Proactive Investors -
- FTSE 100 see saws around opening levels
- Barclays rises after results beat forecasts
- AstraZeneca, Unilever firm after upbeat trading
Flutter names former Kellogg boss as new Chair
Flutter Entertainment PLC (LON:FLTRF) has named former breakfast cereal executive John Bryant as its next non-executive chair.
The Sky Bet and Paddy Power owner said Bryant's appointment as director and chair-designate will take effect following Flutter's AGM today, and he will assume the role of chair from September 1.
The FTSE 100-listed firm said the appointment aligns with its succession plan, as well as good governance practice, with outgoing Chair Gary McGann stepping down on reaching his nine-year tenure as non-executive director.
Bryant is currently a non-executive director of jar maker Ball Corp (NYSE:BALL) and was previously executive chair, and before that chief executive, chief financial officer, and chief operating officer of food maker Kellogg Co (NYSE:K).
The gambling industry is in focus today as the Government unveils its long-awaited White Paper on the industry.
Shares in Flutter were down 1.2%.
Wizz Air and easyJet fly after upbeat comments from JPM
Shares in Wizz Air Holdings PLC (LON:WIZZ) and easyJet PLC (LON:EZJ) firmed after positive comments from JP Morgan.
The investment bank has placed Wizz Air on its Positive Catalyst Watch and upgraded easyJet to neutral from underweight.
JPM has lifted its price target for easyJet to 530p from 370p and for Wizz Air to 3,750p from 3,600p.
Shares in Wizz Air rose 2.3% and easyJet by 1.7%.
“We expect the strong demand environment to continue for European Airlines into the Summer months, amid continued strong consumer appetite for travel and with European capacity still trailing 2019 levels,” JPM said.
On easyJet the broker notes strong revenue momentum is leading to large estimate upgrades.
But it sees better value elsewhere, with Ryanair (IR:RYA) trading below easyJet’s 2024 estimated PE.
Ryanair remains its favoured sector play (overweight) with Lufthansa and Air France KLM (EPA:AIRF) also attracting overweight ratings.
The broker is neutral on British Airways owner, IAG (LON:ICAG), where the price target is now €2.40, up from €2.20.
The FTSE 100 remains firmly grounded though, up just 3 points.
Sainsbury 's faces challenges despite top-end annual profit
Shares in J Sainsbury PLC (LON:SBRY) are just the wrong side of the line as investors digest their top-end annual profits.
The food retailer delivered annual pre-tax profits of £690mln against guidance of £630mln to £690mln and also edged up its forecast range for the coming financial year.
House broker Shore Capital noted full-year pre-tax profit of £690mln was ahead of its twice upgraded £685mln estimate and said it has lifted its prediction for 2024 financial year by £15mln to £660mln.
“JS is working at pace, executing well, and engineering improving options for shareholders - note a net cash non-lease balance sheet,” the broker said.
“We continue to point out a high FCF yield (7.3%), attractive and sustainable dividend flow (flat year-on-year), and scope for management to talk to further shareholder friendliness,” the broker added.
But Sainsbury’s is battling a tough consumer landscape and a competitive industry with the likes of Aldi and Lidl driving price cuts putting pressure on margins as the battle for consumers continues.
Zoe Gillespie, investment manager at RBC Brewin Dolphin, said: “Sainsbury’s is caught between post-Covid normalisation and high inflation, which are simultaneously reducing revenues and cutting into margins.”
“That said, compared to where it was three years ago, the company is in a much better position,” she felt.
“It is a tough environment for supermarkets, which is one of the reasons why Sainsbury’s finds itself among the FTSE 100’s least favoured stocks by analysts.”
“But, it continues to perform reasonably well in the circumstances, with an improving share price, decent balance sheet, and levers to pull – such as the potential sale and lease back of property,” Gillespie added.
Sophie Lund-Yates at Hargreaves Lansdown notes increasing market share in the current environment is impressive.
But she added “Sainsbury’s proposition means it has little choice other than to get its hands dirty and fight with the likes of Tesco and slash prices to retain and attract customers.”
And while attracting customers with low prices now could be the right move for the long-term “the degradation in margin can’t go on forever and profits are already feeling the pinch.”
“However you slice it, the landscape is very tricky,” she reckoned.
“The huge pullback in spending in general merchandise shows the extent of consumer nerves, and the penchant for lower-priced grocery items needs to be short lived if Sainsbury’s is going to be able to lift the margin ceiling it’s currently enforced on itself.”
Shares fell 0.5% to 282.42p.
Barclays extends gains, up 3.7%
Shares in Barclays PLC (LON:BARC) are now up 3.7% as investors continue to warm to first quarter results.
Richard Hunter, Head of Markets at interactive investor, commented “There can be little cause for complaint on a set of numbers which have both grown and beaten expectations virtually across the board.”
“The diversity of the group’s businesses is a boon to Barclays through the various economic cycles and, to some extent, the three main units are all hitting something of a sweet spot.”
He felt “The strength of these numbers and an unchanged outlook from the group will give some comfort to embattled investors, with the market consensus of the shares as a buy likely to remain intact.”
John Moore, senior investment manager at RBC Brewin Dolphin, agreed: “Barclays’ results demonstrate what it is capable of.”
He said previous updates have tended to be overshadowed by legacy and conduct issues, “this seems like the first time in a while its performance has been the principal focus.”
“There is, perhaps, a nod to the banking sector’s recent troubles by the absence of a commitment to increased shareholder returns, despite significant improvements more or less across its operations,” he suggested.
Nevertheless, “Barclays is in a good position, with a strong balance sheet and diversified income stream, with the shares rallying from recent lows.”
The results have pulled other banks higher with Lloyds Banking Group (LON:LLOY) up 1.3% and NatWest Group PLC (LSE:LON:NWG) up 0.9%.
The FTSE 100 continues to swing between red and green, now up 2 points.