Broken-down AA given a jump start by analysts
It’s been a ropey old journey so far this year for investors in the AA – one in which 46pc has been wiped from the value of the roadside assistance firm after it hit a series of potholes.
In fact the damage has been even worse for those who bought into its 2014 stock market listing at 250p, or when the shares were above 400p at their peak in 2015.
Yesterday may represent a fork in the road, analysts believe. It rose 5.6pc, or 2.8p, to 52.95p after it said it would hit financial targets for the year and is on course to hit medium-term goals. Paid membership has stabilised at around 3.2m, while the insurance business performed strongly.
City broker Liberum believes AA shares are worth more than double their current level.
the FTSE 100 ended the session in reasonably chipper mood, closing up 1.2pc, or 87.20 points at 7285.90. Gold was down from Wednesday’s six-year high water mark but remained near $1,500 an ounce. It tends to be a haven investment, and few holders appear willing to offload with a sino-American trade war bubbling in the background.
NMC Health, which owns medical centres in the Gulf states, spiked 4.8pc, or 95p, to 2095p after it settled the market’s nerves over its financial health.
After a two- day sell- off in the wake of its results, Rolls-Royce was back on a roll with bargain hunters driving the price 6pc, or 43.6p, higher to 773.6p.
BT was the second biggest faller of the day as it went ex-dividend, which means anyone buying the stock from now will not get a payout. the 5.9pc, or 10.84p, fall to 173.56p was largely a technical adjustment. that said, price target cuts from Deutsche Bank and HsBC probably didn’t help.
Also on the retreat was bottling and distribution firm Coca-Cola
HBC (off 1.1pc, or 31p, at 2799p) after first-half profits fell marginally short of expectations.
Credit suisse looked at the real estate sector, focused on some rebalancing of valuations downward. the price target for Intu, the struggling shopping centre owner, was cut from 100p to 40p. the shares, hit by worries over its debt pile, fell a further 0.8pc, or 0.3p, to 38.78p.
the swiss bank nipped its valuation of Hammerson back from 450p to 360p, but continues to expect the shares – up 3.1pc, or 6.7p, to 222p – to outperform. While losses widened for lender
Funding Circle it was all about the top line, with revenues up 29pc. shares rose 6.9pc, or 6.8p, to 105.8p. Estate agency chain Savills was moving in the opposite direction after resilient half-year results were used as a cue for profit-taking. the stock, up around 13pc since May’s nadir, fell 2.4pc, or 22.5p, to 925p.
Among the small- caps, Virtual reality entertainment group EVR’s gains were very real. Its shares surged 12.3pc, or 0.75p, to 6.85p after its subsidiary, Melody VR, signed a music licensing agreement with independent labels, Beggars Group and Domino Recording. Artists on Beggars include the xx and Radiohead, while Domino represents performers including the Arctic Monkeys.
Deals also brought a boost for water technology specialist Xeros, which gushed 3.2pc, or 0.3p, higher to 8.24p after agreeing to sell most of the customer portfolio for its Us commercial laundry business.
screening specialist Clear Star was glowing after its medical screening business passed over $1m (£820,000) in monthly sales for the first time. the shares rose 13.9pc, or 7.5p, to 61.5p.