1037 GMT - Ashtead posted strong results with adjusted pretax profit of $1.78 billion for the first nine months of fiscal 2023, beating analyst expectations, Peel Hunt analyst Andrew Nussey says in a note. The equipment-rental company raised guidance for the rest of the year and management remains upbeat as inflation and supply-chain pressures are successfully managed, Nussey says. The U.K. brokerage raises its fiscal 2023 adjusted pretax profit estimated to $2.24 billion, from $2.19 million. "We increase our estimates to reflect the outlook, momentum and guidance," Nussey says. Peel Hunt rates the stock add and has a 6,000 pence target price. Shares are up 2.7% at 5,902 pence. (anthony.orunagoriainoff@dowjones.com)
IWG Well-Positioned But Better Value Seen Elsewhere
1034 GMT - IWG's 2022 results met expectations and it's well-positioned to take market share in the flexible office space sector given its scale and network advantages, but better value could be found elsewhere, RBC Capital markets says. The office-space provider's improvements in occupancy, pricing and service revenues should lead to significant operational leverage on a reduced cost base, but macroeconomic pressures add risk, as do continued inflationary pressures, RBC analysts say in a research note. "It's positive that nothing [is] incrementally negative today given the history, but we think there are better cyclicals to own at this point with less leverage, dividend support and more proven financial delivery," they say. The Canadian bank retains its sector perform rating and 150 pence price target. Shares are up 1.8% at 191.55 pence. (joseph.hoppe@wsj.com)
Persimmon's Structural Challenges Lead Peel Hunt to Cut Rating
1031 GMT - Persimmon generated sector-leading returns for years, but planning system challenges mean returns are falling, Peel Hunt says. The house builder's shares have risen 6% in the year to date, lagging peers' average of 10%, while its price looks unjustified given the in-line return on equity and dividend, Peel Hunt analysts Sam Cullen and Clyde Lewis say in a note. "Absent an unlikely change to the planning backdrop, rebuilding outlet numbers and recovering overhead will require a more aggressive stance on land buying, which is likely to both depress margins and returns," the U.K. brokerage says. Peel Hunt cuts its rating on the stock to reduce from hold and the price target to 1,070 pence from 1,190 pence. Shares are down 0.5% at 1,293.0 pence. (joseph.hoppe@wsj.com)
Greggs's Performance Is in Line With Views as Growth Remains Positive
1029 GMT - Greggs's 2022 performance was entirely in line with market expectations, while current business is robust despite not reporting any surprises, Jefferies analysts Andrew Wade and Grace Gilberg say in a note. Although the U.K. bakery's growth prospect is positive, store estate expansion and evening/hot food segments development, amid other initiatives, will become the main focus, they add. However, Greggs current like-for-like sales up 19% is in line with the board expectations and reflects the pandemic-related impacts in the business, which is likely to normalize from now on, they note. (michael.susin@wsj.com)
Ashtead Endures Macro-Economic Concerns
1016 GMT - For Ashtead, business is booming despite predictions of a global economic slowdown, eToro analyst Mark Crouch says in a note. The equipment-rental company posted strong sales and profit growth last year despite a precarious economic outlook which would normally see lower levels of construction, Crouch says. Moreover, Ashtead has spent GBP800 million on acquisitions and added 120 locations in North America in the first nine months of FY 2023, boosted by President Biden's efforts to grow U.S. infrastructure, he says. "Like many other businesses, inflation perhaps remains the biggest threat, especially when it comes to labor, transportation and fuel costs. However, the firm has proved adept at managing this threat to date," Crouch says. (anthony.orunagoriainoff@dowjones.com)
Fresnillo's Dividend Is a Positive Surprises Despite 2022 Earnings Miss
1015 GMT - Fresnillo's 2022 Ebitda of $751 million came in below Peel Hunt's expectations of $784 million, as higher cash costs offset better-than-expected revenue. The Mexican miner's final dividend of 13.3 cents was also well ahead of estimates of 10 cents, despite a miss on cashflow, Peel Hunt analysts Peter Mallin-Jones and John Gilbert say in a research note. "That said, with capex and exploration spend budgeted higher than our estimates, we see a larger draw on 2023 cash balances than in our present estimates," the U.K. brokerage says. Peel Hunt retains its hold rating and 800 pence price target on the stock. Shares are down 1.0% at 752.8 pence. (joseph.hoppe@wsj.com)
Bank of Ireland's 2023 Targets Imply Consensus Upgrades
1012 GMT - Bank of Ireland's guidance for the year ahead implies an around 10% earnings per share upgrade against consensus, Citi says in a note after the Irish lender guided for net interest income to be 12% higher in 2023 than in 2022, which implies a figure of at least EUR3.36 billion, and outlined its mid-term targets to 2025. "We expect the market to look for more details on financial targets beyond 2023, particularly on [net interest income] trends," say analysts Borja Ramirez Segura and Marta Sanchez Romero. Shares are up 2.9% at EUR10.74. (elena.vardon@wsj.com)
Ashtead's 3Q Was Strong, But Outlook Merits Caution
1006 GMT - Ashtead Group shares rise 3% after the plant-hire company reported better-than-expected third-quarter earnings and revenue. Operating performance was strong, with 3Q earnings about 10% ahead of consensus, driven by a top-line beat of about 5%, RBC Capital Markets says. "Our view doesn't really change that everything is going well for AHT and its peers right now, but we're increasingly concerned about the macro backdrop and see limited wiggle room in forward consensus and multiples in the event of a slowdown over the next couple of years," RBC analysts say in a note. (philip.waller@wsj.com)
Premier Foods' Upgrade Reflects Market Share Gains
1002 GMT - Premier Foods' unscheduled update was a positive surprise given its profit upgrade ahead of 4Q, Jefferies analysts Martin Deboo and Feng Zhang say in a note. The U.K. food manufacturer's FY 2023 sales outlook of at least 10% ahead of FY 2022 levels implies at least GBP990 million, compared with a consensus forecast of GBP978 million, while adjusted pretax profit is anticipated to be around GBP135 million, also above market views of GBP127 million, the analysts highlight. The upgrade reflects continued market share gains in its grocery division along with improving trends in sweet treats, they add. (michael.susin@wsj.com)
Contact: London NewsPlus; paul.larkins@wsj.com
(END) Dow Jones Newswires
03-07-23 0607ET
