 7.4% for the year to 30 September, he expects a tick up to 7.6% in the current financial year.
At Johnson Matthey, the speciality chemicals company was given a lukewarm reception from investors after half-year profits fell 3% to £205 million. Shares were down 3% or 92p to 3,178p, although at these levels Citi said shares looked to be materially undervalued.
Further down the food chain, maintenance services firm Bilby (BILB) surged as much as 25% after reporting a cash profit of £3.15 million for the first half. Analyst forecasts for the entire year were for £5.5 million, so record results mean a big chunk of the job is done already.
Also watch the budget tomorrow for any extra government money aimed at improving standards in social and local authority housing.
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