Easyjet shares sent into a tailspin by Brexit gloom
IN THE wake of a flurry of takeover offers for British companies, analysts are keen to pinpoint the next target.
The spreadsheet aficionados over at Kepler Cheuvreux have flagged Easyjet as possible prey after Brexit, which is scheduled to occur by October 31.
Brexit, they believe, could dampen demand from British customers using the airline.
In a somewhat caustic note, Kepler analysts announced a slew of downgrades for the Lutonbased airline.
They moved its stock rating from hold to reduce, slashed its target price from 1200p to 820p and reckon that its pre-tax profits for 2020 will be down by around 20pc to £350m.
The downbeat analysis sent Easyjet shares plummeting by more than 4pc in early trading, and its stock finished 3.3pc, or 31.6p, lower at 923p.
Fresh worries that the UK is poised to exit the European Union without a deal sent both the FTSE 100 and mid-cap FTSE 250 lower. Shares in banks, which would be exposed to any hit to Britons’ wealth and spending habits, lost ground, with
Lloyds Banking Group closing down 1.5pc, or 0.73p, to 49.59p and Natwest-owner Royal Bank
of Scotland shedding 1.2pc, or 2.3p, to 183.95p.
The Footsie ended the day down 0.19pc, or 13.75 points, to 7268.19, while the FTSE 250 closed marginally in the red, down 0.09pc, or 17.41 points, to 19464.14.
All eyes today will be on the companies that are officially entering and leaving the Footsie and FTSE 250.
FTSE Russell, the group that calculates which firms end up in the indexes based on their market value, will officially confirm today who is in and who is out.
But, claims the Share Centre, it is safe to say goodbye to Direct Line, Micro Focus and Marks and Spencer. Direct Line shares fell 1.4pc, or 4p, to 280.7p, while a rise of 2.4pc, or 26.2p to 1113.8p wasn’t enough to save tech group Micro
Focus, and M&S tipped into the red, down 1.5pc, or 2.9p, to 186.75p, as it faced being relegated from the blue-chips for the very first time since the Footsie was created 35 years ago. Convenience food business
Greencore snapped up takeaway salads and chilled snacks supplier Freshtime UK for a cool £56m.
The privately-owned business employs around 350 people and had profit before tax of £5.6m.
Shares in Dublin-based Greencore rose 3.4pc, or 7.1p, to 217p on the news.
Gold miner Acacia jumped by 3.1pc, or 8.2p, to 272.8p by the close, after shareholders gave the company’s majority investor the
green light to buy the rest of the its shares.
Canadian mining giant Barrick Gold, which already owned a stake, won approval from 99.98pc of votes cast at a one-off meeting to buy the remainder of Acacia’s shares for £951m.
It is hoped the buyout will lead to a resolution in a long-standing dispute between Acacia and the Tanzanian government, which has resulted in multi-billion-dollar tax claims, export bans and arrests of staff members.
Barratt Developments shed 1.6pc, or 10.4p, to close at 622p ahead of releasing its full-year results today. It expects to post pre-tax profit for the year of £910m, up from £836m in 2018.
Small-cap group Xaar delayed its half-year results from September 10 to September 26 as it warned it expects lower revenues than it had guided and said the rest of the year would be ‘weaker’ than previously thought. Shares in the firm, which makes the part of a printer that transfers ink to paper, fell 30.7pc, or 27p, to 61p.