Airlines flying high on hopes of bumper summer
AIRLINE stocks cruised higher as analysts predicted the industry was set for a ‘great summer of profitability’.
Investment bank JP Morgan said European airlines should benefit from holidaymakers jetting off into the sun, after the industry took a battering when Covid measures brought travel to a standstill.
It raised Easyjet to ‘neutral’ from ‘underweight’ and increased the target price to 530p from 370p. Shares in the budget airline, up more than 50pc so far this year, rose 0.2pc, or 1p, to 489.5p.
British Airways owner IAG gained 2pc, or 2.95p, to 148.65p after JP Morgan reiterated its ‘neutral’ rating, while Wizz Air added 1.7pc, or 49p, to 2919p.
The FTSE 100 fell 0.3pc, or 21.06 points, to 7831.58 and the FTSE 250 was up 0.2pc, or 40.04 points, to 19,248.01.
Official figures in the US showed economic growth slowed more than expected in the first quarter as consumers spent more but businesses pulled back on investing in equipment.
On a bumper day of results in London, companies flooded the market with updates. Among them was RS Group, an industrial distributor, which agreed to buy rival Distrelec for around £323m. It rose 1.4pc, or 12.6p, to 908.4p.
Wealth manager St James’s Place ended the first quarter of 2023 with £153.6bn of funds under management, up 4pc on the same period a year ago, but short of the £154.7bn analysts expected. It sank 3.7pc, or 46p, to 1193.5p.
Schroders reported assets under management of £746.3bn in the first three months of this year, up from £737.5bn at the end of 2022, and said its finance boss Richard Keers will retire after a decade in the job. His replacement, Richard Oldfield, joins from auditor PwC on October 2. Shares dipped 0.7pc, or 3.3p, to 478p.
Sales at WPP rose 2.9pc in the first quarter of 2023 as the advertising giant remained hopeful it could grow between 3pc and 5pc this year. Stronger growth in the UK offset lower spending from some US tech clients. Shares slid 4.3pc, or 40.8p, to 916.2p.
Glencore piled pressure on Teck Resources to accept its takeover bid after the mining giant urged its Canadian coal and metals rival to ‘engage constructively’ in talks. Teck, which has rejected Glencore’s approaches, axed a shareholder vote on its own plans to split the business into two.
Observers wondered if Teck did not have the necessary support to press ahead with its plans. Glencore fell 1.7pc, or 8.2p, to 473.2p.
Taylor Wimpey inched up 0.1pc, or 0.15p, to 125.75p after it became the latest housebuilder to report a recovery in the property market amid improved mortgage availability. Warnings of weaker than expected volumes weighed on DS Smith even though the packaging giant’s profit forecast of between £850m and £860m for the year to April 30 will meet the £854m expected by analysts. Shares sank 2.2pc, or 6.9p, to 304.6p.
At Howden Joinery, the kitchen fitter insisted UK sales should rise throughout the year following a 1.6pc like-for-like fall in the 16 weeks to April 15. Shares rose 1.2pc, or 8p, to 676.6p.
There was better news for Inchcape after the car dealer hailed an ‘excellent start to the year’ as an improvement in supply helped revenue soar 50pc to £2.7bn in the first quarter. Shares increased by 4.1pc, or 31p, to 795.5p.
But Capricorn Energy plunged 10.3pc, or 25p, to 217.6p after it said it will scale back all exploration spend outside Egypt and could sell its UK assets.
It hopes to return £461m to shareholders over the next 12 months through special dividends and a share buyback.