Proactive Investors - Melrose a 'top pick' for JPMorgan (NYSE:JPM).
Top of the FTSE 100 risers is Melrose Industries (LON:MRON), up 1.9%, supported by some warm words from JPMorgan.
The investment bank reckons results on March 7 will meet the top-end of the 2023 guidance (at least) and thinks the firm will raise the 2024 guidance to ahead of consensus expectations.
"Melrose remains a key pick for us in 2024; an aerospace pure-play with a credible margin story, further upside to forecasts and a sizeable buy-back supporting the shares," the investment bank said.
It has placed the stock on positive catalyst watch ahead of the results with an unchanged June 2025 price target of 620p.
Drax leaps amid reports of carbon capture approval reports
Drax (LON:DRX) has stormed ahead on Monday, up 7.6%, after a report suggested ministers are to approve a multibillion-pound CO2 capture scheme.
Energy Secretary Claire Coutinho is expected to secure Drax’s future by approving a scheme to bolt two massive carbon capture plants onto Drax’s four generating units, potentially stripping out almost all their CO2 emissions, the Telegraph reported.
The report said Coutinho is also due to launch a consultation into how best to extend the subsidy system under which Drax last year received £617 million from consumer bills.
The scheme terminates in 2027 so Coutinho will propose extending it into at least the 2030s, keeping Drax in business for at least several years.
Rolls-Royce target raised, L&G, Bellway , Crest upgraded
It's another good day for Rolls-Royce Holdings PLC (LON:RR), up 1.7%, as another broker hikes its price target for the firm.
Barclays (LON:BARC) has increased its price target to 409p from 270p and reiterated ‘overweight’ rating on the engineering outfit which was the best performer in the FTSE 100 in 2023.
Another stock on the move is Legal & General Group PLC, up 1.6%, after Berenberg upgraded to 'buy' from 'hold.'
Barclays has also been busy reviewing its price targets and ratings for a number of UK housebuilders.
It has upgraded Bellway (LON:BWY), up 1.7%, to 'overweight' from 'equal weight' and increased its price target to 3,022p from 2,330p but downgraded Berkeley Group, down 0.1%, to 'equal weight' from 'overweight' with a price target of 4,812p.
Crest Nicholson (LON:CRST), up 5.4%, has been upgraded to 'overweight' from 'equal weight' with an increased price target of 258p from 200p but Barratt Developments (LON:BDEV), up 0.8%, has been moved to 'equal weight' from 'overweight,' although the price target has been increased to 560p from 464p.
Weak chemicals outlook hits Shell (LON:RDSa)
The FTSE 100 remains under pressure with Shell PLC (LON:SHEL) one of the worst performing stocks.
Victoria Scholar, head of investment, interactive investor said investors are focusing on the fact that Shell warned that profits from trading oil products and chemicals would be lower resulting in a loss in that division.
She noted the oil major is also facing an impairment charge of between $2.5 billion and $4.5 billion in the fourth quarter, relating to its Singapore refining and chemicals hub. This offset an improved outlook in its gas trading division.
FTSE 100 falls; CMC leaps
The FTSE 100 opened lower hit by falls in oil and mining stocks as the downbeat start to 2024 continues.
At 8:15am, London's blue-chip index was down 19.11 points, 0.3%, at 7,670.50 while the FTSE 250 was up 16.45 points, 0.1%, at 19,226.84.
Susannah Streeter, head of money and markets, Hargreaves Lansdown (LON:HRGV) said “wariness has returned at the start of the week, as investors assess the risks of geo-political conflict, amid fresh signs of global economic slowdown and uncertainty about the trajectory of inflation.”
Shell and BP (LON:BP) fell amid a drop in the oil price as US Secretary of State Antony Blinken embarked on a whistlestop diplomatic tour, in an attempt to calm inflamed tensions.
Streeter noted oil prices have been fluctuating, as fresh concerns about the Middle East have been brewing, but for now focus has switched to signs of a dwindling appetite for oil globally.
“Saudi Arabia has flagged that it is seeing softening demand, prompting it to cut crude prices for buyers in all regions in February,” she noted.
Today, Shell reported a boost to gas trading in its fourth quarter but warned of lower earnings in its chemicals unit.
Elsewhere, CMC Markets leapt 20% after raising profit guidance substantially.
The trading platform has increased its full-year profit forecast to a range of £290-£310 million, up from £250-£280 million.
“ If the improvement in revenue contribution from B2B in the Trading business can sustain, justifying the significant investment the company has made here, we could take a more constructive view on CMC shares,” analysts at Shore Capital said.