Aston Martin reverses after lacklustre quarter
ASTON Martin suffered the day’s biggest reversal following a fierce downgrade from Bank of America Merrill Lynch.
Analysts think the troubled l uxury car maker will cut i ts 2019 outlook again and believe the company had a ‘very weak’ third quarter.
Lacklustre demand for its pricey cars – which have an average price tag of £160,000 – could be revived when it launches its DBX sports utility vehicle in December.
But analysts at the American investment bank point out that the company’s debt mountain is piling ever higher and short-term loans arranged this summer have provided no long-term solution to Aston’s financial car crash.
They downgraded Aston’s stock for the second time this year, putting it at ‘underperform’ from ‘neutral’, and lowered its target price from 550p to 400p.
Shares tumbled 8.5pc, or 40.5p, to 434.7p – a far cry from the 1900p the firm listed at last October.
FTSE 250- listed oil and gas group Cairn Energy came a close second to the car maker, as its shares slumped 8.1pc, or 15.7p, to 177.5p, following a double-dose of bad news.
It abandoned a dud well off the coast of Mexico after failing to find any oil or gas in it and, separately, said it faces a further delay to its £1bn-plus tax claim against the Indian government. Barratt Developments edged up 0.4pc, or 2.4p, to 648.4p after announcing share awards to chief executive David Thomas, operations chief Steven Boyes and finance boss Jessica White.
Thomas was handed £327,000 worth of shares in a bonus plan for 2019. He was awarded up to £1.5m worth of stock – 238,000 shares – in a long–term share plan that will become available in 2022 if he meets certain targets.
Boyes was given a £ 287,000 bonus and a long–term share plan worth £1.2m, while White pocketed £203,000 from the bonus and was handed another £859,000 under the 2022 scheme.
RBC Capital Markets analysts gave Ladbrokes Coral-owner GVC their stamp of approval as they started coverage of the UK gambling sector.
GVC was named RBC’s top pick and given an ‘outperform’ rating, with brokers praising its ‘ excellent track record’ of assimilating acquired firms into the group.
It didn’t help shares, though, as they fell 0.9pc, or 7.6p, to 870p.
Flutter Entertainment’s merger with The Stars Group was dubbed ‘an unparalleled revenue opportunity’, but analysts are holding back slightly until the deal is completed. But RBC brokers put William
Hill on the naughty step for ‘lagging’ in an industry ‘where scale matters’ and lots of other companies have combined to protect themselves. Flutter – also rated ‘outperform’ – lost 0.5pc, or 38p, ending at 7746p, while William Hill – deemed ‘ sector perform’ – slid 0.7 pc, or 1.4p, to 200.1p.
The FTSE 100 edged up 0.09pc, or 6.81 points, to 7331.28, as the market seemed to have largely priced in the EU granting the UK a Brexit extension.
The FTSE 250 rose 0.53pc, or 106.65 points, to 20210.16.
Sirius Minerals started the week on the right foot, with its shares lifting 3pc, or 0.09p, to 3.07p.
Investor forums were awash with hopeful chatter that later this week the potash miner could offer an update on its strategic review.
Boss Chris Fraser previously said the outcome could be pinned down by the end of October.
Fertiliser miner Emmerson rallied after it announced its Khemisset project in Morocco has 72pc more potash in it than the firm previously thought, or around 537m tons. The company’s shares closed 1.3pc, or 0.05p, higher, at 3.9p.