Royal Mail wrapping up a rise after Morgan Stanley delivers upgrade
ROYAL Mail got some pre-Christmas cheer from the City today amid hopes that its parcels business will deliver better-than- expec ted festive volumes.
Morgan Stanley upgraded its full-year estimates after “slightly better” parcels and letters business in recent months. The bank nudged up its price target to help the shares continue their recent recovery, up 2%, or 8.3p, to 407.6p.
Consumer goods firm Reckitt Benckiser also sparked into life as analysts continued to digest the company’s recently announced plan to split into two divisions, one focussed on health and the other on hygiene and home products.
JPMorgan said possible scenarios include a sale of the hygiene and home business or potential reinvestment in M&A in the health division.
The investment bank sees the potential for a valuation of between £64 and £90 depending on the progress of acquisitions or asset sales. It has raised its price target to £75 from £69.
Reckitt’s shares surged 2%, or 150p, to 6551p to help the FTSE 100 index climb 0.3% or 21.85 points, to 7433. The FTSE 250 index was also back above the 20,000 barrier, having risen by 63.87 points to 20,007.75.
Accountancy and payroll software business Sage celebrated a landmark as it signed off the transformation plan it outlined to investors in June 2015.
For each of the three years of the plan, Sage said it had delivered on its target for at least 6% organic revenue growth and 27% underlying operating margins. Newcastle-based Sage, which reported a 41% jump in full-year profits to £342 million, has also benefited from switching more of its customers to cloud-based services.
From virtually no cloud presence in 2014, Sage now has £300 million of annualised recurring revenue, growing at a rate over 80% in the year. Sage shares, which have risen 13% in the past year, were just a penny lower at 774p.
Another strong performer during 2017 has been waste management firm Biffa after a gain of 44% since last November.
The shares continued their ascent today, rising another 4p to 254.25p as the company bolstered full-year forecasts with a strong first-half performance. Interim operating profits were up 9.3% to £43.4 million.
CEO Ian Wakelin said Biffa’s scale and presence meant there were still plenty of opportunities for the firm in a fragmented market.
Revenues at Gfinity soared by 64% to £2.37 million in the year to the end of June. Pre-tax losses at the e-sports company, widened to £5.3 million, up from £3.1 million last year. Bosses said it reflected investment to expand. The shares rose 0.05p to 23.05p. @EvansOnTheMoney